Berkshire Mortgages – Hudson Berkshire Experience Mon, 21 Nov 2022 13:51:02 +0000 en-US hourly 1 Berkshire Mortgages – Hudson Berkshire Experience 32 32 Warren Buffett Owns These 5 Stocks of Value Mon, 21 Nov 2022 13:51:02 +0000

Warren Buffett is one of the greatest investors of our time, and his company, Berkshire Hathaway (BRK.A 0.23%) (BRK.B 0.17%)regularly beats the S&P500, a broader benchmark for the market, on annual performance. One of the ways Buffett and Berkshire are able to do this is through Berkshire’s massive $345 billion stock portfolio, from which Buffett and the rest of his team buy and sell stocks. selected.

Buffett has long been known as a value investor. It tries to find stocks that are trading below their intrinsic value and that the market has missed or simply ignored. Over time, value investors believe these stocks will appreciate nicely as the market wakes up and takes notice.

Given Buffett’s success with this strategy, let’s take a look at five value stocks the Oracle of Omaha currently holds and see if they’ve helped his business succeed.

1. Resume

Known as the original Silicon Valley start-up, HP (HP -8.40%) has been manufacturing computers and printers for decades. While the company may not be seen as the innovator it once was, HP has become a stock that mainstream investors have warmed to for the fundamental reason that it prints lots of cash profits and the used to pay shareholders.

For fiscal year 2022, HP forecasts free cash flow of between $3.2 billion and $3.7 billion. The company is also on track to return more than $5 billion to shareholders in the form of dividends and share buybacks in the current fiscal year. With an annual dividend yield of nearly 3.4%, HP stock is trading at just over 5x earnings.


After investing in nearly every other major U.S. bank over the past few decades, Buffett and Berkshire bought a nearly 3% stake in the troubled bank. Citigroup (VS -0.37%) earlier this year. Citigroup is an obvious value play, with its shares trading at just 60% of its tangible book value, or net worth. Shareholders are right to question the stock at a time when the company has faced regulatory issues over its risk management and internal controls, and after years of lagging returns.

But now CEO Jane Fraser, who took over Citigroup in early 2021, has launched a big transformation plan that includes selling off most of the bank’s international banking operations. This will simplify banking and focus on the most successful businesses. Citigroup still has a lot of work to do, but if management can fix the regulatory issues and create a more focused operation, getting back to full tangible book value should be entirely doable. While Buffett waits, Citigroup is paying out an annual dividend yield of over 4%.

3. Kraft Heinz

The food and beverage multinational Kraft-Heinz (KHC 1.05%) is often referred to as Buffett’s biggest mistake. Berkshire partnered with 3G Capital in 2013 to buy Heinz for $23 billion. They would eventually merge the company with Kraft in 2015 when shares opened around $71.

Today the shares sit at $38, so Berkshire lost a lot of money on the investment. Yet Berkshire continues to own more than 26% of the company. Kraft Heinz still has nearly $19.3 billion in long-term debt, but management has made serious progress in reducing that debt, growing free cash flow in recent years and also paying a dividend yield. greater than 3%.

4. Allied Financial

The Great Digital Consumer Bank Allied Financial (ALLY 0.31%), which specializes in auto loans, is another bank in which Buffett buys shares when its book value is below book value, and which pays out an extremely healthy dividend yield of around 4.6%. Ally took off in 2020 and 2021 as chip shortages and a lack of automotive inventory led to high car prices and huge demand, especially among vehicles, allowing Ally to strongly grow its automotive loan portfolio in detail.

But investors are now worried about loan losses as consumer finances dwindle and many expect a recession next year. Ally is still the originator of auto loans — and at very high yields — and management appears to be taking a conservative approach to credit. If loan losses do not exceed management’s embedded expectations, I suspect Berkshire has a winner here.

5. Jefferies Financial

Berkshire recently disclosed its small stock purchase in an investment bank Jefferies Financial (I F -1.26%) during the third trimester. Similar to Citigroup and Ally, Jefferies also has an attractive valuation, trading just above tangible book value. The bank also pays out more than a 3% dividend yield.

The entire investment banking industry has struggled this year as equity and debt underwriting has slowed significantly in the face of falling equity valuations and market volatility. But Jefferies would gain market share, and Berkshire and Jefferies own a mortgage business together, so Berkshire probably got to know management well.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Ally is an advertising partner of The Ascent, a Motley Fool company. Bram Berkowitz has positions in Citigroup and has the following options: long January 2024 $80 calls on Citigroup. The Motley Fool holds and recommends Berkshire Hathaway (B shares) and Jefferies Financial Group. The Motley Fool recommends The Kraft Heinz Company and recommends the following options: January 2023 Berkshire Hathaway $200 Long Calls (B Shares), Berkshire Hathaway January 2023 $200 Short Puts (B Shares), and Short Calls of $265 from January 2023 on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

Why FTX’s Collapse Evokes Nightmares of the 2008 Global Financial Crisis — and Fears of Crypto Pyramid Schemes Sat, 19 Nov 2022 01:02:29 +0000

Sam Bankman-Fried, chief executive of FTX, during a panel at the Crypto Bahamas conference in Nassau, Bahamas on April 27.ERIKA P. RODRIGUEZ/New York Times News Service

Over a million direct creditors are estimated to be hurt by FTX’s demise, but the cumulative pain of another crypto meltdown raises the specter of something far more pernicious: financial contagion.

FTX is the third crypto exchange to officially file for bankruptcy protection in the past six months, after Celsius Network and Voyager Digital, and a growing number of crypto firms have either liquidated or become irrelevant this year, including Three Arrows Capital, Hedge Fund and Terraform Labs.

The cumulative effect evokes the nightmares of the 2008-09 global financial crisis. Because FTX is such a central player in the crypto ecosystem, the fear is that containing the fallout will be impossible. Like a wildfire that jumped a highway, the FTX meltdown has the potential to amplify contagion throughout the industry.

