Category Archives: Business

Valley International Cold Storage Acquisition, LLC, Recalls Frozen Beef Products Due To Misbranding And Undeclared Allergens

WASHINGTON, Sept. 17, 2022 – Valley International Cold Storage Acquisition, LLC, a Harlingen, Texas establishment, is recalling approximately 22,061 pounds of frozen beef products due to misbranding and undeclared allergens, the U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS) announced today. The product contains milk, a known allergen, which is not declared on the product label.

The frozen products are labeled as Korean-Style Beef, but contain a chicken sausage and pepper product, which contains milk. These items were produced on July 22, 2022. The following products are subject to recall [view labels]:

  • 9.25-oz. cartons labeled as “Healthy Choice POWER BOWLS Korean-Style Beef” with lot code “5246220320” and a “best if used by” date of 04-18-2023.

The products subject to recall bear establishment number “34622” on the end flap of the carton. These items were shipped to retail locations nationwide.           

The problem was discovered when the producing establishment notified FSIS that it had received consumer complaints that the Korean-Style Beef cartons contained a chicken-based product.

There have been no confirmed reports of adverse reactions due to consumption of these products. Anyone concerned about an injury or illness should contact a healthcare provider.  

FSIS is concerned that some product may be in consumers’ freezers. Consumers who have purchased these products are urged not to consume them. These products should be thrown away or returned to the place of purchase.

FSIS routinely conducts recall effectiveness checks to verify recalling firms notify their customers of the recall and that steps are taken to make certain that the product is no longer available to consumers. When available, the retail distribution lists will be posted on the FSIS website at www.fsis.usda.gov/recalls.

Consumers with questions about the recall can contact the Conagra Consumer Care line at 800-672-8152. Members of the media with questions about the recall can contact Daniel Hare, Senior Director of Communications, Conagra Brands, Inc., at 312-549-5355 or Daniel.Hare@conagra.com.

Consumers with food safety questions can call the toll-free USDA Meat and Poultry Hotline at 888-MPHotline (888-674-6854) or live chat via Ask USDA from 10 a.m. to 6 p.m. (Eastern Time) Monday through Friday. Consumers can also browse food safety messages at Ask USDA or send a question via email to MPHotline@usda.gov. For consumers that need to report a problem with a meat, poultry, or egg product, the online Electronic Consumer Complaint Monitoring System can be accessed 24 hours a day at https://foodcomplaint.fsis.usda.gov/eCCF/.

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Tesla Sued To Hold Elon Musk ‘Accountable’ For ‘Misleading And Deceptive Statements’ On Autopilot, FSD – Tesla (NASDAQ:TSLA)

A California-based Tesla Inc TSLA owner has sued the electric carmaker, saying that the company and its CEO Elon Musk are “deceptively and misleadingly” marketing the Autopilot and “Full Self-Driving” software. 

Tesla owner Briggs Matsko has said that he paid a $5,000 premium for his 2018 Tesla Model X to get ‘Enhanced Autopilot’, which was sold as a precursor to FSD software that now costs $15,000 but is still in the Beta phase.

According to the lawsuit, since 2016, Tesla and Musk deceptively advertised the technology as fully functioning or “just around the corner” despite knowing that the technology did not work or was non-existent and made vehicles unsafe.

The lawsuit filed in U.S. federal court in San Francisco seeks unspecified damages for people who, since 2016, bought or leased Tesla vehicles with Autopilot, Enhanced Autopilot, and Full Self-Driving features.

“Plaintiff brings this consumer class action lawsuit to hold Tesla and its representatives, including CEO Elon Musk, accountable for years of making misleading and deceptive statements regarding the company’s advanced driver assistance systems (ADAS) technology,” reads the lawsuit. 

Also Read: Why This Tesla Driver Paid $400 To Implant Car Key Into His Right Hand: ‘It Comes In Handy’

Tesla has come under heavy scrutiny for the controversial Autopilot advanced driver assistance system. Last month, the Department of Motor Vehicles (DMV) in California accused Musk-run Tesla of running fake claims about its Autopilot and FSD features.

The lawsuit claimed, “Tesla has deceptively and misleadingly marketed its ADAS technology as autonomous driving technology under various names, including ‘Autopilot,’ ‘Enhanced Autopilot,’ and ‘Full Self-Driving Capability,’ the latter two of which Tesla charges consumers thousands of additional dollars to add to their new vehicle.”

According to Tesla, Autopilot enables vehicles to steer, accelerate and brake within their lanes, while Full Self-Driving lets vehicles obey traffic signals and change lanes. 

It also said both technologies “require active driver supervision,” with a “fully attentive” driver whose hands are on the wheel, “and do not make the vehicle autonomous.”

Photo: georgemoga on flickr

 

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Google Beware! TikTok Is Now Challenging Its Search Leadership: Report – Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

China-based ByteDance-owned TikTok has taken the social media world by storm and has emerged as a serious contender to the likes of Meta Platforms, Inc. META and Snap, Inc’s SNAP Snapchat.

TikTok, which is loved for its entertainment-focused short videos, is now increasingly presenting a new use case, according to New York Times.

Gen-Z is now reportedly using the video app as a search engine too.

