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    As Britain’s Economy Stumbles, One Sector Is Booming: Whisky

    LONDON — Britain’s economy has been buffeted by the effects of Brexit, the war in Ukraine and, most recently, the government’s dramatic reversal on a series of planned tax cuts that led to the resignation of Prime Minister Liz Truss. But for Scotland’s whisky producers, business is booming, and the British pound’s precipitous decline against major currencies is providing an extra boost, making whisky more affordable for buyers outside of Britain.“The currency has had a major effect — there’s no question about that,” said John Stirling, the co-founder of Arbikie Distillery in Scotland.The volume of whisky exports from Britain has grown over the past two years, including a 10.5 percent increase during the 12 months ending in July over the same period the year before, according to government data.At the Arbikie Distillery. Global demand for whisky has been growing.The surge in exports, driven by higher demand from the United States and the Asia-Pacific region, comes as 20 distilleries have opened in Scotland in the past six years, bringing the total number of distilleries there to 141.As demand for Scotch rises, the pound is trading near historically weak levels. Last month, the pound briefly sank to $1.035, a record low against the dollar in response to Ms. Truss’s economic overhaul, which included £45 billion ($50 billion) in unfunded tax cuts, spooking investors. Her government has since scrapped almost all of the planned cuts, but the pound’s decline has been part of a larger downward trend against major currencies, including those used in the United States, France, Taiwan, India, Singapore and China, the top destinations for Scotch. In the year ending in July, 18 percent of whisky exports, by value, went to the United States, according to government data.Britain is also facing systemic economic issues, such as weak productivity, low pay growth, a shortage of workers and unsteady business investment since the country voted in 2016 to leave the European Union. On Wednesday, the government reported that the country’s consumer prices had risen 10.1 percent in the year through September, driven in part by food prices that recorded their largest increase in more than 40 years.Mr. Perez-Solar with one of the casks at Arbikie Distillery. Twenty distilleries have opened in Scotland in the past six years.With high inflation expected to weigh on consumer spending and business investment, the International Monetary Fund predicted the British economy would go from 3.6 percent growth this year to a 0.3 percent contraction next year.But whisky companies like James Eadie have been able to weather the economic headwinds.“Overall if you look at the last two to three years, we’ve just been going through an incredibly buoyant time,” Rupert Patrick, the chief executive of James Eadie, said. “We’ve all been slightly scratching our heads saying, I wonder why it is so good at the moment.”Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Elon Musk says a global recession could last until the spring of 2024

    Tesla founder and CEO Elon Musk said in a tweet he thinks the global economic decline can last until the spring of 2024.
    Musk becomes the latest corporate titan to express reservations about the economy, joining Goldman Sachs CEO David Solomon, JPMorgan Chase CEO Jamie Dimon and Amazon founder Jeff Bezos.

    Tesla Inc CEO Elon Musk attends the World Artificial Intelligence Conference (WAIC) in Shanghai, China August 29, 2019.
    Aly Song | Reuters

    Tesla founder and CEO Elon Musk thinks the global economic decline can last for another year and a half.
    In a Twitter exchange early Friday morning Eastern time, the mercurial electric car executive and world’s richest man said a recession could continue “until spring of ’24.”

    The remarks came in response to a tweet from Shibetoshi Nakamoto, the online name for Dogecoin co-creator Billy Markus, who noted that current coronavirus numbers “are actually pretty low. i [sic] guess all we have to worry about now is the impending global recession and nuclear apocalypse.”
    “It sure would be nice to have one year without a horrible global event,” Musk replied.
    Tesla Owners Silicon Valley, a Twitter account with nearly 600,000 followers, then asked Musk how long he thought the recession would last, to which he replied, “Just guessing, but probably until spring of ’24.”
    Global GDP grew 6% in 2021 but is expected to decelerate to 3.2% this year and 2.7% in 2023, according to the International Monetary Fund. That would mark the weakest pace of growth since 2021 outside of the financial crisis in 2008 and the brief plunge in the early days of the Covid pandemic. The Federal Reserve projects GDP in the U.S. to grow just 0.2% this year and 1.2% in 2023.
    Musk becomes the latest corporate titan to express reservations about the economy.

    In a tweet Wednesday, Amazon founder Jeff Bezos said it’s time to “batten down the hatches” in preparation for rough economic waters ahead. That tweet accompanied a video of Goldman Sachs CEO David Solomon, who said in a CNBC interview that he thinks there’s a “good chance” of a recession in the U.S.
    JPMorgan Chase CEO Jamie Dimon also has been warning of economic turmoil ahead.
    Musk’s comment also came amid a rough week for Tesla stock as the automaker missed revenue estimates and cautioned about a potential delivery shortfall this year.
    During the analyst call, he expressed more confidence in the U.S. economy than other parts of the world. He did note the impact that interest rate increases are having on the economy.
    “The U.S. actually is in – North America’s in pretty good health,” he said. “A little bit of that is raising interest rates more than they should, but I think they’ll eventually realize that and bring back down, I think.”
    However, he said China is in “quite a burst of a recession of sorts” driven by the real estate market, while Europe “has a recession of sorts, driven by energy.”