“I see a lot of similarities between what’s happening in crypto and what was happening in traditional finance heading into the 2008 crisis,” said Saule Omarova, a Cornell law professor and financial derivatives expert. who was the first US President Joe Biden. choosing to lead the Office of the Comptroller of the Currency, a key banking regulator, said in an interview. (She withdrew her nomination after Republicans torpedoed her chances.) “It’s the same formula.”

Who are the big names affected by the FTX crash? Tom Brady, Ontario Teachers’ Pension Plan, Steph Curry and more

New FTX CEO Describes ‘Unprecedented’ Financial Disaster

To be clear, what has happened in cryptoland so far has nothing to do with the collapse of Lehman Brothers in September 2008. The demise of the investment bank was a Category 5 hurricane for the system. global financial institution, as Lehman had deep ties to major lenders. Crypto, on the other hand, has so far largely operated outside of the traditional financial network.

But one thing has become clear watching the fall of crypto companies: these institutions are interconnected in a way few people realized, and the extent of their exposures to each other, usually through loans, is strangely similar to 2008. While reckless mortgage lending was the root of this crisis, what nearly sent the banking system into a tailspin was an opaque web of derivatives and counterparty exposures between financial institutions, making almost impossible to determine who owed what to whom.

The fact that so many crypto CEOs scoffed at the suggestion of tighter regulation amplifies the analogy, because that’s exactly what happened in the early days of derivatives in the 1990s. a full replay,” said Dennis Kelleher, a former corporate attorney who is now CEO of Better Markets, a nonprofit in Washington, D.C. that advocates for consumer protection.

Left to fester, derivatives spawned a shadow banking system that eventually had the strength to sink the most powerful banks in the world. This may seem like overkill for crypto right now, but without fixes, the potential for widespread financial pain one day cannot be dismissed.

As standalone products, financial derivatives and crypto assets are not inherently good or bad. How they are used determines their impact.

In the beginning, derivatives helped banks and the global economy because they could be used to transfer the risk of a loan off the bank’s balance sheet to a third party, perhaps an asset manager, by overlaying a contact of ‘insurance. The asset manager may not be a great risk manager, but the insurance contract guaranteed that he would be reimbursed if the borrower defaulted. These products help move money through the economy because they free up bank capital, allowing the institution to lend to someone else.

The problem is that derivatives have become more exotic. Banks and hedge funds have started hiring PhDs in math, often with the goal of devising other ways to transfer risk.

Derivatives could also be used for nefarious purposes. Energy company Enron Corp. attempted to transcend its sleepy roots and become a cutting-edge trading giant in everything from natural gas to weather derivatives, but its paper profits turned out to be a sham. Management hid billions of dollars in debt by transferring it to entities that were not on the company’s balance sheet.

In 2002, a year after Enron’s collapse, Warren Buffett and his partner at Berkshire Hathaway, Charlie Munger, warned investors and regulators in the duo’s annual letter to shareholders. “Charlie and I agree on what we think of derivatives and the commercial activities that accompany them: we see them as ticking time bombs, both for the parties who deal with them and for the economic system.”

Yet the popularity of these instruments only grew as Wall Street began to link them to one of the hottest assets: residential real estate. Banks transferred mortgages off their balance sheets by bundling and selling the loans in tranches, and these tranches were often then divided and repackaged into even more tranches, with insurance contacts superimposed on each.

It all started to fall apart when the US housing market began to falter in 2006. Technically, each derivative was unique, but they were all rooted in the same asset: homes. And because there were so many derivatives floating around, it was almost impossible to keep track of how they all interacted.

The crypto industry is a far cry from that, but even in its infancy such interconnection is already present, and it started causing problems in April when the prices of two cryptocurrencies, luna and terraUSD, fell in a matter of seconds. weeks.

Luna attracted a huge following at the start of the year because some major crypto traders had started promoting it, and the resulting demand boosted terraUSD’s fortunes, as the two assets were inextricably linked. TerraUSD is what is known as a stablecoin, used as an intermediary for the inward and outward transfer of cryptocurrencies without having to convert to US dollars.

The problem, however, was that unlike normal stablecoins that hold US dollar reserves in a bank account as a backstop, TerraUSD was backed by luna and a fund of other cryptocurrencies, including bitcoin. When the prices of these cryptocurrencies fell, the bottom fell.

In just a few weeks, US$40 billion worth was wiped out and collateral damage spread to Three Arrows Capital, a hedge fund linked to several other crypto companies. Voyager Digital, a TSX-listed crypto trading and lending platform with loans worth $2 billion, filed for bankruptcy this summer after disclosing that it had lent $655 million to Three Arrows, and the money was not refunded.

Additionally, BlockFi, which acts as a crypto bank and lends to other crypto companies, had to sell itself to survive after lending US$80 million to Three Arrows, while Galaxy Digital Holdings, another cryptography listed on the TSX, disclosed it. would lose US$300 million in a single quarter because of its luna bets.

Galaxy shares have lost 89% of their value over the past year, but the company is still struggling. Voyageur and BlockFI, however, were rescued by FTX – which is problematic now that FTX itself has filed for bankruptcy protection.

When FTX rescued other companies, the consensus was that it had one of the best balance sheets in the industry. What is clear now is that FTX is in financial disarray. After founder and CEO Sam Bankman-Fried resigned at 4:30 a.m. on Nov. 11, the company named John Ray III as its new CEO, and he was stunned by what he has already seen.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial reporting as has occurred here,” he wrote in an affidavit filed with the court.

This week, Mr. Bankman-Fried acknowledged in interviews that FTX had quietly loaned money to Alameda Research, the sister crypto trading company he owned. FTX’s exchange token, FTT, is also attracting attention.

Crypto exchanges often create their own tokens, or coins, which they market as points for loyalty rewards programs. Clients who trade using these exchange tokens, rather than transacting in cash each time, often pay lower trading fees.

But it seems that the money that customers place in FTT coins has not been protected in any way. Instead, Mr. Bankman-Fried may have lent him out to fill Alameda’s financial holes. It may have been happening for a while, but no one noticed because FTT was working fine.

It wasn’t until the price of TTF fell at the start of the month that the whole operation began to shake – the same way derivatives values ​​began to tumble when house prices fell. before the financial crisis. None of the allegations have been proven in court.

