Kardashian Private Equity Firm First Investment

In recent news, SKKY Partners, Kim Kardashian’s private equity firm, has announced its first investment. Forming the company last year with a former exec from Carylyle Group, they have announced a foray into Truff sauces.

In a press release, SKKY explained that their “primary focus is on identifying culturally relevant brands that forge deep emotional connections with their target consumers and offer those consumers coveted products and services.”

As they announce their first investment, Kardashian said, “Truff is exactly the kind of business that embodies what we were looking for when we founded SKKY — a next-generation brand with a deep, authentic connection with consumers and the potential for ongoing growth. We’re proud to be kicking off the SKKY portfolio with this investment.”

The Future of US – China Relations

According to CNBC, the recent meeting between U.S. President Joe Biden and Chinese President Xi Jinping has established a clear boundary in their relationship, offering businesses a sense of certainty. Held in San Francisco during the Asia-Pacific Economic Cooperation conference, this meeting signifies a commitment to cooperate under the principles of reciprocity and mutual respect, aiming to define areas where the U.S. and China can work together.

Both nations are seeking a new economic normal based on mutual benefit and adherence to established rules. Although Biden maintained export controls due to national security concerns, discussions emphasized the need to address the risks posed by advanced AI systems. Additionally, both sides agreed to revive military talks after a year-long hiatus.

The meeting signals a desire to avoid a downward spiral in their relationship and demonstrates that complete separation between the two economies is unlikely. However, the Biden administration continues its efforts to limit U.S. investment in Chinese companies involved in military-related technologies.

Despite the positive tone, long-standing challenges in U.S. business operations in China persist. While the meeting didn’t result in immediate significant agreements, it did set a cooperative tone, providing stability in the relationship. Nevertheless, companies are likely to remain cautious, focusing on reducing risks and diversifying supply chains based on the actual ground realities in China. The U.S. presidential election in 2024 and Taiwan’s upcoming elections also loom as potential factors influencing the long-term dynamic between the nations.

Wang Dong, executive director of the Institute for Global Cooperation and Understanding at Peking University, said, “I think there’s a lot of consensus coming out of this summit… What you get from this summit is a very clear signal the two countries, they are committed to what we can call recouple, in a way, on the basis of reciprocity and mutual respect… I think this is very important for both countries and indeed for the global economy as well.”

Apples for Less Makes Farmers Stressed

If you like apples, you may be in business right now. As reported by CNN, the price of apples has, weirdly, gone way down from September to October. This is particularly unusual since it’s prime apple season at the moment. Apple prices decreased by as much as 7.9%, in contrast to items like butter, flower and sugar which all increased.

Why the decrease? This year the apple-growing weather has been particularly good with mild temperatures and nice soil. Freight costs have been lower and the changes in the export market have led to decreased prices as well. This is all great news for those of you who love apples – but it has farmers worried.

Read the full article to learn more about the apple issues in the American market and what farmers are suggesting should be done to right the situation.

Senators Warren and Graham Release Digital Consumer Protection Commission Act

Democrats and Republicans are setting aside their differences to impose restrictions on Big Tech platforms. US senators, Elizabeth Warren and Lindsey Graham, released the Digital Consumer Protection Commission Act. The bill calls on Congress to launch a governing body with the ability stop the operation of, or sue, platforms that cause potential harm to consumers. This bill would apply not only to social media platforms, but would extend to respond to new concerns that arise as AI continues to develop.  

Warren said in a statement: “For too long, giant tech companies have exploited consumers’ data, invaded Americans’ privacy, threatened our national security, and stomped out competition in our economy. This bi-partisan bill would create a new tech regulator and it makes clear that reigning in Big Tech platforms is a top priority on both sides of the aisle.”

The Act would establish a regulator to license and police the large tech companies in the US, such as Meta, Google, and Amazon, and set clear rules for tech companies. The bill will also enforce repercussions for companies that violate the law. It would implement safeguards for every customer: families will be able to protect their children from cyberbullying and sexual exploitation by requiring these companies to clamp down on these harmful practices. Families will have the ability to seek compensation should the company fail to do so. The bill will also enable consumers to opt out of targeted advertising in order to protect their privacy.  

According to Graham and Warren’s New York Times op-ed: “No company, no industry and no C.E.O. should be above the law. These reforms will ensure that the next generation of great American tech companies will operate responsibly while remaining on the cutting edge of innovation. It’s time for Congress to act.”

Writers Guild Strike Reaches Tentative Deal

On June 4, the Writers Guild of America announced that they reached a tentative deal on a three-year contract with the Hollywood studios. 11,500 screenwriters joined the writers’ strike, which began on May 2, 2023, claiming a rise in television production that has led to deterioration of working conditions and stagnation in wages.

The growing popularity of streaming has also affected writers, as streaming shows have 8-12 episodes per season, whereas traditional television seasons feature over 20 episodes. Writers are also fighting for better residual pay, which has been affected by streaming, as well. Writers also voiced concerns over the future use of AI, and how that may threaten their jobs.

As the strike began, Seth Meyers said that the strike would not only affect the writers, but would extend to production support, including drivers, caterers, costume cleaners, and set carpenters. During the 2007 writers’ strike, which lasted 100 days, the LA economy lost an estimated $2.1 billion.

In Light of Recent Bank Collapse, Financial Advisors Offer Recommendations for Small Business Owners

Following the collapse of Silicon Valley Bank and Signature Bank in March, financial advisors recommend that small business owners reexamine their bank accounts in order to protect their finances. Small business owners must perform their own risk assessment, should their current bank fail.

