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    Los Angeles Rams safety Taylor Rapp to launch NFT and donate funds to fight anti-Asian hate

    In this articleBTC.CB=Taylor Rapp #24 of the Los Angeles Rams warms up prior to a team scrimmage at SoFi Stadium on August 29, 2020 in Inglewood, California.Sean M. Haffey | Getty ImagesLos Angeles Rams safety Taylor Rapp is joining the non-fungible token boom and donating proceeds to help Asian communities struck by recent violence.Rapp will launch six digital collections on Thursday and auction 90 total NFTs, including one that includes tickets to a National Football League game and a meet and greet with players. The NFTs will appear on the OpenSea marketplace, where other athletes like Rob Gronkowski have collections.In an interview with CNBC on Tuesday, Rapp, who is Asian American, said he would donate a percentage of the funds to the #StopAsianHate GoFundMe campaign to support the Asian Americans and Pacific Islanders community. The page has raised over $4 million to combat recent hate crimes.”I am Asian American, and this community means a lot to me,” Rapp said. “I wanted to help my people, and what better way to raise money right now to donate than through creating an NFT collection and using my platform.”Rapp joins a growing group of Asian American athletes who are supporting their community following a recent series of attacks, including a mass shooting in Georgia. Rapp said he’s seen violence against Asian American groups increase since the pandemic started early last year.”I felt like it was a responsibility for me to go out there and do what I can using my platform and my name to try to help out my community and bring more awareness to what is going on right now,” he said.Zoom In IconArrows pointing outwardsRapp will determine what percentage of the funds to donate after the auction, which ends Sunday. He anticipates a “large chunk” will go to the fund. Rapp said the collection celebrates his Asian heritage and includes The Ox zodiac sign, representing the 2021 Chinese calendar. That’s why he named the set: Taylor Rapp-Year of the Ox NFT Collection.Investors and collectors have been pouring money into NFTs this year as part of a broader surge of interest in crypto-related assets. In sports, the mania started with the National Basketball Association’s partnership with Dapper Laps to create digital artwork. Dapper said on Tuesday it raised over $300 million, and the company is now valued at $2.6 billion, according to USA Today.The collectibles sit on blockchain technology, a digital ledger that creates a unique ID for every asset. Rapp’s collection will be connected to the Ethereum blockchain.Along with Gronkowski’s collection, which sold for over $1 million, Kansas City Chiefs star quarterback Patrick Mahomes also launched an NFT set. Rapp called NFTs a “cool and innovative way to connect with fans.””I believe the NFTs are here to stay, and they will eventually take over sports trading cards,” he said. “I wouldn’t be surprised in the next three to four years if every player had their own NFT collection.”Zoom In IconArrows pointing outwardsStaying healthyRapp admitted he’s still learning the cryptocurrency space and owns some bitcoin. He’s also getting more into real estate after purchasing his first home in Washington.Rapp is coming off an injury-plagued 2020 campaign with the Rams. After playing in 15 games his rookie year and recording 100 combined tackles, Rapp appeared in nine games this past season, recording 44 tackles and one interception.He said “durability” will be essential for 2021 and “just making sure I stay as healthy as possible because you’re not going to get on the football field if you’re hurt.”Rapp, a 2019 second-round pick, will make approximately $919,000 for the 2021 season if he remains on the Rams’ roster.WATCH: The rise of NFTs and why people are collecting moments and assets differently now More

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    What if Europe’s fiscal largesse were as generous as America’s?

