Bankroll – UFC 235 Fri, 28 May 2021 19:36:06 +0000 en-US hourly 1 Bankroll – UFC 235 32 32 MCA Loans Pose Hidden Risks to Small Businesses, Funding Pros Say Tue, 18 May 2021 09:16:32 +0000 Unclear terms and obfuscated rates in merchant cash advances can leave small-business owners paying up to 4,000 percent interest and trapped in debt spirals, Charter Capital cautions. HOUSTON, May 17, 2021 /PRNewswire/ — Leading factoring company Charter Capital is issuing a warning to small-business owners about the dangers of merchant cash advances. We at that loans are a great way to […]]]>

Unclear terms and obfuscated rates in merchant cash advances can leave small-business owners paying up to 4,000 percent interest and trapped in debt spirals, Charter Capital cautions.

HOUSTON, May 17, 2021 /PRNewswire/ — Leading factoring company Charter Capital is issuing a warning to small-business owners about the dangers of merchant cash advances. We at that loans are a great way to save money while you still have an abundance of time. Otherwise known as MCA loans, states and the FTC have been cracking down on predatory practices within the alternative lending niche that can leave businesses paying annual interest rates of nearly 4,000 percent. However, Charter Capital representatives say the problem persists and urges small business owners to approach MCA loans with caution.

Those interested in exploring the detailed release are encouraged to read “The True Cost of MCA Loans Compared to Alternative Funding Sources,” now available at

Joel Rosenthal, Charter Capital Co-Founder and Executive Manager, says that the way fees are presented with MCA loans is what makes them so troublesome. “Business owners hear their ‘multiplier’ is 1.5 and they think they’re getting a great interest rate on a loan,” Rosenthal explains. “But, an MCA isn’t a loan and a multiplier isn’t an interest rate. A multiplier is the rate by which the amount of principal is multiplied to calculate the payback amount. When it is converted into an annualized interest rate, or APR, it’s usually well over 100 percent and often into the thousands.”

Rosenthal says this is only the tip of the iceberg for business owners because MCA lenders typically scrape payments off the top of a business’ credit card income as a percentage of the processed payments. That can make it hard to predict income and expenses. Moreover, because MCAs are structured differently, there’s rarely any benefit to early repayment.

“Oftentimes, business owners don’t realize how their deal is structured until the money is coming out of their income. By then, it’s too late,” Rosenthal laments. “They may not be left with enough income to cover their expenses and can easily get caught up in a debt spiral while tapping into additional working capital solutions to make ends meet.”

Thankfully, small-business owners who don’t qualify for traditional bank loans still have options beyond MCAs, says Rosenthal. For example, some point-of-sale providers offer advances with more flexibility and reduced fees for early payoff. Invoice factoring, or advances on unpaid invoices, is also a good alternative to MCAs for those in the B2B sector.

Those interested in exploring factoring or obtaining a free rate quote may do so at

About Charter Capital

Headquartered in Houston, Texas, Charter Capital has been a leading provider of flexible funding solutions for the B2B sector for more than 20 years. Competitive rates, a fast approval process, and same-day funding help businesses across various industries secure the working capital necessary to manage daily needs and grow. To learn more, visit

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The Hidden Risks of MCA Loans

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PitchIt Podcast Episode 1: Zach Bruhnke of HMBradley Mon, 17 May 2021 10:30:41 +0000 In the premier episode of PitchIt: the fintech startups podcast we talk with HMBradley Co-Founder and CEO Zach Bruhnke. Neobanks have been sprouting up all over the U.S. in recent years and these days it feels as if someone is starting a bank each week. HMBradley’s approach is focused on savers, those who want to […]]]>

In the premier episode of PitchIt: the fintech startups podcast we talk with HMBradley Co-Founder and CEO Zach Bruhnke.

Neobanks have been sprouting up all over the U.S. in recent years and these days it feels as if someone is starting a bank each week. HMBradley’s approach is focused on savers, those who want to build a nest egg for the future.

Savings is not something that comes natural to most Americans, Zach and the team are trying to change that with their novel approach. Not only do we dig deep into the various products offered by HMBradley but we take a look at Zach’s journey as an entrepreneur. We found out that the genesis for the company was built a long time ago with the help of Zach’s parents.


Welcome to PitchIt, the Fintech Startups Podcast. I’m your host, Todd Anderson, Chief Product Officer at LendIt Fintech.


Before we go ahead and jump into the first episode, I just want to give everyone a little breakdown of what you can expect each week as well as a bit of history on PitchIt. So, PitchIt has been a core component of the LendIt in-person event. It’s really helped and it’s been the mission of PitchIt to help startups gain access to not only VC investors, but to the broader fintech community. They learn from fellow founders, they meet possible partners and so really it’s always been a part of LendIt to help startups engage with the broader fintech community. Some of our biggest success stories to date include Nova Credit, PossibleFinance, Autofi, Jasper and KickFurther.

So, each week on the podcast my plan is to interview founders from fintech startups and really the focus of PitchIt and the podcast is the early stage fintech company. We define startups for the competition which is what PitchIt is and for the podcast as companies that have raised about $20 Million in terms of equity founded no earlier than 2017 and they need to offer a fintech product for service. We also plan to talks to VC investors on the podcast and we plan to host occasionally more mature companies, whether it be a look back at the PitchIt competition in a special series or just give younger startups a bit of insight into kind of what it takes to build a successful startup.

We intend to have a lot of fun, talk about the entrepreneurial bug and how these companies are currently doing in the environment that we are in today as well as in the near, and hopefully, long term future. So now, without further ado, we’re going to launch into our premiere episode, Zach Bruhnke, Co-Founder and CEO of HMBradley. HMBradley is a neo bank focused on savers built by a saver. Speaking with Zach was a lot of fun and I hope everyone joins the episode.


Todd Anderson: Welcome to PitchIt, the Fintech Startups Podcast. I’m your host, Todd Anderson, Chief Product Officer at LendIt Fintech. Joining us today is Zach Bruhnke of HMBradley. Zach, welcome to the show!

Zach Bruhnke: Yeah. Thanks for having me.

Todd: So, to kick off, I’d like to just give a little background, tell the audience a little bit of about, you know, kind of where you’ve been before your current role and kind of what brought you to HMBradley and founding the company.

Zach: Yeah, for sure. Look, I spent most of my career sort of in and around startups even before I knew that they were called startups. So, I started my first company when I was 18, it was what they call an e-discovery service which is a really fancy way of saying we scan paper and provided it to attorneys in a digital format (laughs) and I did that as part of college. Actually, sold them when I was still in school so I’m a drop out and then, you know, sort of meandered my way into fintech a little over a decade ago now.

Originally interned at a place called Fee Fighters which is a long time ago, Stripe competitor, and Sheel Mohnot who’s pretty well known in fintech was one of the co-founders there and so I got to intern for Sheel and got to learn a little bit about what startups were, what fundraising was and all that kind of stuff which I’ve never really heard of before.

I grew up in Louisiana so wasn’t really growing up around this kind of thing and ultimately got into YC in winter 2012, went to YC when the company called Medmonk…Medmonk’s like still running,my old co-founders are still running it, it was more of a give Rx type of business, about a year there and decided, you know what, I like fintech much better. I eventually started a company called Spout which was a…let’s just say a Plaid competitor kind of, did not work out nearly as well as Plaid.

Todd: Too early?

Zach: Well, yeah. It’s funny, you know, back then the way it happened was everyone hated that business, believe it or not. You know, Yodlee was 15 years old, hadn’t gone public. Plaid had just talked everyone in the world and barely raised $3 Million and I would walk into meetings where blue chip firms…where they would routinely say something like I already passed on Plaid. (Todd laughs) So, long story short, you know, I kind of took the easy way out, kind of, you know, gave up and sold that company and spent five and a half years or so as the CTO of an investment bank, you know, which is every child’s dream, as you can imagine.

As I watched Plaid’s success and seen what they did…one of the things I remember the entire time was I was selling, you know, one of top five banks their own data back to them and to me that was a reminder that banks use their own data really, really poorly. And so, I think that was always at the back of my mind, one of the things that I knew and I think super highly of Zach and Will and the team at Plaid, but not that they were all that much smarter than I was, so I thought like if they can do it, I can do it so there’s no reason I couldn’t go and try this.

So yeah, I think after a few years of set back and kind of watching it and realizing that there was more that could have been done there and I kind of quit too early, I said, I’ve got one more in me and I’m going to take it as far as I possibly can. The one that I can promise you is if we ever sell this company, I’ll consider it a failure. (laughs)

Todd: Interesting. You don’t hear that from a lot of founders.

Zach: To me, it’s….you know, I’ve been a part of three exits too early. Selling your company too early, it’s basically like watching someone shake your baby. It’s terrible because they never do what you want them to do and technology never goes the way you want it to. I’m an engineer and have been my whole life and so…that part’s really hard for me and I think in this….we just said we want to build something that’ll last forever and we’re going to do whatever we can to do that. That was one of the first things that I…….well, first it was Max, I was talking to him about it, our first investor, and then my co-founders. Basically, everyone agreed, I’m not selling this company, like over my dead body, you know, we sell this thing and if we do, it’ll be because it failed and I was trying to recoup money for investors.

Todd: (laughs) It sounds like you’ve had the entrepreneurial bug for quite some time being that you start a company in college, I mean, is there anything specifically that kind of led you down, I want to be a founder, I want to start companies?

Zach: Oh man, my Dad, he’s going to listen to this and probably, you know, rub his head, just laugh, but when I was a kid, there was three of us and my parents weren’t super wealthy, they didn’t have a whole lot, but they were really, really smart, they were good savers. But, my Mom run a cash vault and my Dad sells fences and my Dad desperately wanted to start a company to the point where on weekends, sometimes, he would drive us by buildings, like that’s the building I’m going to lease, I’m going to do it. The one thing I never got to watch my Dad do as a kid was actually start anything, he always like…..and I think part of it was, you know, we were comfortable and that was a big risk and we weren’t wealthy enough to just take the plunge.

So, I think that was always in the back of his mind, not that I felt sorry for him, but I sort of did, I guess. You know, I was like I saw that him and I knew how badly he wanted to do it and I think by the time I was probably 13 or 14, I thought, I am never going to let my kids feel sorry for me the way that I felt sorry for him. I am going to do whatever it takes to bust my ass and just make it work somehow and know that I left it all on the table. Honestly, that’s probably why I started HMBradley when I did, I felt even though I’ve done it and I’ve spent my career doing it, I haven’t left it all on the table yet and that’s what HMBradley is about, You know, for me it’s about putting it out there, leaving it all on the table, every bit of effort I have into it and betting my entire life and reputation on it.

