Boots & Sabers

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Category: Economy

Uber Diversity Executive Takes Leave Amidst Controversy

For the life of me, I don’t understand why companies think that it is their responsibility to use the workplace to correct society’s ills. They should certainly keep bigotry and hate out of the workplace (we call that “professionalism”), but why does Uber and other companies feel like they need to use their time and resources to address societal or cultural issues? Not only is it not their job, it is fraught with professional and market peril – like we see in this story.

CNN — 

Uber’s diversity chief is on leave from the company after criticism from some employees related to an internal panel called “Don’t Call Me Karen.”

Bo Young Lee, Uber’s chief diversity and inclusion officer, is on a leave of absence, Noah Edwardsen, an Uber spokesperson, confirmed to CNN on Monday.

Lee oversaw a series of sessions called “Moving Forward” at Uber that focused on issues around race, gender identity and class. One of the more recent sessions was titled, “Don’t Call Me Karen,” and focused on the experiences of a handful of women leaders, a person familiar with the matter told CNN. “Karen” is a slang term that usually refers to a middle-aged white woman with a strong sense of entitlement, often at the expense of people of color.


According to the New York Times, which was first to report the news, Black and Hispanic workers at Uber first felt that organizers of the event were focusing more on the harms caused by using the moniker “Karen” than the harms white people can inflict on people of color.

In a follow-up listening session, the Times reported, some employees felt their concerns weren’t being heard and that instead of a chance to provide feedback or have a dialogue, they were lectured by Lee about their response to the initial “Don’t Call Me Karen” event.

Deadbeat Demands More Money To Fuel Spending Spree

Giving the government even more money to spend will not solve the problem.

“With additional information now available, I am writing to note that we still estimate that Treasury will likely no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1,” she wrote.


Total consumer debt hit a fresh new high in the first quarter of 2023, pushing past $17 trillion even amid a sharp pullback in home borrowing.


The total for borrowing across all categories hit $17.05 trillion, an increase of nearly $150 billion, or 0.9% during the January-to-March period, the New York Federal Reserve reported Monday. That took total indebtedness up about $2.9 trillion from the pre-Covid period ended in 2019.

That increase came even though new mortgage originations, including refinancings, totaled just $323.5 billion, the lowest level since the second quarter of 2014. The total was 35% lower than in the fourth quarter of 2022 and 62% below the same period a year ago.

Banking Collapse Accelerates


Trading in the shares of two more regional US lenders was temporarily suspended on Thursday amid a widening crisis for the country’s mid-sized banks.


Regulators stepped in to halt trading in the Los Angeles-based PacWest and Arizona’s Western Alliance following dramatic drops in their share prices.


It came after another mid-sized bank, First Republic, was sold to JP Morgan earlier this week. Depositors had pulled $100bn from First Republic, fearing their money was no longer safe.


PacWest had sought to calm markets on Wednesday and said it was in talks with several potential investors after its shares fell by as much as 60%. But the sell-off continued on Thursday and affected other regional banks.

NYPD Pilots Flexible Shifts

While I expect these options to be popular with some, I doubt it will stem the exodus. I don’t think most are leaving (or not joining) because of the way shifts are structured.

The flexible schedule comes amid a mass exodus of veteran officers retiring or taking jobs at other departments for better pay and benefits. The department is experiencing high overtime costs as the rest of the force picks up the slack with extra hours.




Under the 12-hour shift option, officers work three days on and three days off within the NYPD’s scheduling framework.


In the 10-hour option, officers would work 10-hour shifts for four days, followed by two days off.


Officers based in the Bronx — in the 45th and 47th precincts and in Transit District 11 and Public Service Area 8, which serves city housing projects in the 43rd, 45th and 47th precincts — are participating in the pilot program. If the program works, the city hopes to expand it.

New Zealand Ceases Livestock Exports


WELLINGTON (Reuters) – New Zealand’s last exports of livestock by sea have been completed and live exports have ceased, its agriculture minister said on Friday, as it fully implemented a ban on export shipments of animals on the grounds of their welfare.