    IT CAN BE easy to forget that Europe might reasonably be expected to outperform the American economy. True, population growth in the former is slower. But because Europe remains far less integrated than America—politically, economically and culturally—it has room to exploit efficiencies that the latter has already realised. And because parts of Europe remain economically underdeveloped (nominal GDP per person in Bulgaria, the EU’s poorest member, is roughly a quarter of that in Mississippi, America’s poorest state), the scope for rapid catch-up growth in poorer places is substantial. Yet Europe has struggled to realise its potential in the 21st century. Chronic underperformance is now more or less taken for granted; the experience during the pandemic, and the likely recovery from it, could reinforce its reputation for mediocrity. But a dose of American-style stimulus—more appropriate to economic conditions in Europe anyway—could change that. From 2000 to 2007 the EU’s economy (excluding Britain) grew by a decent 2.1% per year, on average, while America’s grew by 2.5%. Alas, the comparison has never since so flattered the Europeans. They lost ground after the global financial crisis, having stumbled through a secondary debt crisis. On the eve of the pandemic, GDP in theEU was only 12% above its 2007 level; American output was 22% higher. Then, in 2020, covid-19 took nearly 8% off the EU’s GDP, almost twice the decline in America. Looked at in purchasing-power-parity terms, Europe’s economy was roughly the same size as America’s in 2000. It limped into 2021 7% smaller.A day late and a euro shortYet the most startling phase of transatlantic divergence may be about to begin. According to the European Commission’s most recent forecasts, the EU is likely to grow by 3.7% this year (and at a similar rate in 2022). America, by contrast, is now projected to grow by 6-7% in 2021. Indeed, by the end of next year the American economy is expected to be 6% larger than it was in 2019—and, remarkably, bigger than forecasters in 2019 had thought it would be in 2022—while Europe will scarcely have regained its pre-pandemic level of output. Just as important, America appears to be poised to escape the low-growth, zero-interest-rate trap that has ensnared so much of the rich world over the past two decades, and which seems likely to maintain its grip on Europe. Indeed, the pandemic may represent the third crisis to deal a blow both to Europe’s level of output and also to its subsequent growth rate. Europe’s problems are manifold. An ageing, slow-growing population limits its potential, as does slower productivity growth than what America typically manages. Some of its trouble reflects bad luck: that a once-a-century financial crisis struck while euro-area macroeconomic institutions remained cripplingly underdeveloped, for instance, or that a devastating pandemic hit before European growth had made a full recovery. During the global financial crisis, the European Central Bank played a destructively hawkish role (one that it has not reprised in the pandemic, thankfully). Yet there is no ignoring the damage done to European fortunes by persistently inadequate fiscal policy. In the great recession of 2007-09, America’s federal budget deficit reached nearly 10% of GDP, or almost two-thirds more than the central government deficit across the EU. Borrowing on both sides of the Atlantic subsequently fell much faster than economic conditions warranted. But America’s deficit began widening again from 2016 while European deficits shrank. Europe loosened its purse strings far more in the fight against covid-19 than it did during the financial crisis; across the EU government borrowing rose to nearly 10% of GDP in 2020. But America, again, did more, notching up a budget deficit of 19% of GDP last year. And borrowing will only drop a smidgen this year, to about 15%, thanks to the passage in March of another stimulus package, of $1.9trn. A new proposal to spend an additional $2trn on infrastructure may widen the deficit further, though Joe Biden’s administration seeks to fund at least part of that initiative with new tax revenue.Europe is hardly re-embracing austerity. Budget rules intended to limit member states’ borrowing, which were suspended last year, will not be reimposed until at least 2023. Borrowing across member governments may thus reach about 5% of GDP this year. Crucially, the EU itself has fiscal firepower to wield now, courtesy of the Next Generation EU fund agreed by member states last year, and backed, in a first, by European bonds. This pot of €750bn ($880bn, or about 6% of the EU’s GDP in 2020) will direct large sums of money towards recovery efforts and growth-boosting investments over the next five years. Such spending is badly needed given Europe’s pitifully weak levels of investment in recent years. While in America gross fixed capital formation grew by just under 1% a year in 2016-20, in Europe it shrank, according to an analysis by Christian Odendahl and John Springford of the Centre for European Reform. But current plans are simply far too modest. The EU’s economy is currently about 20% smaller than it would have been had it expanded from 2008 onwards at the same pace it managed from 2000 to 2007. That is a gap in output of about €3trn. American-style fiscal expansion is not without risks. Critics warn that too much borrowing and spending could lead to worryingly high rates of inflation. But Europe, where inflation has been lower for longer, would have comparatively little to fear from a similarly bold fiscal programme. While some European economies carry unnervingly high debt loads, the EU as a whole has a much lower level of debt to GDP than America. Low interest rates are more firmly entrenched in Europe. While America’s overnight interest rate rose as high as 2.4% before the pandemic, Europe’s remained stuck at zero. The yields on some European ten-year government bonds remain in negative territory. And though Eurosceptic sentiment has receded in recent years, existential threats to the EU could stage a swift and powerful return if a robust American recovery exposes the gratuitous nature of anaemic European growth. Europe’s governments have done well to do better than they managed a decade ago. Imagine what could be, though, if they were to do enough. ■This article appeared in the Finance & economics section of the print edition under the headline “The underachiever” More