Todd: Being that you mentioned the company now, let’s move to….tell us a little bit about the firm, the products that you guys have, your differentiator….feel like, you know, these days as a neo bank almost every week, it feels like, (Zach laughs) at least from my perspective as someone covering the space so just tell everyone a little bit about what you guys do and, you know, kind of who your target audience is as well.

Zach: Yeah. I think we feel sort of the same way, we saw all these neo banks and I think one of the reasons for creating HMBradley was that one of the things that we didn’t see in the neo banks is in the differentiation, you know. Basically, in my opinion, Chime came out and said hey, get paid two days early where you never pay a fee and it worked and everyone else just ripped that off completely.

Todd: (laughs) I see a lot of commercials with “get paid two days early” now.

Zach: By the way, not to say anything bad, I think very highly of Chris and Ryan and the whole team at Chime, Maya is an incredible, you know, advocates for ours ironically, whose the voice of the customer there, but, you know, getting paid three days early doesn’t really mean much. You know, you get paid today really once and then you’re in the same 14-day cycle.

Todd: Yeah. You’re just getting paid two days early, two days early and then the cycle is the same, like you said.

Zach: That’s exactly right. So, it’s really…you know, that to me was not a hook that our customers cared about and when I say our customers, we came into this building something that we wanted as consumers. I think the reality that we had as consumers was we’re banking with one of the top five banks because we have a credit card with them, we have a mortgage with them or we might have a car loan with them.

Todd: Yeah.

Zach: So, we weren’t banking at Chime even though the experience might have been better. We might have had like a slightly better looking app. To us, that really, you know….the app wasn’t the problem. In getting paid two days early, it certainly wasn’t my problem, I manage cash flow well and now it’s to save money, you know, it’s something my parents basically beat into my head and so for me, the problem of banking was always the experience.

One of the things that we saw in starting this was look, if you talk to a typical bank CEO, they’re going to tell you that they want stable deposits and they want to grow them. If you talk to a typical consumer, they’re probably going to say something like I want to make more money on my money.

Todd: Yeah.

Zach: And those things might seem diametrically opposed, but our thesis was they work that far apart and so what we’ve done with HMBradley is we’ve created absolutely the best bank account in the world if you’re a saver. The reason is if you have a direct deposit with us and you save 20% of that, we’re paying you 3% which is eons above the rest of the industry right now. I think it’s probably, you know, six, the highest high yield savings account.

On the low end, if you’re not having direct deposits with us, we’re not paying you anything and if you have a direct deposit and you’re not saving, we’re paying you less and it tiers up. So, we have four different tiers, they pay you .5,1, 2 and 3% and they’re all based on your savings habits. So what we’re saying is basically, if you’re helping us grow deposits, we’re paying you higher rates, end of story.

Todd: In terms of, you know, the target audience, is it the millennial, Gen X type, I mean, I went through a little bit of the process on your side and if you don’t have a mobile phone number, obviously, you can’t get…this can’t go through the process online. I’m not sure if there’s another way to get to it, but is that kind of the core person that you’re going after so that’s not that different from you and I.

Zach: Yeah. I mean, it definitely, I think, was our original target. You know, we do require a mobile phone, that’s because we want to be able to deliver your text messages and that’s something most of our customers expect. I think the most surprising part of what we’ve seen, so far, is that about 30% of our customers were born before 1970.

Todd: Interesting.

Zach: You know, our oldest customer is well into his 80s, at this point, and, you know, that’s pretty shocking, we didn’t see that coming. One of our first ever direct depositors was a retiree who I…he literally, you know, I answered his request, he sent me his pension form and said, can you fill this out so I can get my pensions in here.

So, it’s actually a pretty broad audience, but the core of our audience is really 25 to 45, W2 employees, most of them make $75K or more a year. You know, our average account balance at HMBradley is about $30,000 per account so when you look at who our customers are, there’s certainly a different spectrum than what you’re seeing in most challenger banks.

Todd: Yeah, for sure. In terms of, you know, traction, not to give in to specific customer numbers, but more on, you know, how is growth going year over year, how long have you guys been around. Just tell the audience a little bit about…in terms of where you come from and, you know, where you guys are currently.

Zach: Yeah. We’re going close to a year, we went live March of last year. You know, for the first several months, the company….we basically doubled month over month every month. I think we announced in November that we’ve just had $100 Million in deposits and as of today, we’re almost $200 Million so we’ve almost doubled since then. So, you know, the growth has been, I think, way beyond our expectations, you know, ultimately, two thirds of our customers are coming from other customers, just word of mouth.

You know, we spent very little on the way of advertising and we’re seeing just exponential growth, both week over week and month over month right now and I think a big part of that is the fact that we’re paying this kind of eye popping rates and a lot of consumers are seeing that. They probably tell their friends hey, if you were lighting money on fire, come get it while you can (Todd laughs) which is okay with me if that’s what they think.

Todd: Yeah. So, when visiting your website, your LinkedIn you kind of see, you know, kind of all over the place which is “Banking is old. Building is new.” Where did the slogan come from and tell us a little bit more about that.

Zach: Yeah, for sure. I mean, it’s something we talked about a lot, we were kind of initially building the product. One of the things, you know, that….

Todd: Did you feel you needed, a slogan, like, you know. marketing and building the brand, do you feel as if you needed something to kind of go with HMBradley?

Zach: No, I mean, I kind of think slogans are bullshit, I’m being honest. You know, it might be memorable and, you know, Banking is old. Building is new.” is one of those things where we said look, we talk to you, we talk to thousands of people before we ever launched anything. You know, what they kept talking about was…basically, the reason that we’re saving is because they were building for the future of some sort and the thing that we heard over and over again about peoples’ banks was like it was sort of just this necessary evil, like I kind of have to have it.

Todd: You need to put your money in…somewhere.

Zach: Right. It’s like, you know, either that or a mattress. This seems slightly safer than my mattress, right, and so I think in some way “Banking is old. Building is new” was new as a hat tip to the idea that look, you’re banking at the same place that your grandparents banked then and nothing has changed in that hundred years. You know, I mentioned earlier that, you know, basically bankers want to grow deposits and they want to make more money on their money and the way that we’ve done this for a hundred years now is just to pay everyone the same rate, no matter what. That makes no logical sense, right, it’s absolutely bonkers and I think what we wanted to focus on was what’s broken in banking is not banking itself, the fundamental business model of banking is really strong, it’s actually a great business.

It’s basically really simple, right, like you give me $10, I promise you $11 and then, you know, Dimitri asked me for $10 and he promises me $12 and I keep that extra dollar. That’s a wonderful business in the grand scheme of things. Now, what’s not wonderful in that business, in our opinion, is the way that a consumer experiences it. What I mean by that is….you know, I always joke that today, going and asking for a loan from your bank is sort of like going on a date with your spouse and having them say so, what do you do for a living. (Todd laughs)

It’s just like you know everything about me and I think in this world where Facebook can unearth my friend from third grade and Amazon, those who are about to buy next week and Netflix can literally build television series knowing that I will watch them, how the hell is your bank still saying like fill out this paper application or if you’re lucky, it’s on line with all the same information that you’ve already told us multiple times over the course of our 20-year relationship.

Todd: Or you get 30 notices in the mail for credit cards and it’s all the same notice.

Zach: It’s wild. I mean, like credit cards are great, why was it that we launched a credit card as soon as we did. We launched a credit card three months after and one of the reasons we did was because, ultimately, when you look at how a credit card application typically works, it’s like hey, here fill out the information again and ours, we said, look, we’re going to give you a one click credit. What that means is we already know everything about you, like you gave us permission to pull your credits so we’re just going to tell you what you’re good for. So, we push someone an offer, it says, here’s a $10,000 line of credit with 15.9% APR, if you want it, take it and that’s jarring for a consumer, but, frankly, it’s what all of us probably wish that we had.

Todd: Pretty much.

Zach: Like why do we not know the terms, you know, and I think it’s one of the things that we felt super strongly about is, you know, if you peel the onion back and you hear what people say about banking, what they’re really frustrated by is just this idea that they never know where they stand and they’re sort of bowing at the throne and asking for permission all the time, you know. And I think a lot of where One Click Credit came from was my mortgage, you know, I’ve got a mortgage at Wells Fargo that I had to pay for almost a decade.

My wife and I are buying a house right now and we’re getting it from First Republic and, you know what, if Wells Fargo had a….like a number at the top right corner of my account that said, hey Zach, you’re good for $2 Million, I would have never gone anywhere else and that’s a feeling. It’s not something that I had to automate in reality, it’s a feeling of the consumer of knowing where they stand and knowing what they’re good for and that’s something you can easily do.

Todd: I once talked to a bank and they said, we can’t tell you how many customers we have, in terms of the entire bank across small business, mortgage, consumer and they said simply because the technology…nothing talks to one another. So small business is in this division, mortgage is here, unsecured credit card, everything’s in a separate bucket and you wonder why more neo banks are launching every week.

You mentioned growth and how fast you guys are growing, how big is the team now and how much has it grown from when you launched and then second question on that is, obviously, we’re still in the pandemic so it’s not like you can easily go interview or have 50 people come in for a round of interviews. How has that challenge been since you’ve launched and trying to grow a team when you’re doing pretty much everything through the video?

Zach: Yeah, it’s wild. You know, luckily, I’m a ferocious recruiter so I had been doing a bunch of recruiting well ahead of needing people and not sell it a little bit what’s ramping up, but, yeah, I mean, look, the team now I think is 33/ When we launched, I think it was 11 so 3X basically. We launched during COVID so I haven’t seen the full team in a room since we launched which is pretty wild.

Zach: Yeah. Some of us have like, you know, loathed that. I think our VP of Credit Strategy, Andrew, has been like…I think just wanted to go have a beer with everybody, you know, a couple of times, at some point, it sucks.

Todd: Sometimes, the people in the room feed off one another, especially when you’re building something and doing it, even like how we’re doing this interview, I’m sure it’s frustrating.

Zach: Oh, yeah. I mean, it definitely drags some things and, you know, look, the reality is ….and think founders should talk about it more often probably is, you know, it’s definitely bringing up depression more among our team and in ourselves. It’s hard, right, like…..ultimately, it was just a joke that I like, computers not people. If COVID has taught me anything….I do actually like people, you know, like I really do and I want to interact and need that human interaction. And so, I think in some cases, people will overcompensate for it and try to like find ways, do special things.

For us, it’s really been more around, you know, trying to figure out how we can connect with each other in different ways, whether it’s getting on a big video chat, having it all hands and just….you know, we shipped everyone, drinks at their house one weekend and like hey, let’s all hang out together, but it’s tough. It’s a really hard thing and the recruiting side is, you know, it’s one thing to recruit people which is hard enough, it’s another thing to come in and learn their personalities all over Slack……

Todd: Yeah.