Trauma is already ricocheting through the crypto sector. Genesis, a crypto lender with $2.8 billion in active loans as of September, halted investor repayments as it has $175 million in funds locked on FTX. BlockFi, meanwhile, disclosed “significant exposure” to FTX and Alameda, including loans to Alameda.

Gary Gensler, chairman of the U.S. Securities and Exchange Commission, warned against such schemes, saying in August 2021 that the crypto industry was “rife with fraud, scams, and abuse.” But he couldn’t do much about it because lawmakers haven’t decided how to govern crypto. For a regulator to have jurisdiction, a traded asset must fit into a box, whether it is a currency, a security, or something else entirely.

This year’s crypto meltdown will likely compel lawmakers to act because so much money has been lost and the contagion is worrying. As of last November, the total value of crypto assets worldwide stood at US$3.2 trillion, according to the FT Wilshire Digital Asset Index. Today it is US$861 billion.

Some experts are hoping new rules will help mainstream banks enter the industry – something many banks have desperately done because crypto trading fees are so high. If they do, their participation could help clean up the industry.

But Ms. Omarova, the derivatives expert who nearly became America’s top banking regulator, isn’t so sure. “That was exactly the logic of allowing banks to get into the derivatives business: they know how to manage risk.”

Derivatives regulations were enacted in 2000 in the United States, and eight years later Lehman Brothers went bankrupt. “There is always a danger,” she said.

Select Board reviews second Housatonic School redevelopment proposal Wed, 16 Nov 2022 03:24:04 +0000

207 Pleasant St., the location of the Housatonic School building. Photo via Google Maps.

Greater Barrington— The second of two redevelopment proposals for the former Housatonic School was considered at the board meeting on Monday, November 7. The elementary school building, located at 207 Pleasant Street in Housatonic, was built in 1907 and has been vacant since its closure. down in 2003.

The first of two proposals, submitted by Arete Venture Partners LLC, was considered at the October 24 Select Board meeting.
The Nanuet, NY company plans to build 14 residential apartments on the second and third floors of the building, including four 650 square foot studios that will be priced at affordable housing rates. In addition, the company intends to install 5,500 square feet of open concept commercial space.

Meanwhile, WDM Properties of North Adams and Pittsfield wants to turn the building into a 10-unit apartment complex, with rents set at $1,765 per month. At the Nov. 7 meeting, company project manager David Carver told the Select Board that each apartment would be 1,200 square feet and would include two bedrooms, a kitchen, washer and dryer.

“Our proposal involves the creation of 10 two-bedroom apartments and responds to Berkshire County’s strong need for quality, market-priced housing,” Carver told the Select Board. “Over the past 50 years, the rate of rental housing production has lagged far behind the production of heavily subsidized low-cost housing, as regulated by the federal government. This accommodation is usually defined by [the Department of Housing and Urban Development] serving households whose income is less than 50% of the region’s median income. We propose in this project to serve residential household incomes up to but not more than 100% of the median household income. This cap is proposed due to the inclusion of municipal funds, development budget and the need to reserve units for this target market. »

Carver said apartment rent will be no more than 30% of the region’s median household income, including utilities. He said HUD reports the area’s median household income is $92,100, which he says would yield a maximum monthly rent of $2,300, which includes utilities. “However, to remain competitive in the rental market and better serve the target market, we are offering starting rents of $1,765 including heating,” Carver said. “Tenants would pay for their own electricity and air conditioning which is estimated at $125 per month, for a total housing cost of $1,890 per month.”

The company proposes to create 20 parking spaces all around the building, i.e. two parking spaces per dwelling. The company’s parking proposal includes a handicap accessible parking unit.

Selection committee member Garfield Reed asked Carver if any of the apartments would be handicap accessible. “Because it’s only 10 units, it’s not necessary and we don’t provide that,” Carver said. “If there were 12 or more units, all common areas [on each floor] would need to be handicapped accessible. If there were 20 or more units, at least one unit out of 25% must be accessible. The [units] will all be of a good size, but accessibility is limited by building access.

Carver estimates that the total budget for the project would be $3,500,000. “The reuse of this building will require the use of historic tax credits and the grant offered by the city in the RFP, in conjunction with private bank financing and developer equity,” Carver said.

To finance part of the project, the company received a proposal from Berkshire Bank Senior Vice President D. Matthew Emprimo for a multi-advance commercial real estate loan of up to $1,500,000 over a 10-year term.

Emprimo added in the proposal that “Berkshire Bank also has a strong interest in being the investor for the $1 million tax credit on this project. The negotiation and underwriting of the tax credit price would take place during the bank’s loan due diligence process. »

Vice President Leigh Davis asked Carver how much the company plans to claim historic tax credits and what the timeline for claiming the credits looks like. “That’s probably the hardest part of setting up the finances,” Carver said. “Usually it takes so long to do it. We learned from our consultant that projects that are shovel-ready and meet the criteria move forward much, much faster. That’s going to be critical in this project.

Carver said the company could get between 20% and 25% of the total project cost in historical tax credits and is expected to raise about $1 million from credit sources. “Are you confident enough that you will receive these tax credits?” Vice President Davis asked Carver. “And if for some reason you don’t receive them, how will that affect your overall budget?”

“Certainly that would be a problem,” Carver said. “If the funding comes neither from our local bank nor from tax credits, yes, the project is in jeopardy.”

Vice President Davis asked if the company would return to the city to make up any shortfall in funding for the project if it did not receive historic tax credits.

“I don’t know how realistic that is,” Carver said. “I would be very uncomfortable going into town unless she had the money to do so. Personally, I would feel uncomfortable asking that.

The select committee is due to discuss the two proposed projects at its next regular meeting on Monday, November 21 at 6 p.m.

Find WDM Properties’ proposal to redevelop the former Housatonic school here.

Tips for buying a house during the holidays | Immovable Fri, 11 Nov 2022 17:55:39 +0000

The holidays are a unique time to buy a house. Sellers are scarce, the weather is uncooperative, and many real estate professionals are on vacation, leading to delays and other issues.