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    The electric-car boom sets off a scramble for cobalt in Congo

    ON THE STREETS of Kolwezi, a mining city in the Democratic Republic of Congo, huge billboards advertise “executive” mobile-phone-data packages, a few gigabytes for a few dollars. They are popular not just with the suited types shown on the hoardings; they also sell to more roughly dressed men who work in crude “artisanal” mines, who use the data to check the price of cobalt. “Every day we look at the LME,” says Claude Mwansa, a miner who lives in Kapata, a neighbourhood where most people work in mining. He means the London Metal Exchange, where cobalt is traded.That price has soared from $30,000 per tonne in January to nearly $52,000. The reason is surging optimism about electric cars. Carmakers are setting ambitious sales targets. Joe Biden, America’s president, plans to replace the government’s fleet of vehicles with electric ones. All this requires cobalt for batteries, and 75% of the metal is mined in Congo. Meeting the demand will not be easy.By value, as much as 90% of cobalt mined in Congo comes from industrial firms such as Glencore, an Anglo-Swiss trader, and China Molybdenum, a Chinese state enterprise, which use modern methods to drill and refine the ore. The rest comes from miners like Mr Mwansa, who dig mostly by hand on land held by co-operatives, or else illegally, on land owned, say, by industrial firms. They mainly sell to Chinese middlemen who operate “depots” that line the main road out of Kolwezi, where they do basic processing and then transport the ore to South Africa or Tanzania, to be shipped to China.Yet by employment, artisanal mining outweighs the industrial sort. Glencore’s two mines employ around 15,000 people; more than 200,000 may work on artisanal sites. “Creusers” work in hand-dug pits, using shovels and pickaxes to get the ore out. It is carried on people’s heads to rivers to be washed and transported on motorbikes. Accidents are common. Pits collapse; pumps refreshing the air fail. But the money is good, by Congolese standards. Working three or four days a week (all that most can physically manage), a miner can make 100,000 Congolese francs ($50). Most Congolese live on less than $2 a day.Most buyers, however, want little to do with artisanal mining, because of the poor working conditions and the use of child labour. Apple and Tesla are among those being sued in America for using cobalt illegally mined on Glencore’s property by children who died (Glencore is not a defendant). The firms argue that the case should be dismissed and they should not be held responsible for the conditions of workers who mined cobalt they bought in a global supply chain, where provenance was hard to trace. Though some electronics firms have stopped using Congolese cobalt, carmakers have little choice—nowhere else generates as much. Tesla has vowed, but so far failed, to engineer cobalt out of its batteries. Last year it struck a deal with Glencore to buy “certified” cobalt.Glencore says it does not sell artisanal cobalt but “recognises the legitimacy” of the practice. It supports the “Fair Cobalt Alliance”, which tries to improve conditions in artisanal mines. But in practice the big firms have tried to cut off the industry. Miners complain that walls have been erected and guards hired to keep them off sites they say are theirs. Some now scramble over walls to mine at night.Congo’s government has its own solution. On March 31st Gecamines, the state mining firm, announced the start of operations of a state enterprise with a legal monopoly on all artisanal cobalt. This, it says, will help regulate conditions in the mines and also raise revenue. Trafigura, a Singapore-based commodities trader, says it will help sell the output, which will be certified by an NGO as free of child labour. Soldiers have been sealing off artisanal mines since the plan was first announced in 2019.Miners in Kapata say all they want is a free market. “There are too many mafias here,” says Mr Mwansa. They worry that the new state firm will be an excuse for officials to extract more in bribes. “The government just wants to steal,” says Bernard Tshibangica, another miner. But buyers, desperate for cobalt not tainted by child labour, may see it otherwise. ■This article appeared in the Finance & economics section of the print edition under the headline “From the red earth” More