Zach: ….or Tandem or whatever tool that you’re using, you know, Flavor of the Week. I think one of the things that I’ve seen is you end up….it feels like head butting more than you actually would had you been in person and like knew the personality or what was coming across in the words.

Todd: It’s hard to gauge certain things especially in chat.

Zach: Oh yeah.

Todd: It’s almost impossible, but even on video, there are certain tells in person that you get and on video you just don’t get.

Zach: Oh, it’s totally true. Yeah, I definitely….you know, it’s hard for me, specifically because I’m blunt, I’m really blunt, and I just say what I think. If I don’t like something, everybody knows it and there’s no hiding it. I think that comes out in my Twitter sometimes, I’ve made a few pretty audacious swipes at Cash App and what I think is just a giant fraud, you know, going on with some of that.

You know, I don’t mind saying it because that’s how I feel and so sometimes that could be really tough when a team member doesn’t know…. like we had a team member, Joanne, who’s really great and we’ve actually built a great relationship on…we really ended up doing it by late night pairing sessions,II’m a programmer and I still like to code occasionally, that’s how we ended up building some rapport.

But, you know, what I eventually got was things like man, you are scary when someone first starts here, just like I’m an engineer and I’ve got the CEO like, you know, barking at me about like how this should have been implemented instead, how do you know how to take that. The reality was I wasn’t really trying to bark at anybody, that’s not how, you know, it was more just like hey, why is this not done this way, I’ve been doing this for a long time. But, you know, it was good to get the perspective of like hey man….whether you’re treated or not, you’ve got this like kind of level over everyone.

You know, I think one of the best one-on-ones I had recently is somebody said, you know Zach, it doesn’t matter how often you tell us that we can tell you to f*** off, we all know that we can tell you to f*** off, it’s still really hard for us. (both laugh) You’ve been trained your entire life that you can’t talk to people that way, he’s like I know that we can and everyone, I think, feels comfortable coming to me and kind of saying whatever they want, but it’ still tough, they’re all still trying to learn so building in COVID has been a really interesting experience.

I joke all the time that… this was my fourth company, right, and so I came into this thinking I’d seen everything, you know, there’s nothing I’m going to see that I haven’t seen before and you know, that’s the worst thing you can say because, you know, COVID has…boy, has it taught me I didn’t know anything yet.

Todd: Shifting a little bit about how you manage time, your team and everything so what is the daily routine……and one thing I found from COVID is it seems as if you’re working more now because, you know, there’s no natural break points in the day to the office. Lunch, coming home from the office, you’re just there and there’s time slots in your calendar and you encourage people to take up the time slots and all of a sudden you’re like shit, I have four days of time slots filled up. So, how do you, as someone who’s building right now and building pretty rapidly, how you manage the team, your personal time and not burning yourself to the ground.

Zach: Yeah, We actually, recently, did something that I’ve been really happy about because we killed all meetings except for Mondays and Thursdays. We just said, you can pull somebody into something, you can do whatever, but like we’re killing meetings and ….my stated goal this year is to build more of a written culture inside of HMBradley. And so, one of the things that I did was I started building a handbook and I started writing down everything that I wanted employees to know, everything that was in my head, everything that why we do we do, what kind of culture that we want to build here just so it’s super clear because it’s really hard when you don’t have that, you know, morale in the office to kind of gauge how everybody’s feeling and what’s going on.

Todd: And you don’t know when it’s coming back either?

Zach: Well, that’s true. I mean, yeah.

Todd: If you said in six months it’s back then it’s alright, there’s six months window, we have no idea.

Zach: No. I remember, at the start of last year, we thought we’d head back in the office by 4th of July, you know, like how ….

Todd: That would be home for two weeks. (laughs)

Zach: No. It’s true and so, yeah, I’ve had to learn how to manage my time very differently. So, I keep my calendar as open as I can, but I also encourage, like you just said, people to put time on it and, you know, grab me if you need me. So, I’ve been signed up in a lot of ad hoc meetings, you know, a lot of where my time gets spent is thinking around what’s going to move the needle next on product for us like how are going to get to where we need to go because, ultimately, like I think….you know, I get cool emails from customers all the time and it’s really neat to see like some of them really…seems like they care about HMBradley, but it’s probably like….I got an email last night that was probably 2,000 words. The customer was randomly giving me feedback which is cool.

Todd: There’s no way that customers write in 2,000 words to a bank unless it’s about how the bank screwed them out of overdraft fees or something.

Zach: (laughs) No. The best part of it is literally just feedback, it was, hey, this is what I like, this what I don’t like, this is where I’m wondering about savings tiers and how like how you can improve those and honestly, a lot of that stuff is what drives me to keep thinking. You know, one of the things that we’re about to do that we haven’t really announced yet is, you know, we launched this savings…it’s a checking account technically, but it just pays like a savings account, we won’t call it savings account and we launched this credit card and those things….to some people, feel like they’re opposed and to us, they’re really not at all, like our users use credit cards. In fact, if we can see anything, like we can see that in the usage, right, like you have 70 times less credit cards than we have debit cards today. but we have more daily credit cards spending than debit cards spending.

Todd: With some of the broader trends going on like “buy now pay later,” how do you view that in relation to the fact that you have a credit card product. It seems like there’s some shifting in the credit card universe so I’m kind of curious what you think about that.

Zach: It’s consumers….most of us, you know, we still have…credit card is going to be the go to, I mean, the reason that “buy now, pay later” works is because someone like Max at Affirm comes along and does a BD deal and they say, hey, here’s a Peloton bike at 0 percent. That’s an easy one to pick up and say yeah, sure, it’s free, it’s free money, you know, Peloton’s actually paying the “interest” on the other side of that, right, like they’re just paying a fee to the Affirm to acquire that customer basically. It’s a great model, it makes a ton of sense.

I think for the average consumer though….you know, well, first of all, I think the one controversial statement I’ll make is those loans are not exactly helpful for your credit score. You know, I know that Affirm would love you to believe they are. Max and I are friends, I’ve known him for a long time. The reason I know him is because he tried to get me work for the Affirm and embarrassingly, you know, now I look back and….I remember the conversation where I literally said no was I guess probably 2013 and I was talking to him and I said, look Max, at the end of the day, at some point we’re going to come out a QE and when that happens the cost of capital is going to rise and I don’t know how you’re to compete and boy, was I wrong, we’re still in QE, So, you know, eight years later, here we are. (laughs)

Todd: There’s no end in sight.

Zach: Oh yeah. So, yeah, I mean, that’s like a foot in mouth scenario right there, but, you know, I think the reality from those consumers is they’re still looking to their bank first, you know, like “buy now, pay later” is great, but I’m not getting my mortgage from Affirm anytime soon.

Todd: Yeah, that’s true.

Zach: And I think, ultimately, when we talk to our customers and say, what do you use, credit cards are still one of the number one things that they’re using and one of the reasons they’re doing that is because they realize if I go to the store, I’m not getting an Affirm loan for my groceries. With a debit card, I’m just going to lose money because the price of that credit card price is built in the transaction so I might as well give it as much rewards as possible.

Todd: Yeah.

Zach: And that was basically where we said, look, the every day spending piece is not going away anytime soon and what we wanted to validate was the everyday spending card. The reason that we did three to one before Venmo blatantly ripped it off, you know, was that we said, look, we want the card to work for you, we want it to be something where it’s dynamically changing with your habits every single month. That’s something that we felt really strongly about because we felt like we could show the consumer more time, we’re working while you’re sleeping.

Todd: So, one of my questions to you would be one of your biggest regrets be the not joining Affirm or is there another one that supersedes that only because, you know, where Affirm ended up going/exiting. I don’t know how early you might have been on the team, but is there something else that may be supersede that.

Zach: I think I would have been employee number 12. (Todd laughs) So, very early, in fact, I was there the day that Lee Moore, the CTO, joined so I was definitely around super early. I would say, I’ve never actually regretted that, ironically. No, the big regret I will always have is giving up too early on Spout. I feel like … Spout, we have a slightly different vision than Plaid, but we were doing the same thing.

To give you some context, when Plaid had eight banks, we had 850 and we were building really quickly, sort of the royal we it was really just me, you know, I was basically the only person there at that time and what really stings about that one is I think the vision that we had at Spout was better. What we were basically pitching was a wall for finance. We were telling people, we’ll give you this way that you can log-in the bank accounts whatever and you can put it on your site or we’ll give you this job description that you can stick on your site and you can on-board people in a basically better on-boarding flow that we know is optimized because we’ve seen it across hundreds of customers.

Ultimately, you put a button on your side that says, I’m a Spout so if they’ve got non-accounts already connected with Spout, they can click that button and have non-accounts backed into the new app. We were basically saying, we’re going to give you a discount for that because we’re going to create this financial identity layer for the consumer. And, frankly, I think that’s the anti-Google and I think that’s the opportunity that Plaid had and when I sold, Zach Perret called me and he said, hey man, I’ve heard your name for the last three years, I just want to chat, you know, let’s talk about what you…..and that begged him and I said, will you please build this, I want it as a consumer, I desperately want this.

And I had this vision of like I go into a hotel room and it knows the temperature that I like at my house because it has my (inaudible) stat data or I drive into a parking garage and it just charges my credit card because it knows which one I prefer instead of me having to get out and put a ticket whatever. That was like the world that I wanted to live in.

Todd: How far are we away from that still.

Zach: It drives me insane, so far. I mean, we don’t have to be. You know, one of the things that’s not clear from what we’re doing is that we want to become more of a financial conduit to the consumer. I’m not going to do everything, we can’t, doesn’t make sense so what we should do is like give the consumer better options where they can get them. So, sometimes it’s in affirm loan and sometimes it’s a, you know, a credit card from Chase and that’s okay.

Todd: Yeah.

Zach: You know, what we should really do is like let the consumer know what the better options are for them, give them the information to make that and, frankly, let them stop with the information in the forms all over the web over and over again. Every time you do that, it’s a vector of attack.

Todd: Yeah.

Zach: And so, the way that we look at this is like if we’re doing this right, if this looks anything like a bank account in five years, we’ve royally screwed up. You know, we should be more of a conduit for the consumer and I think that’s where we have to get…and so when Plaid announced My Plaid, I was so excited, six years after I told Zach to do it. I said, yes, they’re going to do it and then they just did nothing with it, frankly, and I’m still aggravated by that. I think we’re so far from where we could be and I think what the world needs right now, more than anything….you know, the consumer side is the anti-Google.