But there are also big, noticeable benefits to buying a home during the holiday season — as long as it’s done right.

“While many people associate the holidays with family reunions and time off from work, for homebuyers the holiday season can be the perfect time to buy property,” says Alex Shekhtman, CEO and Founder of LBC Mortgage. in Beverly Hills, California.

Are you planning to buy a house at the end of the year? Here’s what to expect – and how to do it successfully.

Benefits of buying during the holiday season

As Skekhtman mentioned, there are serious benefits to buying a home while on vacation. On the one hand, there is generally less competition. This not only makes it easier to find a home, but also to get a good deal when you do.

“There are usually fewer buyers in the market, which gives you more bargaining power,” Shekhtman says. “Also, many sellers are motivated to sell during this time of year and may be willing to accept a lower offer.”

According to ATTOM Data Solutions, he’s right: the best days to buy a house – at least in terms of price – are all during the last two months of the year (November 28, December 5, December 26, December 19 and December 12, to be exact).

But it’s not just lower prices that you could enjoy with the purchase of a vacation home. Real estate agent Rachel Bennett says sellers are simply more motivated this time of year – and that means other valuable perks too.

“Buyers looking this holiday season will face much less competition and may be able to negotiate a number of things such as price, seller concessions and mortgage buyouts,” says Bennett, agent at Orchard in Austin, Texas.

Finally, we must also think about the tax advantages. Buyers able to close their mortgages before the end of the year could be eligible to write off their mortgage interest charges, property taxes and more in April.

Disadvantages of buying during the holiday season

Despite the many advantages of buying a vacation home, there are also some disadvantages to consider. First, agents say there are generally fewer sellers, which means fewer listings to choose from.

“Inventory is typically lower during the holidays, which means shoppers have fewer choices overall,” says Christy Budnick, CEO of Irvine, Calif.-based Berkshire Hathaway HomeServices. “You also need to be able to look past all the holiday decorations to see the house as you would live in it.”

Additionally, real estate professionals – including agents, lenders, and home inspectors – tend to have limited availability during this season. This can lead to delays and scheduling difficulties.

“The main challenges will be timelines,” says Michael Nourmand, president of real estate firm Nourmand & Associates in Beverly Hills, Calif. “It’s harder to line up inspections because people are on vacation and the loan process is moving very slowly.”

Weather, not to mention shorter daylight hours, can also add an extra layer of difficulty, especially when visiting homes. Plus, the upfront costs of buying a home — including the down payment, closing costs, and moving costs — can pose a financial challenge, especially during an already expensive time of year.

Advantages The inconvenients
Less competition Fewer ads
More bargaining power Agents, lenders, inspectors and other professionals less available
Potentially lower prices Possible delays
May allow you to realize a new tax deduction if you buy before the end of the year Many initial costs during an already expensive period

Tips for buying a house while on vacation

If you’re choosing to buy a home this holiday season, real estate professionals say there are a few strategies that can make your journey easier.

1. Hire a good agent.

Having a good agent by your side is essential at any time of the year, but it’s especially important during the holidays. First and foremost, you’ll want one that’s experienced and well-connected in your area.

“Fewer homes are often listed from Halloween to New Years,” says Jon Sanborn, co-founder of real estate investment firm SD House Guys in Philadelphia, Pennsylvania. “You will need someone to find these key properties and use their network.”

Choosing an agent who has colleagues you can lean on is also a good idea.

As Bennett explains, “I would recommend working with a brokerage that has multiple agents on staff. This will ensure that your search does not need to slow down, even if agents take time off to be with their families.

2. Get pre-approved.

You should also get pre-approved for your mortgage. This gives you a clear idea of ​​what price you should be shopping at and also helps you act quickly when it’s time to make an offer.

“If you see the right house, it will help your agent make an offer on any day,” Bennett says. “You won’t need to spend time researching various speakers while on vacation.”

Getting pre-approved can also help you in a rising rate market, when you may need to make budget adjustments quickly.

“The single most important step a buyer can take to ensure a smooth transaction is to get pre-approved for a mortgage,” Budnick says. “With interest rates changing rapidly, it will be important to understand how much you are entitled to and what it will mean for your purchasing power if rates rise during your housing search.”

3. Plan ahead.

When shopping during the holidays, you can expect to encounter a few no-shows. Maybe your agent is going to visit family or you have a vacation planned as well.

“As soon as you step into the Thanksgiving holiday, people’s spirits kick in,” says Christian Ross, chief broker at Engel & Völkers in Atlanta, Georgia. “People don’t take two days off; they take a week’s vacation. Make sure you have additional points of contact so you can get your questions or concerns answered in a timely manner.

You should also line up other professionals early on in case they have other plans as well. This can include cleaners, painters, moving companies, and most importantly, a building inspector.

“Keep a home inspector on the lookout the closer you get to landing your dream home,” says Christa Kenin, agent at Douglas Elliman in Connecticut. “A delayed inspection can delay your mortgage process and frustrate the seller.”

4. Know the seller and be aggressive.

Since demand is down this time of year, agents say buyers have leverage — leverage they should use to get the best deal possible.

“Sellers would much rather unload a house before winter hits,” Kenin says. “Buyers can capitalize on this anxiety. I encourage my vacation home hunters to negotiate aggressively as we get closer to vacation.

To help you in these negotiations, work with your agent to understand the seller and their motivations for selling.

As Budnick says, “Determine the seller’s hot spots. Are there things important to the seller that are not important to you? If so, use them in your favor in the negotiations.

Oklahoma GOP Governor Kevin Stitt is fighting for a second term | app Tue, 08 Nov 2022 22:21:42 +0000

OKLAHOMA CITY (AP) — In dark red Oklahoma, the first term of Republican Gov. Kevin Stitt, a wealthy businessman whose first term was rocked by feuds with tribal nations and members of his own party, finds himself in a surprisingly tough re-election campaign against Democrat Joy Hofmeister.

Hofmeister, 58, the two-term state superintendent of public schools who switched sides to run against Stitt, lambasted Stitt for his good-guy plan to divert public education money to schools private.