TikTok’s “powerful algorithm,” levered to personalizing videos shown to a user based on his/her interactions with content, and the sense that real people are synthesizing and delivering information, rather than faceless websites have served to give the platform credibility as a search engine, the report said.

When searching for information about a restaurant in a locality, youngsters prefer taking cues from a real person talking about it rather than rely on long-winding written review, the Times said, citing a TikTok user.

See also: TikTok Takes This Step Amid Increased Scrutiny Over Misuse Of US User Data

The Chinese app’s emergence as a search tool is in line with the broader transformation happening in digital search, the report said. People now use Amazon, Inc. AMZN to search for products and Snapchat’s Snap Maps to locate local businesses, it noted.

Alphabet, Inc.’s GOOGL GOOG Google, which is currently the search leader, has taken note of competition gaining ground. A Google executive reportedly told a tech conference in July that the company’s studies have unearthed the fact that about 40% of the young people lean toward TikTok or Meta’s Instagram to locate a restaurant, rather than relying on Google.

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Fed to keep interest rates above 4% beyond 2023, economists predict

The US central bank will lift its benchmark policy rate above 4 per cent and hold it there beyond 2023 in its bid to stamp out high inflation, according to the majority of leading academic economists polled by the Financial Times.

The latest survey, conducted in partnership with the Initiative on Global Markets at the University of Chicago’s Booth School of Business, suggests the Federal Reserve is a long way from ending its campaign to tighten monetary policy. It has already raised interest rates this year at the most aggressive pace since 1981.

Hovering near zero as recently as March, the federal funds rate now sits between 2.25 per cent and 2.50 per cent. The Federal Open Market Committee gathers again on Tuesday for a two-day policy meeting, at which officials are expected to implement a third consecutive 0.75 percentage point rate rise. That move will hoist the rate to a new target range of 3 per cent to 3.25 per cent.

Nearly 70 per cent of the 44 economists surveyed between September 13 and 15 believe the fed funds rate of this tightening cycle will peak between 4 per cent and 5 per cent, with 20 per cent of the view that it will need to pass that level.

“The FOMC has still not come to terms with how high they need to raise rates,” said Eric Swanson, a professor at the University of California, Irvine, who foresees the fed funds rate eventually topping out between 5 and 6 per cent. “If the Fed wants to slow the economy now, they need to raise the funds rate above [core] inflation.”

While the Fed typically targets a 2 per cent rate for the “core” personal consumption expenditures (PCE) price index — which strips out volatile items like food and energy — it closely monitors the consumer price index as well. Inflation unexpectedly accelerated in August, with the core measure up 0.6 per cent for the month, or 6.3 per cent from the previous year.

Most of the respondents project core PCE will drop from its most recent July level of 4.6 per cent to 3.5 per cent by the end of 2023. But nearly a third expect it to still exceed 3 per cent 12 months later. Another 27 per cent said “it was about as likely as not” to remain above that threshold at that time — indicating great unease about high inflation becoming more deeply embedded in the economy.

“I fear that we have gotten to a point where the Fed faces the risk of its credibility seriously eroding, and so it needs to start being very cognisant of that,” said Jón Steinsson at the University of California, Berkeley.

“We’ve all been hoping that inflation would start to come down, and we’ve all been disappointed over and over and over again.” More than a third of the surveyed economists caution the Fed will fail to adequately control inflation if it does not raise interest rates above 4 per cent by the end of this year.

Beyond lifting rates to a level that constrains economic activity, the bulk of the respondents reckon the Fed will keep them there for a sustained period.

Easing price pressures, financial market instability and a deteriorating labour market are the most likely reasons the Fed would pause its tightening campaign, but no cut to the fed funds rate is anticipated until 2024 at the earliest, according to 68 per cent of those polled. Of that, a quarter do not anticipate the Fed lowering its benchmark policy rate until the second half of 2024 or later.

Few believe, however, the Fed will augment its efforts by shrinking its balance sheet of nearly $9tn via outright sales of its agency mortgage-backed securities holdings.

Such aggressive action to cool down the economy and root out inflation would have costs, a point Jay Powell, the chair, has made in recent appearances.

Nearly 70 per cent of the respondents expect the National Bureau of Economic Research — the official arbiter of when US recessions begin and end — to declare one in 2023, with the bulk holding the view it will occur in the first or second quarter. That compares to the roughly 50 per cent who see Europe tipping into a recession by the fourth quarter of this year or earlier.

A US recession is likely to stretch across two or three quarters, most of the economists reckon, with more than 20 per cent expecting it to last four quarters or more. At its peak, the unemployment rate could settle between 5 per cent and 6 per cent, according to 57 per cent of the respondents, well in excess of its current 3.7 per cent level. A third see it eclipsing 6 per cent.

“This is going to fall on the workers who can least afford it when we have rises in unemployment due to these rate increases at some point,” warned Julie Smith at Lafayette College. “Even if it’s small amounts — a percentage point or two of increase in unemployment — that’s real pain on real households that are not prepared to weather these types of shocks.”

An easing of supply-related constraints related to the war in Ukraine and Covid-19 lockdowns in China could help minimise just how much the Fed needs to damp demand, meaning a less severe economic contraction in the end,” said Şebnem Kalemli-Özcan at the University of Maryland. But she warned the outlook is highly uncertain.