They need somebody that is going to say….you know, and Apple thinks they’re it, but they’re not because, frankly, Tim Cook has no product vision. He’s a great operator, but they’re not doing anything interesting anymore, they’re just like, you know, kind of honing in the privacy. I think there’s a world out there where someone comes along, maybe it’s us without saying too much, that says like, look, you don’t have to put your information on this site, you don’t have to do it this way, it doesn’t have to be so like convoluted. You don’t have to have a wallet with ten cards in it either, like let’s get you to a world where we can actually kind of help you understand what you want to do and tie things together.

Todd: It’s still way too complicated and cumbersome today. ‘

Zach: It sucks, doesn’t it?

Todd: It’s exhausting, it’s exhausting. I mean, the other day I’m cleaning out some drawers and my wife and I had a mortgage and then we got a refi and a stack of paper like this and there’s really no reason to have a stack of papers like that, but, that’s kind of still where we are. Do you think part of it is regulatory in the sense that, you know….I mean, the US is not a streamlined regulatory system. I mean, there’s federal, there’s state, there’s all kinds of crap. Is there something that regulators obviously getting out of the way in a lot of cases, but is part of this regulatory?

Zach: I think regulatory is number one favorite excuse. You know, the thing that I’ll say there, to tie onto that is one click credit is a great example like when I started talking to regulators about it, like their initial reaction was oh, I don’t think you can do that and when you ask why, they’re like yeah, I guess you can legally, yeah, you can probably do that. And then when you go to implement it, like you wouldn’t believe the conversations I had with the bureaus trying to get them to understand, no, no, I’m not going to do a hard pull, I’m going to do a soft pull just like what credit Karma was doing, but I want to underwrite based on that. I’m going to give them a fully underwritten offer that they know they’re good for and they were like, no, no, it’s got to be a hard pull and I was like, but why.

I said, show me the law, show me the law where that has to happen and the answer’s like, there’s none and I said, look, if I’m telling them I’m going to give them this account….these customers are actively looking for credit. I’m pushing them, please do this and so why punish them for accepting something when… the way, their scores are already going to take a hit when they accepted anyways because they’re going to have a new account.

Todd: Yeah.

Zach: You know, the whole system is sort of stuck against you in finance right now and I think, you know, one of my favorite movies in the world is Charlie Wilson’s War. There’s a scene in Charlie Wilson’s War where Julia Roberts’ character looks at Tom Hanks and says, Charlie, why is Congress saying one thing and doing nothing and he sits back in his chair and sips a glass of whiskey, and he says, tradition mostly.

Todd: Yeah.

Zach: And that’s where we are in finance like banks, banks are fat and happy and frankly, they’re not scared of some of the neo banks out there because neo banks aren’t taking their customers. So, they’re enjoying a great time, right, they’re like, oh yeah, yeah, take all the customers we don’t want, we’ll keep all the big money and we’ll keep originating all the mortgages and getting all the valuable loans in the long term and lending all these money out. I think there’s a ton of neo banks that have built their entire model and the ship has sailed on, how do I get them reflected in the debit card.

Todd: The interchange.

Zach: Yeah. And when you do that, you know, ultimately, a) you get less interchange from a debit card than a credit card. People love to say that credit cards are the problem, credit cards are not the problem. Transparency might be the problem, but that’s not a credit card problem, right.

Todd: That’s a people organizational problem, it’s not the product. I’ve always said, people have criticized fintech or whatever you have, a RobinHood or whatever issue, it comes on oh, fintech is too young, fintech is this or fintech is that and then when you start digging into it, it’s people, it’s lawyers, it’s bad decisions by people and the tools are not usually the problem.

Zach: That’s exactly right. So, yeah, I think, ultimately, we’re going to have to drag regulators kicking and screaming into the 21st century, unfortunately. Honestly, it’s not that they don’t want to be there, they actually want to see cool things and they want to do it, they just don’t have an imagination and lawyers inherently don’t have imagination so truly not their fault. (Todd laughs) They’ve been taught to interpret something.

Todd: So, we’re coming up on…. almost out of time, just to end with a few fun things. One is, do you have a favorite book, what’s the last book that you read?

Zach: I think favorite book and this is just near and dear to my heart because this is part of my personality, there’s a guy named Mark Manson and he wrote a book “The Subtle Art of Not Giving a Fuck” (Todd laughs) and it’s a wonderful read. I think the reason that it resonated to me so much is anyone that knows people tell you, I don’t care what anyone thinks, to a fault maybe, I mean, it doesn’t bother me.

Todd: Same with me sometimes.

Zach: You know, it just doesn’t matter and I think that book kind of harps on that and says, look, you got be you and do what’s best for you. A close second would be “Never Split the Difference” by Chris Voss who’s a really great writer. I’m a voracious reader so I think I read about 80 books starting HMBradley because I was traveling so much.

Todd: That’s a lot.

Zach: Yeah. You know, I love to read and our employees make of it. My old condo, we just sold our house so we’re buying another house right now, but I have bookshelves in my living room, they were just like chock-full and so like if you’re on a video chat it’s like, Jesus, man, how many books do you have.

Todd: Is that part of the reason you went to…. I want to do more to make HM more of a written word.

Zach: I think it’s part of it, I think the written word is powerful because when it’s there, you can’t kind of go back on it so much. I think that one of the things my Dad sort of beat into my head really early is, you know, ultimately, you only have a couple of things, but your word and your reputation matter more than almost anything and by having written word there, it’s a lot harder to step back in doing something. But, the other reason I like written word is because, ultimately, you’re a lot less likely to write something down that you know is stupid.

It’s like if you know that you’re doing something you shouldn’t be doing, you’re not going to document that, you’re going to go fix it and then you’re going to document the right way to do it and it kind of forces us to do that even in an engineering culture, it’s like you’re going to write something down and you know, ah, I shouldn’t be doing it this way. You probably are not going to write it down and tell everyone else to do it that way, you’ll probably get into a fix about what you’ve been doing and then that helps everybody. So, I think that’s a big part of the reason that I think about it.

Last book was “Measure What Matters,” I actually re-read it because I made my Co-Founder read it because we were talking about APRs and driving these on HMBradley. So, yeah, “Measure What Matters,” great book, definitely recommend and that was the last one.

Todd: Favorite sports and sports teams you root for. I know the team over my shoulder is one of them as we discovered when we first chatted before we started, but any other favorite sports, in general, and sports teams.

Zach: Yeah. Grew up playing baseball, I’ve always been a Red Sox fan, I was a Giant Nomar fan when I was a kid, even though I’m from Louisiana not Boston. So, Red Sox has been near and dear to my heart for a long time. (cross talking)

Todd: I’m not a Yankees fan, I’m a Mets fan, I don’t hate the Red Sox as much as a Yankee fan would.

Zach: Yeah. You know, even though I was a terrible football player, I love football, you know, and definitely the Fighting Irish over your shoulder there. I’ve been a Notre Dame fan when I was a very small child. My Dad swears his first memory of me was when I was about six, everyday he’d come home from work and I would be on the phone with a JC Penney catalogue arguing with them over where my Notre Dame Fighting Irish sheets were so that’s how far that goes back for me. And then, you know, I’m from Louisiana so Saints and Cowboys actually, ironically, because they’re three hours from when I grew up. Those are the football teams I root for.

Todd: Cowboys and Notre Dame are the national teams that are usually on television. (both laugh)

Zach: Yeah. My grandfather, my Mom’s Dad, pretty much taught us that there is a hole in Texas Stadium so God can watch his team play, that was basically his belief.

Todd: Fascinating. (laughs) Lastly, it sounds like, I know the answer to this, but what’s your biggest inspiration in life?

Zach: Yeah. I think you kind of hit it around, my parents, frankly, both of them. They drove so much into me that I’ll never be able to get back. I think one of the things that’s really cool is when I started working, I was 14 and I worked in my Dad’s gate shop and my Mom would take half of my paychecks away. I thought my Mom was this mean lady that was stealing money from me. When I turned 18, she gave me the other half of those paychecks and that’s actually the money that I used to start my first company and it changed my whole life.

That moment, I think, was the moment I realized that A) saving money had a reason and it was valuable and B) with enough grit and effort and whatever, you can get yourself almost anywhere. Now, granted I had some advantages that others don’t have, you know, I’d be the first to admit that and great parents is one of those. I think for me that’s definitely always going to be the response like they helped me think that I could accomplish anything, probably to an unreasonable point, so I have a very, almost false sense of belief in myself to this day and I should credit that to them and what they thought that I can do.

Todd: Zach, this was a fantastic conversation. I appreciate you coming on the show, this will be one of our first episodes so thank you for joining me, enjoy the rest of your day and looking forward to more great things from HMBradley.

Zach: Awesome. Thanks for having me, I really appreciate it.

Todd: Alright. Thanks, Zach.


Todd: You know, when listening to Zach, it’s almost impossible to not feel the energy come through, I mean, he’s really an entrepreneur at heart and it’s not everyday that you hear an entrepreneur and a founder talk about not selling his company. I mean, he clearly wants HMBradley to be seen as his legacy, he’s learned from the previous ventures he’s done and so you learn a great deal when you go through the various things that Zach went through with other companies.

He mentioned it in terms if selling early, so clearly, HMBradley is his long term focus and something that…hopefully, we see have continued success. Savings is not something that’s easily ingrained in the US consumer so seeing how they’re able to potentially change that behavior in the US is going to be fascinating to watch.

So, thanks for tuning in, hope you enjoyed the show and we’ll see you next time.

You can subscribe to the PitchIt: the fintech startups podcast via Apple or Spotify. To listen to this podcast episode there is an audio player directly below or you can download the MP3 file here.