She launched a 50-stop bus tour across 27 counties in the final week of the campaign to hammer home the message, stepping off the coach for the 1970 Three Dog Night hit “Joy to the World.”

“He’s a rural school killer,” she said in her stump speech. “And if you kill the school, you kill the community.”

Jack Zedlitz, 48, a lifelong Republican who recently sided with Independence, voted for Hofmeister at the Crown Heights Church of the Nazarene in Oklahoma City on Tuesday, saying Stitt’s support for school vouchers was too much. harmful to public schools.

“One of the unintended consequences is that it will hurt some of the most vulnerable school districts that typically educate the poorest and most marginalized communities,” Zedlitz said.

The issue is also one that resonates in rural Oklahoma, which in 2018 helped provide Stitt, 49, a wealthy mortgage company owner and political outsider, the state governorship. He won 73 of the state’s 77 counties, many by huge margins, after campaigning to bring a businessman’s “fresh look” to state government.

“The turnaround you elected me for is working,” Stitt told a crowd of more than 300 gathered at the Crossroads megachurch on the south side of Oklahoma City for a rally last week with the U.S. senator. Ted Cruz from Texas. took place with Virginia Governor Glenn Youngkin in Tulsa.

Stitt brags about the state’s record savings and funding for public schools under his watch, and the state’s rapid emergence from pandemic-related shutdowns that have helped the economy rebound quickly and sustain the state unemployment rate at a low level.

Jessica Perez, 46, voted for Stitt at Oklahoma Christian University on Tuesday and said her state oversight during the pandemic appealed to her.

“It didn’t make sense to me that you could go to Home Depot but not go to church,” Perez said. “I believe he’s an effective leader. What he says he’s going to do, he does.”

Although Democrats haven’t won a statewide election in Oklahoma since 2006, Stitt has faced a barrage of blistering attack ads from black money groups. . The groups don’t have to report their donors and have spent millions since the June primary hammering out its school voucher plan. Other ads highlighted his mass release of prisoners and a series of scandals in his administration, including a lucrative no-tender contract with a barbecue restaurant, mis-spent pandemic relief funds for the education and his plans to build a new state mansion.

The black money attacks on Stitt and other media boosting Hofmeister follow ongoing feuds Stitt has engaged in with many of the 39 federally recognized Native American tribes, another issue that Hofmeister has come down hard on. affected during the election campaign.

In a sign Hofmeister posed a tall order, the Republican Governor’s Association super PAC launched a late ad buy tying Hofmeister to high gas prices and President Joe Biden, who lost Oklahoma to the profit from Donald Trump by more than 33 percentage points and remains highly unpopular in the state. Stitt also loaned his campaign $2 million, bringing his total fundraising to more than $10 million, more than triple the $3.1 million raised by Hofmeister.

Independent Ervin Yen, an Oklahoma City anesthetist and former Republican state senator, and libertarian Natalie Bruno d’Edmond are also running for governor.

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Rising interest rates boost Warren Buffett’s Berkshire Hathaway earnings Sat, 05 Nov 2022 15:46:20 +0000

Warren Buffett’s Berkshire Hathaway is quickly becoming one of the main beneficiaries of the sharp rise in US interest rates, as its fortress-like balance sheet begins to generate hundreds of millions of dollars in revenue for the sprawling conglomerate.

The interest the company earns on its $109 billion cash nearly tripled from a year earlier to $397 million in the third quarter, it disclosed on Saturday, noting that the gain was “primarily due to rising short-term interest rates.

Berkshire holds the vast majority of its cash in the form of short-term Treasury bills, deposits in banks and money market accounts, where interest rates have risen rapidly as the Federal Reserve has tightened monetary policy . Last week, the US central bank raised rates to between 3.75 and 4%, from near zero at the start of the year, and traders expect that rate to rise above 5% next year.

While tighter policy has sent shockwaves through financial markets — even bludgeoning the value of Berkshire’s mammoth stock portfolio — it is finally starting to pay dividends to cash-holding businesses and consumers.

Data from the Investment Company Institute showed cash placed in money market funds for daily retail investors hit an all-time high.

Buffett and Berkshire Vice Chairman Charlie Munger have presided over a significant expansion of Berkshire’s cash holdings over the past decade, which they say is critical given the potential catastrophic payouts that the businesses of company insurance may one day have to perform.

That’s a point underscored by third-quarter results which showed Berkshire suffered a pre-tax loss of $3.4 billion from Hurricane Ian, which killed more than 100 people as it swept through. parts of Florida. US President Joe Biden has said it will take years, not months, for the region to recover.

Berkshire’s insurance unit suffered an operating loss of $962 million in the quarter, with Geico warning that rising prices for used auto parts and an increase in accidents were weighing on its results.

Column chart of quarterly interest and other income ($ millions) showing higher interest rates starting to pay off for Berkshire Hathaway

Buffett and Munger have long been able to sustain significant losses in its insurance division due to the large “float” – the insurance premiums it collects before it ultimately has to pay bond claims. This float helped fuel its equity investments and fund the company’s business acquisitions.

The sell-off in financial markets hampered Berkshire’s equity portfolio, which includes large stakes in Apple, American Express, Chevron and Bank of America. The company said the value of its portfolio fell to $306.2 billion from $327.7 billion at the end of June.

Those declines pushed it to a net loss of $2.7 billion in the period, or $1,832 per Class A share, from a profit of $10.3 billion a year earlier. worth $6,882 per share. Buffett has long called fluctuations in his portfolio of investments — which he must account for in his profit and loss accounts due to accounting rules — “meaningless.”

The dozens of companies it owns, which are widely watched for signs of the health of the US industrial and commercial complex, have laid bare the resilience of the US economy while signaling the potential downturn orchestrated by the Fed. Berkshire’s results also showed the effects of inflation and struggles for better wages as real living standards come under pressure from rising prices.

Revenue at its BNSF railroad jumped 17% to $6.5 billion, but profits fell as the volumes of freight it shipped fell and it paid higher wages to its employees . The railroad became a flashpoint earlier this year as more than 30,000 unionized BNSF workers threatened to strike, pushing back on terms and demanding higher wages.