“Clearly this is one shock after another, so I’m not confident this is going to happen right away,” said Kalemli-Özcan. “I cannot tell you a timeframe, but it is going in the right direction.”

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Europe suffers fuel prices soar as Russia cuts natural gas supply

BERLIN — Jörg Mertens knew the West’s standoff with Russia had sent energy prices soaring across Europe. But his August bills left him gobsmacked.

His energy tab had surged by 70 percent.

“I’m afraid,” said the 60-year-old Munich man, his voice breaking. After rent, the increased costs — about $190 a month for electricity and heat, compared to $112 before — will leave him with $366 a month for food, medicines and transit during Germany’s worst bout of inflation since the 1970s.

“I’ll have to buy less food, said Mertens, who has a spinal disease and survives off a fixed early pension. “In winter, how will I pay the rent?”

Across Europe, Russian President Vladimir Putin’s weaponization of natural gas exports — withholding shipments, the Europeans say, to punish the West for imposing sanctions on Russia — is dropping a bomb on consumers in some of the richest countries on earth. The nations that have been hit hardest — including Germany, Britain, Italy and the Netherlands — have seen ratepayers slapped with year-over-year surges as high as 210 percent, even as officials and analysts warn of the prospect of rationing and blackouts in winter.

The letters left behind by demoralized Russian soldiers as they fled

In Britain, cash-strapped residents are abandoning pets while schools are warning that rising energy costs mean they can no longer afford new textbooks. In Poland, officials are weighing the distribution of anti-smog masks as Poles consider burning trash for heat in winter. In Germany, residents of old West Berlin are dusting off coal- and wood-burning ovens that once served as insurance against the Russians targeting energy supplies during the Cold War.

Several European countries are suffering scarcity and soaring prices for a fuel of last resort: firewood. Thieves, sensing opportunity, are stealing logs from truck beds; scammers are setting up fake websites, posing as wood sellers to con desperate consumers. Wood-burning ovens and furnaces in several countries have almost completely sold out.

“Firewood is the new gold,” said Franz Lüninghake, 62, a systems administrator in Bremen, Germany, who has a wood-burning furnace on back order. His estimated energy bill for the next year? $4,500 — up from $1,500 for the 12 months to May.

Norbert Skrobek, a Berlin chimney sweep — a licensed technician who dons a vintage uniform to inspect and consult on wood- and coal-burning furnaces — said he’s seen a surge in demand as Berliners refurbish old heaters and install new ones. A stampede of locals buying portable heaters, he fears, could trigger dangerous carbon monoxide leaks if improperly installed or used.

“I’m convinced we’re going to have to carry some people out horizontally this winter,” he said.

European nations have been scrambling to reduce consumption, fill reserves and source replacements for Russian natural gas, all while pledging hundreds of billions of euros worth of financial aid to consumers and businesses. To stanch the economic bleeding, the German government is even moving to add hundreds of thousands of people to housing welfare rolls.

But those steps are unlikely to fully offset the far higher costs, leaving analysts warning of an increase in poverty, a devastated middle class, growing government debt and greater environmental harm.

E.U. proposes emergency energy measures as Russia’s war tests Europe

Cuts in shipments of Russian natural gas, used to power electricity grids and heat homes in many parts of Europe, is the biggest factor driving prices higher. But that’s been exacerbated by other setbacks, including scheduled shutdowns of French nuclear power plants to fix corrosion. French authorities have warned the public to prepare for the possibility of rolling blackouts later this year. To save energy, the Eiffel Tower — a towering lantern that ordinarily illuminates the City of Lights until 1 a.m. — is to be turned off by 11:45 p.m.

From Naples to Nuremberg, Germany, consumers are opening their energy bills to sticker shock.

“Putin has played everything to the hilt. So every cut in Russian gas supplies has brought us price jumps,” Klaus Müller, head of Germany’s energy regulator, told The Washington Post. “That is the price of this war.”

Europeans were already funding a transition to renewable energy sources through taxes and tariffs on their power bills, paying more on average than their American counterparts. Now, that gap has widened. As winter approaches, the economic pain could test the continent’s resolve on sanctions to punish Russia for invading Ukraine.

Short of soldiers to send to war, Russia’s mercenaries recruit in prisons

Soaring prices have become a key issue for European parties known for cozy relationships with Moscow, sowing doubt in inflation-weary countries over the wisdom of the sanctions. Matteo Salvini, leader of Italy’s right-wing League party, part of a coalition favored to win national elections this month — suggested Italians were paying too high a price. The generally pro-Russian far right in Germany, meanwhile, is mobilizing a “winter of rage,” calling on ratepayers to take the streets against crippling energy costs.

“Enemies of democracy are just waiting to abuse the crisis to spread doomsday fantasies, fear and uncertainty,” German Interior Minister Nancy Faeser told the Rheinische Post last week. “It is irresponsible to fuel the fears of people who are being hit particularly hard by soaring prices.”

Ahead of an unpredictable winter, European consumers are growing desperate.

In Britain, a recent survey showed, nearly one in four people were planning to keep the heat off this winter. The country, unlike some European neighbors, isn’t dependent on Russia for its natural gas — it makes up less than 4 percent of its supply. But its energy market has been upended by the high prices driven by shortages elsewhere. Domestic gas prices rose by 96 percent and electricity prices by 54 percent in the year to July.

