Infoman

Member since 2017-07-15T03:50:57Z. Last seen 2025-01-02T20:05:01Z.

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  Infoman

  One year on, uk is still stuck

  Guardian 18/9/2023

  Reversing managed decline was Liz Truss’s message. Almost a year ago, the shortest serving prime minister in UK history told the story of a nation wallowing in a low-growth mire. This week marks the anniversary of her catastrophic attempt to change course with a mini-budget that crashed the pound, punished mortgage holders and destroyed her party’s reputation for economic competence in one fell swoop.

  A year on, the economy is still going nowhere fast. Thirteen years of Conservative government have had little positive impact. The economy has missed out on billions of pounds in growth, while average wages are still no higher today, after inflation, than in 2007. Even by the Tories’ own yardsticks for success – sound public finances, low taxes and free enterprise – there is failure: the national debt is at the highest level since the 1960s, taxes as a share of the economy are higher than at any time since Clement Attlee’s postwar Labour government and Brexit has tied businesses in red tape.

  It won’t always be popular to say, but Truss was right in saying Britain needed economic growth. Where she was badly wrong was in her prescription. Most economists reckoned the plans announced by her chancellor, Kwasi Kwarteng, would have had a minimal impact on growth while adding to the drivers of economic inequality. Not even the free markets bought her supposedly free market message.

  In the aftermath of Truss’s febrile 49 days in power, Rishi Sunak and his chancellor, Jeremy Hunt, smoothed over the chaos by reversing most of her agenda and restoring tighter budget settlements. Since then, though, their time in office has been squandered – focused not on doing things but on blocking them.

  With inflation stubbornly high, some government borrowing costs are back above mini-budget levels. Rather than the brief aberration of sky-high mortgage costs for those unlucky enough to refinance during Truss’s tenure, fixed mortgage rates of about 6% are again the average.

  Revisions to the UK’s economic performance since the Covid pandemic show the country is now in the middle of the pack for growth rather than an international outlier. Yet inflation remains higher than in many comparable nations.

  The Bank of England is expected to raise interest rates this week for the 15th time in a row since December 2021, stomping yet harder on the economic brakes to tame inflation.

  Underscoring its challenge, inflation figures on Wednesday are likely to show an increase in August driven by higher petrol prices – just as the economy runs into a brick wall of past rate rises.

  Faced with this stagflationary environment, Bank of England policymakers are preparing to hold rates at restrictively high levels until they are convinced inflation will drop back to 2%. This will create a grim backdrop for the next election, stoking the chances of recession and maintaining pressure on businesses and households.

  Even if two quarters of negative growth are avoided, the likelihood is the economy will remain stuck in first gear at best. The Bank forecasts an annual growth rate of just 0.5% for 2023, the same again in 2024 and growth of just 0.25% in 2025 – a tenth of the average rate in the decade leading up to the 2008 financial crisis.

  Should the Bank stick to the plan of leaving interest rates high, attention will turn to the government for answers on how to reboot growth and raise living standards. However, after the mess of the Truss mini-budget politicians are unwilling to pull hard on the fiscal levers.

  Sunak remains as reluctant as ever to take bold action and is instead scrambling to identify cost savings before November’s autumn statement, as witnessed in his consideration of real-terms cuts to pensions and benefits and possible downgrading of the HS2 rail project. On his watch, the priority is budget constraints first, living standards second.

  Labour, fearing a repeat of the 2019 election when voters rejected Jeremy Corbyn’s spending plans, is taking a safety-first approach under Keir Starmer, betting the public want competence more than radical change.

  But with the public realm crumbling, NHS waiting lists expanding, households still under pressure from the soaring cost of living and the economy flatlining, something has to give.

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  2023/09/18
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  Infoman

  Local museums lead the repatriation drive

  Guardian 18/9/2023

  In the past two years Glasgow has become the first UK museum to repatriate objects to India. Newcastle and the Horniman in south London followed an example set by Aberdeen and Cambridge universities by returning looted Benin bronzes to Nigeria. Exeter handed sacred regalia to the Siksika Nation in Canada. Oxford returned the remains of 18 indigenous people to Australia.

  Earlier this month Manchester completed a landmark return of 174 objects to the to the Anindilyakwa community, who live on an archipelago in the Gulf of Carpentaria, off northern Australia.

  It was a tearful handover which

  Unesco hailed a “historic, moving” example of repatriation which it hoped others would see as a model.

  The scale of repatriation – or rematriation, as it was proudly labelled by a Scottish museum returning a totem pole to Canada

  – is unprecedented. But missing from all this, campaigners say, are London-based national museums, which look increasingly isolated.

  “Regional museums are so far ahead of national institutions,” said Lewis McNaught, who runs the not-for-profit Returning Heritage project. “The trend is actually now global. The UK is really falling behind quite dramatically.”

  Dan Hicks, a professor of contemporary archaeology at Oxford University and a curator at the city’s Pitt Rivers Museum, said repatriation had become part of the “fake culture wars”, with some on the right seeing it as “wokery”.

  “What that means, sadly, is that our national institutions are being forced into a position of inertia and making themselves more irrelevant every week that goes by and with every restitution that we see from the regions and elsewhere around the world,” he said. “Everyone else is getting on with it.”

  The big reason for the two different narratives is that the London-based national museums are hamstrung by legislation.

  The British Museum Act 1963 specifically forbids the museum from disposing of its holdings. The National Heritage Act of 1983 prevents trustees of institutions, including the V&A and Science Museum, from deaccessioning objects unless they are duplicates or beyond repair.

  Regional museums, which are run by local authorities, universities or are regimental or private, don’t have the same issue.

  Repatriation was not a new issue or debate, said Hicks. “There is a deep and long history to restitution in this country. Edinburgh university was returning human remains two generations ago, never mind one generation … There are scores, if not hundreds of stories, over the past 40 to 50 years. It should be part of what museums do. It’s a part of the job.”

  Glasgow is seen as a leader in the repatriation conversation since an agreement in 1998 to return a Sioux warrior shirt acquired in the 19th century from Buffalo Bill’s wild west show. The return of the Lakota Sacred Ghost Dance shirt to the Wounded Knee Survivors Association established criteria that have been widely adopted in the museum sector.

  Duncan Dornan, the head of museums and collections at Glasgow Life, said repatriation should be seen as a two-way process and recalled the joy at the signing ceremony last year for the repatriation of artefacts to India.

  “It was a very emotional event, and Glaswegians of Indian heritage were very emotional. Their response was that they were very proud of their city,” he said. “We see repatriation as establishing a relationship of equals and emphasising Glasgow as an outward-looking modern city.”

  The recent Manchester Museum return of objects was seen as important because the organisation was not giving back artefacts that had been looted. They were everyday objects including dolls made from shells, baskets and boomerangs.

  “We believe this is the future of museums,” said Esme Ward, the director of Manchester Museum. “This is how we should be.”

  The UK government has no plans to change the law, which could then lead to movement in some of the most high-profile repatriation debates such as the Parthenon marbles and the Benin bronzes.

  Lord Vaizey, a former longserving Conservative arts minister, has said the 1983 act “makes it almost impossible for UK museums to establish themselves as outwardlooking, modern institutions fit for purpose in the 21st century”.