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    Cramer says there's no reason for Ark's new space ETF to exist

    In this articleLHXNFLXKTOSTRMBPRNTLMTAMZNGOOGL9618-HK9988-HKTMEARKXCNBC’s Jim Cramer said Tuesday he was skeptical about the latest exchange-traded fund launched by Cathie Wood’s Ark Invest.”One look at the newly launched ARK Space Exploration ETF tells you everything you need to know about how managers can’t resist creating new funds, even if there’s no reason for them to exist,” Cramer said on “Mad Money.”The ARK Space Exploration ETF (ARKX) tracks publicly traded companies in the budding space industry. The fund, which began trading Tuesday, sipped 1% to $20.30 in its first session.Trimble, The 3D Printing ETF and unmanned systems provider Kratos Defense and Security Solutions are the fund’s three highest-weighted holdings. Defense contractors L3Harris and Lockheed Martin, as well as airplane manufacturer Boeing, are also part of the fund due to their space exposure.While ARKX includes some pure space plays, Cramer was perplexed as to why names like Amazon, Alphabet and Netflix were included in the fund along. Chinese e-commerce plays JD.com, Alibaba and Tencent — as well as tractor manufacturer Deere — are also part of the ETFs holdings.”It’s ridiculous, but there aren’t enough genuine space-related stocks to make a decent ETF and the manager wants to collect that 0.75% expense ratio,” Cramer said. “Maybe … don’t launch a space ETF if you have to pad it out with Netflix and Deere.”Ark Invest did not immediately respond to CNBC’s request for comment.Ark Invest, which targets disruptive companies particularly ones in technology, has picked up a lot of attention for its other funds’ strong during the Covid-19 pandemic. However, that momentum has eased this year in as many investors have sold high-growth stocks from the past year in favor of companies whose businesses are expected to boom during an economic recovery. In its ARKX prospectus, the company said it plans to invest at least 80% of its assets in domestic and foreign companies that are connected or will benefit from space travel or services beyond the earth’s surface.Disclosure: Cramer’s charitable trust owns shares of Alphabet, Amazon and Boeing.DisclaimerQuestions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – InstagramQuestions, comments, suggestions for the “Mad Money” website? [email protected] More

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    New York State Senate passes bill to legalize recreational weed