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    Here’s how venture capital is helping to lift the next generation of Latinos in finance

    There are more than 62 million Hispanic or Latino people in the U.S., according to the 2020 Census. That’s nearly 19% of the total population.
    Nevertheless, Latinos made up 4% of large U.S. companies’ most senior executives, according to the Hispanic Association on Corporate Responsibility.
    Venture capital firms are emerging as a way for Latino investors to direct resources back to their communities and uplift small businesses.

    U.S Treasury yields rose further on Friday as investors digested the need for further interest rate hikes to curb inflation.
    Photo by Michael M. Santiago | Getty Images News | Getty Images

    Even though Latinos are the second-largest ethnic group in the U.S., they’re underrepresented across many industries, including finance, which can have long-term effects on the ability to grow wealth.
    A group of Latino-led and focused venture capital firms is looking to change that.

    There are more than 62 million Hispanic or Latino people in the U.S., according to the 2020 Census. That’s nearly 19% of the total population, second only to non-Hispanic whites. They also represent one of the largest and fastest-growing sectors: In 2019, the total economic output of the group was $2.7 trillion, up from $1.7 trillion in 2010, according to a report from the Latino Donor Collaborative.

    Lea este artículo en español aquí.

    But in 2021, Latinos made up only 4% of large U.S. companies’ most senior executives, per a survey from the Hispanic Association on Corporate Responsibility. And a separate study in 2019 by the CFA Institute found that only 8% of workers in investment management firms were Latino compared to 9% Asian, 5% Black and 84% white.
    Similarly, only 2% of venture capital professionals and partner-level professionals at institutional firms are Latino, a study from LatinxVC discovered.
    “We’re trying to increase [Latino] venture capitalists within established venture organizations,” said Mariela Salas, the executive director of LatinxVC. “We’re also trying to retain those Latinos that are in institutional and smaller firms.”

    The investing gap

    Latinos also are less likely to have access to investing. Latino household wealth lags that of white counterparts, and only 26% of Hispanic households have access to an employer-sponsored 401(k) plan, compared to 37% of Black households and half of white ones, the Economic Policy Institute found.  

    Lack of access to capital markets makes it harder for Latinos to build meaningful wealth. It also means they’re underrepresented as shareholders of companies if they aren’t holding stocks and that they’re not lending a proportional voice to investing decisions.
    “We should be mindful of the connection of finance and the capital markets to the broader economy,” said Rodrigo Garcia, global chief financial officer of Talipot Holdings, an investment management group. “It’s always been a critical piece that we have representation in asset management, in the people who are making decisions on the purchases of stocks, bonds, venture capital private equity and more.”

    Latino-focused venture capital

    There are several Latino-focused venture capital firms that are working on at least one piece of the puzzle: investing in their communities.
    One of those firms is the Boston Impact Initiative, which just launched a $20 million fund focused on investing in entrepreneurs of color.
    “We take the earliest risk, we’re funding the teeny-tiny startups that hopefully one day will grow into those companies that become publicly traded and become available in the retail finance sector,” said Betty Francisco, CEO of the Boston Impact Initiative. Those businesses include Synergy Contracting, a women-owned construction company, and Roundhead Brewing, the first Latino-owned craft brewery in Massachusetts.
    Another group, Mendoza Ventures, was started in 2016 to address the lack of both women and Latinos writing checks to fund new companies. The Boston-based firm run by Adrian Mendoza has raised $10 million across two funds.
    “We give the opportunity to first-time accredited investors, people of color and women to get access to venture capital,” Mendoza said. Accredited investors are individuals or entities that meet specific earned income, net worth or asset thresholds in order to invest in sophisticated or complex securities.
    “The majority of wealth in America comes from [mergers and acquisitions] and that comes through venture capital and private equity, so why not be able to diversify on the other end?” Mendoza added.

    What investors can do

    To be sure, there has been some progress in the financial industry. In 2021, the number of Latino certified financial planners rose by 15% from the prior year. Still, of the overall class of professionals who passed the exam that year, only 2.7% identified as Latino.
    Those in the industry see that there’s a benefit to having more people with diverse experiences in all areas of finance.
    “You cannot replicate anyone’s lived experience,” said Marcela Pinilla, director of sustainable investing at Zevin Asset Management. She added that as a Latina in finance, she wants to bring more people of color into the industry.
    From the perspective of the retail investors themselves, one of the most powerful things they can do is look at what they’re investing in and ask how many of those dollars are going to Latino fund managers, Latino-led funds or even companies with Hispanic leadership.
    “I think just the simple question of ‘who is managing my money?'” is important, said Mendoza.

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    An often-overlooked economic measure is signaling serious trouble ahead

    The Conference Board’s Leading Economic Indicators index indicated that conditions worsened in September.
    While not usually considered a major data point, the LEI, combined with Fed rate hikes, is signaling trouble for the economy.
    “We went from a Fed that was way too easy to being irresponsibly tight,” said Joseph LaVorgna, chief U.S. economist at SMBC Capital Markets.