The government announced in 2021 that shipping animals offshore, largely for building herds in trading partners like China, would be halted but farmers would be given two years to transition out of the profitable export business.


“Our position on the map means that the journey to northern hemisphere markets will always be a long one and this brings unavoidable animal welfare challenges,” Agriculture Minister Damien O’Connor said in a statement announcing that live exports had ceased.

Finland Opens New Nuclear Reactor

This is the way.

OL3’s operator Teollisuuden Voima (TVO), which is owned by Finnish utility Fortum and a consortium of energy and industrial companies, has said the unit is expected to meet around 14% of Finland’s electricity demand, reducing the need for imports from Sweden and Norway.


The new reactor is expected to produce for at least 60 years, TVO said in a statement on Sunday after completing the transition from testing to regular output.


“The production of Olkiluoto 3 stabilises the price of electricity and plays an important role in the Finnish green transition,” TVO Chief Executive Jarmo Tanhua said in the statement.


Construction of the 1.6 gigawatt (GW) reactor, Finland’s first new nuclear plant in more than four decades and Europe’s first in 16 years, began in 2005. The plant was originally due to open four years later, but was plagued by technical issues.

Tech Layoffs “outsized impact on parts of the business that don’t generate revenue”

Ouch. This is the same reason that we see layoffs disproportionately hitting areas like DEI. It’s a good lesson for anyone’s career… work in the part of the business that generates money. It’s not always possible. Every company needs HR, accounting, etc. people, but it’s safest if you are somewhere in the flow of cash.

CNBC spoke with influencers, small businesses and Meta account managers as well as a half-dozen former contractors and former Meta employees about the deterioration in customer service at the company since the job cuts began in November. Taken together, they tell the story of a company whose quick pivot in late 2022 from rapid expansion mode to forced contraction had an outsized impact on parts of the business that don’t generate revenue.


The slashing of customer service has left Meta unable to address user issues ranging from people being locked out of their accounts to software bugs not getting fixed in Facebook Groups. It’s long been a challenge for Meta, given that Facebook and Instagram are used daily by billions of people. In August, Meta’s vice president of governance, Brent Harris, told Bloomberg News the tech giant was looking to improve its support.


A Meta spokesperson declined to comment for this story but sent CNBC examples of various ways the company has invested in customer service in recent years, including a small test of a live chat support feature on Facebook and a support site for some creators.

WWE Merges with UFC

This merger seems somehow appropriate with the Trump indictment.

World Wrestling Entertainment is merging with Endeavor Group, the parent company of competitor UFC, to form a new publicly traded company.


The deal values the newly combined company at over $21 billion: UFC is worth $12.1 billion and WWE is valued at $9.3 billion. Endeavor shareholders will own 51% of the newly combined company, while WWE shareholders are getting 49%.


“This is a rare opportunity to create a global live sports and entertainment pureplay built for where the industry is headed,” said Ariel Emanuel, CEO of Endeavor, in a statement. Emanuel, a Hollywood powerhouse agent, will be the CEO of the new company and retain his chief executive title at the agency.


McDonald’s Closes Offices Ahead of Layoffs

This is an interesting tactic.

Fast food chain McDonald’s is temporarily closing its US offices this week ahead of an expected announcement on corporate job cuts.


The Wall Street Journal, which first reported the move, said McDonald’s had told US and some international staff to work from home so it can deliver decisions on jobs virtually.


The burger chain has declined to comment on how many posts are affected.


The cuts are part of a wider company reorganisation it announced in January.


At the time, McDonald’s boss Chris Kempczinski said the company was being hurt by an “outdated and self-limiting” structure.


The Wall Street Journal said it had seen a message from the company stating that: “During the week of April 3, we will communicate key decisions related to roles and staffing levels across the organization.”