  There are ways of getting around the act. The V&A said last year that it was returning the Head of Eros, a life-sized marble carving dating to the 3rd century AD, to Turkey to be reattached to the famous Sidamara sarcophagus. It made good a promise made by Britain in 1934, but the arrangement is essentially a long-term loan, not an unconditional return.

  Across the world, from the US to France to Germany and the Vatican, countries are repatriating objects. “Almost everywhere you look, items are being returned,” said McNaught.

  In July, for example, the Netherlands repatriated nearly 500 looted objects to Sri Lanka and Indonesia. They included the famous and fabulous ruby-inlaid Cannon of Kandy dating from 1745, one of six objects from the Rijksmuseum which represented the first return of colonial items from the museum’s collection. Items being returned to Indonesia included the “Lombok treasure”, 335 precious stones, gold and silver jewellery looted by Dutch troops from a Balinese royal palace.

  The Vatican has also voiced willingness to return indigenous artefacts. “The Seventh Commandment comes to mind: If you steal something you have to give it back,” Pope Francis said in April.

  The London-based national museums are undoubtedly hamstrung by law, but that does not stop regular demands for the return of objects.

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  2023/09/18
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  Infoman

  Venture Capitalists Late to Instacart Face Losses in IPO

  BER­BER JIN

  The Wall Street Journal 18/9/2023

  When Instacart lists in the coming week, it will leave many of its later investors with significant paper losses— a sign of the pain venture capitalists are facing after years of fast-and-loose spending.

  The grocery-delivery firm is targeting a valuation of as much as $10 billion—sharply lower than the $39 billion valuation it reached at the peak of the startup funding frenzy two years ago. Many of the investors who poured almost $1 billion into Instacart’s last three funding rounds will be underwater on those shares.

  Take T. Rowe Price. Its growth stock fund invested $86 million in Instacart, starting with a funding round in 2020, according to a securities filing. The value of that investment will be down by more than 40% if the shares are listed in the company’s latest target price range.

  DST Global, the venture firm known for its early bet on Facebook, made an investment of around $75 million in Instacart in 2020, people familiar with the matter said. At the same time, the venture firm General Catalyst invested about $50 million, they said. Both companies are looking at unrealized losses of more than 35% on those investments.

  Investors who bought in 2015, when Instacart raised its third funding round, or later would have made more by investing in the Nasdaq

  Composite Index over the same period.

  The outcomes underline a sobering new reality for venture capitalists: The billions of dollars they poured into latestage startups during the era of cheap money could leave them with losses even as the most promising companies in their portfolios go public.

  “Private investors going forward are going to need to embrace the new reality of a reset valuation world,” said Byron Deeter, a partner at Bessemer Venture Partners. “There will be a lot of down round IPOs.”

  Instacart’s target range of $28 to $30 a share gives it a valuation of $9.3 billion to $9.9 billion. It is scheduled to set the IPO price on Monday. The listing comes after a prolonged freeze in the market for tech IPOs and is being watched as a test case to gauge Wall Street’s appetite for new issues.

  Startup founders have been reluctant to take their companies public after last year’s market rout, worried any listing price would be much lower than their last private valuations. The resulting IPO slowdown has lasted almost two years, starving venture firms of a crucial source of income and denting their financial performance.

  This year, tech stocks have rallied, pushing up the Nasdaq by more than 30%. That has given more founders the confidence to consider listing their shares. Instacart’s investors aren’t selling shares in the public listing and are required to hold on to their stock for at least a few months after the IPO. They could see gains on their investment if shares of Instacart rise.

  Shares of British chip designer Arm—which listed well below its last private market valuation—jumped more than 20% on its first day of trading Thursday.

  After the Arm surge, Instacart bumped up the target range for the IPO price by more than 7%.

  The company has some recent momentum in its business. It posted five consecutive quarters of operating profit, a rare feat for a gigeconomy startup. Still, its core delivery business growth has come down sharply from pandemic peaks.

  Investors who put money early into Instacart—the traditional bread and butter of venture investing—still stand to make a lot of money, even if not as enormous an amount as they once anticipated.

  Sequoia Capital, Instacart’s largest outside shareholder, invested $8 million in one of its earliest rounds of funding in 2013. That initial investment has grown to a stake worth around $1 billion. Another winner is Andreessen Horowitz, which led another early funding round the following year.

  The investors carrying paper losses invested much more money in much later rounds when cheap money flowed into Silicon Valley. Beginning in 2020, Instacart raised three rounds of funding in quick succession, almost tripling its valuation within the span of a year.

  It has since become a cautionary tale for bull-market investing. Last year, tech shares slid as a steep rise in interest rates led investors to avoid high-risk companies. Oncehighflying tech stocks such as DoorDash and Uber Technologies stalled. Some measures of Instacart’s valuation followed. The firm slashed its internal valuation to $12 billion earlier this year, demoralizing employees and investors. Uber and DoorDash shares have rebounded from their 2022 lows. This year Uber has risen more than 90%, and DoorDash has climbed more than 60%.

  Investors are now dialing back from brash investing. Across Silicon Valley, firms are winding down the megafunds that competed to make massive startup investments during the boom years.

  Many are refocusing on what has historically been the source of the greatest returns—writing small checks for young companies.

  While Sequoia has bet almost $300 million in Instacart over the years, it made most of its profit from its first tiny investments in the company: the $8 million it invested in 2013 and the $13 million it invested in 2014, people familiar with the transactions said.

  The firm had less luck investing later. It put $50 million into Instacart’s March 2021 funding round. At the IPO, that stake is set to be worth $12 million or less.

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  2023/09/18
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  Infoman

  Conscientious people lives longer life

  The number of people who are living to at least 100 years old in the U.S. has doubled over the past decade.

  Many centenarians credit their longevity, at least in part, to their positive attitude.

  Roslyn Menaker, 103, told The Guardian that “happiness, joy, appreciation … a positive outlook,” are why she has lived so long. Ruth Sweedler, 103, told CNBC Make It that she was always praised for her good attitude growing up. “When I walked into a classroom, my teacher would say, ‘Good morning, sunshine!’ Because I was so cheerful,” she said.

  While seniors might feel being positive has played a role in their longevity, the relationship between personality and aging is more nuanced, says David Watson, a former professor of personality psychology at the University of Notre Dame.

  “I think the effects of just being positive are overstated,” he says. But there are other traits he believes are closely linked to longevity.

  ‘Conscientious people don’t do stupid things’

  When breaking down personality, it’s helpful to look at the Five Factor Model, a personality theory that suggests most people’s traits can be grouped into five categories: openness, conscientiousness, extroversion, agreeableness and neuroticism.

  Conscientiousness, or how organized and disciplined you are, is the most related to longevity, Watson says.

  This is likely because people with high degrees of conscientiousness are better at taking care of themselves. Conscientious people, for example, tend to drink alcohol in moderation and eat more balanced meals, he says.

  “Conscientious people don’t do stupid things so they have lower rates of accidents and better health behaviors,” he says.