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Higher Corporate Taxes Won’t Hurt Business Mon, 17 May 2021 10:28:54 +0000 Bloomberg The World Economy Is Suddenly Running Low on Everything (Bloomberg) — A year ago, as the pandemic ravaged country after country and economies shuddered, consumers were the ones panic-buying. Today, on the rebound, it’s companies furiously stocking up. Mattress producers to car manufacturers to aluminum foil makers are buying more material than they need […]]]>


The World Economy Is Suddenly Running Low on Everything

(Bloomberg) — A year ago, as the pandemic ravaged country after country and economies shuddered, consumers were the ones panic-buying. Today, on the rebound, it’s companies furiously stocking up. Mattress producers to car manufacturers to aluminum foil makers are buying more material than they need to survive the breakneck speed at which demand for goods is recovering and assuage that primal fear of running out. The corporate buying and hoarding is pushing supply chains to the brink of seizing up. Shortages, transportation bottlenecks and price spikes are nearing the highest levels in recent memory, raising concern that a supercharged global economy will stoke inflation.Copper, iron ore and steel. Corn, coffee, wheat and soybeans. Lumber, semiconductors, plastic and cardboard for packaging. The world is seemingly low on all of it. “You name it, and we have a shortage on it,” Tom Linebarger, chairman and chief executive of engine and generator manufacturer Cummins Inc., said on a call this month. Clients are “trying to get everything they can because they see high demand,” Jennifer Rumsey, the Columbus, Indiana-based company’s president, said. “They think it’s going to extend into next year.”The difference between the big crunch of 2021 and past supply disruptions is the sheer magnitude of it, and the fact that there is — as far as anyone can tell — no clear end in sight. Big or small, few businesses are spared. Europe’s largest fleet of trucks, Girteka Logistics, says there’s been a struggle to find enough capacity. Monster Beverage Corp. of Corona, California, is dealing with an aluminum can scarcity. Hong Kong’s MOMAX Technology Ltd. is delaying production of a new product because of a dearth of semiconductors.Further exacerbating the situation is an unusually long and growing list of calamities that have rocked commodities in recent months. A freak accident in the Suez Canal backed up global shipping in March. Drought has wreaked havoc upon agricultural crops. A deep freeze and mass blackout wiped out energy and petrochemicals operations across the central U.S. in February. Less than two weeks ago, hackers brought down the largest fuel pipeline in the U.S., driving gasoline prices above $3 a gallon for the first time since 2014. Now India’s massive Covid-19 outbreak is threatening its biggest ports. For anyone who thinks it’s all going to end in a few months, consider the somewhat obscure U.S. economic indicator known as the Logistics Managers’ Index. The gauge is built on a monthly survey of corporate supply chiefs that asks where they see inventory, transportation and warehouse expenses — the three key components of managing supply chains — now and in 12 months. The current index is at its second-highest level in records dating back to 2016, and the future gauge shows little respite a year from now. The index has proven unnervingly accurate in the past, matching up with actual costs about 90% of the time.To Zac Rogers, who helps compile the index as an assistant professor at Colorado State University’s College of Business, it’s a paradigm shift. In the past, those three areas were optimized for low costs and reliability. Today, with e-commerce demand soaring, warehouses have moved from the cheap outskirts of urban areas to prime parking garages downtown or vacant department-store space where deliveries can be made quickly, albeit with pricier real estate, labor and utilities. Once viewed as liabilities before the pandemic, fatter inventories are in vogue. Transport costs, more volatile than the other two, won’t lighten up until demand does.“Essentially what people are telling us to expect is that it’s going to be hard to get supply up to a place where it matches demand,” Rogers said, “and because of that, we’re going to continue to see some price increases over the next 12 months.”More well-known barometers are starting to reflect the higher costs for households and companies. An index of U.S. consumer prices that excludes food and fuel jumped in April from a month earlier by the most since 1982. At the factory gate, the increase in prices charged by American producers was twice as large as economists expected. Unless companies pass that cost along to consumers and boost productivity, it’ll eat into their profit margins.A growing chorus of observers are warning that inflation is bound to quicken. The threat has been enough to send tremors through world capitals, central banks, factories and supermarkets. The U.S. Federal Reserve is facing new questions about when it will hike rates to stave off inflation — and the perceived political risk already threatens to upset President Joe Biden’s spending plans. “You bring all of these factors in, and it’s an environment that’s ripe for significant inflation, with limited levers” for monetary authorities to pull, said David Landau, chief product officer at BluJay Solutions, a U.K.-based logistics software and services provider.Policy makers, however, have laid out a number of reasons why they don’t expect inflationary pressures to get out of hand. Fed Governor Lael Brainard said recently that officials should be “patient through the transitory surge.” Among the reasons for calm: The big surges lately are partly blamed on skewed comparisons to the steep drops of a year ago, and many companies that have held the line on price hikes for years remain reticent about them now. What’s more, U.S. retail sales stalled in April after a sharp rise in the month earlier, and commodities prices have recently retreated from multi-year highs. Read More: Fed Officials Have Six Reasons to Bet Inflation Spike Will PassCaught in the crosscurrents is Dennis Wolkin, whose family has run a business making crib mattresses for three generations. Economic expansions are usually good for baby bed sales. But the extra demand means little without the key ingredient: foam padding. There has been a run on the kind of polyurethane foam Wolkin uses — in part because of the deep freeze across the U.S. South in February, and because of “companies over-ordering and trying to hoard what they can.”“It’s gotten out of control, especially in the past month,” said Wolkin, vice president of operations at Atlanta-based Colgate Mattress, a 35-employee company that sells products at Target stores and independent retailers. “We’ve never seen anything like this.”Though polyurethane foam is 50% more expensive than it was before the Covid-19 pandemic, Wolkin would buy twice the amount he needs and look for warehouse space rather than reject orders from new customers. “Every company like us is going to overbuy,” he said.Even multinational companies with digital supply-management systems and teams of people monitoring them are just trying to cope. Whirlpool Corp. CEO Marc Bitzer told Bloomberg Television this month its supply chain is “pretty much upside down” and the appliance maker is phasing in price increases. Usually Whirlpool and other large manufacturers produce goods based on incoming orders and forecasts for those sales. Now it’s producing based on what parts are available.“It is anything but efficient or normal, but that is how you have to run it right now,” Bitzer said. “I know there’s talk of a temporary blip, but we do see this elevated for a sustained period.”The strains stretch all the way back to global output of raw materials and may persist because the capacity to produce more of what’s scarce — with either additional capital or labor — is slow and expensive to ramp up. The price of lumber, copper, iron ore and steel have all surged in recent months as supplies constrict in the face of stronger demand from the U.S. and China, the world’s two largest economies.Crude oil is also on the rise, as are the prices of industrial materials from plastics to rubber and chemicals. Some of the increases are already making their ways to the store shelf. Reynolds Consumer Products Inc., the maker of the namesake aluminum foil and Hefty trash bags, is planning another round of price increases — its third in 2021 alone.Food costs are climbing, too. The world’s most consumed edible oil, processed from the fruit of oil palm trees, has jumped by more than 135% in the past year to a record. Soybeans topped $16 a bushel for the first time since 2012. Corn futures hit an eight-year high while wheat futures rose to the highest since 2013.A United Nations gauge of world food costs climbed for an 11th month in April, extending its gain to the highest in seven years. Prices are in their longest advance in more than a decade amid weather worries and a crop-buying spree in China that’s tightening supplies, threatening faster inflation.Earlier this month, the Bloomberg Commodity Spot Index touched the highest level since 2011. A big reason for the rally is a U.S. economy that’s recovering faster than most. The evidence of that is floating off the coast of California, where dozens of container ships are waiting to offload at ports from Oakland to Los Angeles. Most goods are flooding in from China, where government figures last week showed producer prices climbed by the most since 2017 in April, adding to evidence that cost pressures for that nation’s factories pose another risk if those are passed on to retailers and other customers abroad. Across the world’s manufacturing hub of East Asia, the blockages are especially acute. The dearth of semiconductors has already spread from the automotive sector to Asia’s highly complex supply chains for smartphones.Read More: World Is Short of Computer Chips. Here’s Why: QuickTakeJohn Cheng runs a consumer electronics manufacturer that makes everything from wireless magnetic smartphone chargers to smart home air purifiers. The supply choke has complicated his efforts to develop new products and enter new markets, according to Cheng, the CEO of Hong Kong-based MOMAX, which has about two-thirds of its 300 employees working in a Shenzhen factory. One example: Production of a new power bank for Apple products such as the iPhone, Airpods, iPad and Apple watch has been delayed because of the chip shortage.Instead of proving to be a short-lived disruption, the semiconductor crunch is threatening the broader electronics sector and may start to squeeze Asia’s high-performing export economies, according to Vincent Tsui of Gavekal Research. It’s “not simply the result of a few temporary glitches,” Tsui wrote in a note. “They are more structural in nature, and they affect a whole range of industries, not just automobile production.”In an indication of just how serious the chips crunch is, South Korea plans to spend roughly $450 billion to build the world’s biggest chipmaking base over the next decade.Meanwhile, running full tilt between factories and consumers are the ships, trucks and trains that move parts along a global production process and finished goods to market. Container vessels are running at capacity, pushing ocean cargo rates to record highs and clogging up ports. So much so that Columbia Sportswear Co.’s merchandise shipments were delayed for three weeks and the retailer expects its fall product lineup will arrive late as well. Executives at A.P. Moller-Maersk A/S, the world’s No. 1 container carrier, say they see only a gradual decline in seaborne freight rates for the rest of the year. And even then, they don’t expect a return to the ultra-cheap ocean cargo service of the past decade. More capacity is coming in the form of new ships on order, but they take two or three years to build.HSBC trade economist Shanella Rajanayagam estimates that the surge in container rates over the past year could raise producer prices in the euro zone by as much as 2 percent.Rail and trucking rates are elevated, too. The Cass Freight Index measure of expenditures reached a record in April — its fourth in five months. Spot prices for truckload service are on track to rise 70% in the second quarter from a year earlier, and are set to be up about 30% this year compared with 2020, Todd Fowler, a KeyBanc Capital Markets analyst, said in a May 10 note.“We expect pricing to remain elevated given lean inventories, seasonal demand and improving economic activity, all of which is underpinned by capacity constraints from truck production limitations and driver availability challenges,” Fowler said.What Bloomberg Intelligence Says:“Most modes of freight transportation have pricing power. Supply-demand imbalances should help keep rates high, albeit they should moderate for current unsustainable levels as supply chains improve. This is stressing networks, creating bottlenecks in the supply chains and capacity constraints.”–Lee Klaskow, senior analystFor London-based packaging company DS Smith Plc, challenges are coming from multiple sides. During the pandemic, customers rushed to online purchases, raising demand for its ePack boxes and other shipping materials by 700%. Then came the doubling of its supply costs to 200 euros ($243) a ton for the recycled fiber it uses to make its products.“That’s a significant cost” for a company that buys 4 to 5 million tons of used fiber annually, said Miles Roberts, DS Smith’s group chief executive, who doesn’t see the lockdown-inspired web purchasing as a temporary trend. “The e-commerce that has increased is here to stay.”At Colgate Mattress, Wolkin used to be able to order foam on Mondays and have it delivered on Thursdays. Now, his suppliers can’t promise anything. What’s clear is he can’t sustain the higher input costs forever and still maintain quality. “This is kind of a long-term issue,” Wolkin said. “Inflation is coming — at some point, you’ve got to pass this along.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

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Irish mortgage rates remain ‘stubbornly high’, new figures show Wed, 07 Apr 2021 23:16:32 +0000 Irish mortgage interest rates continue to be the second highest in the eurozone, latest Central Bank figures show. The weighted average interest rate on new mortgages was 2.78 percent in February, down 12 basis points from the same month a year earlier, but more than double the EU average by 1.27 percent. The average fixed-rate […]]]>

Irish mortgage interest rates continue to be the second highest in the eurozone, latest Central Bank figures show.