McDonald’s has also asked employees to cancel all in-person meetings at its headquarters, the paper said.

I get it. It’s a good way to avoid workplace violence. I knew a company once who never fired people on Fridays under the theory that people might stew on it over the weekend and come in Monday to blow the place up. I’m not sure I buy that theory, but it’s a thought. Perhaps McDonald’s is on to something here.

It’s going to be a crappy week for a lot of people at McDonald’s, but it’s been tough all over.

Town Rejects Development to Preserve Heritage

And we wonder why the housing stock struggles to keep up with demand. By all means… let’s reject an investment in the community, more homes, more business, and more growth to keep some dilapidated old buildings. There is a way to honor our past while still investing in our future.

EATONVILLE, Fla. (AP) — A developer on Friday ended plans to purchase a 100-acre (39-hectare) property from the local school system in a historically Black town in Florida following a public outcry that the deal threatened the cultural heritage of the community made famous by Harlem Renaissance writer Zora Neale Hurston.


Derek Bruce said in a letter to Orange County Public Schools in Orlando that he had terminated the deal to purchase the land where a former school for Black students stood in the town of Eatonville. The school system said in a statement that it wouldn’t consider any further bids for the land.




An association dedicated to preserving Eatonville’s cultural history last week sued to stop the $14.6 million deal, claiming it threatened the cultural heritage of the town. The developer had plans to build 350 homes, as well as business spaces, raising fears the project would increase traffic and price out longtime residents of the town.

Inflation Tops 10% in UK


U.K. inflation unexpectedly jumped in February, as food and energy bills continued to rise, placing further pressure on households.


The consumer price index (CPI) increased by an annual 10.4%, above the 9.9% consensus forecast among economists in a Refinitiv poll and up from 10.1% in January. On a monthly basis, CPI inflation was 1.1%, exceeding a forecast of 0.6%.

Biden’s First Veto

He is ensuring that your financial managers can prioritize things like environmental issues above maximizing returns on your investments. It doesn’t mean that they have to, so be sure to speak to your financial advisor to make sure that they really have your best interests in mind. Heck, they might be shaving off 10% of your returns for the Big Guy.

WASHINGTON — President Joe Biden issued his first veto Monday after Congress voted to block a Labor Department rule allowing retirement plans to weigh the long-term impacts of social factors and climate change on investments — a move Republicans say is a “woke” policy that hurts retirees’ pockets.


“I just signed this veto because the legislation passed by the Congress would put at risk retirement savings of individuals across the country,” Biden said in a video posted to Twitter. “They couldn’t take into consideration investments that would be impacted by climate impacted by overpaying executives.”


Senate Republicans, along with two Democrats, voted on the measure March 1, needing only a simple majority for it to pass. Sens. Jon Tester, D-Mont., and Joe Manchin, D-W.Va., who are both up for reelection next year in Republican states, voted with Republicans.

FED To Flood Economy with Cash to Fuel Inflation

They are making it worse. Much worse.

LondonCNN — 

The US Federal Reserve and several other major central banks announced a coordinated effort Sunday night to boost the flow of US dollars through the global financial system with the aim of keeping credit flowing to households and businesses.

“The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing a coordinated action to enhance the provision of liquidity via the standing US dollar liquidity swap line arrangements,” the central banks said in a joint statement.


The swap line between US Federal Reserve and the ECB, for example, enables the ECB to receive US dollars in exchange for an equivalent amount of euros. The ECB can then distribute those dollars to commercial banks in the 20 countries that use the euro.

The agreements can be an important tool for preserving financial stability and preventing market tension from affecting the economy, according to the ECB. During the global financial crisis of 2008 following the collapse of Lehman Brothers, funding markets dried up because of an extreme aversion to risk. Under these circumstances it became difficult for euro area banks to obtain US dollars.

From Monday through at least the end of April, the Fed and other central banks will make dollars available on a daily basis, rather than weekly.

Here me out… SAILS

We’re going back to wood ships with sails for international trade. It’s “progress.”