  Don’t miss: 100-year-old sisters share 5 simple tips for leading a long, happy life

  The good news is you can increase your conscientiousness with age. There are even conscientiousness workshops that seek to increase a person’s ability to self-regulate, Watson says.

  “The basic idea is if you want to increase your conscientiousness, act more conscientious, and the attitude follows the behavior,” he says. “Try to be on time for things. Follow through on things.”

  This doesn’t mean a positive attitude does nothing, he adds.

  Agreeableness can play a part in longevity, too, especially when it comes to weathering stressful situations.

  “Psychologically healthy people have a quicker recovery time,” he says. “They are able to tell themselves, ‘This is not that big of a deal.’ They find ways to bring themselves back into that equilibrium.”

  If you’re living a healthy lifestyle and able to bounce back from hardship, that, Watson says, could lead to having a longer, more satisfying life.

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  2023/09/18
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  Infoman

  16/9/2023

  The ex­ec­u­tive push­ing Mi­cro­soft to em­brace AI

  In the tech industry’s artificial-intelligence race, Microsoft is taking an unusual tack: pouring billions into a tiny, unproven startup, rather than relying on homegrown technology and in-house teams.

  A relative newcomer to the company is behind this bet: Chief Technology Officer Kevin Scott.

  Scott joined the tech giant seven years ago as part of an acquisition and has bucked Microsoft’s culture to promote a $10 billion partnership with OpenAI.

  Scott said his OpenAI-or-bust strategy was the only way the company could have catapulted itself ahead. His approach has rankled some employees, especially within Microsoft’s research division, who found their own AI projects pushed aside and their resources curtailed. Many have left the company out of frustration.

  “It’s just been clear as day that you have to pick the things that you think are going to be successful and give those things the resources to be successful every day,” Scott, 52, said in an interview.

  Microsoft is about to bet its biggest brands on OpenAI’s technology. It is integrating the tech into PowerPoint, Word, Excel and the rest of its best-selling software in the coming months. It will be the first test of whether customers actually want to pay for new AI features that can generate documents and summarize emails. Microsoft has already made the technology the backbone of upgrades in its

  Bing search engine and will add it to its Windows operating system as well.

  An amiable and cerebral engineer from rural Virginia, Scott has made a career embracing his outsider status. Within Microsoft, an agreement with Chief Executive Satya Nadella makes him one of the few top leaders allowed to work from the San Francisco Bay Area, rather than Microsoft’s Redmond, Wash., headquarters.

  He’s been at Microsoft for less time than many of his C-suite colleagues who came up through the company’s ranks. Nadella joined in 1992. Brad Smith, vice chair and president, started the year after. The chief marketing officer started in 1991 and the chief financial officer in 2002.

  Scott, who lives in the Silicon Valley community of Los Gatos, Calif., with his wife and two teenage children, says in the tech world he often feels like an outsider: “I sometimes still don’t think that I quite fit in.”

  He graduated with an engineering degree at a private Christian college now called the University of Lynchburg. While working for a Ph.D. in computer science at the University of Virginia, Scott dropped out to join Google in 2003.

  In 2011 he moved to help run engineering at LinkedIn, where he developed a reputation for his ability to untangle the intricacies of complex systems. A few years after taking the job, he led the effort to rebuild the structures behind the company’s website from the ground up to handle hundreds of millions of users.

  He would often sit in the back of meetings as executives debated strategies, recalls Jeff Weiner, then LinkedIn’s CEO. After everyone had opined, Scott would chime in with what many at the company viewed as the definitive perspective.

  Scott proved to be particularly sharp when he was asked to determine whether a technical problem was surmountable. If he said it was, Weiner was confident he’d be right.

  “His track record with regard to that kind of assessment was essentially 100%,” Weiner said.

  Scott joined Microsoft after it acquired LinkedIn in 2016. Nadella had taken over as CEO two years earlier and was reimagining the company.

  Microsoft had struggled with a morass of side projects and been late to opportunities like the mobile revolution. Nadella wanted do away with the company’s insular culture that favored in-house ideas and sidelined leaders who came in through companies Microsoft acquired. He wanted to bring more of a fast-growth, risk-taking approach and shift away from what he saw as a conservative corporate culture dominated by Redmond lifers.

  At Microsoft, Scott’s casual infusion of colorful vernacular stands out, say current and former colleagues. LinkedIn co-founder Reid Hoffman, now a Microsoft director, recalled that a colleague once pulled Scott aside at a corporate event and asked him to refrain from using four-letter words in his presentation; he complied.

  Scott typically swears for emphasis, rather than out of anger. “He says ‘That’s a f—ing great idea!’ ” Hoffman said.

  In 2017, and less than two months after Microsoft’s acquisition of LinkedIn closed, Nadella picked Scott to become the companywide CTO—a position created specifically for him. It gave him oversight of Microsoft’s research division and also created an Office of the CTO, whose members work with groups across the company to help guide their technical strategy.

  Scott soon turned to the company’s AI progress. While Microsoft had been building generative AI models for years, he found that it was behind Google, Meta Platforms’ Facebook and others.

  Around the same time, OpenAI was looking for an investor with deep pockets and a willingness to build a computing infrastructure to train its AI. It also wanted a backer that understood its mission of building technology that can learn, converse and solve problems like a human, a new level of computing called artificial general intelligence, or AGI.

  OpenAI CEO Sam Altman approached Nadella at Allen & Co.’s annual conference in Sun Valley, Idaho, in 2018 to invest in OpenAI and the two companies soon decided to work together. Scott and Microsoft CFO Amy Hood worked out the details of the deal.

  It gave Microsoft early access to OpenAI’s products and a guarantee that the tech giant would back the startup with its infrastructure. It also pledged to allow OpenAI to continue to pursue its goal of AGI.

  Altman, who knew Scott from his Google days, said he wouldn’t have done the deal without him. Scott, he felt, could balance OpenAI’s ambitions and Microsoft’s need to use the technology in profitable products.

  “Kevin was in the small handful of people that took AGI seriously,” Altman said in an interview.

  Scott had to overcome skepticism inside Microsoft, including from then-Executive Chairman Bill Gates, who felt the company already had what it needed to compete on AI, said Hoffman. Scott and Nadella helped bring Gates around, he said. Gates didn’t respond to requests for comment. But he’s said elsewhere that he’s since come around to OpenAI and the power of its technology.

  The investments—$1 billion in 2019 with billions more in the following three years, then a $10 billion round this past January—came with consequences. Microsoft had to ration its resources as OpenAI needed ever more computing power to train its massive AI model.

  Scott divvied up access for server time on the machines outfitted with the high-end chips needed for AI through what he dubbed “Capacity Councils.” Every week, project leaders had to compete for access to computing clusters, a process aimed at cutting down a sprawling array of pet projects and very long-term research initiatives.

  The virtual meetings typically included about 20 employees, representatives from different teams making their case in front of executives. They could grow rancorous, according to current and former employees, one of whom likened the meetings to kindergartners fighting over toys. If teams didn’t like the ruling of the councils, they could appeal. Scott made the call when a decision was appealed to the highest level.

  While some people weren’t happy with his decisions, Scott said Microsoft needs to focus on projects that can make money.