    Employees work at the BMW manufacturing plant in Greer, South Carolina, October 19, 2022.
    Bob Strong | Reuters

    The economy sent a low-key signal Thursday that a recession is looming — and that the Federal Reserve could be making a policy mistake by continuing to try to slow things down.
    According to the Conference Board’s Leading Economic Indicators index, conditions worsened in September, with the gauge down 0.4% from the month before and off 2.8% for the six-month period.

    “The US LEI fell again in September and its persistent downward trajectory in recent months suggests a recession is increasingly likely before year end,” said Ataman Ozyildirim, senior director of economics at the Conference Board. Ozyildrim noted that the weakness in the index was “widespread” as high inflation, a decelerating jobs picture and tighter credit conditions are pressuring the economy.

    The index looks forward using 10 metrics that include manufacturing hours worked, jobless claims, building permits, stock market indexes and credit spreads.
    Normally, the LEI is not considered a major data point. It’s not necessarily that the measure isn’t a good snapshot of the economy, but more that the data points that go into the index are already known, so there’s not much new information.

    A reverse trend for the Fed

    However, in the present conditions, the index is of greater significance as it comes at a time when the Federal Reserve is looking to tighten the screws further on growth in an effort to bring down rampant inflation.
    That bucks a general historical trend where the Fed is usually loosening policy when the outlook turns darker. However, Fed officials are stressing that they’re far from finished when it comes to raising rates.

    “We went from a Fed that was way too easy to being irresponsibly tight,” said Joseph LaVorgna, chief U.S. economist at SMBC Capital Markets and a former senior economic advisor to then-President Donald Trump. “When this basket is signaling the weakness that it’s showing, what the Fed typically does is not raise rates. But in this case, it’s not only raising rates aggressively, but with a commitment to continue raising rates aggressively.”
    LaVorgna’s research shows that in previous downturns in the leading indicators, the Fed was always cutting rates or in pause at the same time. This was the case in early 2020, the financial crisis in 2008 and the recession in the early part of the 21st century — among multiple other economic contractions.

    He is concerned that the Fed’s insistence on tightening policy will have even worse outcomes ahead.
    “The lags in the policy mean the full effects of Fed actions have not yet been wholly felt. Worryingly, the Fed is not done,” LaVorgna said in a client note.
    LaVorgna is not alone in his belief that the Fed is overdoing its efforts to tamp down inflation that continues to run around its highest levels since the early 1980s.
    In a recent CNBC interview, Starwood Capital Group CEO Barry Sternlicht said the central bank is risking “unbelievable calamities if they keep up their action, and not just here, all over the globe.” Goldman Sachs CEO David Solomon, JPMorgan Chase CEO Jamie Dimon and Amazon founder Jeff Bezos in recent days all have expressed concern about a recession ahead, though they have not singled out the Fed’s actions.

    Disappointment on inflation

    However, Philadelphia Fed President Patrick Harker said Thursday he thinks the central bank still has work to do before it can relax as he said he’s seen a “disappointing lack of progress” in the inflation fight.
    “What we really need to see is a sustained decline in a number of inflation indicators before we let up on tightening monetary policy,” said the central bank official, who is a nonvoting member of the rate-setting Federal Open Market Committee.
    Thus far, the inflation data indeed has not been on the Fed’s side.
    In addition to the typical headline metrics such as the consumer price index and the Fed’s preferred personal consumption expenditures price index, the Cleveland Fed’s “sticky price” CPI rose 8.5% on an annualized basis in September, up from 7.7% in August. The measure looks at items such as rent, the price of food away from home and recreation costs.
    Services inflation has been particularly nagging, rising 7.4% in September on a 12-month basis, up from 6.8% in August, according to Trading Economics. That has happened as the economy has transitioned back to services from high goods demand for much of the Covid era.

    Critics, though, say the Fed is following too many backward-looking data points. But policymakers also are fighting a battle against inflation expectations that, while drifting lower now, could turn higher especially now that gasoline prices are rising again.
    “The challenge for the Fed is we haven’t seen the true leading indicators be leading in the sense that inflation has still stayed persistently elevated in the face of these leading indicators that would suggest otherwise,” said Jeffrey Roach, chief economist for LPL Financial.
    In Roach’s view, the only bright spot is that financial markets could be close to pricing in all of the damage from higher rates and inflation. Also, the continued decline in the LEI at least could give the Fed reason to slow the pace of its rate hikes. Roach expects the Fed to hike by another 0.75 percentage point in November, then decelerate to a 0.5-point move in December, which is not the market expectation.
    “In a nutshell, this report does not likely change anything for the November meeting,” Roach said. “However, you could argue that this does build a case for a downshift in December.”