Prime Minister Liz Truss, in her first major announcement as head of government, said last week that consumer energy bills would be frozen for two years. The typical household would pay no more than $2,885 a year, the government said, a savings of more than $1000 per year off commercial rates.

Ed Trewhitt, 55, owner of Brickyard Bakery in Guisborough, England, said it won’t be enough to save his business. If energy prices stay this high, he said, he’ll be forced to close next year. The cost to run his bread oven has doubled over the last year to $2,300 a month. That spike comes on top of Britain’s soaring inflation, which is at a 40-year high.

“The energy prices are crippling, but it’s everything. My flour costs alone have gone up by 80 percent in the last year,” Trewhitt said. “It’s just not sustainable.”

Even as heat scorched Europe this summer, panicked buyers began hoarding firewood weeks ago, sending prices spiking.

‘The Russians are in trouble,’ U.S. official says

In the rural village of Ag, Hungary, two hours southwest of Budapest, Nikoletta Kelemen said the price of firewood — used almost exclusively as winter fuel — has nearly doubled. A single tree’s worth of kindling, the 35-year-old nongovernmental organization worker said, now costs roughly half the average village salary of $249 a month.

“I imagine it will come down to burning furniture,” Kelemen said.

Wood theft in the forests around Stuttgart, Germany, has increased, according to Götz Bülow von Dennewitz, the count who oversees forest management in the area.

“They drive in with a trailer or a tractor and a loading truck and a crane, have professional equipment, saw the stuff together and drive it out,” he said. “Audacity prevails.”

Authorities have warned that illegal cutting and emissions from older ovens make burning wood far from environmentally friendly. But many here feel increasingly as if they have little choice.

On the last day of August, Russia shut off the Nord Stream 1 pipeline — the main link of gas into Germany — claiming a need for maintenance. This month, Putin blamed Western sanctions for delays and warned he would cut off the energy supply altogether if the West followed through with vows to impose price caps on Russian energy exports.

“We will not supply gas, oil, coal, heating oil — we will not supply anything,” Putin said during an economic forum in the Pacific city of Vladivostok, Russia.

Germany, slouching toward recession, is ahead of schedule in filling up its gas reserves. But a bitterly cold winter could still cause hardship. If the government imposes rationing, officials say, they will put citizens before industry.

The German government this month also rolled out a 65 billion euro aid package to help struggling households — its third in seven months — while vowing to claw back excessive profits from providers.

But analysts say the package may prove of limited help for millions. Aid checks won’t go out until December, leaving Germans to foot the increases now. And for many, poverty researcher Christoph Butterwegge said, the one-time checks won’t fully cover the price hikes.

He expects many German households will be paying 20 to 30 percent of their incomes on energy by winter, driving up the rate of energy poverty, defined in Germany as anyone paying more than 10 percent of net income for power and heat.

“There will be poor people who will face the alternative of either starving or freezing,” Butterwegge said.

For Putin and Xi, Ukraine war creates wrinkle in ‘no limits’ friendship

Mertens should receive roughly $300 from the new package in December, not enough to offset the $390 in extra energy costs he’ll pay between now and then. Unless prices come down, or the government steps in again, he’ll be billed at least an extra $78 a month starting in January. More, if prices climb further.

It’s money he doesn’t have. Wealthier households might manage, but he lives on the margins, where every euro counts. It comes to down to choices like cutting down on food and soap, or skipping the replacement of his ragged winter boots.

“Such thoughts,” he said. “They come at you like a hot wave and leave you struggling for air.”

In the Berlin neighborhood of Kreuzberg on a recent morning, 41-year-old scientist Vinzenz Schönfelder watched as Skrobek inspected his old white and gold furnace. Built in the 1880s and unused for decades, the wood-burning oven is Schönfelder’s fallback in the dire case that Germany runs out of heating gas this winter.

“That what scares us the most, that the power supply is no longer stable,” he said.

It reminded him, he said, of growing up in East Germany, where citizens were more prepared for occasional blackouts. “The last time I experienced this [uncertainty] was as a child in the 80s.”

He resents what he describes as Germans again being caught in the middle of what he sees as a struggle between Washington and Moscow.

The sanctions “haven’t ended the war, and they haven’t weakened Russia substantially,” he said. “At the same time, they have really hurt Germany enormously.”

Meanwhile, he said, “the Americans are watching on comfortably.”

Adam reported from London. Meg Kelly in Berlin contributed to this report.

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A squirrel in a Virginia substation caused a blackout



CNN
 — 

A small creature caused a blackout in Virginia Beach last week: a wandering squirrel that made its way into the substation.

It happened around 8:45 a.m. on September 7, according to a tweet from Bonita Harris, spokesperson for Dominion Energy, which provides electricity in Virginia and other states.

The power outage affected over 10,000 Virginians, Harris said. Power was restored by around 10 a.m.

Harris told CNN that animals occasionally get stuck in the company’s substations, despite efforts to keep them out.

“Dominion Energy has standard equipment in place to keep squirrels and other animals safe when near our equipment,” Harris said. “This equipment reduces the number of incidents greatly, but sometimes determined little critters will still get in there.”