  “We do research, but this is not a research endeavor,” Scott said “We are trying to build things that are useful for other people to use.”

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  2023/09/18
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  Infoman

  https://youtu.be/zNVQfWC_evg?si=_XXTYeVpFpWoAMjv

  2023/09/16
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  Infoman

  Airline Ties Rewards To Spending Model

  ALI­SON SIDER AND JA­COB PASSY

  The Wall Street Journal 14/9/2023

  Travelers won’t need to step on a plane to earn status in Delta Air Lines’s frequentflier program—if they spend enough money.

  Delta had been a holdout in keeping its SkyMiles loyalty program closely tied to flying even as rivals had shifted to reward credit-card spending more richly.

  Now, the carrier is shifting to a model that ties status exclusively to how much people spend, either on travel with the airline and its partners, on co-branded credit cards, or by booking hotels, rental cars and vacation packages through Delta channels.

  Elite status has long been highly sought after—and hotly pursued—by frequent fliers who cherish perks like early boarding, free checked bags, seat upgrades and bonus miles to spend on award travel. Delta is the latest carrier to decide that flying is no longer a prerequisite.

  Dwight James, Delta’s senior vice president of customer engagement and loyalty, said the changes mean there are more ways for people to earn status and that it will be simpler to navigate. Instead of the three metrics that currently contribute to a customer’s progress toward the upper echelons of Delta’s Medallion status tiers, there will be just one.

  “We wanted to make the program more welcoming to customers,” James said. “But we also want to ensure that we’re reserving the most premium experiences for our most premium customers.”

  Travelers will have higher spending bars to clear.

  Delta customers currently need to spend the equivalent of $3,000 on flights to earn Silver status, the lowest. Starting next year, requirements based on the number and distance of flights taken will be gone, but customers will have to spend double that. For the highest status, Diamond, they will need to spend $35,000 a year—$15,000 more.

  Delta isn’t the only airline to make it more expensive to earn and maintain higher levels of status recently, which analysts say reflects the continuing travel boom. Other carriers also have been raising the bar for earning rewards as they look to address a glut of top-tier fliers that made it more difficult for members of loyalty programs to reap highflying benefits. Delta previously raised spending thresholds last year but left the overall structure of the program intact.

  Delta also announced Wednesday plans to further restrict access to its Sky Clubs to ease the crowding that has become a persistent problem in the post-Covid travel boom.

  Delta already has tried several tactics, including capping visits at three hours, limiting who can buy annual passes and raising fees. But it says demand is still exceeding clubs’ capacity, even as it has opened new spaces.

  Those with the Delta SkyMiles Reserve card will now get 10 visits a year and can gain unlimited access only if they spend $75,000 on their card in a calendar year. SkyMiles Platinum cards will no longer provide access to Delta Sky Clubs.

  The shift underscores changes in airlines’ customers. The road warriors who racked up points through constant flying haven’t fully returned. Leisure travelers, who fly less frequently, have proved willing to shell out for pricey premium tickets and other perks. James said millennials are spending more than ever on travel but devote the bulk of their budgets to things like hotels.

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  2023/09/15
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  Infoman

  SpaceX’s Starlink Soars, but Falls Far Short of Goals

  MICAH MAID­EN­BERG AND ROLFE WIN­KLER

  The Wall Street Journal 14/9/2023

  SpaceX’s satellite-internet division has outpaced rivals, generated surging revenue and played a pivotal role in Ukraine. The business still has a long way to go before living up to Chief Executive Elon Musk’s ambitions.

  Starlink, which relies on a satellite fleet to provide highspeed internet connections, reported $1.4 billion in revenue for 2022, according to recent documents viewed by The Wall Street Journal—up from $222 million the year before.

  The company had predicted the business would be bigger by now: A 2015 presentation SpaceX used to raise money from investors, viewed by the Journal, projected the division the company would later call Starlink would generate almost $12 billion in revenue and $7 billion in operating profit in 2022.

  SpaceX is best known for blasting off rockets, but Starlink is key for the company’s plan to one day send humans to Mars. Global spending on high-speed internet is orders of magnitude bigger than outlays on rocket launches, and Musk needs a cash cow to help pay for technology that could make interplanetary missions possible.

  Investors in the company have said they are also watching Starlink closely because it undergirds much of SpaceX’s roughly $150 billion valuation and could one day go public, according to comments Musk has made in the past. A SpaceX spokesman didn’t respond to requests for comment.

  The documents viewed by the Journal don’t break out Starlink’s profitability, but they show the company overall reported a loss for 2022 and a slim profit for the first three months of this year.

  Musk—who is also Tesla’s CEO, owns X, the social-media company formerly known as Twitter and has backed other ventures—is known for setting aggressive goals.

  Starlink hasn’t signed up customers as quickly as SpaceX had hoped. Toward the end of last year, Starlink had more than one million active subscribers, SpaceX has said. The company thought its satellite-internet business would have 20 million subscribers as 2022 closed out, according to SpaceX’s 2015 presentation.

  Starlink is bumping up against a reality articulated by many skeptics of satellite internet. The majority of the world’s population that the business could serve and that can afford high-speed broadband lives in cities. In those regions, internet service is readily available, usually offers

  cheaper monthly costs than Starlink and doesn’t require specialized equipment.

  Most of the Earth’s surface is ocean, and while Starlink has looked to cruise operators, shipping, oil rigs and even airlines as possible customers, those represent a smaller market.

  Starlink, which first deployed satellites in 2019, has shaken satellite-broadband rivals, prompting many to try to save money and deploy better technology to keep up.

  The company’s fleet of reusable rockets has enabled it to launch satellites faster and in greater numbers than competitors, many of whom rely on SpaceX rockets to blast off their own satellites. The company has around 4,700 functioning Starlink satellites in orbit, ahead of where the company thought it would be.

  Starlink drew worldwide attention last year when Musk ordered the service turned on for Ukraine, following Russia’s invasion. After shipping terminals and providing internet connections, he grew concerned about the business’s involvement in the war, and recently Musk said he declined a request to activate Starlink near Sevastopol, in Ukraine’s Russian-occupied Crimea.

  The recent documents viewed by the Journal showed that capital expenditures at SpaceX for 2022 were $3.2 billion. SpaceX has funded its capital investments in part by using upfront cash that customers use to reserve future launch slots, as well as by selling additional stock. Those sources of cash could be unsustainable without faster and more profitable growth.

  The company last raised funding more than a year ago, according to regulatory filings. Musk said in April he didn’t believe the company would need additional outside capital.

  SpaceX is trying to stoke growth at Starlink. User kits for the service are available from Home Depot and Best Buy. The company agreed to use third-party distributors to reach business clients. In July, it said Starlink was available in 60 countries.

  Starlink has also sought out customers among recreational-vehicle and boat owners, and struck a deal to provide connections to T-Mobile customers in areas without wireless service.

  Competitors are behind Starlink, but are setting their own plans for low-Earth-orbit satellite networks. Amazon.com is expected to have two prototype satellites launched soon. Canadian satellite operator Telesat recently said it came up with a funding plan to deploy a new fleet, called Lightspeed.