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    U.S. Details How It Plans to Police Foreign Firms

    A government committee issued new guidelines for how it determines penalties for foreign companies that break agreements to protect U.S. national security.WASHINGTON — The federal government on Thursday laid out for the first time how it will determine penalties for foreign companies that break agreements to protect American national security.When some foreign companies buy American firms, they sign agreements with the Committee on Foreign Investment in the United States, a group of federal agencies, in order to mitigate national security concerns about the new ownership. The committee, known as CFIUS, has the ability to levy fines, some of them very large, on companies that break those agreements.The new guidelines issued on Thursday give insight into how the committee, which wields considerable power over foreign transactions but is often seen as a black box, makes its decisions. In recent years, CFIUS has forced a Chinese company to sell the dating app Grindr and has made another Chinese firm divest an American maker of hotel management software. The committee is currently negotiating an agreement with TikTok, the popular video app, to resolve concerns posed by its Chinese ownership.According to the new guidelines, the committee could consider more serious penalties when a foreign company’s failure to follow an agreement causes an especially grave risk to national security. CFIUS would also consider whether it took a long time for the committee to learn of a foreign company’s failure to comply with an agreement. And it would take into account whether a company’s failings had been intentional or simply negligent, according to the new guidelines, which are not binding.President Biden has been trying to limit the sway that China and other adversaries have over American companies and consumers. Lawmakers and regulators have grown increasingly concerned that China could use its proximity to major computer chip manufacturers in Asia to influence the supply of a device that is central to a vast array of products, including appliances and automobiles. Many are also worried that Chinese-owned apps like TikTok and WeChat might hand over Americans’ data to Beijing under Chinese laws.This month, the Biden administration issued restrictions that stop Americans from working with Chinese chip companies. Last month, Mr. Biden signed an executive order directing CFIUS to closely scrutinize whether corporate deals involving foreign companies, including from China, would expose the personal data of Americans or involve crucial emerging technologies.The guidelines issued on Thursday do not name any specific foreign country.Paul Rosen, the assistant secretary for investment security at the Treasury Department, which oversees CFIUS, said in a statement that most foreign companies abided by their agreements on national security. But, he said, “those who fail to comply with CFIUS mitigation agreements or other legal obligations will be held accountable.”The committee has been busy in recent years, reviewing hundreds of corporate deal filings in 2021, according to the reports it sends to Congress. In some of those cases, the committee agreed to approve a deal only if the foreign company agreed to carry out measures designed to reduce its concerns.Mr. Rosen said in his statement that the guidelines sent a “clear message” that it was “not optional” for companies to follow their agreements with the government.Under federal law, the government can fine companies that violate their agreements with the committee. The fines can be significant, reaching as high as the total value of the corporate deal in question.The guidelines also publicly explain how companies can challenge a penalty from the government, and they shed more light on how the committee monitors for violations. According to the memo, the government learns of possible violations from “across the U.S. government, publicly available information, third-party service providers (e.g., auditors and monitors), tips” and participants in the deal itself. More

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    A Federal Reserve President Spoke at an Invite-Only, Off-Record Bank Client Event