The squirrel did not survive the incident, Harris said, although sometimes animals receive a brief shock and go mostly unharmed.

Harris said workers quickly rerouted power to another source to keep as many customers’ lights on as possible.

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Opinion: Adobe’s stock got slammed for spending $20 billion on Figma. But it now owns a rare company.

Adobe beat revenue and profit expectations, and on the same day announced it would acquire a smaller but faster-growing rival in online design-collaboration tools. The stock market rewarded the company by pushing down its shares
ADBE,
-3.12%
to the lowest level in almost three years. 

Investors punished the company not for its earnings report, released Thursday, but for their disdain of the Figma deal. Specifically, the deal’s price. 

Read: Nervous investors are slamming tech deals. Just look at Adobe.

In a $20 billion half-cash, half-stock transaction, Figma became the highest-multiple cloud-scale SaaS deal ever done. An estimated $400 million in revenue for all of 2022 marks this deal at around 50 times this year’s revenue in what I believe to be the second-largest software as a service deal in history. 

In this market, where growth is persona non grata, the market deemed this deal a bridge too far. However, in this case, the market may have gotten this wrong.

Figma is among the fastest-growing companies 

If you aren’t familiar with Figma, it’s a red-hot, venture-backed (before Thursday) company that makes collaboration tools used for digital experiences. While Figma was founded in 2011, the first five years were spent trying to get to product. The company printed its first dollar in revenue in 2017 and will hit $400 million in annual recurring revenue (ARR) in 2022. 

For those who aren’t familiar with SaaS economics, hitting $400 million in recurring revenue in just over 10 years is remarkable. However, doing so five years from the first dollar of revenue is even more impressive.

For reference, the average cloud-scale SaaS company books $10 million in revenue after about 4.5 years, according to Kimchi Hill. In the same study, assessing more than 72 SaaS companies that reached $100 million, only eight did so in less than five years from the first dollar — and that was precisely $100 million. Most take five to 10 years to hit $100 million, and well-known names like DocuSign
DOCU,
-6.14%,
Coupa
COUP,
-4.28%,
RingCentral
RNG,
-5.34%
and Five9
FIVN,
-4.22%
took 10 to 15 years. 

Beyond its speedy growth, the company is also performing in a way that should have been lauded by at least the savviest of investors. Its 150% net customer retention rate, 90% gross margins, high organic growth and positive operating cash flow make it more of what investors want in a company today. Adobe already grows in the double digits, plays in attractive markets, compounds ARR and, at this point, has seen its multiple come way down off its highs. 

It is also worth considering how Figma may benefit from Adobe’s strong market position, known product portfolio and defined channels, and go-to-market strategies to speed its growth in this space with a total addressable market of about $16.5 billion. 

Rare companies are still rare 

Perhaps it sounds as if I’m gushing over this deal. I want to be clear that I am not. At least not yet.

However, the hive mind of the market can be quite perplexing at times, and there is a data-driven story here that justifies Adobe’s decision to buy Figma at such a lofty price. Unfortunately, we won’t know with any certainty for five or even 10 years. Investors may not like that, but Adobe’s longevity depends on operating with the longer term in mind. 

Tough economy or not, rare companies are still rare, and Figma is traversing market conditions and delivering growth in a large market, drawing Adobe in at an unprecedented price. Perhaps higher than it should have, or could have, paid. 

However, based on its rapid revenue growth, strong net dollar retention, 100% growth rate in 2022, massive margins and apparent synergies across the Adobe portfolio, it may be Adobe that has the last laugh on this one. 

Daniel Newman is the principal analyst at Futurum Research, which provides or has provided research, analysis, advising or consulting to Adobe, Five9 and dozens of other technology companies. Neither he nor his firm holds any equity positions in companies cited. Follow him on Twitter @danielnewmanUV.



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Global economy weakens amid inflation fight, war and pandemic

Stubbornly high inflation has Wall Street worried that the Federal Reserve will respond by raising interest rates until the United States tumbles into recession, taking the weakening global economy with it.

While analysts say the U.S. economy grew in the third quarter, signs of trouble are multiplying, here and abroad. Higher mortgage rates are chilling the U.S. housing market; energy shortages are hurting German factory output; and recurring coronavirus lockdowns are hobbling Chinese businesses.

The Fed and other central banks are tightening credit to fight historically high inflation even as three of the world’s main economic engines — the United States, Europe and China — are sputtering. With the United States and other governments also reducing spending on pandemic relief measures, the global economy is getting less support from policymakers than at almost any time in 50 years, the World Bank said on Thursday in a new report that warned of rising global recession risks.

“I see a bumpy path ahead,” said Daleep Singh, chief global economist for PGIM Fixed Income. “We’re in a world in which the shocks are going to keep coming.”

FedEx’s stock plunged Friday, pulling broader financial markets down as well, after the package delivery company’s chief executive, Raj Subramaniam, said he expected a “worldwide recession.”

Rate hikes are little help for Estonia’s 22 percent inflation, Europe’s worst

Central banks, meanwhile, are engaged in the most aggressive campaign of rate increases since the late 1990s, according to Citigroup. This month, central banks in Europe, Canada, Australia and Chile have hiked rates, and the Fed is expected to do so for the fifth time since March at its meeting next week.