A tentative agreement in September gave employees concessions and BNSF said payroll costs rose 27% in the third quarter from a year earlier.

Energy companies in Berkshire’s utilities division saw a 17% increase in revenue, boosted by higher electricity costs.

But the company’s real estate brokerage unit saw sales fall by almost a fifth and operating profits fell 72% from a year earlier as the housing market cooled and sold fewer than houses.

Berkshire said rising mortgage rates should also put pressure on its handful of companies in the housing sector. During the quarter, however, those companies – including brick maker Acme and flooring group Shaw – were able to raise prices and saw strong demand.

Overall operating profit reached $7.8 billion, up from $6.5 billion a year earlier. The results were helped by stronger profits in its manufacturing and services businesses.

Line chart of total return (%) showing Berkshire outperforming both stocks and Treasuries in 2022

Berkshire, which this year bought a 21% stake in common stock of energy company Occidental, revealed that in the fourth quarter it would start reporting the oil and gas giant’s profits as part of its results.

The company also said it spent just over $1 billion in the quarter to buy back its own shares.

Berkshire’s Class A shares, which have fallen 4.1% this year, have largely outperformed the broader market. The benchmark S&P 500 index fell 20.9% while an investor in US Treasuries lost 15.3%, according to Ice Data Services.

UK set to adopt biggest interest rate hike in 3 decades | Economic news Thu, 03 Nov 2022 09:03:17 +0000

LONDON (AP) — The Bank of England is expected to announce its biggest interest rate hike in three decades on Thursday as it seeks to fend off stubbornly high inflation fueled by Russia and the US invasion of Ukraine. disastrous economic policies of former Prime Minister Liz Truss.

Economists expect the bank to raise its benchmark rate by at least three-quarters of a percentage point, to 3%, after consumer price inflation returned to a 40-year high in September. Additionally, wholesale natural gas prices, although down from their August peak, are expected to rise further this winter, pushing up energy bills and further fueling a cost of living crisis.

The interest rate decision is the first since the Truss government announced £45bn ($52bn) in unfunded tax cuts that sparked financial market turmoil, pushed up costs mortgages and forced Truss out of office after just six weeks. His successor, Rishi Sunak, has warned against spending cuts and tax increases as he seeks to undo the damage and show Britain is committed to paying its bills.

The rate hike will likely be the Bank of England’s eighth consecutive and largest since 1992. It comes after the US Federal Reserve announced a fourth straight three-quarter point jump on Wednesday as central banks around the world world are tackling inflation which is eroding living standards and slowing down. economic growth.

Britain’s central bank could choose to hike rates by up to 1 percentage point to show it’s serious about tackling inflation after being criticized for being slow to react earlier this year, says Luke Bartholomew , Senior Economist at abrdn.

“The Bank of England will try to look through the volatility caused by government policy and gas price movements, and focus on underlying inflationary pressure,” Bartholomew said in a note to investors. “However, given the impact on household spending of such large inflationary moves and the risk to inflation expectations, this adds further complication to an already very difficult policy decision for the bank.”

Central banks have struggled to contain inflation after initially believing price rises were fueled by international factors beyond their control. Their reaction intensified in recent months when it became clear that inflation was taking root in the economy, translating into higher borrowing costs and higher wage demands.

The war in Ukraine has driven up food and energy prices around the world as shipments of natural gas, grain and cooking oil have been halted. This came on top of inflation which started to pick up last year as the global economy began to recover from the COVID-19 pandemic.

Europe has been particularly hit hard by a spike in natural gas prices as Russia responded to Western sanctions and support for Ukraine by cutting shipments of fuel used to heat homes, generate electricity and the oil industry electricity and European nations competed for alternative supplies on world markets.

The UK also struggled, with wholesale gas prices quintupling in the 12 months to August. While prices have fallen more than 50% since the August peak, they are expected to rise again during the winter heating season, worsening inflation.

The British government has sought to protect consumers with a cap on energy prices. But after the turmoil caused by Truss’ economic policies, Treasury chief Jeremy Hunt limited the price cap to six months instead of two years, ending on March 31.

Meanwhile, food prices jumped 14.6% in the year to September, driven by soaring prices for staples such as meat, bread, milk and eggs , said the Office for National Statistics. This brought consumer price inflation down to 10.1%, the highest level since early 1982 and equal to the level last seen in July.

The rising cost of tea bags, milk and sugar means that even the “humble” cup of tea, which people across the country turn to when they need a break from the pressures of everyday life, is becoming more and more expensive, according to the British Retail Consortium said on Wednesday.

“While some supply chain costs are starting to come down, this is more than offset by the cost of energy, which means a tough time ahead for retailers and households,” said Helen Dickinson, director general of the consortium.

The failure of Truss’ economic plan has made matters worse, pushing the pound to a record high against the dollar, threatening the stability of some pension funds and triggering predictions that the Bank of England will raise interest rates higher than expected. This increased mortgage costs as lenders reviewed their products.

The economic turmoil is making home ownership even more out of reach for many young people, according to research released this week by Hamptons, a UK property agency.

Mortgage rates are averaging around 6.5%, down from 2% a year ago.

This means the average first-time home buyer would need to put down a down payment equal to 41% of the purchase price to keep their monthly repayments at the same level as a similar buyer who made a 10% down payment last year. , Hamptons said.

Against this backdrop, Bank of England Governor Andrew Bailey said last month that policymakers “will not hesitate” to raise interest rates to bring inflation back to the 2% target of the bank.

“As things stand, my best guess is that inflationary pressures will require a stronger response than we perhaps thought in August,” Bailey said Oct. 15 in Washington.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Great Barrington workers are the heart of the town Mon, 31 Oct 2022 20:24:14 +0000

For the editor:

I moved to Great Barrington in 1973. There was already an affordable housing problem then. Over the past half-century, it has exploded into a full-fledged crisis of epic proportions.

A few years after moving to the area, I lost my teaching job. But my then wife and I loved the Berkshires so much we decided to stay here. As an educator, I knew I would never make a lot of money, which I didn’t care. My priorities were a wonderful community and a beautiful home for my family. I thought if we had an affordable house we would probably still be ok as it would serve as the Rock of Gibraltar.