    James Bullard, who leads the Federal Reserve Bank of St. Louis, appeared at a Citigroup forum last week in Washington. Reporters were not invited.James Bullard, the president of the Federal Reserve Bank of St. Louis, spoke last Friday at an off-the-record, invitation-only forum held by Citigroup, and open to clients, on the sidelines of the World Bank and International Monetary Fund’s annual meetings in Washington.Mr. Bullard’s remarks touched on both monetary policy and issues of financial stability during a tumultuous week in the global economy. It was the kind of speaking event that the news media would typically be able to attend given the potential for market-moving news, but Mr. Bullard and his staff did not alert reporters.Mr. Bullard was not compensated for his speech, a spokesperson for the Federal Reserve Bank of St. Louis said. But he appeared behind closed doors and in front of Wall Street investors at a critical juncture for markets, when every comment a central banker makes has the potential to move stocks and bonds. It gave the attendees a behind-the-scenes snapshot into the thinking of a voting Fed policymaker and Citi a possible chance to profit from his comments, inasmuch as clients may use the bank’s services in hopes of receiving similar access in the future.“This is not normal,” said Narayana Kocherlakota, a former president of the Federal Reserve Bank of Minneapolis. With a bank’s clients involved, he added, “the optics are terrible.”The Federal Reserve Bank of St. Louis called the discussion informal and said Mr. Bullard had participated in the event in the past. It also noted that he had given an interview to Reuters earlier in the day with remarks similar to those he made at the Citi event, and appeared at other forums in Washington on Friday and Saturday. As a result, they said, the public had access to his views.But a person who attended the speech, who spoke on the condition of anonymity because the forum was meant to be off the record, said Mr. Bullard had also suggested during his comments that based on the historical record, the market gyrations in response to the Fed’s moves had been less pronounced than might have been expected given how much rates have increased. The Reuters article did not include that observation.Mr. Bullard had shared that view on financial stability in public before, the St. Louis Fed spokesperson said.Mr. Bullard gave an interview to Reuters earlier in the day with remarks similar to those he made at the Citi event, a spokesperson at the St. Louis Federal Reserve said.Hiroko Masuike/The New York TimesAt the Citi event, Mr. Bullard also reiterated his view that another large three-quarter-point rate increase could be appropriate in December, which the Reuters article noted.This was not the first time that a Fed official had spoken before an invitation-only group of people who may have benefited from talking to him. In March 2017, Stanley Fischer, then the Fed’s vice chair, gave a closed-door speech at the Brookings Institution that drew some outcry. More commonly, Fed officials meet with economists and traders from banks and investment funds in small-group settings to exchange information about markets and the economy.Our Coverage of the Investment WorldThe decline of the stock and bond markets this year has been painful, and it remains difficult to predict what is in store for the future.A Bad Year for Bonds: This has been the most devastating time for bonds since at least 1926 — and maybe in centuries. But much of the damage is already behind us.Discordant Views: Some investors just don’t see how the Federal Reserve can lower inflation without risking high unemployment. The Fed appears more optimistic.Weathering the Storm: The rout in the stock and bond markets has been especially rough on people paying for college, retirement or a new home. Here is some advice.College Savings: As the stock and bond markets wobble, 529 plans are taking a tumble. What’s a family to do? There’s no one-size-fits-all answer, but you have options.And Fed officials regularly speak at bank events, though their remarks are typically flagged to the news media and either open to them, streamed or recorded. That was the case with a UBS event where Mr. Bullard was a speaker on Saturday..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}What we consider before using anonymous sources. Do the sources know the information? What’s their motivation for telling us? Have they proved reliable in the past? Can we corroborate the information? Even with these questions satisfied, The Times uses anonymous sources as a last resort. The reporter and at least one editor know the identity of the source.Learn more about our process.What is notable about Mr. Bullard’s Citi meeting is that it was neither an information-gathering excursion with a handful of people nor a publicly available speech. About 40 people attended the event, which had a formal agenda and was advertised to Citi clients, two people familiar with it said. Mr. Bullard spoke for 10 minutes before answering attendee questions.“It’s important, even mission-critical, that the Fed is in open dialogue with all sectors of the economy,” said Kaleb Nygaard, who studies the central bank at the University of Pennsylvania. “Much of the letter, as well as the spirit, is that the central bankers are supposed to be on the receiving end of the information.”The Citi forum also featured central bankers from outside the United States — including Anna Breman, deputy governor of Sweden’s Riksbank, and Olli Rehn of the European Central Bank’s governing council — but at least some of their appearances were flagged to the news media and some of their speeches were published.It is not clear if Mr. Bullard’s speech violated the Fed’s communication rules, but some outside experts said they seemed to tiptoe near the line.The Fed’s rules do not explicitly bar central bankers from closed-door meetings, though they do say that, “to the fullest extent possible, committee participants will refrain from describing their personal views about monetary policy in any meeting or conversation with any individual, firm or organization who could profit financially” unless those views have already been expressed in their public communications.The rules also say officials’ appearances should “not provide any profit-making person or organization with a prestige advantage over its competitors.” That Citi was able to offer a closed sit-down with a central bank official may have given it such an advantage, even if his remarks did not break major news.“Citi is flexing here” in its ability to offer “privileged access,” said Jeff Hauser, director of the watchdog group the Revolving Door Project, explaining that for investors, a chance to understand a central banker’s thinking in real life is a valuable source of financial intelligence.“There are few better sources of information on the planet than a member of the Federal Open Market Committee,” he added. “Their every utterance is treated as potentially market moving.”Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, had failed to correctly report trading activity in a managed retirement account for several years.Valerie Plesch/BloombergThe Federal Reserve Board and Citi declined to comment.The news comes just as an ethics scandal that has dogged the central bank for more than a year appears to be on the verge of bubbling back up.The Fed’s ethics rules came under scrutiny last year after three central bank officials were found to have made financial transactions during 2020, when the Fed was actively shoring up markets at the onset of the coronavirus pandemic and officials had access to market moving information.All three resigned early, though some cited unrelated reasons, and the Fed ushered in a sweeping overhaul of its trading rules. But last week, one official — Raphael Bostic, president of the Federal Reserve Bank of Atlanta — disclosed that he had failed to correctly report trading activity in a managed retirement account for several years. His retirement account had several trades on key dates in the market meltdown of 2020, though he said he had no knowledge of the specific trades, since he used an outside money manager.Norman Eisen, a senior fellow in governance studies at the Brookings Institution and an expert on law, ethics and anti-corruption, said Mr. Bostic’s trades appeared “benign” relative to those of the other officials.Of Mr. Bullard’s appearances, he said that at first glance, “it’s not an ethics violation, but it’s not a great look.” More

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    How Finnair’s Huge Bet on Faster Flights to Asia Suddenly Came Undone