Some economists fear that the world’s central bankers are misreading the global economy in their rush to raise rates, just as they did — in the opposite way — last year when they insisted inflation would prove temporary and resisted acting. The cumulative effects of multiple countries tightening credit at the same time could strangle global growth.

“I don’t really get the sense that many or any central banks are paying huge attention to how their policies are affecting the rest of the world,” said Maurice Obstfeld of the University of California at Berkeley, the former chief economist of the International Monetary Fund.

The Fed’s rate hikes are driving the dollar up against other major currencies, which makes imported goods less expensive for Americans, while making it harder for people and businesses in other countries to afford products made outside their borders.

Major oil importers such as Tunisia have been especially hard hit, since crude is priced in dollars. The stronger greenback also hurts developing nations that have large dollar debts. As their local currencies lose value against the dollar, it takes more Turkish lira or Argentine pesos to make debt payments.

Falling food and fuel costs offer poorer nations little relief

Despite raising its benchmark lending rate by two-and-a-half points since March, the Fed has been unable to slow the economy enough to take the pressure off prices. On Thursday, initial jobless claims fell for the fifth straight week, in the latest sign that the labor market remains too hot for the central bank’s comfort.

Though strong hiring is good news for American workers, many economists have said that unemployment will need to increase before inflation cools.

The Labor Department’s report this week that consumer prices in August were 8.3 percent higher than one year ago — little changed from 8.5 percent in July — disappointed investors.

Some analysts expect the Fed to keep hiking beyond the 3.8 percent level that policymakers suggested in June would complete their anti-inflation work. On Friday, economists at Deutsche Bank said the Fed’s benchmark lending rate could hit 5 percent next year — roughly twice the current level.

Wall Street firms such as Oxford Economics this week said the Fed will hit the brakes hard enough to corral prices even if it sends the United States into a brief downturn.

“Higher-for-longer inflation, more aggressive Fed monetary policy tightening and negative spillover effects from a weakening global backdrop will combine to push the U.S. economy into a mild recession,” the firm said in a note to clients.

Since 1981, U.S. and global growth have largely moved in tandem, according to Citigroup research. In each of the four global recessions since 1980, the United States — which accounts for roughly one-quarter of world gross domestic product, or GDP — slowed either right before the global economy fell into a slump or at the same time.

The IMF said this summer that the global economy was in danger of slipping into recession as a result of aftershocks from the war in Ukraine, the pandemic and inflation. The IMF alarm followed a World Bank warning of the risk of global “stagflation,” a toxic combination of persistently high prices and anemic growth.

There is no official definition of a global recession, though the World Bank uses the term to describe a fall in per-person global GDP. Some economists say a broad decline in a number of metrics, such as industrial production, cross-border capital flows, employment and trade, or an economic slump involving a large number of major economies distinguishes a true global recession.

“We have the U.S., Canada and Europe all in recession over the second half of this year and early next year. Whether you call that a global recession or not is in the eye of the beholder,” said Ben May, Oxford Economics’ director of global macro research. “But we are going to go through a very weak patch. It’s going to feel like a recession.”

The big worry is Europe, which is struggling to adjust to the loss of Russian natural gas supplies. Moscow reacted to European sanctions after the invasion of Ukraine by slashing shipments of natural gas to Europe by roughly 75 percent, according to Barclays.

As energy prices soared, consumers and businesses on the continent felt the pinch. After years of holding borrowing costs below zero, the European Central Bank has raised rates twice since July to curb inflation that tops 9 percent — and plans more such moves despite a weakening economy.

“It’s their most dramatic shift in policy since the global financial crisis. The energy supply shock hits them much harder than the U.S.,” said economist Carmen Reinhart of Harvard’s Kennedy School of Government.

Pick your economy: Sizzling labor market or fizzling growth

Some economists say a broader adjustment is underway. After decades in which global integration kept a lid on price pressures in the United States and other advanced economies, external forces now are fueling inflation.

Governments in the United States, Europe and China are encouraging greater domestic production via subsidies and investment restrictions. Reshaping global supply chains will cost more, as will efforts to speed the transition from fossil fuels to address climate change, said Dana Peterson, chief economist for the Conference Board.

“The days of ultralow inflation are probably over,” she said.

Global economic activity contracted in the second quarter for the first time since the early days of the pandemic in 2020. If that contraction turns into a full-blown recession in the months ahead, traditional fixes will not be available.

With inflation raging near 40-year highs in the United States, Europe, Canada and the United Kingdom, central bankers are intent on raising rates, not lowering them — the customary remedy for low growth.

In 2008, when an imploding housing bubble ignited a global financial crisis, the Chinese government stepped up with a nearly $600 billion wave of infrastructure spending, followed by years of generous financing by state banks. The total rescue amounted to more than one-quarter of China’s gross domestic product, far more than the United States spent on stimulus, according to a study by the Organization for Economic Cooperation and Development in Paris.

The Chinese spending translated into orders for factories in the United States and Europe, copper mines in Peru and iron ore producers in Australia.

Today, China is preoccupied with its own troubles — including a debt-ridden property sector and flagging export growth — ahead of a sensitive Communist Party Congress in October, which is expected to grant Chinese President Xi Jinping an unprecedented third term.