We had very little money, but we were determined to buy or build a house. We were very lucky. A hard court became available in Alford for $6,000. We collected enough money to buy it, and a few years later, with the support and encouragement of the Great Barrington Savings Bank and a little help from the family, we were able to build a small but beautiful house out of logs.

Those days are over! Shamefully today no one in the South Berkshires who is not well secured can do what we were able to do. Real estate prices in the Great Barrington area have left ordinary people and hard workers, like us, in the dust. Not only has home ownership become a pipe dream, but so has affordable rent. It is not exaggerated! According to the 2020 Housing Study cited in Bill Shein’s first article, 43% of Great Barrington residents were “cost overburdened” or spent more than 30% of their income on housing expenses. This equates to a few thousand people being rushed or choking each month.

The result is undeniable and frightening. If you plan to live in or around Great Barrington today and you don’t have a mortgage or affordable rent yet, you better have plenty of cash.

Ian Rasch, the property developer featured in Bill’s series, thinks he can help the situation significantly. His plan is to include affordable rental housing in his current downtown redevelopment buildings and others he plans to buy in the future. The key, however, is strong public subsidies for affordable apartments. For without them they cannot be included.

Looking at Mr. Rasch’s vision for Great Barrington, there are five things to keep in mind. First, his top priority is to make as much money as possible for himself and his investors. Second, its biggest return will come in the form of high-end downtown rentals, as market research has shown that there is a growing demand for such apartments from affluent people, many of whom live in outside the region. Third, the buildings Mr. Rasch is interested in are old and very expensive to renovate. This is why public subsidies must be so substantial. He gives a hypothetical example: an affordable apartment costing $400,000 to build requires a subsidy of $200,000. Fourth, it is apparent from Bill’s interviews with Mr. Rasch that those with the lowest incomes will not be able to afford affordable housing. And fifth, the downtown affordable housing that Mr. Rasch envisions pales in comparison to the scale of the problem. He suggests that with the renovation of a cluster of downtown buildings, perhaps 40 affordable housing units could be created. And, again, chances are those who need it most will be left out.

Mr. Rasch is committed to renovating the city center because he sees it as an opportunity to make a lot of money. Remove that factor and it’s safe to say that his interest in affordable housing wouldn’t go beyond words.

I am not a housing specialist. Far from there! But I know of at least two affordable housing options that seem much better alternatives to Mr. Rasch’s plan. The first concerns revolutionary 3D printers. It’s amazing how quickly they can build a super cheap tiny house. ICON, an Austin, Texas-based company, uses technology to build homes for poor and low-income people both at home and abroad. The second alternative is a company called ZenniHome. She makes beautiful little prefab houses, with furniture included, for $75,000 to $100,000. It seems to me that 3D printers and ZenniHome can do a lot more for less than Mr. Rasch, that is if your first priority is affordable housing and not luxury downtown apartments!

But there is a hard truth to Great Barrington’s housing crisis that goes far beyond Mr Rasch. It is that in the current circumstances, there is no global solution. Nobody can solve the problem. Neither private developers, nor non-profit organizations, nor the city, nor the regional authorities, nor the Massachusetts, nor the federal government.

This is because the housing crisis is rooted in an economic system, American capitalism, which is not designed to provide affordable housing for everyone. It relies on the so-called free market, which is not free or fair (see Robert Reich’s books for a full analysis). In fact, the market is doing the opposite. It creates the very conditions that currently have so many local residents in a stranglehold. And they are not alone. You hear stories almost every day about communities across the country with the same problem.

Only a completely different economic system, based on the principle that all Americans make valuable contributions to the common good through their socially necessary labor, can solve the housing crisis that afflicts Great Barrington and so many other cities. Such a system would ensure that all basic human needs, including housing, would be met at truly affordable (not market) prices.

The workers of Great Barrington are the heart of the town. They build and maintain it and, through their daily activities, make it such a vibrant community. Everyone deserves an affordable home to buy or rent. Instead, a cold and indifferent market, which the people of Great Barrington did not create, has turned the dreams and aspirations of so many into bitter fruit. The real solution awaits another time and place.

In the meantime, I urge the people of Great Barrington to reject Mr Rasch’s plan for affordable housing linked to the development of luxury apartments. If he wants to further develop downtown into a light of the Hamptons, which many residents oppose, let him exclude affordable housing and pay all the costs (i.e. no subsidies) to him. -same. Public funds should be used entirely for the people who really need them and who are the backbone of the community, not for private developers who want to use them to fund their self-help projects.

Mitch Gurfield

Wall Street rally marks first weekly win streak since summer | app Fri, 28 Oct 2022 18:03:28 +0000

Tech stocks led a broad rally on Wall Street on Friday, capping another strong week for the market, as investors hailed strong earnings from Apple and other companies.

The S&P 500 rose 2.5% and posted its first consecutive weekly gains since August. The Dow Jones Industrial Average rose 2.6% and the tech-heavy Nasdaq composite climbed 2.9%. Small company stocks also gained ground, pushing the Russell 2000 Index up 2.3%.

Apple’s latest quarterly results showed the iPhone maker made even bigger profits over the summer than expected. Its shares rose 7.6% and led a rally in tech stocks that had been heavily beaten a day earlier.

Intel jumped 10.7% after profiting much better than analysts had expected, although it said it saw “worsening economic conditions”.

Gilead Sciences climbed 12.9% and T-Mobile US gained 7.4% after also beating Wall Street earnings expectations.

Investors were also encouraged by a consumer spending report released a day after new data showed the economy grew slightly in the third quarter and inflation eased.

“You have an economy that almost refuses to collapse, an economy that is basically resilient, but at the same time inflation is coming down and that’s what the Fed wants and that’s obviously what the market wants” said Quincy Krosby, chief equity strategist for LPL Financial.

That has helped fuel hopes on Wall Street of a Federal Reserve “pivot,” where the central bank is scaling back the sharp interest rate hikes that have rattled the market. Such a move could boost the market, although many analysts say such hopes could be overblown.