  Part of SpaceX’s challenge is that Starlink satellites are designed to last five years before they fall out of orbit and burn up, meaning the company has to continually manufacture and launch them.

  SpaceX aims to make launches of upgraded Starlink satellites more efficient with Starship, a massive rocket. The initial Starship launch ended with an explosion a few minutes into the flight in April. It isn’t clear when SpaceX might get to try to launch Starship again.

  If it can squeeze down costs, the company still will have to find subscribers, often far from the regions home to the most potential customers.

  “I’m pretty sure we can launch satellites into orbit,” SpaceX President Gwynne Shotwell said in an interview four years ago with the Journal. A question the company was asking itself then about Starlink, she said: “Can you make money out of it?” Early this year, she said Starlink was expected to do so in 2023.

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  2023/09/15
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  Picasso Work Set to Auction for $120 Million

  KELLY CROW

  The Wall Street Journal 14/9/2023

  Sotheby’s will auction the 1932 portrait, ‘Woman With a Watch.’ It hails from the estate of Emily Fisher Landau, a New York collector who died in March at 102.

  Sotheby’s just landed the chance to sell the undisputed star of the fall auction season: A royal blue, green and red portrait of Pablo Picasso’s young mistress curled up in a chair, “Woman With a Watch,” estimated to top $120 million this November.

  The 1932 portrait hails from the estimated $400 million estate of Emily Fisher Landau, a New York collector who died in March at age 102. Fisher Landau’s 120-piece trove includes major examples by Jasper Johns, Ed Ruscha and Andy Warhol, so market watchers will be closely following the estate’s performance to gauge global bidder interest during the current slump. The Picasso, which carries the artist’s second-highest asking price ever, will come under the most scrutiny.

  “Masterpieces are incredibly market resilient,” Brooke Lam“Woman pley, Sotheby’s head of global fine art, said. Lampley confirmed the house won the consignment in part by guaranteeing Fisher Landau’s heirs that the house itself would buy her pieces, including the Picasso, if no other bidders stepped up during the Nov. 8-9 sales.

  To break Picasso’s record, With a Watch” will need to sell for more than the $179.4 million paid in 2015 for a 1955 harem scene, “Women of Algiers (Version O).”

  Collectors tend to pay a premium for Picasso’s works from the 1930s, with half of the artist’s top 10 priciest works hail

  ing from that decade, according to auction database Artnet. Three date to the same year Sotheby’s example was painted: 1932, a seminal period in Picasso’s career when he was readying works for a retrospective and reveling in a secret love affair with MarieThérèse Walter. In 2010, Christie’s sold another Picasso from 1932, “Nude, Green Leaves and Bust,” for $106.5 million.

  Museums including London’s Tate Modern have devoted entire shows to that singular year when Picasso used a lush, jewel-tone palette to paint his mistress lounging in voluptuous repose. The Tate Modern didn’t borrow Fisher Landau’s Picasso, but at least six other museums have exhibited it over the years, most recently a 2022 show of her collection at the Norton Museum of Art in West Palm Beach, Fla.

  Fisher Landau, born in 1920 and raised in New York, bought the Picasso with her first husband, real-estate developer Martin Fisher, in 1968 when she was just starting to collect art. The following year, armed burglars disguised as repairmen broke into their Upper East Side apartment and stole her jewels out of her safe. She decided to spend the insurance payout on art.

  “She never bought important jewelry after that,” said her daughter, Candia Fisher, also a collector. “She’d point out women wearing big pieces at galas and say, ‘Think of the art they could buy.’”

  Her mother later married clothing manufacturer Sheldon Landau, and in 1991 the couple arrayed much of the collection—estimated then to be around 1,500 works—in a former parachute harness factory in Queens. The Fisher Landau Center for Art regularly mounted shows until 2017, when Candia Fisher said her mother was no longer able to oversee it and no one else in the family wanted to take over.

  The family is holding on to some of those pieces. Fisher Landau also gave around 400 pieces to New York’s Whitney Museum of American Art, where she served as a longtime trustee. In 1994, the museum named the fourth floor of its former Breuer Building in her honor.

  In a twist, the Breuer now belongs to Sotheby’s. But since the house is still transforming the space into an auction hub, Fisher Landau’s estate will be auctioned off at its current York Avenue headquarters across town.

  Other sale highlights include Johns’s “Flags” from 1986, a side-by-side view of two U.S. flags that Sotheby’s expects to sell for at least $35 million, and Warhol’s camouflage “Self Portrait” dated to the same year, which is estimated to sell for at least $15 million.

  Willem de Kooning’s wispy red-and-blue abstract “Untitled XV” from 1983 is estimated to sell for at least $6 million, and Georgia O’Keeffe’s “Pink Tulip” from 1925 is estimated to sell for at least $3 million.

  Another work to watch: Ruscha’s “Securing the Last Letter (Boss),” a 1964, blueand-orange wordplay painting in which the conceptual artist paints a clamp that appears to be squeezing the second “s” in the word boss. Sotheby’s said it still hasn’t finalized an asking price for that work, but expectations will likely run high as its sale coincides with the artist’s must-see retrospective at the Museum of Modern Art.

  Fisher Landau was known to have one of the world’s biggest collections of Ruscha’s work and visited him often at his studio in Los Angeles. “Mom used to get so excited about seeing Ed,” her daughter said, adding, “Artists were her rock stars.”

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  2023/09/15
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  ETF Is Still the Best Bet for Investors

  Bur­ton G. Malkiel Mr. Malkiel is the au­thor of “A Ran­dom Walk Down Wall Street,” whose 50th an­niver­sary edi­tion was re­leased this year.

  The Wall Street Journal 14/9/2023

  Active portfolio managers claim that agile stock picking is the best way to invest. Many have lately argued that simple indexing is a bad strategy in today’s environment because the stock market is dangerously “narrow.” Seven stocks—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla—constitute close to 20% of the S&P 500’s value and have been responsible for almost 90% of the index’s gains this year. Now these “Magnificent Seven” are beginning to falter. The simple index investor, the active managers warn, will soon be overly concentrated in a small number of stocks that are overpriced and have been hyped by the promise of artificial intelligence.

  This argument is wrong. Indexing a stock portfolio through a low-cost fund remains the best way to participate in the stock market. Critics of indexing tend to point to the late 1990s, when the promise of the internet drove high-tech stocks like Apple and Amazon to triple-digit price/earnings ratios and the market indexes to unprecedented high valuations. The market then declined sharply until 2002. Another sharp decline occurred during the 2007-08 financial crisis. The market ended the first decade of the 2000s below where it started. Index investors got banged up. Tech stocks got crushed. Even successful companies such as Amazon and Apple lost more than 90% of their value through early 2002 before finally recovering.

  But did indexing really fail? The evidence suggests it didn’t. From 1990 to 2009, according to the Bogle Financial Research Center at Vanguard, a broad U.S. stock market index fund outperformed the average actively managed equity fund by almost 1% a year. The total stock market index returned 8.42% annually in that 20-year period, including both the dot-com bubble and the poor returns that followed. The realized annual return from the average actively managed equity mutual fund was only 7.53%. And the best 20 active funds of the 1990s underperformed the index by more than 3 percentage points a year in the first decade of the 2000s.