    A recreational marijuana smoker indulges in smoking weed on April 14, 2020 in the Bushwick section of the Brooklyn borough of New York City.Bruce Bennett | Getty ImagesThe New York State Senate on Tuesday voted 40-23 to pass a bill to legalize recreational marijuana. New York Governor Andrew Cuomo said he would sign it after agreeing with state lawmakers on the framework just days ago.The New York State Assembly is also expected to vote on the bill.If the bill is signed, the Empire State would become the fifteenth state in the country, along with the District of Columbia, to have legalized the drug for recreational use.New York City Mayor Bill De Blasio has said he supports the legislation on the basis of racial equity. “I think this bill goes a long way. I think there’s more to do after, but it goes a long way,” De Blasio said, according to WDTV ABC 11.Black and Brown New Yorkers made up 94% of marijuana-related arrests by New York Police in 2020, even though white New Yorkers use marijuana at the same rates.The move to legalize weed comes after neighboring state New Jersey recently legalized the plant. Lawmakers’ goal was to pass the bill as part of the state budget before the April 1 deadline.Legislators debated the measure in the Senate for three hours, with Republican senators alleging that the bill is dangerous and does not represent the wishes of all New Yorkers. The bill’s sponsor, Senator Liz Krueger responded during the proceedings: “We took endless meetings with anyone who asked us … in truthfulness I’m not sure I have ever met with as diverse a group of people as I did over the seven years that my chief of staff and I were working on this bill.”Legalization is expected to eventually rake in billions of dollars in revenue for the state and for New York City in particular, with a hefty 13% tax which includes a 9% state tax and a 4% local tax. The measure also includes a potency tax of as much as 3 cents per milligram of THC in the product, which is the natural psychoactive component that delivers the famous effects of the plant’s high.An estimate from Cuomo’s office predicts annual tax revenues from legal weed sales could bring in $350 million a year and 60,000 jobs to the state when the industry is fully established.The measure allows for possession of up to three ounces of marijuana and 24 ounces of marijuana concentrate. The bill also allows for the growth of up to six plants at home and creates equity programs to provide loans and grants to people and small farmers that have been disproportionately affected by the war on drugs.”My goal in carrying this legislation has always been to end the racially disparate enforcement of marijuana prohibition that has taken such a toll on communities of color across our state, and to use the economic windfall of legalization to help heal and repair those same communities,” Krueger said in a press release. While recording her vote in favor of the measure, Krueger said: “I saw such injustice going on, and for young people whose lives were being destroyed for doing something I did when I was a kid. Nobody put a gun to my head and nobody tried to put me in jail because I was this nice white girl.”Some officials are even calling for the bill to fund universal basic income and home ownership programs for communities most heavily affected by the drug war. Rochester, New York Mayor Lovely Warren said: “With the legalization of marijuana on the horizon, we have the ability to enact legislation locally to make the concept of reparations through a UBI and home ownership a reality for Rochester and its families,” Rochesterfirst.com reported.The bill will expunge the criminal records of tens of thousands of people, has a goal of 40% revenue reinvestment into communities of color, and will grant 50% of adult-use licenses to social equity applicants and small businesses. The bill will also establish “a well-regulated industry to ensure consumers know exactly what they are getting when they purchase cannabis.”The measure willalso create an Office of Cannabis Management, which will be an independent agency operating with the New York State Liquor Authority. The agency would be in charge of regulating the recreational cannabis market and the existing medical cannabis programs. The agency would also be overseen by a Cannabis Control Board, which would be composed of five members — three appointed by the governor, one appointed by the state Senate and one appointed by the state Assembly.Police groups and the New York Parent-Teacher Association have openly expressed concern around the bill. “Absolute travesty. All research submitted shows it will be harmful to children, makes the roads less safe,” New York State PTA Executive Director Kyle Belopkopitsky said, according to ABC 7 New York reported. “And I have absolutely no idea what the legislature is thinking in thinking they want to advance this right now.”New York officials are launching an education and prevention campaign to reduce the risk of cannabis use among school-aged children, schools will also be eligible for drug prevention and awareness programs. The state will also launch a study that examines cannabis’ effect on driving and whether it depends on factors like metabolism or time, the study will be due Dec. 31, 2022.The bill will also allow for localities to pass laws banning cannabis dispensaries and consumption licenses, with a deadline of nine months after legalization.Once signed, legalization of the plant will be effective immediately but recreational sales are not expected to begin for one or two years. More

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    NIH study shows promising immune cell response against some Covid variants that could be good news for vaccines

    Mirimus lab scientists preparing to test COVID-19 samples from recovered patients on April 8, 2020 in Brooklyn, New York.Misha Friedman | Getty ImagesA type of T-cell responsible for destroying cells infected with virus was able to recognize three Covid-19 variants in a small U.S. study, a promising sign that the vaccines should still protect against new, emerging strains, researchers at the National Institute of Allergy and Infectious Diseases said Tuesday.Researchers, led by NIAID staff scientist Andrew Redd, investigated whether T cells found in blood samples of patients who recovered from the original strain of the virus recognized B.1.1.7, the variant first detected in the U.K., B.1.351, originally found in South Africa, and P.1, first seen in Brazil. The NIAID is part of the National Institutes of Health, which published the study.Each of the three variants scientists looked at included mutations in the so-called spike protein the virus uses to enter human cells. Mutations in this spike protein region could make it less recognizable to T cells and neutralizing antibodies, another important part of the immune response, following infection or vaccination, the researchers said.In the study, which used blood samples from 30 recovered Covid-19 patients, the T cell responses “remained largely intact and could recognize virtually all mutations in the variants studied,” they said, adding that larger studies are still needed.”The researchers note that their findings suggest that the T cell response in convalescent individuals, and most likely in vaccines, are largely not affected by the mutations found in these three variants, and should offer protection against emerging variants,” the U.S. agency wrote in a press release.The study’s findings may offer some hope to public health officials as they race to vaccinate the U.S. and other parts of the world. New variants have been a concern for health officials, as studies have shown variants have the ability to reduce the effectiveness of current vaccines. White House chief medical advisor Dr. Anthony Fauci has pushed Americans to get vaccinated as quickly as possible before potentially more dangerous variants emerge.On Monday, the head of the Centers for Disease Control and Prevention, Dr. Rochelle Walensky, issued a dire warning to reporters. She said she’s worried the nation is facing “impending doom” as variants spread and daily Covid-19 cases begin to rebound once again, threatening to send more people to the hospital.Scientists say that strong responses from both antibodies and T cells are likely required to mount an effective immune response against the virus. Further studies examining immune responses are still needed, the researchers emphasized, including whether a booster shot would be effective against emerging variants.”New variants are continuing to be identified all over the world, and it will be important to continually examine these for the possible accumulation of T cell escape mutations,” the researchers wrote.The researchers also noted the study had limitations, including the relatively small size of the population examined and that all participants were from North America. More