The central bank has been very clear about its intention to go too far in order to rein in inflation, which means big gains on pullback hopes seem premature, said Liz Young, chief investment strategist at SoFi.

“This rally has now become a bit irrational and fragile at this level,” Young said.

The S&P 500 rose 93.76 points to 3,901.06. The Dow gained 828.52 points to 32,861.80. The Nasdaq gained 309.78 points to 11,102.45. The Russell 2000 gained 40.60 points at 1,846.92.

Many large US companies reported higher-than-expected earnings, although the bag remains decidedly mixed.

Friday’s strong earnings helped offset a 6.8% decline for Amazon, which offered a weaker-than-expected forecast for future revenue. It’s the latest Big Tech company to take a beating this week after reporting discouraging trends. It’s a sharp turnaround after the group dominated Wall Street for years with seemingly unstoppable growth.

Earlier in the week, Meta Platforms lost nearly a quarter of its value after posting a second straight quarter of revenue declines amid falling ad sales and fierce competition from TikTok. Microsoft and Google’s parent company also reported slowdowns in key areas.

Such woes have created a sharp split on Wall Street this week, between lagging Big Tech stocks and the rest of the market. The Nasdaq, which is full of high-growth tech stocks, posted a 2.2% gain this week. It would have performed even worse had it not been for Apple’s boost from Friday. The Dow, meanwhile, jumped 5.7% for the week as it places less emphasis on technology.

Rising interest rates hit Big Tech stock prices harder than the rest of the market, and the pressure mounted on Friday as yields rose.

“Markets still seem unwilling to believe that we could end up in a place where an earnings recession is possible,” Young said.

Data released in the morning showed increases in wages and other compensation for American workers over the summer were in line with economists’ expectations. This should keep the Fed on track to continue raising rates sharply in hopes of weakening the labor market enough to reduce the country’s high inflation. Other data showed that the Fed’s preferred inflation measure remains very high and that US households continue to spend more despite this.

The Fed is trying to starve inflation of the purchases made by households and businesses needed to keep it high. It does this by intentionally slowing down the economy and the job market. The worry is that it could go too far and cause a big drop.

The Fed has already raised its benchmark overnight interest rate to a range of 3% to 3.25% from virtually zero in March. He is widely expected to push through another increase that is triple the usual size next week, before he potentially makes a smaller increase in December. Not only do higher rates slow the economy, but they also hurt stock prices and other investments.

The two-year Treasury yield, which tends to track expectations for Fed action, rose to 4.42% from 4.28% late Thursday.

The 10-year yield, which helps set rates on mortgages and many other loans, fell to 4.01% from 3.93%.

Trading in Twitter shares ended after Elon Musk took control of the company following a lengthy legal battle.

Associated Press writers Elaine Kurtenbach, Matt Ott and Mari Yamaguchi contributed.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

]]> Reading’s Household Support Scheme is here to help you stay warm this winter – Reading Today Online Wed, 26 Oct 2022 05:03:37 +0000

By Cllr Jason Brock

This week we have yet another Prime Minister.

Political parties aside for a moment, I really hope the government is now able to tackle the serious problems facing our country.

I don’t have much hope, I’m afraid.

The feuds at Westminster – and perhaps especially the internal dysfunctions of the party – can seem far removed from our daily lives.

It would be easy for me to gloat behind my Labor membership, but the crisis in our government has real consequences for the people of Reading who are now facing higher mortgages, the threat of rent increases, rising inflation and public services to breaking point.

In day-to-day life, rising bills make it difficult for many of us to manage, especially the cost of heating the home with the cold winter months coming.

Elsewhere you may have seen details of our household support scheme which we have promoted to help low income people around Reading through the provision of energy and cost of living vouchers as well as financial support for community organizations helping neighborhood residents. through the city.

We will continue to work to ensure that this program benefits as many people as possible, but we also know that broader actions with strategic objectives are necessary.

This is especially true for helping people in the longer term and thinking beyond just offering acute crisis relief now.

Many of you may be wondering how energy efficient your home is and whether some changes could help you use less gas and electricity to control your bills.

If so, I would strongly encourage you to apply for our Sustainable Heat scheme which we have just launched, with £1.7m in grants available.

With this, eligible residents can get a range of energy efficient upgrades that will require them to pay nothing at all, either before or after the work.

To qualify for free home improvements, properties must have an EPC rating of D, E, F or G – which can be checked here: If a property does not have an EPC, residents can still apply.

Applicants must also have a total annual family income of less than £30,000 (or less than £20,000 after rent/mortgage costs) or be in receipt of certain means-tested benefits.

Private owners are also eligible for the program, although they will have to contribute one-third of the cost of the works.

I sincerely hope that landlords recognize the need to do good with their tenants and treat them with dignity and respect rather than just as an opportunity to make money.

If a home and household are eligible, available options include improved insulation and ventilation to reduce bills and improve comfort, solar panels to generate electricity for the home, upgrades energy-efficient lighting to cut costs and improved heating controls to help save money and reduce unnecessary energy consumption.

The grant can be up to £10,000 for a gas-heated home. For houses not heated by gas (and rather by electricity or oil, for example), the subsidy is decreasing from £10,000 to £25,000 each.

There are no pitfalls, so you have nothing to lose by applying. You can find out more about the scheme, which is brought to the Council by our partner City Energy, by visiting where there is also a link to City Energy’s application page.

Alternatively, you can check if you are eligible and apply directly to City Energy at, by emailing [email protected]or by calling them on: 029 2168 0951.

If you are not eligible but are on a low income and are over 60, have very young children, or have a disability or health condition, you may still qualify for assistance from our Winter Watch team with home energy checks, advice on your bills, insulation and exclusion project and emergency support to keep warm.

If you need help and think you might be entitled to it, you can contact us on 0118 937 3747 or email [email protected]

Don’t suffer in silence, help is available. Our Money Matters website – – brings together all the information and advice we have to help you manage the cost of living increases over the coming months, including a benefits checker and information on managing your health and well-being. -being.