    Nestled near Europe’s rooftop, Finland spent decades leveraging its location to become a popular gateway for Asian travelers. Its flagship airline, Finnair, offered flights from Tokyo, Seoul and Shanghai to Helsinki that, by crossing over Russia, were hours shorter than flights to any other European capital. Airport chiefs invested nearly $1 billion in a new terminal with streamlined transfers. There were signs in Japanese, Korean and Chinese, and hot water dispensers for the instant noodle packets favored by Chinese tourists.Then Russia sent troops across Ukraine’s border on Feb. 24, and overnight the carefully constructed game table was overturned.Russia closed its airspace to most European carriers in response to bans on Russian planes. What was once a nine-hour flight to Helsinki when routed over Russia’s 3,000-mile expanse would now take 13 hours and as much as 40 percent more fuel because it had to swoop around borders.Finnair’s competitive advantage as the fastest connection from Asia and a travel hub for Europe vanished in a wisp.The sudden disintegration of Finnair’s business model is part of the wide-ranging economic upheaval that the war in Ukraine is causing for businesses around the globe.Companies that invested or traded heavily with Russia were immediately affected, and more than 1,000 have withdrawn operations from Russia, according to a database compiled by the Yale School of Management.Juho Kuva for The New York TimesNearly $1 billion was spent to build a terminal in the Helsinki, Finland, airport to streamline transfers for passengers from outside Europe.When Russia closed its airspace, Finnair could no longer pitch itself as the fastest connection from Asia.“The Asia strategy had been 20 years in the making,” Topi Manner, Finnair’s chief executive, said.High energy prices have blitzed a wider range. The Hungarian Opera House’s Erkel Theater will temporarily close because it cannot pay its energy bill. Hakle, one of the largest manufacturers of toilet paper in Germany, declared insolvency because of soaring energy costs, while ceramic, glass, chemical, fertilizer and other factories across Europe have been forced to scale back or shut down.The snack food industry, unable to get sufficient supplies of sunflower oil from Ukraine, has had to scramble for substitutes like palm oil, forcing manufacturers to rejigger supply chains, production and labeling, since they could no longer boast that their products were “nonallergenic” and “non-G.M.O.”The closed airspace caused Japan Airlines and ANA to cancel flights to Europe. And this month Virgin Atlantic said it was ceasing all traffic to and from Hong Kong because of Russia’s ban. For Finnair, though, the fallout has been extreme.“The Asia strategy had been 20 years in the making,” Topi Manner, Finnair’s chief executive, said from the company’s headquarters, next to the Helsinki terminal in Vantaa. Services were tailored to meet the tastes of its Asian customers. Half of its in-flight movies are dubbed or subtitled in Japanese, Korean and Chinese. Meal offerings include crispy chicken in Chinese garlic and oyster sauce and Korean-style stir-fried pork in spicy sauce with bok choy and steamed rice. The airline’s ground staff in Helsinki are fluent in the region’s native languages.Market Square in central Helsinki.Before the coronavirus pandemic, half of the airline’s revenue was generated by travelers from Asia. Passengers that used Helsinki as a hub to transfer to other destinations accounted for 60 percent of the revenue.But with “no end in sight” to the war, Mr. Manner said, the airline’s management quickly concluded “that Russian airspace will remain closed to European carriers for a long time and we need to adapt to that reality.”This summer, Finnair operated 76 flights between Helsinki and Asia, compared to 198 in the summer of 2019. Overall, the airline is going at 68 percent of its capacity. Operating losses in the first half of this year amounted to 217 million euros.“We really have to regroup,” Mr. Manner said.In some respects, Finnair has been regrouping ever since the pandemic hit in early 2020 and virtually halted world travel. China’s “zero Covid” policy, which continued to lock down Shanghai and other major cities this year, sharply reduced East-West traffic, hampering Finnair’s recovery compared with airlines that have large domestic markets or operate in other regions. Finnair, half of which is owned by the government, fought to survive by furloughing employees, cutting costs and raising 3 billion euros in new financing.Juho Kuva for The New York TimesThe new terminal was expected to draw 30 million passengers by 2030, a projection that has been thrown out by the uncertainty now facing Finnair’s Asia strategy.The project aimed to improve services for the connecting passengers from Asia who would never leave the airport.A 2017 publicity campaign by the state-owned company that runs Finland’s terminals primarily targeted customers from China.