To get on track to reach net zero emissions by 2050, international shipping will have to reduce its emissions by 15% by 2030. So far, emissions from the industry have been going more or less consistently in the other direction.


One way to reduce emissions from shipping is to introduce a very old technology: sails. Wind is a clean source of propulsion that is often in abundance at sea. Some shipbuilders are taking this inspiration from the past extremely seriously, and even making the structure of the ship out of wood.

Illinois Dictates PTO Policy to Businesses

It’s not about whether it is a good idea or not. It’s about whether or not it is the role of government to dictate the terms of an employment contract.

CHICAGO (AP) — Illinois will become one of three states to require employers to offer paid time off for any reason after Gov. J.B. Pritzker signed a law on Monday that will take effect next year.


Starting Jan. 1, Illinois employers must offer workers paid time off based on hours worked, with no need to explain the reason for their absence as long as they provide notice in accordance with reasonable employer standards.


Just Maine and Nevada mandate earned paid time time off and allot employees the freedom to decide how to use it, but Illinois’ law is further reaching, unencumbered by limits based on business size. Similarly structured regulations that require employers to offer paid sick leave exist in 14 states and Washington, D.C., but workers can only use that for health-related reasons.

Government Closes Another Bank

Rut rho.

U.S. regulators on Sunday shut down New York-based Signature Bank, a big lender in the crypto industry, in a bid to prevent the spreading banking crisis.


“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority,” Treasury, Federal Reserve, and FDIC said in a joint statement Sunday evening.




Signature is one of the main banks to the cryptocurrency industry, the biggest one next to Silvergate, which announced its impending liquidation last week. It had a market value of $4.4 billion as of Friday after a 40% sell-off this year, according to FactSet.


As of Dec. 31, Signature had $110.4 billion in total assets and $88.6 billion in total deposits, according to a securities filing.

Credit Card Companies Pause Effort to Track Gun Purchases

It’s just a pause, but the news is welcome. I don’t think Visa and Mastercard understand the American gun-owning consumer very well. They stand to lose a lot of revenue as we just use cash.

Visa and Mastercard paused their decision to start categorizing purchases at gun shops, a significant win for conservative groups and Second Amendment advocates who felt tracking gun shop purchases would inadvertently discriminate against legal firearms purchases.

The move is a setback for gun control groups. They say categorizing credit and debit card purchases might help authorities see potential red flags — like significant ammunition purchases — before a mass shooting could be carried out.

After Visa and Mastercard announced their plans to implement a separate merchant category code for gun shop purchases, the payment networks got significant pushback from the gun lobby as well as conservative politicians. A group of 24 GOP state attorneys general wrote a letter to the payment networks threatening legal action against them if they moved forward with their plan.


In a statement, Visa indicated that the legal pushback was partially the reason it paused the implementation.

“There is now significant confusion and legal uncertainty in the payments ecosystem, and the state actions disrupt the intent of global standards,” the company said.

Visa and Mastercard have said the gun shop categorization was a decision out of their control. The International Organization for Standardization, better known as ISO, is the group that categorizes merchant codes and Visa and Mastercard were just following their decision, the companies said. Gun control advocates lobbied for the change to ISO, not to Visa and Mastercard.

Another Bailout?

Decisions will be made soon.

Silicon Valley Bank was aptly named: It held the funds of hundreds of U.S. tech companies and was a crucial player in the valley’s economy. But on Friday, it became the second largest bank failure in U.S. history after a rapid run on its deposits. Some $175 billion in customer accounts were taken over by the Federal Deposit Insurance Corporation (FDIC), which is now tasked with returning money to the bank’s customers.


But more than 85% of the bank’s deposits were uninsured, according to estimates in a recent regulatory filing. That’s because FDIC deposit insurance is meant for everyday bank customers and maxes out at $250,000. Many Silicon Valley startups had millions, or even hundreds of millions of dollars deposited at the bank—money they used to run their companies and pay employees. Right now, nobody’s sure how much of that cash is left.