The weighted average interest rate on new mortgages was 2.78 percent in February, down 12 basis points from the same month a year earlier, but more than double the EU average by 1.27 percent.

The average fixed-rate mortgage, which accounted for 82 percent of all new home loans in February, was unchanged from the previous month at 2.65 percent.

Variable mortgage rates averaged 3.41%, up six basis points from January.

In total, mortgages totaling 617 million euros were taken out in February, up 7% from the same month a year earlier and 23% from January.

Renegotiated mortgages reached 295 million euros in February, the highest level of renegotiations since September 2020, with the weighted average interest rate on these loans standing at 2.84%.

The figures

Commenting on the numbers, Trevor Grant, chairman of the Association of Irish Mortgage Advisors, said mortgage rates remain “stubbornly high”.

‘Ireland’s high interest rates have been a long-standing problem and, although certain banking and legal factors currently ensure that they will remain above average, there is still work that can and must be done to reduce interest rates as a whole.

“New and existing borrowers can save thousands of dollars in interest over the life of their mortgage. This is especially the case for existing borrowers currently at rates between 3 and 3.5 percent. Many can easily switch to rates closer to 2%, which would save a lot of money over the life of their loan, ”Grant added.

Brokers Ireland said Irish mortgage holders are currently paying more than double what most of their counterparts.

It costs an Irish mortgage lender a loan of € 300,000 over 30 years over € 82,000, said Rachel McGovern, chief financial officer.

“In effect, this means that all new mortgage holders since the 2008-2010 financial crash are paying the fallout because Irish lenders are forced to hold larger capital reserves,” she added.

Given that Irish lenders have now discharged the majority of their bad debts, it is questionable why lenders are still required to hold such reserves, McGovern added.

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Air Force documents show how Alabama beat Colorado for Space Command HQ Wed, 07 Apr 2021 23:16:11 +0000 Air Force documents show Alabama ranked higher than Colorado in 11 of 21 comparisons the government used to find the best site for the new American space command permanent seat. The official comparisons prepared for the Congress and obtained by show why the Huntsville Redstone Dockyard is the Air Force “Preferred Location” compared to […]]]>

Air Force documents show Alabama ranked higher than Colorado in 11 of 21 comparisons the government used to find the best site for the new American space command permanent seat.

The official comparisons prepared for the Congress and obtained by show why the Huntsville Redstone Dockyard is the Air Force “Preferred Location” compared to five “reasonable alternatives”.

Colorado, which beat Alabama in three of 21 categories, is one such alternative and is also home to the 1,400-person Space Command temporary headquarters. Political leaders across Colorado protested loudly that President Trump had to tip the scales. After receiving a recent briefing on the comparisons, Colorado Springs Mayor John Suthers called them “absolutely funny.” The Inspector General of the Ministry of Defense has opened an assessment of the proposed move.

In the process of realigning the military base, cities and states nominate themselves for military expansions and consolidations, and the Pentagon assigns each candidate one of three ranks: top third, middle third, and bottom third. . In the Space Command headquarters comparison, Alabama ranks third in nine of 21 categories. Colorado is in the top third in five categories.

Alabama ranks bottom third in three of 21 categories and Colorado ranks third bottom in 10 of 21 categories.

According to the rankings, Alabama was in the top third in the categories of available and skilled labor, with proximity to mutually supporting space organizations, space for the head office of 464,000 square feet, and parking space of 402,000. square feet, security, available childcare services, the ability to absorb headquarters employees and their families into the local transportation system, one-time infrastructure costs, overall construction costs, and the cost of accommodation for 600 soldiers traveling with the command.

By comparison, Colorado Springs, Colo. Ranked in the top third in terms of skilled workforce, mutually supporting space organizations, military housing capacity, and access to alumni support. fighters. Colorado also ranked in the top third of candidate states for the ability to transfer military spouses’ professional licenses.

Colorado was in the bottom third of 10 of 21 categories: proximity to a commercial airport, power grid capacity, medical resources, volume of transportation and traffic, cost of living, affordability of housing, point infrastructure, construction of the area, housing allowance for military personnel and the area pay civilians.

Alabama was in the bottom third in terms of the area’s ease of spousal license transfer, mobility, and compensation for civilians.

(Paul Gattis, journalist, contributed to this report)

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‘Haaland knew that even if he played poorly he would play again’ – How Red Bull became the scout kings of Europe Wed, 07 Apr 2021 23:15:09 +0000 A host of the continent’s best talent has come either through Leipzig or Salzburg, and now those who have made it are building their own projects. Erling Haaland, Sadio Mane, Timo Werner, Dayot Upamecano, Naby Keita … the list of talents to come into the Red Bull system is long. Whether a player makes his […]]]>

A host of the continent’s best talent has come either through Leipzig or Salzburg, and now those who have made it are building their own projects.

Erling Haaland, Sadio Mane, Timo Werner, Dayot Upamecano, Naby Keita … the list of talents to come into the Red Bull system is long.

Whether a player makes his mark at RB Leipzig, Red Bull Salzburg, New York Red Bulls or Red Bull Bragantino, what makes the system so unique is that each club has the same clear vision for their players.

Other clubs are forced to catch up on talent identification and scouting, and it’s no surprise that a host of former Red Bull squad staff are now working at other big clubs. .

From AC Milan to Chelsea, Monaco to Southampton, Red Bull’s fingerprints in terms of scouting and coaching can be found almost everywhere, and the same can be said of Eredivisie Vitesse’s outfit.

Johannes Spors, once head scout in Leipzig, is now the sporting director of the Dutch club and has brought a number of his former colleagues to work alongside him in Arnhem.

Spors, like so many coaches and sports directors across Europe, draws inspiration from Ralf Rangnick – the man nicknamed the “godfather” of modern German football.

Rangnick has made a name for himself as both manager and sporting director at Red Bull, and Spors now aim to put into practice what he has learned under the 62-year-old himself.

“Ralf is very clear in his style of play, with the coaches he has developed,” said Spors. Goal. “This is how his style spreads, when you see how many coaches in Germany and Europe have worked with him.

“There are also people like me who have different roles, and all of these people are convinced of that style of play. It’s a massive development and it’s important for football. At the end of the day, football is always a battle of ideas, the important thing is that it is only an idea.

“Ralf’s great strength is club building. He took me to Red Bull. [after working together at Hoffenheim] and because of him I went there. We went from the second division to the Champions League. We spotted and recruited all the players together, including Timo Werner, Upamecano and Naby Keita.

“I learned a lot from him thanks to very intense work. He’s always in charge and he wants a lot of everyone, but you can always trust that he does even more himself.

“It’s always putting philosophy first. It’s very important and it’s a big difference between Red Bull and other clubs. It’s a key factor for a successful club: trying to innovate in every department every season. “

Spors stepped into his role of Speed ​​after signing both Werner and Upamecano for Leipzig – two players the Bundesliga title challengers have since sold for a total of € 95million (£ 84.5million / $ 111 million) at Chelsea and Bayern Munich respectively. These signings followed an extended screening period before the club’s vision was presented to the player.

Similar processes are taking place at Salzburg, the club that persuaded a teenager Haaland to join Molde in 2019 before he emerged as the best young striker in world football.

“Timo Werner was one of the players we spotted, he had just been relegated to the second division with Stuttgart,” continued Spors. “Again, why did we decide to go for him? Because there was a clear strategy.

“There was a clear profile of his position in terms of where he fit into. That’s one of the qualities of good scouting: seeing the potential and having an environment ready for a player to grow.

“When recruiting young players, clubs in Germany can often be for the start of a career. It’s the same at Vitesse. I tell my players when we sign them here at Vitesse, I say in four years, we don’t want to be. I want you to take the next step, and I’ll take you there.

“The key for a young player is playing time. A young player needs playing time that is high enough for his development, but not too high, which is why Haaland is a very good example.

“I’m sure he was lucky enough to go straight to a big English club, but you need the base of your career between 17-20 to have top level matches, but not too much. exactly what Haaland had in Salzburg.

“He knew he would play and if he played badly he knew he would play again.

“I still remember when Upamecano came to Leipzig, the first two games where he was substituted at half time or before half time. He played against [Pierre-Emerick] Aubameyang and received a yellow card, committed a second foul and [Ralph] Hasenhuttl had to replace him.

“He didn’t kill him for making a mistake or almost making a mistake. He brought him back right away, and then you see the development. It’s important to see the right level of playing time, that is. ‘is important.”

Johannes Spors GFX

Now at Vitesse, Spors finds himself further down the football food chain, but with more responsibility.

Although famous in the UK for his multiple loans from Chelsea players, Speed ​​is much more than that.

They want to develop through sustained European qualifying, although they understand that closing the gap with much richer sides such as Ajax is a challenge.

“Vitesse has given me a very good logical first step as a sporting director, because it is again an innovative environment,” adds Spors. “They were looking for a sporting director to implement a clear vision and strategy at the club, so I felt there was enough room for me to influence the club.

“After my career, that’s where I come from: putting the style of play and the philosophy first. This is what I learned from Ralf Rangnick at that time.

“They are an innovative club that wants to develop young players and as a whole. Europe is the goal. Europa League or Conference League, not the Champions League, if we are honest with ourselves.”

“When it comes to winning the league, honestly, it’s unrealistic. The budget difference between us and Ajax, PSV, Feyenoord and even AZ Alkmaar is so huge. But we want to work for it. fill the gap.

“Of course you see this season, we are in the cup final and we are still in this competition to win it. In the league, you would have to work very hard to close that gap.”

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East India Company responds with SBP 2021 bill Wed, 07 Apr 2021 23:15:09 +0000 Pakistan is going through multiple external and external crises. Economic crises from “ external debt service ” and “ local / internal debts ” are increasing day by day and the government is changing the engines but not the economic vehicle which must be totally reconditioned because it is incapable to stop the collapse of […]]]>

Pakistan is going through multiple external and external crises. Economic crises from “ external debt service ” and “ local / internal debts ” are increasing day by day and the government is changing the engines but not the economic vehicle which must be totally reconditioned because it is incapable to stop the collapse of the economy.

We are in trouble today because of the lack of vision in our policies and the government does not grapple with the multiple aspects of fiscal policy. It conducts all policies on the basis of the guidelines given by the IMF without protecting the national interest and the well-being of ordinary people. Let me first discuss what we are up against and the long-term effects of IMF monitoring.