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    As Wall Street reels, Archegos’ fire sale raises big questions about regulation

    In this article8604.T-JPCSG.N-CHMS.BBKAGSCIKAmerican flags hang from the facade of the New York Stock Exchange (NYSE) building in New York January 28, 2021.Mike Segar | ReutersThe diverging fortunes of major banks in the fallout from the Archegos Capital Management meltdown raise serious questions for global regulators, experts said. Archegos’ forced liquidation of several of its positions triggered a fire sale of a number of U.S. media stocks last week.Nomura and Credit Suisse announced Monday that they expect to suffer “significant” losses, after the multibillion dollar family office defaulted on margin calls last week. Both banks had served as prime brokers to the beleaguered hedge fund. However, fellow brokers Goldman Sachs, Deutsche Bank and Morgan Stanley escaped relatively scot free, having already unloaded positions relating to their Archegos margin calls. The margin call defaults are estimated to have cost the banks around $6 billion in total. Reports suggest that several of the banks had communicated with one another on the Archegos squeeze. Some proceeded to unload their positions in the nick of time, while others were left holding the bag. Former SEC lawyer Mark Berman said regulators would be looking not just at how Wall Street prime brokers allowed Archegos to build such heavily leveraged positions, but also the banks’ collective approach to credit negotiations and risk management. “If it is true that four major prime brokers, commercial banks, were sitting trying to negotiate a situation, what caused some of them to go out on the side and deal to reduce their exposure and let others sink?” said Berman, CEO of compliance consultancy CompliGlobe. Berman and several experts told CNBC on Tuesday that the focus of regulators should be on the risk reporting by regulated entities such as investment banks. Archegos reportedly purchased derivatives from the banks known as total return swaps, which enable investors to bet on share price moves without owning the underlying stock. The fund was therefore able to use loans to build outsized positions investing in global stock markets. The banks issued margin calls on the hedge fund last week — a demand that Archegos deposit more money into its margin accounts or sell some of the assets held in them, in order to bring it up to the brokers’ required minimum value. The hedge fund proceeded to default on these calls. ‘Ring fencing’ revisited “In terms of regulation, it is not so much necessarily about regulating the family firms — I mean, if they want to bet their money, that is fine — it is the fact that it is leveraged,” said Thorsten Beck, professor of banking and finance at Cass Business School.  “It’s the fact that the different investment banks have lent too much money and are now trying to unwind all of their positions in a rather uncoordinated way, so I think that is where the regulation has to start.” Beck told CNBC that some regulators may look at “ring fencing” of banks’ operations, ensuring that if banks wish to lend to potentially risky clients such as Archegos, such activities must separate from the commercial bank and units that have implications for the real economy.Since January 2019, large banks in the U.K. are required to legally separate their retail and investment banking operations to prevent shocks from the financial system negatively affecting consumer banking.Unlike the former regulations in the U.S. under the Glass-Steagall Act of 1933, which were repealed in 1999, new U.K. legislation permits retail banks to be part of a larger banking group that also engages in investment banking.The markets have largely shrugged off the Archegos fallout as an isolated incident, since only a limited number of investment banks seem to be affected.  Luke Hickmore, investment director at Aberdeen Standard Investments, who holds Credit Suisse debt in his fixed income portfolio, said the likely hit based on Monday’s equity movement was “probably not enough to stress their capital buffers to the point where the regulator steps in.” ‘The next shoe to fall’ However, Pluribus Labs head of strategy Greg Williamson suggested that there could be lasting effects from the issues highlighted by Archegos’ meltdown, which will come in the form of global regulatory change. “Things like total return swaps just weren’t looked at for the positions that were held by the holders of the swaps. You really didn’t know what the risk exposure was of the portfolio that entered into the swap, but also of the bank that was on the other side of the swap,” Williamson told CNBC’s “Squawk Box Europe” on Tuesday.  “It is clear that neither of the parties were exercising risk control when they put these total return swaps on. I think the next shoe to fall will be an increase in regulatory oversight.” Archegos founder and co-CEO Bill Hwang, who managed $10 billion of family money through the fund, previously worked at Tiger Management and pleaded guilty on behalf of his firm to insider trading in a case brought by the Securities and Exchange Commission in 2012.  “In all likelihood, we will see derivatives be added to additional scrutiny and probably the upstanding derivatives positions added to the capital bases of banks and investment banks, which could restrict activity in the future. I think that is the big shoe that could fall,” said Williamson. More