“We created a path through the pandemic,” Mr. Manner said, but it always was intended to lead “back to the Asia strategy.”No longer. Last month, the company officially announced an about-face.“We started to pivot our network toward the West,” Mr. Manner said, expanding its partnership with American Airlines, British Airways and other carriers. In the spring, it launched four new weekly flights from Dallas-Fort Worth and three from Seattle. New routes from Helsinki to Stockholm, Copenhagen, Mumbai, India, and Doha, Qatar, have also been unveiled. As jet fuel prices skyrocket, the airline is also renting out planes and crews to other airlines, and it plans to shrink the size of its fleet and staff, and to slash costs.Finnair, which has lost 1.3 billion euros over the past three years, said it hoped to return to profitability in 2024.“It will take some time before the company gets to see if this is the right decision,” said Jaakko Tyrväinen, an airline analyst with SEB, a Nordic financial services group.For the new Helsinki terminal — which opened in June — a strategy shift was also needed.Central Helsinki.An estimated 30 million passengers were expected by 2030, up from the nearly 22 million that the existing terminals handled in 2019. Those projections are now irrelevant, and airport officials say the situation is too uncertain to make any meaningful update to that figure. Next year, 15 million travelers are expected to pass through.Perhaps more pointedly, the project, begun nearly a decade ago, was designed to improve services for transfer passengers from Asia — a majority of whom would never leave the airport.A multimedia publicity campaign that Finavia, the state-owned company that runs the country’s airline terminals, rolled out in 2017 for Helsinki airport — code letters HEL — primarily targeted customers from China. With a nod to the 2004 film “The Terminal,” the campaign, “Life in HEL,” featured Ryan Jhu, a popular Chinese actor and social media influencer, living for a month in the terminal.Now, Helsinki has an expansive new terminal dedicated to non-European transfer traffic but very few travelers.Juho Kuva for The New York TimesThe project to build the new terminal was begun nearly a decade ago.The spacious aukio, or meeting plaza, includes a wraparound video installation depicting Finnish landscapes.The upshot to the changes forced upon Finnair is vastly fewer connecting passengers in a terminal designed for them.On a recent weekday afternoon, the long, snaking lanes created to handle crowds at passport control were deserted. The spacious aukio, or meeting plaza, where passengers could sit and watch a wraparound video installation depicting Finnish landscapes, hosted a lone woman with a backpack. Moomin Shop, which sells merchandise related to the Finnish cartoon characters — particularly popular with Japanese visitors — had no customers. The Moomin cafe, farther down the main hallway, was mostly deserted.“Mornings are normally slow,” said Liccely Del Carpio, who works at the Moomin store, adding that business often picks up later in the afternoon. “All in all, it’s been OK.”The European terminal was bustling, but most of the shops and cafes that stretched along this terminal’s long hall were empty. Several other spaces were unleased or shuttered.Sami Kiiskinen, the vice president of airport development at Finavia, said that the hundreds of millions of euros in loans used to construct the airport would ultimately be repaid, but that “the schedule of paybacks must be reconsidered.” Negotiations are happening, he said.Yet, despite the likelihood that the war in Ukraine will drag on and Russian airspace will remain closed to European traffic, Mr. Kiiskinen is optimistic.“We still believe in our strategy,” he said. Major infrastructure developments like airports are designed on a 50-year horizon, he said. “Putin is not going to be there forever.”Juho Kuva for The New York TimesOn a recent weekday afternoon, a cafe branded for Moomin merchandise, cartoon characters popular with Japanese visitors, was mostly deserted.Sami Kiiskinen of Finavia, which runs the terminal, acknowledged the problems facing the project’s finances but remained optimistic over the long run: “Putin is not going to be there forever.”The new terminal at the Helsinki airport is just one of numerous commercial ventures across Europe that have been affected by Russia’s invasion of Ukraine. More