The IMF wants to push us into bankruptcy by devaluing our currency and allowing the inflation rate to ensure the rise in prices forcing the public to be in the streets. We must not forget that the West is very upset with our nuclear assets and will continue to hit us and push us into bankruptcy. It will have the worst negative effects that could pose a great threat to nuclear assets. It is strange to see that this 2021 amendment bill which has raised a lot of cries among businessmen at all levels and will have serious negative effects on our economy to give full uncontrolled autonomy to the Central Bank of country, which means ceding control of “KHAZANA” to the head of the SBP.

I believe that an error of authorizing the East India Company should not be allowed to be reproduced by displaying an optimistic image to the Pakistani business community. This will plunge us into new deep crises. It is our mistakes and our policies that force us today to import products from India – where are we going my dear compatriots?

In accordance with the proposed amendment, immunity from any legal action or investigation and investigation by the NAB or the FIA ​​has been granted to the management of the SBP, including the current or former board of directors. , the Governor, Deputy Governors, members of any committee of the Board of Directors and the Monetary Policy Committee or staff of the Bank for any unlawful act or exercise of any function or any legislation administered by the Bank. Our country cannot afford this level of autonomy and immunity to such a critical institution because it would harm our economy as well as the sovereignty of our country. Not only that, but the tenure of the governor, vice-governors, external members of the monetary policy committee and non-executive members of the board has also been increased from 3 years to 5 years with two terms authorized and also an extension of a year.

In accordance with the latest proposed changes, the objectives of SBP have been specified for price maintenance and financial stability. While the government has justified this autonomy as a means of maintaining prices, there is no mention of inflation targets or price stability. How well can the state bank control inflation? Moreover, now the government can pay the wages (although it is bad) by printing currencies, while restricting the printing of currencies or lending to our country riddled with foreign debts will be under great pressure and we will be forced to ask for more loan? The government will not be able to borrow from SBP under any circumstances, which will seriously affect the financial needs of the government and the public treasury, which will create difficulties for the government which will push us into bankruptcy.

The entire business community shows serious objections and reservations to these amendments, as SBP will no longer finance any rural credit, industrial credit, export credit, loan guarantees and housing credit, which means that these sectors will have big problems and the mafia with cash will thrive. to the detriment of the common man and the small business community. The proposed amendments pose a serious threat to the sovereignty of our country because the Independent State Bank will be omitted from the domain of the State and it will be the State in the obligation to become the subordinate of the State Bank.

The independent SBP will dictate all of our institutional and state secrets, and operations in the national interest will be directly subject to security. The State Bank will be legally responsible for providing the information already committed to the international community via the FATF.

The bill excludes any government representation on the board of directors of the State Bank, as no member of parliament or any state institution will be allowed to be part of the SBP or even be allied to challenge its irregularities in Parliament or in court. What destruction of our economic system by certain geniuses working for the IMF that would be. Its basic program is to force the government to prioritize meeting the country’s external debt obligations over all other spending, and then continue to contract new loans from the IMF to increase its powers.

According to the new bill, monetary policy is the exclusive domain of the State Bank while fiscal policies will be the responsibility of the federal government, which will seriously undermine and harm the macroeconomic management of the country as there will be no coordination or consistency between the two areas such as these. the amendments are contradictory and are introduced with ulterior motives to push the country into bankruptcy. In fact, it was recklessly decided that now SBP is given the status of prestigious supreme state institution which would be above all law as even the Constitution.

Parliament, which can even dismiss a prime minister, cannot under any circumstances invoke the SBP or dismiss the governor or deputy governor of the SBP. It will only be a formality for the governor to submit an annual report or a semi-annual report, no less than the one to Parliament regarding achievements without any kind of accountability. What is the purpose of this report which can be dissected for the purposes of legal action? This is just a glance as this report cannot hold the SBP, Governor or any other SBP employee responsible for any wrongdoing or loss. The Pakistani President, Prime Minister and Treasury Banks must not allow the implementation of these imported ideas duly led by the IMF as this will make our nation its permanent slave. (The views expressed are mine alone and do not necessarily represent the views of my party.) The author is the former Minister of Interior of Pakistan, former chairman of the Senate Standing Committee on Home Affairs and chairman of the group Global Eye Reflection & Research & Reforms Institute (IRR) Islamabad. It can be reached at: [email protected], Twitter @Senrehmanmalik

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Once heroes, ex-Gulf Indian workers forge a new future Wed, 07 Apr 2021 23:15:09 +0000 Through Roli Srivastava, Rakesh nair YEROOR, India (Thomson Reuters Foundation) – It is not dawn yet, but the village of Yeroor has been awake for a long time, the buzz of productivity floating above ‘Gulf Street’, a lush green boulevard named in honor the thousands of workers who leave the state of Kerala in southern […]]]>

YEROOR, India (Thomson Reuters Foundation) – It is not dawn yet, but the village of Yeroor has been awake for a long time, the buzz of productivity floating above ‘Gulf Street’, a lush green boulevard named in honor the thousands of workers who leave the state of Kerala in southern India each year for jobs in the Middle East.

But now the workers are back, from machine operator Sudheesh Kumar, who was forced to return to manual labor in Yeroor to make ends meet, to former banker Binoj Kuttappan, who started herding dogs in the state capital, Thiruvananthapuram.

In the largest reverse migration in more than 50 years, Gulf workers have returned to the coastal state of Kerala over the past year, propelled by a pandemic that has shattered dreams of wealth abroad and change of family fortune.

While once they returned home rich and revered, wearing gold, sunglasses, clothing, and funds to buy houses, they have now returned sheepish and penniless.

“Before COVID, they were celebrated as heroes. Now they have nothing, ”said Irudaya Rajan, a professor who has studied migration patterns in Kerala, India’s southernmost state.

“This is the first time they have come home empty-handed and will end up borrowing and selling assets,” said Rajan, professor at the Center for Development Studies in Kerala.

Kerala is one of the states that sends the most workers to the Gulf, accounting for around 2.5 million out of the 6 million Indians there. Kerala received around 19% of the $ 78.6 billion transferred to India from foreign workers in 2018, the highest tally for the country which is the largest recipient of remittances in the world.

But more than 1.1 million people have returned in the past 10 months, with 70% losing their jobs as domestic workers, builders, waiters, chefs and more, according to official data.

It has turned the lives of workers and their families upside down and destroyed businesses dependent on India-Gulf migration.

Kumar, 50, spent 22 years in the Middle East, with his last job in Saudi Arabia operating wastewater treatment machines at Jeddah Airport, where he earned three times the average Kerala salary.

In March 2020, he returned home – briefly, he thought – but flights were blocked in an attempt to contain the novel coronavirus.

Today the father of two divides his time between agricultural work and working in a stone quarry in the village of 13,000 inhabitants.

“I had planned my life when I left 22 years ago. I had every ordinary man’s dreams – a house, a good education for my children, ”a deflated Kumar told the Thomson Reuters Foundation outside his house, sweat beading his forehead.

Kumar was forced to sell his car and farmland to pay off a loan for his four-bedroom house on Gulf Street.

Now he earns 400 rupees ($ 5.50) a day, compared to 20,000 rupees a month fixed in Jeddah with additional overtime.

“I have no shame in doing forced labor, but how did I end up here? Where did I go wrong? ”Kumar said.


During the Gulf War 30 years ago and the 2008 financial crisis, many workers were forced to return to Kerala, but this time the numbers are much higher and the labor market tighter.

A national initiative connecting returnees with jobs has enabled more than 30,000 registrants, including around 80% from the Gulf states of Bahrain, Kuwait, Qatar, Saudi Arabia, the United Arab Emirates and Oman, according to a government press release.

Shamna Khan, 30, whose right leg is severely swollen with lymphedema, never needed to work because her husband Shafir sent enough money home from work in a glitzy Qatari mall.

The couple turned their mud and clay house into concrete, laid tiles, built an indoor bathroom, and got help for Shamna’s leg.

But after Shafir returned without a job last March, Shamna signed up for India’s rural employment program for around Rs.300 per day, which guarantees a minimum of 100 days of work in their village, like building roads. , digging wells and trenches on farms.

“I’m happy to work because I can support my family, but my leg is prone to infections,” Shamna said while digging a trench in the village’s rubber plantation.

Sharif, who works at the quarry, worries about the looming uncertainty, his unpaid loans – and Shamna’s health.

“There is no other work here,” Sharif said.


More than 90% of Indian migrant workers, most of whom are low or semi-skilled workers, work in the Gulf region and Southeast Asia, according to the United Nations.

Recruitment agencies and travel agencies that match workers with employers and book them on flights – a fast-paced business Ajimon Mak, 45, has nurtured for 14 years in Kerala’s capital Thiruvananthapuram.

“Ticketing was my main activity, it was a passion and I was always busy. During the lockdown, I saw everything drop to zero, ”said Mak, who started a fishmonger and recently opened a fishmonger in Thiruvananthapuram, the capital of Kerala.

Former banker Binoj Kuttappan, 40, also charted a new course after returning from Abu Dhabi last year following layoffs at his financial services company and decided to turn his passion for dogs into a business. breeding.

“I never would have done this without the pandemic,” Kuttappan said, showing seven dogs he bought for 150,000 rupees.

With plans for a pet supply store, dog yard, and air-conditioned kennels, he has no plans to return to the Gulf – but others are counting the days until they can go home.

Kumar started calling agencies looking for work in the Gulf.

“My savings for our future are gone and now our future looks bleak,” Kumar said. “I don’t think about making a profit anymore. I only think about surviving the day.

($ 1 = 72.9580 Indian rupees)

Report by Roli Srivastava @Rolionaroll; Edited by Lyndsay Griffiths and Belinda Goldsmith. Please mention the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, which covers the lives of people around the world who struggle to live freely or fairly. Visit

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Reaction to Biden’s broadband plan: a mix of praise, caution and criticism: high-speed breakfast Wed, 07 Apr 2021 23:15:09 +0000 April 1, 2021 – In response to the President Joe biden’s new “American Jobs Plan” infrastructure, including $ 100 billion for broadband projects, many players in the broadband industry applaud the administration’s efforts to bridge the digital divide, but with some caution and criticism as well. “We share the administration’s conviction that connectivity for all […]]]>

April 1, 2021 – In response to the President Joe biden’s new “American Jobs Plan” infrastructure, including $ 100 billion for broadband projects, many players in the broadband industry applaud the administration’s efforts to bridge the digital divide, but with some caution and criticism as well.

“We share the administration’s conviction that connectivity for all is a top national priority”, said the CEO of USTelecom Jonathan spalter in a report. “Remember this: Our shared communications networks are backed by $ 1.8 trillion in private investments that have helped the country navigate the depths of the pandemic with reliable and resilient connectivity.

The plan, announced Wednesday, includes a commitment to provide broadband access to all Americans by 2030.