The yuan this year also has fallen almost 9 percent against the dollar and is hovering near the symbolically important level of 7 yuan to the greenback.

“Chinese leaders are more reluctant to use levers they’ve used in the past,” said May. “China is less likely to be the spender of last resort.”

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Meet the 30-year-old on the verge of selling his company to Adobe for $20B

Almost overnight, this 30-year-old has become the tech world’s newest titan — and is poised to become one of the world’s youngest billionaires.

Dylan Field, the co-founder and CEO of San Francisco-based Figma, is on the cusp of an epic windfall after Adobe
ADBE,
-3.12%
announced plans to acquire his company for $20 billion this week. Field will stay on with Figma (which makes collaborative design tools), and he reportedly owns a a sizable stake in his company. Forbes estimated it at 10%, which means Field could be looking at a $2 billion payday from the deal. (Field declined to provide details of his ownership share with MarketWatch.)

Considered something of an upstart rival to Adobe, Figma describes itself as a “design platform for teams who build products together.” Its distinguishing factor is that it’s cloud-based, which has made its products especially valuable to designers and other workers separated physically from one another during the pandemic — or to those continuing to collaborate in today’s hybrid work environment.

And Adobe clearly saw value in Figma’s model. The acquisition is said to be the largest in Adobe’s history, although some Wall Street analysts have questioned whether it paid too much. (What’s more, Adobe’s shares tumbled toward their worst week since 2002 in light of the news.) But Adobe chief executive Shantanu Narayen advised investors that the deal will “significantly expand our reach and market opportunity.”

Either way, it’s a mighty leap for Field, who started Figma with Evan Wallace, a one-time Brown University classmate, in 2012. As a Wall Street Journal story noted, Field was living in a gritty San Francisco apartment just four years ago, and buying dollar cups of coffee on his way to work.

“I had a very small sip of Champagne last night.”


— Dylan Field, co-founder and CEO of Figma

On Friday, MarketWatch caught up with Field, who grew up in northern California, to learn more about the Adobe deal — and how it will change his life. Here is some of what he had to say (some comments have been edited for brevity and clarity):

On how Field’s life may change with the payout from Adobe: While Field wouldn’t discuss the specifics of what he’ll earn from the deal, he doesn’t deny he stands to benefit significantly. He says he’s not thinking about much beyond his company and its next chapter. “Right now, I’m just all in on Figma and trying to think about how to make Figma successful, especially in this new context,” he says. In other words, he’s not yet planning on colonizing Mars with his riches a la Elon Musk.

But Field admits he’s still pretty buzzed about the events of the past week. “It’s very cool though, I’m not going to lie,” he says.

On how he celebrated the deal: Field is known to love wine, but he says he hasn’t been drinking much in the last few weeks because he’s been so focused on his work and the deal. Nevertheless, he says, “I had a very small sip of Champagne last night” with the Figma team.

On Figma’s value proposition: Put simply, it’s all about the ability to work together via the cloud. “We’re able to make it collaborative,” says Field of the tools that Figma offers. “So, if you’re a designer and I’m an engineer, no longer do we have to exchange files back and forth… We can make edits together. We can riff off each other’s ideas. That collaboration mattered to a lot of our customers.”

A newer product that Figma offers is FigJam, which Field describes as a “whiteboard solution.” The thought behind it, Field explains, is “that we can help people go from ideation and brainstorming into the design process and all the way to production.”

On why and how the Adobe deal came together: Field notes that when he co-founded the company there was a serious question as to whether the world had enough designers to make Figma a viable entity. “We weren’t sure there’s a big enough market here,” he says. But with the world going ever more digital — and, by extension, tapping increasingly into digital design tools — the design community has flourished, and the need for good design has become ubiquitous. “Every company has to care about design,” he says.

“Adobe’s mission is creativity for all, Figma’s mission has been to make design accessible for all. Those are two sides of the same coin in some ways.”


— Dylan Field, co-founder and CEO of Figma

Thus, Adobe’s desire to tap into what Figma offers its customers as a leading-edge digital design platform, Field explains. And not just tap into it, but also help Figma expand its platform through adding different tools and capabilities — not only for the designer audience, but also for the broader creative audience. “That got us really excited, because it accelerates the impact that we already wanted to have, but also scales the impact,” Field says.

On Figma’s image as an “Adobe killer”: Yes, Figma has been described as that. And Field once even tweeted, “Our goal is to be Figma not Adobe.” Field says he still stands by the remark in that the two companies are distinct in certain respects, although he also notes they ultimately share similar goals: “Adobe’s mission is creativity for all; Figma’s mission has been to make design accessible for all. Those are two sides of the same coin in some ways.” He adds that both companies are aligned “around craftsmanship and community” and “there’s so much we can do together.”

On Field’s views about education: Much has been made of the fact that Field didn’t graduate from college — he attended Brown University, but left in his junior year to start his entrepreneurial career (he got accepted for a fellowship program run by financier Peter Thiel). Field says he is not anti-college per se. “I care a lot about learning, and (going to) a university can be a great way to do that in a structured fashion.” But he also says there are other ways to gain knowledge, pointing to online courses that are readily available. As a result, Field finds it hard to fathom that a lot of companies still require college degrees of applicants. “I think they’re missing out on a lot of great talent,” he says.