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    Times Square May Get One of the Few Spectacles It Lacks: A Casino

    The battle to win a New York City casino license has heated up in Manhattan, with real estate and gambling giants offering competing proposals for Times Square and Hudson Yards.Times Square, New York City’s famed Crossroads of the World, could hardly be considered lacking. It has dozens of Broadway theaters, swarms of tourists, costumed characters and noisy traffic, all jostling for space with office workers who toil in the area.Now one of the city’s biggest commercial developers is pitching something that Times Square does not have: a glittering Caesars Palace casino at its core.The developer, SL Green Realty Corporation, and the gambling giant Caesars Entertainment are actively trying to enlist local restaurants, retailers and construction workers in joining a pro-casino coalition, as the companies aim to secure one of three new casino licenses in the New York City area approved by state legislators earlier this year.The proposal has enormous implications for Times Square, the symbolical and economic heart of the American theater industry, and a key part of the city’s office-driven economy. Although foot traffic in Times Square was almost back at 2019 levels during recent weekends, theatergoers and office workers have been slower to re-embrace a neighborhood where violent crime has risen.Overall attendance and box office grosses on Broadway are lagging well behind prepandemic levels, and there is considerable anxiety within the industry about how changes in commuting patterns, entertainment consumption and the global economy will affect its long-term health.A casino in Times Square faces substantial obstacles. There is already a competing bid for a casino in nearby Hudson Yards from another pair of real estate and gambling giants, Related Companies and Wynn Resorts.And with casino bids also taking shape in Queens and Brooklyn, there is no assurance that the New York State Gaming Commission will place a casino in Manhattan, let alone Times Square, one of the world’s more complex logistical and economic regions.Few things change in Times Square without notice or protest. When the city installed pedestrian plazas in the area more than a decade ago, the move was widely condemned and even lampooned by late-night talk show hosts, before being eventually embraced as an innovative foray in urban design. When the neighborhood’s army of costumed characters gained a reputation for aggressive solicitation, the city restricted them to designated “activity zones,” raising free speech concerns.Now critics worry that putting a casino at 1515 Broadway, the SL Green skyscraper near West 44th Street, would alter the character of a neighborhood that can ill afford to backslide toward its seedier past, and further overwhelm an already crowded area.In a copy of a letter soliciting support for the casino, which was obtained by The New York Times, the companies promised to use a portion of the casino’s gambling revenues to fund safety and sanitation improvements in Times Square, including by deploying surveillance drones.Yet the idea of a casino has already found an influential opponent: the Broadway League, a trade association representing theater owners and producers. On Tuesday, the league sent an email to its members saying it would not welcome a casino to the neighborhood.“The addition of a casino will overwhelm the already densely congested area and would jeopardize the entire neighborhood whose existence is dependent on the success of Broadway,” the league said in a statement. “Broadway is the key driver of tourism and risking its stability would be detrimental to the city.”The congestion in Times Square is both a closely watched sign of vibrancy and a potential irritant, particularly for commuters and theatergoers who sometimes cite the crowds and the cacophony as reasons to stay away.For New York, Times Square is an important financial engine — the city relies heavily on tourists to spend money at the neighborhood’s hotels, restaurants, stores and entertainment venues.There are ample indicators that Broadway is still struggling: Several productions, including “The Phantom of the Opera,” which is the longest-running Broadway show in history, and “A Strange Loop,” which won this year’s Tony Award for best musical, have announced plans to close.Last week, there were 27 shows running on Broadway, seen by 225,731 people and grossing $29 million; in the comparable week in October 2019, before the pandemic, there were 34 shows running that were seen by 286,802 people and grossed $35 million.Still, the Actors’ Equity Association, the labor union representing actors and stage managers, is among those supporting the casino bid, suggesting a contentious road ahead for a proposal that will face a lengthy approval process.“The proposal from the developer for a Times Square casino would be a game changer that boosts security and safety in the Times Square neighborhood with increased security staff, more sanitation equipment and new cameras,” Actors’ Equity said in a statement. “We applaud the developer’s commitment to make the neighborhood safer for arts workers and audience members alike.”The simmering tensions between local power brokers, months before the formal bidding process has even begun, foreshadow the fight ahead for developers hoping to cash in on what could become the most lucrative gambling market in the country, at a time when traditional office-using tenants have become more scarce.A state committee formed this month to review casino applications said the process would open by Jan. 6, and that no determinations on locations would be made “until sometime later in 2023 at the earliest.”In their letter seeking support for the casino, SL Green and Caesars said that gambling revenues could be used to more than double the number of “public safety officers” in Times Square and to deploy surveillance drones.The letter said a new casino would result in more than 50 new artificial intelligence camera systems “strategically placed throughout Times Square, each capable of monitoring 85,000+ people per day.” The safety plans were developed by former New York Police Commissioner Bill Bratton, according to SL Green.Mr. Bratton did not respond to a request for comment.“As New Yorkers, it’s incumbent on us to keep making sure Times Square is keeping up with the times, and doesn’t go back to what I’ll call the bad old days of the ’70s or the early ’90s,” said Marc Holliday, the chief executive of SL Green. “And we all remember what that was like, when it comes to crime, and, you know, open drug use.”The casino is expected to include a hotel, a wellness center and restaurants, right above the Broadway theater that is home to “The Lion King” musical and a stone’s throw from the site of the ball drop on New Year’s Eve.Earlier this year, the state authorized up to three casino licenses for the New York City region. Legislators have touted the union jobs, tourists and tax revenue that a casino would attract, citing the fact that the bidding for each license will start at $500 million.Two existing “racinos” — horse racetracks with video slot machines but no human dealers — are considered front-runners for two of the three licenses: Genting Group’s Resorts World New York City in Queens and MGM Resorts International’s Empire City Casino in Yonkers, N.Y.The competition for the third license features many of the country’s major casino companies. Steven Cohen, the owner of the New York Mets, has been talking with Hard Rock about a casino near the baseball team’s stadium in Queens. Las Vegas Sands has been finalizing plans for its preferred casino location in the area, and Bally’s Corporation has been scouting for a development partner.The Wynn-Related proposed casino would be on the undeveloped western portion of the Hudson Yards, which was supposed to be completed by 2025 and include residential units and parks. Related, the developer of Hudson Yards, said it plans to fulfill all of its prior housing and public space commitments for the area.In a private pitch deck obtained by The Times, Wynn and Related wrote that Hudson Yards, near the Javits Center, was the ideal location to target “diverse upscale” guests for a casino resort complex.“Because it attracts the upper tier of gaming consumers, Wynn is able to dedicate less than 10 percent of its resort space to gaming, yet still generate significant gaming revenue and tax benefits for municipalities,” reads a slide in the deck.The deck also features photos of an outdoor man-made waterfall — and of a couple enjoying cocktails while watching a cigarette-holding animatronic frog, apparently from Wynn’s “Lake of Dreams” show.In their pitch letter, SL Green and Caesars said the casino was a “once in a lifetime opportunity to once again solidify Times Square as the world’s greatest entertainment area.”Community support is an integral ingredient to winning state approval for a casino license.The Broadway League’s “influence and clout and understanding of what theatergoers want is crucial to the future of Times Square, and if they’re opposing this proposal, I don’t see how it proceeds,” said Brad Hoylman, the state senator representing the district that encompasses Times Square.But Andrew Rigie, president of the New York City Hospitality Alliance, which represents the city’s restaurants and bars, said the group would support a casino in Manhattan if it used local restaurant operators or provided vouchers to nearby eateries. A major question surrounding the economic impact of casinos is whether they incentivize guests to stay and eat inside the building, which could hurt surrounding businesses.Alan Rosen, the owner of Junior’s Cheesecake, a restaurant chain with locations in Times Square and at the Foxwoods Resort Casino in Connecticut, said he was unconcerned.“I can’t see it hurting my business,” he said. “Look at Las Vegas. What do people do? They eat. They go to shows. It’s a lot more than gambling these days.” More