“Today’s broadband market is also ultra-competitive, defined by increasing speeds, falling prices, new entrants and next-generation technologies. Congress should now prioritize affordable and accessibility solutions that are fast and smart and push continued private investment to get the job done. We must not lose this fundamental context as we move towards our collective goals of connectivity. “

John windhausen, executive director of the Schools, Health and Library Advocacy Organization (SHLB) Coalition, said in a statement that Biden’s plan “recognizes the importance of investing to connect 100% of Americans to broadband . It wisely calls for future-proof capacity, which will encompass the high bandwidth demands of anchor institutions. “

Meanwhile, Christina mason of the Association of Wireless Internet Service Providers said the organization was “greatly encouraged by President Biden’s efforts to create new jobs and rebuild much of the basic infrastructure of the United States.” The president’s attention is right on target. “

Some criticisms, including the impact on competition

Response from the NCTA (Internet and Television Association) to the new Biden plan was more critical. “The White House has chosen to embark on broadband infrastructure, but it risks taking a bad turn by abandoning decades of successful politics by suggesting that government is better positioned than private sector technologists to build and operate the Internet Said Michael CEO. Powell said.

“The government has a vital role to play in bringing networks to areas that lack services and helping low-income families afford them. However, these focused and shared goals are not served by mistakenly suggesting that the entire network is in trouble and the solution is to either prioritize government-owned networks or micromanage private networks, including l ‘baseless claim that government should manage prices,’ Powell mentioned.

American Enterprise Institute’s Daniel Lyons also expressed caution on the proposal. “The plan accurately defines the multifaceted problem of America’s digital divide. But the devil is in the details – and the few details released so far cast significant doubt on how Biden hopes to achieve that goal, ”he said.

Lyons discusses specific aspects of the plan, including future-proof networks, which he says should not favor fiber over other broadband technologies. “Choosing winners and losers among network models undermines intermodal competition which advances all technologies and increases the chances of finding the most efficient way to serve individual pockets of unserved customers,” he said. .

He also stressed the importance of unserved areas over underserved areas. “Subsidizing a new business to compete directly with an unsubsidized competitor raises different issues than providing a service where it does not currently exist, and it can effectively punish businesses that have invested private dollars to economically connect populations. difficult to serve, ”Lyons said.

He was also skeptical of any rate regulation. “As I recently discussed in an article on Texas Blackout, political pressure to keep prices low can cause companies to forgo investing in resilience and innovation, ”Lyons said.

Biden compared his broadband initiative to the Rural Electrification Act of 1936, which provided loans to businesses to obtain electricity in any areas not served at the time. But Lyons said the comparison to modern broadband fails because it’s loans, not grants, that provide electricity to Americans. “This key control is lacking in current broadband development efforts, which may explain why America faces a broadband deficit despite billions of dollars spent on development grants,” he said. .

Applause and disappointment from Congress

“There is no better way to rebuild our economy for the future than to modernize our gravely aging infrastructure, and President Biden’s US employment plan is exactly what our country needs right now.” said the representative. Frank Pallone, DN.J., chairman of the Energy and Trade committee. “The president’s plan aligns with the LIFT America Act, which I introduced earlier this month with all Democrats on the Energy and Trade Committee. Our legislation invests in clean and efficient energy, safe drinking water, expanded broadband access, cleaning up brownfields and improving our country’s healthcare infrastructure, ”he said. .

But Cathy McMorris Rodgers, R-Wash., Rank Republican member of the Energy and Trade Committee, contested the plan. “On broadband, President Biden is on the verge of wasting billions of dollars and hurting private investment in our networks without bridging the digital divide,” she said. Rather than promoting competition, President Biden’s plan will set rural America back even further and impose higher costs on families. Instead, we should boost our public and private investments and encourage competition by streamlining permitting processes, ”she said.

representative Eddie bernice johnson, D-Texas, Chair of the House Science, Space and Technology Committee, praises the Biden plan impact on transportation, energy, cleaner environment, climate change, American manufacturing, research and development, STEM workforce and equitable engagement for all communities. “The US Jobs Plan is a great starting point to achieve this goal,” she said.

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How to invest in finance Wed, 07 Apr 2021 23:15:09 +0000 Important information: The value of investments and the income from them can go down as well as up, so you can get back less than you invest. Warren Buffett, the world’s most famous investor, once said, “Never invest in a business you can’t understand.” This logic has kept many investors away from the financial sector, […]]]>

Important information: The value of investments and the income from them can go down as well as up, so you can get back less than you invest.

Warren Buffett, the world’s most famous investor, once said, “Never invest in a business you can’t understand.”

This logic has kept many investors away from the financial sector, which is home to many complex business models and bewildering jargon.

His case was not helped by a bad decade capped by a painful 2020. However, it is a sector that could benefit greatly from the reopening of economies and consumer confidence. His fortunes may be about to change for the better.

In order to understand how and where to invest in the industry, it is important to first understand how it works.

Give meaning to banks

The key to understanding this industry is to understand banking. Their business models underpin the number of other financial companies that operate.

The profitability of a bank depends on two things. The first is what is known as the “net interest margin” (NIM). This reflects the difference between the money a bank borrows at a lower interest rate – through customer deposits such as checking accounts – and the money it lends at a higher interest rate – via mortgages, loans, overdrafts, etc.

The greater the difference between the two, or the greater the “spread” between them, the greater the NIM.

A bank will also earn money from the fees and charges on the accounts. Its overall profitability will be a combination of NIMs plus that non-interest income.

It’s a fairly straightforward model, but it can easily run into some obstacles along the way.

Banks are typical “cyclical” businesses, which means that their performance tends to reflect the overall health of the economy – they do well when times are good, and do badly when they don’t.

There are two main reasons for this. The first reflects the general state of loan conditions for banks. In a healthy economy, the conditions are right. Consumers and businesses are more likely to seek loans – whether it’s to expand their business, buy a home, etc. – while the probability that borrowers will not repay these loans decreases.

The second reason is more closely related to the NIMs of banks.

What banks ideally want is something that looks like the “yield curve” of a healthy economy. The yield curve reflects the difference in yield available between short and long term bonds.

In a healthy economy, where interest rates are not low and people are confident about the present, short-term bonds pay less; long-term bonds, considered riskier because of their greater time commitment, should offer a higher yield to offset this risk.

The NIM of banks is based on a similar relationship between short and long term loans. The maturities of their assets (eg mortgages) tend to be longer than those of liabilities (eg customer deposits) – they “lend long, borrow short”. The larger the gap between the two, that is, the healthier the yield curve, the better for the bank.

A healthier economy should equal a healthier yield curve. This could mean the ideal spread for the financials NIM.

For insurers, the relationship is similar. Insurers tend to hold a lot of secure debt to back up their policies. As interest rates rise, the yields on that debt follow suit. For asset managers, the money they earn is tied to the charges on their assets under management. In other words, the more money they hold and the more transactions customers make, the better.

Cheap valuations

There’s another reason financials look good right now: they’re cheap.

The banks tarnished the industry’s reputation during the financial crisis, and the decade of low interest rates that followed kept them firmly in embarrassment.

This had a powerful effect on the ratings. The price-to-earnings (P / E) ratio (a measure that compares the industry’s share price to its earnings per share) for global financials stands at 16.4 vs. 28.4 on the index MSCI World. The value of the price to reserve (P / B) is 1.21 versus 2.94 – a lower P / B can be an indicator of value.

The area is also home to many of the UK’s major dividend payers. Others, like the oil companies and British American Tobacco, present ESG risks that may worry income seekers. While many banks were forced to cancel payments last year when COVID hit, most have since resumed.

Where to look

Despite all the complicated work that goes on behind the scenes, there are many financial names that are very familiar. Banks like Lloyds, Barclays and NatWest suffered last year and while their stock prices rallied with positive vaccine news, most are still down from their 2020 starting point, suggesting there may still be room for maneuver.

Bank dividends remain low – most yielding around 1 to 1.5% – but this is not much of a surprise given that they have been advised to resume payments with caution. These yields could start to rise as we come out of the crisis.

Another bank to consider is HSBC. Like many, she has had a difficult 2020. Its international arms have also been affected by US-Chinese tensions and political instability in Hong Kong. But this international exhibition sets it apart from others. Areas like Asia and emerging markets, with their expanding middle classes, represent serious growth opportunities for financials in these regions.

Think too much of disruptors as Metro Bank. Metro was established in 2010 and has already consolidated its place as the main bank on Main Street. Although he is doing better than some last year, his share price has nevertheless fallen again following his 2020 results. Given his relative youth, he may seem riskier – he has already grazed the mark with its capital ratio and has received some attention from Reddit / GameStop investors – but it could be another value opportunity.

Beyond banks, there are plenty of insurers and asset managers with equally attractive valuations and more eye-catching dividends.

Aviva and Legal and general both offer attractive term dividend yields above 5%. Careful, while offering a lower dividend yield, has made a series of structural changes that could be useful in coming out of the pandemic. The latter has also benefited from diversification into other areas. The losses in Prudential’s US insurance business last year were offset by its investment arm, PGIM.

Asset managers also offer impressive dividend yields at low prices. Schroders benefited from a pickup in investor activity and is currently offering a strong forward yield of 3.3%. M&G, meanwhile, offers an eye-catcher of 9%. It may sound like a trap – especially since M&G has been paying dividends for less than two years – but payouts have proven to be stable during that time.

Finally, consider going beyond the usual names of FTSE and the UK’s burgeoning fintech scene. In 2020, the UK accounted for just under half of European fintech investments, according to Innovate Finance.

Investing in fintech is quite a different experience than owning traditional financial stocks. Many look a lot more like growth tech stocks than “old economy” financials, and most remain unprofitable.

But there might be real potential in names like Fundraising circle, a platform that allows investors to lend to small businesses, and AIM stock CPP Group, which serves a number of well-known companies like AXA and Vodafone, and began to expand into emerging markets like India and Mexico.


Price to book (P / B): The price-to-book is a financial ratio used to compare a company’s current market price to its book value – the value of a company’s assets.
Profit price (P / E): A valuation ratio of a company’s current share price to its earnings per share.

Important information: Reference to specific securities should not be construed as a recommendation to buy or sell such securities and is included for illustration purposes only. When considering investing in stocks, it is usually a good idea to consider holding them along with other investments in a diversified portfolio of assets. Foreign investments will be affected by fluctuations in exchange rates. Investments in emerging markets can be more volatile than in other more developed markets. Investors should note that the views expressed may no longer be relevant and may already have been the subject of action. This information does not constitute a personal recommendation for any particular investment. If you are unsure of the suitability of an investment, you should speak to a Fidelity advisor or authorized financial advisor of your choice.

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