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    Lululemon forecasts better-than-expected sales as digital business accelerates

    In this articleLULUPedestrians wearing protective masks walk past a Lululemon store in San Francisco, California, on Monday, March 29, 2021.David Paul Morris | Bloomberg | Getty ImagesLululemon on Tuesday reported revenue and profit for the fiscal fourth quarter that topped analysts’ estimates, boosted by the athletic apparel maker’s online business, and double-digit sales growth in both its women’s and men’s divisions. It offered an upbeat outlook for sales during the current quarter and for the year, anticipating consumer demand for its sweat-wicking leggings and sports bras will continue. The retailer has been a huge pandemic beneficiary, with many people stuck at home gravitating toward workout clothing as everyday wear. The company’s shares dropped more than 1% in after-hours trading, having risen more than 60% over the past 12 months. Lululemon cautioned that a potential resurgence of Covid cases could hurt its business, despite its forecast for revenue growth. Here’s how Lululemon did during the quarter ended Jan. 31 compared with what analysts were expecting, based on a poll by Refinitiv:Earnings per share: $2.58 adjusted vs. $2.49 expectedRevenue: $1.73 billion vs. $1.66 billion expectedLululemon reported net income of $329.8 million, or $2.52 per share, compared with net income of $298 million, or $2.28 per share, a year earlier. Excluding one-time items, the company earned $2.58 per share, better than the $2.49 expected by analysts.Its revenue spiked roughly 24% to $1.73 billion from $1.4 billion a year earlier. That topped expectations for $1.66 billion.Its online sales surged 92%, as many consumers preferred staying put at home and shopping from the comfort of the sofa during the Covid pandemic. Women’s sales were up 19%, and men’s grew 17% during the quarter, the company said.In North America, revenue grew 21%, while international sales rose 47%.Direct-to-consumer sales nearly doubled, and represented 52% of total sales in the quarter, compared with 33% of sales during the year-ago period, it said.”We are still in the early innings of our growth, fueled by exciting innovations,” CEO Calvin McDonald said in a statement.Lululemon now expects first-quarter revenue to be in a range of $1.10 billion to $1.13 billion, compared with analysts’ average estimate of $999.5 million, according to Refinitiv.For fiscal 2021, the company is calling for revenue to be in a range of $5.55 billion to $5.65 billion, compared with analysts’ average estimate of $5.42 billion.It cautioned, however, that further resurgences in Covid-19, including from variants, could cause additional restrictions that could suppress shopper demand as well as lead to supply chain disruption.For now, the company said it remains on track to reach the targets it previously charted to hit by 2023, including doubling its men’s and online sales, and quadrupling international revenues.Lululemon also now owns at-home fitness equipment maker Mirror, which offers another source of revenue growth beyond the pants, tops and workout accessories that it sells. It said it plans to ramp up investments in the start-up, which generated $170 million in revenue in 2020, including results from before Lululemon’s $500 million acquisition. Lululemon’s shares are down about 8% year to date, as of Tuesday’s market close. The company has a market cap of $41.3 billion.Find the press release from Lululemon here. More