  There is no way to predict which active managers will be the best stock pickers. Portfolio-manager fees are the only reliable predictor of performance. The lower the fees, the higher the returns realized by investors. The quintessential low-fee equity funds are index funds. Competition has driven the expense ratio of total stock market U.S. equity funds almost to zero.

  Certainly there are some similarities today to the economic environment of the dot-com era of the late 1990s. Technological innovation promises to transform our economy. The internet is revolutionizing how we communicate, access information and purchase goods and services. But changes— today, as then—occur slowly. It wasn’t until the early 2000s that productivity statistics reflected internet-related technological improvements. Today, artificial intelligence promises to transform transportation, entertainment, medicine and more. But these changes won’t be rapid. Stock-price reactions that assume a virtually instant realization of benefits are likely to be overdone.

  There is no doubt that U.S. equities are richly valued in part because of the promise of AI. The cyclically adjusted price/earning ratio for the market as a whole stands at 30, well above its longrun average in the midteens. But that multiple was over 40 in early 2000, a record high. The average multiple for the Magnificent Seven is about 50. But the multiples for Apple, Amazon and Cisco Systems, the darlings of the market in early 2000, were over 100. The average multiple for Apple, Alphabet, Meta and Microsoft today is just over 30. Only Nvidia has a triple-digit earnings multiple. It may be that hype over the promise of AI has inflated these multiples to unwarranted heights. But it is also possible that they simply reflect the enormous potential of AI to transform the way the world’s work is done.

  The basic idea of efficient markets isn’t that prices are always correct. In fact, they are always wrong. What efficiency implies is that information is reflected in prices without delay. And the current tableau of market prices reflects the combined judgment of hundreds of thousands of investors, including those of the research departments of the most influential firms on Wall Street— as well as the galaxy of active managers who run mutual funds and institutional portfolios. It’s rare for an individual manager to make correct bets against the wisdom of the market. And even when it does happen, it doesn’t last. More than 90% of active managers fail to beat the market over 10and 20-year periods.

  It isn’t impossible to beat the market. But if you go active, chances are you’ll underperform. Years of evidence in a variety of market environments confirms the wisdom of indexing. And if you do decide to alter your portfolio from market weightings, you can do so with much less risk if your active bets are made around a core portfolio that is broadly indexed.

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  2023/09/15
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  An Aspiring India Basks in the G-20’s Glow

  Sadanand Dhume

  The Wall Street Journal 14/9/2023

  For many observers, last week’s Group of 20 summit in New Delhi marked the emergence of India as a leading player in global affairs. That’s the conventional wisdom in India, trumpeted endlessly by governmentfriendly media. It will likely be central to Prime Minister Narendra Modi’s re-election campaign next year, as he attempts to become the first Indian leader in more than 60 years to win three consecutive national elections.

  But Indians shouldn’t believe too much of the hype. While India matters considerably more today than it did 10 years ago, it is far from achieving Mr. Modi’s stated goal of becoming a Vishwa Guru, or teacher to the world. If anything, the G-20 summit underscores that India needs the U.S. and its allies more than ever to achieve its domestic and geopolitical ambitions.

  The New Delhi summit wouldn’t have made an international splash if it hadn’t coincided with a real increase in India’s stature. Mexico, Turkey and Argentina, among others, have all taken their turns as G-20 hosts without commentators reading geopolitical significance into it. In India’s case, the endless stream of photo-ops of Mr. Modi posing with world leaders lined up with meaningful national advances.

  Ten years ago, India’s $1.86 trillion economy was the 10th largest in the world at market exchange rates, according to World Bank figures. By last year, India’s gross domestic product nearly doubled to $3.39 trillion, making it the world’s fifth-largest economy, ahead of the U.K. The International Monetary Fund estimates that India will become the world’s thirdlargest economy as early as 2027.

  Earlier this year, India overtook China to become the world’s most populous nation for the first time since the 1750s. While China’s population has already begun to decline, the United Nations expects India’s to peak at 1.7 billion in 2064. And weeks before the G-20 summit, India became only the fourth nation to land a craft on the moon, and the first to land on its harder-to-reach south pole. That a Russian lunar craft crashed a few days earlier heightened India’s achievement.

  As it has risen, India has become more active in shaping global events.

  “Ten years ago, nobody in India cared about foreign policy,” says Constantino Xavier, a fellow at New Delhi’s Centre for Social and Economic Progress. “Now India’s international aspirations have become part of Modi’s domestic political ambitions across the country.”

  India treated its yearlong stint as chair of the G-20—a group founded in 1999 to represent 19 large national economies and the European Union—as a combination debutante party for itself and extended campaign event for Mr. Modi. Over the course of the year, India hosted 100,000 delegates from 125 countries. Foreign diplomats traveled to 60 Indian cities. An estimated 15 million Indians took part in a G-20related event.

  Posters and giant billboards across the country reminded Indians that Mr. Modi was “Solving the Greatest Challenges of the World Together” and “Giving Voice to the Global South.” In an interview before the summit, Mr. Modi told the Press Trust of India that his development model has shown how “India can also be a guiding principle for the welfare of the world.”

  But for all this buildup, it wasn’t clear that India could pull off a successful summit. A meeting of G-20 foreign ministers in March failed to come up with a joint statement thanks to deep divisions between Western nations and Russia and China over Ukraine. Both Vladimir Putin and Xi Jinping skipped the New Delhi summit, the first time Mr. Xi has missed a G-20 gathering since he became president in 2013.

  In the end, however, Mr. Modi was spared the embarrassment of a summit without a joint statement when participants agreed to watered-down language on Russia’s invasion of Ukraine to overcome intransigence from Russian and Chinese diplomats. They also agreed to a proposal by Mr. Modi to include the African Union as a member of the G-20. On the sidelines of the summit, the U.S., Saudi Arabia and India, among others, announced an infrastructure project that aims to challenge China’s Belt and Road Initiative by linking India by ship and rail to Europe via the United Arab Emirates and Israel.

  For India and Mr. Modi, all this undoubtedly counts as a foreign-policy win. But it doesn’t change hard realities. China’s economy is more than five times as large as India’s and Beijing remains hostile to India’s aspirations. The U.S.-led global order welcomes India’s rise. A Chinese- and Russian-led order would seek to quash India’s ambitions rather than nurture them.

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  2023/09/15
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  No Inflation Rest for the Fed

  Wall Street Journal 14/9/2023

  Inflation rebounded in August, which is bad for consumers but perhaps not enough to spook the Federal Reserve from standing pat on monetary policy when its Open Market Committee (FOMC) meets next week.

  The consumer-price index climbed a sharp 0.6% for the month, owing largely to a surge in fuel prices. Prices are up 3.7% over the last 12 months, which is substantial progress from the heights of summer 2022. But gasoline prices were up 10.6% for the month, as no doubt our readers have noticed. Services less energy are also continuing to be sticky, rising 0.4% for the month and 5.9% in the last year.