The tech sector was already wading through a harsh macroeconomic climate, with layoffs abounding and stock prices sinking precipitously. Silicon Valley Bank’s downfall is likely to exacerbate those problems—and could threaten the wider economy. “It’s like a Lehman Brothers moment for Silicon Valley,” says one Silicon Valley startup founder whose company has millions of dollars tied up in SVB. “It feels like something that never should have happened, because it’s such a trustworthy entity.” The person spoke on the condition of anonymity because they are worried about losing customers over their ties to SVB.

Insured to $250k means exactly that. The taxpayers should not be on the hook for anything above that. Does it suck for the depositors? Absolutely. Is it tragic for the people who won’t get paid next week because the money is gone? I can’t imagine the stress. It sucks. It all sucks.

But terms are terms and contracts are contracts. We have to stop the madness of thinking that the American taxpayers will ride to the rescue every time bad things happen in the private sector. There is too much money in the economy chasing too few goods. Hence, inflation. While it sucks, the evaporation of billions of dollars out of the economy is a necessary evil to stymie the larger evil of inflation. I continue to contend that the best thing would be for the federal government to cancel much of the inflationary spending, but absent the political will to do that, the private sector will have to contract to let the air out of the inflationary bubble.

Warning to all. If you have more than $250k in a bank, you should spread your money into multiple banks or accept the risk.

Silicon Bank Collapse

The Fed’s efforts to deflate the economy to stem inflation is working. Sort of. The problem is that there will be unforeseen consequences. A better way to cool inflation would be for the federal government to pull back hundreds and hundreds of billions of dollars that are committed, but not yet spent, as part of the various spending sprees of the past five years.

Regulators shuttered SVB Friday and seized its deposits in the largest U.S. banking failure since the 2008 financial crisis and the second-largest ever. The company’s downward spiral began late Wednesday, when it surprised investors with news that it needed to raise $2.25 billion to shore up its balance sheet. What followed was the rapid collapse of a highly-respected bank that had grown alongside its technology clients.


Even now, as the dust begins to settle on the second bank wind-down announced this week, members of the VC community are lamenting the role that other investors played in SVB’s demise.


“This was a hysteria-induced bank run caused by VCs,” Ryan Falvey, a fintech investor of Restive Ventures, told CNBC. “This is going to go down as one of the ultimate cases of an industry cutting its nose off to spite its face.”


The episode is the latest fallout from the Federal Reserve’s actions to stem inflation with its most aggressive rate hiking campaign in four decades. The ramifications could be far-reaching, with concerns that startups may be unable to pay employees in coming days, venture investors may struggle to raise funds, and an already-battered sector could face a deeper malaise.


The roots of SVB’s collapse stem from dislocations spurred by higher rates. As startup clients withdrew deposits to keep their companies afloat in a chilly environment for IPOs and private fundraising, SVB found itself short on capital. It had been forced to sell all of its available-for-sale bonds at a $1.8 billion loss, the bank said late Wednesday.

Michigan to Return to Forced Unionization

This could be a boon for Wisconsin if we had a governor who knew how to play it. Instead, I’m sure Indiana will appreciate the new manufacturing jobs.

LANSING, Mich. (AP) — Michigan’s Democratic-led Legislature moved Wednesday to repeal the state’s “right-to-work” law that was passed more than a decade ago when Republicans controlled the Statehouse.


Repealing the law, which prohibits public and private unions from requiring that nonunion employees pay union dues even if the union bargains on their behalf, has been a top priority for Democrats since they took full control of the state government this year. Party leaders announced Tuesday that they planned bring the repeal to a vote in the state House on Wednesday.


The state House is also expected to vote Wednesday on restoring the state’s prevailing wage law, which requires contractors hired for state projects to pay union-level wages. The House Labor Committee advanced the bills early Wednesday along party lines.




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