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What happened to 2 dollar bills?

“If you had a $2 bill, perfect,” said Heather McCabe, a writer and $2 bill evangelist who runs the blog Two Buckaroo chronicling her spending with twos and other people’s reactions. “It’s a very useful thing to pay for a small amount.”

Yet the $2 note is the unloved child of paper currency.

It’s considered a curiosity to some and scorned by others in the United States. The myths around the $2 bill — nicknamed “Tom” by fans because it features Thomas Jefferson’s portrait on the front — are endless. Many Americans think $2 bills are rare, are not printed anymore or have gone out of circulation.

Wrong.

The Treasury Department’s Bureau of Engraving and Printing (BEP) will print up to 204 million $2 bills this year, based on an annual order from the Federal Reserve System. There were 1.4 billion $2 bills in circulation in 2020, according to the latest data from the Federal Reserve.
But $2 bills account for just 0.001% of the value of the $2 trillion worth of currency in circulation.

BEP doesn’t have to request new $2 bills each year, like it does for other bills. That’s because $2 bills are used so infrequently and last longer in circulation. The Fed orders them every few years and works down the inventory.

“Many Americans have pretty dubious assumptions about the $2 bill. Nothing happened to the $2 bill. It’s still being made. It’s being circulated,” McCabe said. “Americans misunderstand their own currency to the extent they don’t use it.”

Bad luck

The United States first issued $2 bills beginning in 1862, around the time the federal government first started printing paper money. Alexander Hamilton’s portrait was on the two until a new series was printed in 1869 with Jefferson.

But the deuce was unpopular and never gained a foothold with the public.

A major reason: The the $2 bill was considered bad luck. Superstitious people would rip off the corners of the bill to “reverse the curse,” making the bills unfit to use.

“He who sits in a game of chance with a two-dollar bill in his pocket is thought to be saddled with a jinx,” the New York Times said in a 1925 article. “They have been avoided as ill-starred.”

The two was also known for keeping controversial company. It was associated with gambling, where it was the standard bet at racetracks, and prostitution.

And during the nineteenth century, crony candidates frequently used $2 bills to bribe voters. Someone holding a $2 bill was thought to have sold a vote to a crooked politician.

The Treasury Department during the 1900s tried unsuccessfully several times to popularize the use of the $2 bill. In 1966, it gave up and discontinued printing the bills “because a lack of public demand.”

But a decade later, as the United States approached the bicentennial, the Treasury designed a new $2 bill series with a portrait of the signing of the Declaration of Independence on the back.

The aim was to cut the number of $1 bills in circulation and save the Treasury money on production costs.

But the relaunch in 1976 failed. People viewed the new version as a collector’s item and hoarded them instead of going out and spending them.

The Postal Service offered to stamp them only on April 13, the first day they were issued in honor of Jefferson’s birthday, unintentionally adding to the idea that they were commemorative bills -— a misconception that continues to this day.

“The press and public now tend to link the $2 bill with the Susan B. Anthony dollar under the general heading of ‘fiascos,'” the New York Times said in 1981.

There’s no rational reason why $2 bills aren’t as popular as other bills, said Paolo Pasquariello, a professor of finance at the University of Michigan. But people exhibit a preference for multiples of 1 and 5, he said.

Another reason $2 bills never took off: Cash registers, invented in the late 1800s, were never designed with a place to hold them, so cashiers didn’t know where to stash them.

“There wasn’t an alteration of cash registers for $2 bills,” said Heather McCabe. “The infrastructure of paying for things didn’t change. There was not an adjustment of how people work with that bill.”

If cash registers had a familiar slot for $2 bills, the bill would be more popular, she argued.

$2 subculture

But there are people who swear by $2 bills. In fact, communities and subcultures have developed around them.

US Air Force pilots who fly U-2 spy planes always keep a $2 bill in their flight suits.
Since the 1970s, fans of Clemson University’s Tigers football team have paid and tipped with $2 bills -— “Tiger Twos” — in other cities’ restaurants, bars, shops and hotels. The tradition started as a way to prove to Georgia Tech in Atlanta that it would benefit the city to schedule games against Clemson.
“There is a degree of popularity to them. There is a sense of excitement,” said Jesse Kraft, a curator at the American Numismatic Society. “But as far as putting them back into circulation, that’s the key that’s missing.”

Kraft is a proponent of adopting $2 bills more widely.

He notes that it’s about half as expensive for the Treasury to print a $2 bill than higher denominations, which come with costlier security features on the paper. It’s also more efficient to print $2 bills than $1 bills because the Treasury can print twice as much for the same amount of money and requires less storage.

John Bennardo, who made a 2015 film about $2 bills called “The Two Dollar Bill Documentary,” has made it his mission to “educate people and enlighten them and start using $2 bills in their life.”

In short, he concludes, $2 bills are underappreciated in the United States and a way for strangers to meet and engage.

“You will get remembered if you use a $2 bill,” Bennardo said. “It has this ability to connect people in way that other bills don’t. It opens up a dialogue between you and the cashier.”

“It’s a practical bill with inflation. But it’s social currency as well.”

CNN’s Harry Enten contributed to this article.

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