The Federal Deposit Insurance Corporation insures deposits up to $250,000, and most small business owners have less than that in their accounts. According to a JPMorgan Chase Institute survey of 600,000 of its small business account holders, the median cash balance was $12,100. However, businesses that have employees have higher payroll costs and, thus, higher risk.

A paper published in March 2023 assesses the likelihood of further banks crumbling. Experts advise diversifying one’s holdings in order to have more coverage in the event of a bank collapse. They also point out that holding an account in a separate bank enables the small business owner to wire funds, if one bank seems to suddenly be on the brink of collapse.

Another option is for banks to use the IntraFi Network, which splits a customer’s deposit into smaller amounts of less than $250,000. These smaller lumps are sent to other banks in the system, which grants customers various F.D.I.C-insured accounts.

Ultimately, financial experts and banks advise asking where service providers bank to ensure that there are backups in place.

New Initiative for Student Loan Forgiveness

In April 2022, the US Department of Education announced a new initiative for public service student loan forgiveness and income-driven repayment (IDR). Payment plans that are income-based enable student loan borrowers to repay at a lower rate, based on family size and income. After 20-25 years of payments, the remaining debt can be cancelled.

In March 2023, the Department of Education notified borrowers whose loans could be canceled, and around 3.6 million borrowers will be given at least three years of credit toward forgiveness, according to the Federal Student Aid.

According to loan advisors, President Biden’s loan-cancellation program is separate from this program, and will not be affected if this program is not passed by the US Supreme Court. The Biden administration also announced an updated plan for income-based loan forgiveness, called REPAYE. REPAYE is more generous than existing loan repayment plans in that it will lower payments on undergraduate loans from 10-15% of discretionary income to 5%. It will also affect interest in that if the borrower’s payment does not cover interest for a particular month, the remaining interest will not be charged or added to the balance.

According to the White House, President Biden’s plan will eliminate debt fully for approximately 18 million people, and 90% of the country’s 45 million student loan borrowers will receive some form of debt-relief. The plan was brought to the Supreme Court on February 28, 2023, and is expected to issue a decision by June 2023.

Uber Reports Increase in Revenue at the end of 2022

While Uber reported a downturn in revenue during the pandemic, chief executive, Dara Khosrowshahi said that the last 3 months of 2022 was the company’s “strongest quarter ever.” Khosrowshahi added that the company expects even more momentum in 2023.

Uber reported $8.6 billion in revenue from the last quarter of 2022, which is a 49% increase from the previous year due to the Omicron variant of COVID-19 limiting travel options. In 2020, during the lockdown at the start of the pandemic, Uber cut around 7,000 employees. However, according to Khosrowshahi, the pandemic is no longer impacting Uber’s operations. In fact, during the last quarter of 2022, active drivers hit an all-time high.

Khosrowshahi claims that the current economic inflation is working to Uber’s benefit in that 70% of drivers say that it is the reason that they join Uber’s platform. As Uber exceeded Wall Street analysts’ estimates for the end of 2022, their stock rose 5.5% in trading at the beginning of February 2023.

Microsoft Invests in OpenAI

Microsoft announced on January 23 that they were making a “multiyear, multibillion dollar investment” in OpenAI, the maker of ChatGPT. In 2019, Microsoft invested $1 billion in OpenAI, and described their agreement from this past Monday as the third stage of the partnership between these two companies. News of the investment came on the heels of Microsoft’s announcement that they plan to lay off 10,000 employees as part of a larger cost-cutting measure.

This partnership authorizes the usage of OpenAI’s tools in Microsoft products, which gives Microsoft an edge over Google. According to OpenAI, the investment enables them to continue developing AI, and Microsoft’s Azure cloud platform will continue operating as an exclusive provider for OpenAI.

According to Microsoft, by incorporating the technology behind ChatGPT into their Bing search engine, they will revolutionize internet searches. Anton Korinek, AI researcher and professor of economics at the University of Virginia explains,

“[ChatGPT] allows consumers to interact with their computer in a much more natural and conversational form than traditional search.”

Microsoft CEO Satya Nadella said,

“We formed our partnership with OpenAI around a shared ambition to responsibly advance cutting-edge AI research and democratize AI as a new technology platform. In this next phase of our partnership, developers and organizations across industries will have access to the best AI infrastructure, models and toolchain with Azure to build and run their applications.”

Service 2.0: Congress Passes New Retirement Regulations

US President Joe Biden is expected to sign on a new spending package, Secure 2.0. This package will both enable Americans to more easily save for retirement and lower the costs of withdrawing retirement savings.

Highlighted below are some of the new provisions of Secure 2.0, as per the breakdown of the Senate Finance Committee:

  1. A provision set to go into effect after December 31, 2024, and requires employers to set a minimum default rate of 3% (maximum 10%) for each employee. In addition, employers will be required to set an automatic yearly contribution of 1% up to a maximum contribution rate of at least 10% and no more than 15%. The provision requires many employers who initiate a new workplace retirement savings plan to enroll their employees in Secure 2.0.
  2. Another provision set to go into effect after December 31, 2023 allows employers to match a contribution to the employee’s retirement plan based on the employee’s qualified student loan payments. This will enable the employee to save for retirement while simultaneously paying down student debt.
  3. A third provision, set to go into effect after December 31, 2024, shortens the service time for part-time workers who work at least 500 hours a year to join a workplace retirement plan. Currently, the required service time is three years, and under Secure 2.0, it will be two years; this will ease part-time workers’ ability to save.