  The good news for the Fed is that so-called core prices, sans food and energy, rose only 0.3% for the month. After three straight months of relatively small increases, core prices are now up only 4.3% in the last 12 months. That’s still well above the Fed’s inflation target of 2%, but it will probably give Chairman Jerome Powell confidence that he’s slowly winning his antiinflation fight.

  Whether the Fed raises its fed-funds target rate another 25 basis points next week from the current 5.25%-5.5% probably doesn’t matter much. The market doesn’t expect it, and it doesn’t look to us like another one is required even with the August price rebound.

  The harder challenge for the Fed will be keeping money tight enough for long enough to get back to its 2% target even as the political clamor rises on Wall Street and Washington for rate cuts. The Fed signaled in June that its median projection was four 25-point rate cuts next year, but that will depend on further inflation progress.

  Wall Street wants to restart the easy-money party, but the best case for Fed caution is in the Census Bureau data on real incomes that we report nearby. Inflation punished America’s lower- and middle-income earners with a vengeance in 2021 and 2022.

  The corner on falling incomes looked like it might have turned this year with five monthly increases in real average hourly wages from March to July. But the consumer-price rebound in August meant that real wages fell 0.5% for all employees, erasing nearly all of the gains for June and July. Americans need a raise, and that means slaying the inflation beast.

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  2023/09/15
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  夜生活 Change in Habits of after work

  ANNE MARIE CHAKER

  The Wall Street Journal 14/9/2023

  Office happy hours, client dinners and other night gatherings are rarer and earlier these days

  Patience for after-hours work socializing is wearing thin. After an initial burst of postpandemic happy hours, rubber chicken dinners and mandatory office merriment, many employees are adopting a stricter 5:01-and-I’mdone attitude to their work schedules. More U.S. workers say they’re trying to draw thicker lines between work and the rest of life, and that often means clocking out and eschewing invites to socialize with co-workers.

  Corporate event planners say they’re already facing pushback for fall activities and any work-related functions that take place on weekends.

  “The flake-out rate is so much higher at events now,” says Gretchen Goldman, a research director in Takoma Park, Md.

  This summer Goldman invited 100 colleagues for casual afterwork drinks at some picnic tables just outside the office as a goodbye party. She was taking a new job with the federal government. Fewer than 10 showed up.

  “I guess people are just busy,” she says.

  The pandemic altered eating and drinking habits, and pandemic puppies, now fully grown dogs, have to be walked on a schedule.

  With fewer people back in offices, there are fewer impromptu happy hours and a lack of interest in staying out late with colleagues, some bosses and workers say.

  Andy Challenger oversees employees who participate in the fantasy football league at his outplacement firm, Challenger, Gray & Christmas. When some of them floated the same game plan as prior years—an in-office pizza party that goes past 11 p.m. as everybody drafts their favorite players—the pushback was swift.

  This season, the pizza arrived at 4:30 p.m. and everyone was finished and out of the office by 6 p.m.

  “Normally that would have been the starting time,” he says.

  For decades, an unspoken rule of office culture has been that much of work happens outside the 9-to-5 window. Getting ahead often requires being known outside the building and having organizational allies—the type of networking that’s helped by showing up for dinner with the boss and getting relaxed face time with coworkers at happy hours, says Jon Levy, a New York City-based consultant who advises organizations on connection and culture.

  Now, even the go-getters are saying no to after-hours schmoozing opportunities. The thinking is: “That 20th happy hour isn’t going to produce anything better for me,” Levy says.

  People are less jazzed about eating out once they are home, and many got pretty good at making dinner during the pandemic, says David Portalatin, food industry adviser at Circana Group, a market research firm.

  In the past year, U.S. consumers had 264 million restaurant dinners after leaving work, which is down 43% from 2019 levels, according to Circana. And reservations are now earlier: In 2023, 26% of after-work restaurant dinners happened before 6 p.m., compared with 21% in 2019.

  Barbara Martin hosts bimonthly evening soirees for clients of her marketing firm, Brand Guild. Traditionally, cocktails start flowing around 6:30 p.m. and the mingling could last until 9 o’clock—or beyond. But last Thursday she pulled the start time forward to 5:30 p.m. sharp.

  “‘I’d love to come to these if you could do them earlier,’ ” Martin says she’s heard again and again this summer. “Nobody wants to overbook themselves until 10 p.m. on a weeknight anymore.”

  Attitudes don’t appear to be changing as the summer vacation season ends. Kay Ciesla is helping organize an all-staff gathering for 80 people at the American Immigration Lawyers Association, the Washington, D.C., nonprofit where she works as a governance executive. She is considering an axthrowing theme, and serving finger foods and cocktails.

  “I’m already getting pushback,” she says of spending precious time that bleeds into personal hours on team building. Due to scheduling conflicts the group can’t gather until December. One employee voiced concern that the socializing could turn into a superspreader event ahead of Christmas travel.

  Doug Quattrini, an event planner in the Philadelphia area, has already booked six Christmas parties. What’s different this year, he says, is that most are on weekdays, in the office— and end at 8 p.m.

  “Nobody wants to take up people’s Fridays, Saturdays and Sundays,” says Fausto Pifferrer, co-owner of Blue Elephant Catering in Saco, Maine, near Portland, which has booked several office holiday parties for Monday through Thursday.

  Younger Americans are drinking less. The share of people between 18 and 34 who said they “ever” drink alcohol has fallen to 62% from 72% two decades ago, according to Gallup data.

  Caroline Wong, the chief strategy officer at Cobalt, a cybersecurity company in San Francisco, quit drinking in her early 30s and tries to plan social gatherings sans alcohol. A team off-site next month will be a tour of waterfalls near Portland, Ore. She’s noticed things wrap up earlier when there’s no drinking involved.

  “It’s like, ‘You know what, we hung out for 90 minutes. We’re good and I’ll see you tomorrow,’” Wong says. “I think there’s something awesome about that.”

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  2023/09/15
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  Tech Leaders Debate AI Risks Amid Push to Enact Regulations

  RYAN TRACY AND DEEPA SEETHARA­MAN —Katy Stech Ferek con­trib­uted to this ar­ti­cle.

  The Wall Street Journal 14/9/2023

  WASHINGTON—Elon Musk, Bill Gates, Mark Zuckerberg and other technology heavyweights debated the possibilities and risks of artificial intelligence in a closed-door meeting with more than 60 U.S. senators who are contemplating legislation to regulate the technology.

  Musk, the CEO of Tesla and owner of X (formerly Twitter), warned about what he views as AI’s potential to threaten humanity, according to a participant. Microsoft co-founder Gates said the technology could help address world hunger, said Sen. Chuck Schumer (D., N.Y.), who convened Wednesday’s session.

  Other speakers included Facebook founder Zuckerberg and the CEOs of Google, Microsoft, Nvidia and IBM, along with union leaders, civil rights advocates, and others.

  Schumer at one point asked the guests if they agreed that the government needed to play a role in regulating artificial intelligence. Everyone present raised their hands, Schumer said.

  “No one backed off in saying we need government involvement,” Schumer said in an interview after the session ended. “They understood that there needed to be government responsibility, because let’s say even these companies would be willing to install guardrails on themselves—they’ll have competitors who won’t.”

  Despite that consensus— and Schumer’s vow to move toward passing legislation within months—the meeting also laid bare some of the tension points ahead.

  One debate centered on socalled “open-source” AI systems that are available for the public to download and modify. These systems allow companies and researchers to tap in to AI technology similar to the models that power ChatGPT without spending millions of dollars to train them.

  Tristan Harris, head of the nonprofit Center for Humane Technology, argued that bad actors can abuse open-source AI systems, including the Llama 2 model recently released by Meta Platforms, the company led by Zuckerberg, according to people in the room.

  Harris said his nonprofit was able to get the Llama 2 model to provide instructions on how to create dangerous biological compounds, these people said.

  Zuckerberg parried back, saying similar instructions can already be found on the internet, the people said. He added that open-source models could pose dangers, but that Meta was trying to build this technology as safely as possible, the people in the room said.

  Zuckerberg told senators in his opening statement that open source “democratizes access to these tools, and that helps level the playing field and foster innovation for people and businesses,” according to excerpts released by Meta. Another point of tension related to workers who see AI as a potential threat to their jobs. Sen. Maria Cantwell (D., Wash.) recounted a moment where the head of the Writers Guild of America West, Meredith Stiehm, described the views of members who are on strike seeking a new contract with Hollywood studios in part to address those fears.

  Also in the room: The head of the Hollywood trade group Motion Picture Association.

  “That was, like, two sides right there,” Cantwell said. “Lots of different viewpoints.”

  Some executives in the room argued that adding too many safety guardrails on AI systems risked American leadership in the technology. Another contested topic: the possibility that future AI systems could wipe out humanity.

  Deb Raji, an AI researcher who attended Wednesday’s meeting, said she urged the room to focus on current-day harms, including biased decisions in housing, hiring or criminal sentencing, that can come from hastily deployed AI systems.

  She also advocated for building auditing methods for AI systems now before companies develop even more powerful AI systems.

  The closed-door nature of the session drew criticism from some quarters. Sen. Josh Hawley (R., Mo.) questioned whether the meeting was designed “to prevent senators from asking tough questions the CEOs don’t want to answer,” and he called on Schumer to bring AI legislation up for a vote.

  Schumer, who organized the meeting with a bipartisan group of three other senators, said the format was designed to allow a frank debate.

  “There were people who have created AI systems and there were people who had problems with parts of the AI systems,” Schumer said. “They talked directly to each other, they answered one another.”

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  2023/09/15
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  .

  Assumable loans” allow sellers to transfer their own mortgage loans to the buyer alongside the house

  A 3% Mortgage Rate In a Grim 7% World? A Startup Sees Gold

  BEN EISEN

  The Wall Street Journal 14/9/2023

  There are millions of outstanding mortgages with a 3% interest rate. A new startup says it can help today’s home buyers get their hands on them.

  Mortgage rates are now above 7%, leaps and bounds above the 3% they grazed two years ago. Buyers and sellers alike are giving up, sucking demand and supply out of the housing market. And things are expected to stay that way, with the Federal Reserve signaling plans to keep rates high for the foreseeable future.

  Roam, a real-estate company that launched Wednesday, is betting that it can popularize an obscure workaround. “Assumable loans” allow sellers to transfer their own mortgage loans to the buyer alongside the house

  In theory, the idea sounds great, at least for discouraged house hunters who can inherit a lower-rate loan. Sellers, in turn, might fetch higher prices for their houses.

  But Roam’s vision faces an uphill battle. Loan assumptions haven’t gained much traction recently, even though rates are up. Many lenders are cool to the idea because for them it would mean more work for less money.

  Some 22% of active mortgages are part of the government programs that have assumption features, according to the mortgage-data and technology company Black Knight. That includes loans extended through the Department of Veterans Affairs and the Federal Housing Administration programs.

  Few consumers know about the option, and fewer still follow through with it. The FHA has processed 3,349 assumptions in the fiscal year that ends Sept. 30, up from 2,566 in the year prior.

  Raunaq Singh, Roam’s founder and chief executive officer, said his new company will find and advertise home listings attached to attractive assumable mortgages. It is initially launching in Georgia, Arizona, Colorado, Texas and Florida.

  The company aims to help

  with the paperwork and other bureaucratic hoops. That means working with the seller’s mortgage company on behalf of the buyer and seller.

  “Have you ever called someone every day until you get what you wanted?” said Singh, who earlier in his career worked at the online realestate company Opendoor. “That’s the kind of service we do on your behalf.”

  A loan assumption is different from a standard sale, in which a buyer takes out a mortgage at the going rate to pay the seller. In that case, a seller uses the money to pay off his or her own mortgage and pockets the rest.

  An assumable transaction doesn’t replace an old mortgage with a new one, but instead transfers the old mortgage to the new owner. The seller is relieved of the remaining mortgage liability, so the balance is subtracted from the purchase amount owed. The buyer must come up with cash to cover the rest of the purchase price.

  Take a $500,000 house that is tied to an assumable mortgage with a $300,000 balance. Even after the buyer assumes the mortgage, the buyer still needs to come up with $200,000. Unless the buyer can pay that amount, he or she would need to take out a second loan at going rates.

  Roam said it would recommend lenders to provide additional financing. It wouldn’t specify which lenders it will work with. Roam will collect a fee from the buyer that equals 1% of the purchase price.

  Roam, with 10 employees, received $1.25 million in a seed-funding round led by the venture-capital firm Founders Fund and Eric Wu, who cofounded Opendoor. Tim Mayopoulos, the former Fannie Mae CEO who briefly ran Silicon Valley Bank after it failed, is an adviser.

  The startup could run up against the Luddite world of mortgage banking, where assumption documents are still often transmitted by fax machine. Lenders sometimes drag their feet in processing assumptions because they earn only a few hundred dollars for processing them, often not enough to cover the cost and far less than they make originating new mortgages, according to Ted Tozer, nonresident fellow at the Urban Institute’s Housing Finance Policy Center.

  For loan assumptions to become popular, lenders will need to be allowed to earn more on them, Tozer said. “There’s not much you can do with that if the lenders aren’t going to be efficiently processing assumptions,” he said.

  If assumptions did take off, mortgage investors could effectively demand higher rates on new loans to compensate for being stuck holding assumable mortgages for longer, according to John Kerschner, head of U.S. securitized products at Janus Henderson Investors.

  Another challenge: Not every seller wants to part with a loan. If a seller with a VA loan bequeaths a mortgage to a civilian buyer, the seller might not be able to take out a new VA loan immediately.

  Veterans United Home Loans, the largest VA lender, expects to process about 150 assumptions this year, up from about two dozen last year.

  Jessica Pardinas and her family assumed a Veterans United loan with a rate of just over 3% when they bought a four-bedroom home in Bowie, Md., in August. She knew loan assumption was a possibility because it was mentioned in the listing. Because Pardinas is a veteran, the process was a little easier.

  The seller hadn’t paid down much of the loan balance, so a second loan wasn’t needed. She estimated taking the lower rate will save about $10,000 a year.

  “It was a very welcome surprise,” she said. “We certainly will be able to put the money we are saving to good use.”

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  2023/09/15