Raphael Stevens

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    Why American credit-card delinquencies have suddenly shot up

    WHEN IT COMES to the finances of American consumers, the viral videos produced by Caleb Hammer, a personal-finance social-media star, provide some cause for concern. His “financial audits” of debt-laden guests have amassed almost 2m followers on TikTok and YouTube in less than three years. Mr Hammer’s interviewees—typically young and foolish—scramble to justify their wild borrowing habits, to their interviewer’s growing ire. More

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    China’s leaders look to have blinked in their property face-off

    If you are going to buy a flat in China, common advice goes, you should buy it from a “model student”. That is, a developer who has followed the rules, kept debts under control and refrained from excessive expansion. Vanke, a Shenzhen-based firm and one of China’s biggest homebuilders, once qualified as such. Its name appears on lists of China’s strongest developers. It has a good record of completing homes on time. Most important, it is state-backed. So it is all the more surprising that Vanke is now flunking out of school and may become the first developer in the current property crisis to receive a bail-out. More

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    Donald Trump’s reciprocal tariffs are absurd

    “He started it,” is playground justice. It may soon be America’s trade policy. On February 13th Donald Trump announced he had decided, for what he later called “purposes of fairness”, to employ reciprocal tariffs. When the levies will go into effect, and how they will apply, is uncertain. A memorandum directs federal agencies to look into “non-reciprocal trade arrangements”, including value-added taxes (VAT) and non-tariff barriers, and to report on remedies by April 1st. Like teachers tasked with adjudicating a squabble, American officials now face the unenviable task of working out which trade partners are the worst behaved. More

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    To spend big, Germany’s next government may need EU help

    When, in october 2017, Wolfgang Schäuble left the Detlev Rohwedder Building for the final time after his stint as German finance minister, hundreds of civil servants, dressed all in black, waited under his window in the shape of a giant zero. Their schwarze Null symbolised the balanced budget, or surpluses, he had achieved since 2014. It was the apogee of German fiscal self-congratulation. More

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    Investors fear inflation is coming back. They may be right

    After peaking in 2022 at 11% year on year, inflation across the rich world has steadily fallen. Until now. As central banks bring down interest rates, headline inflation across the rich world is edging up (see chart 1 ). It rose from 2.1% in September to 2.5% in December. More

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    Fed officials are worried about tariffs’ impact on inflation and see rate cuts on hold, minutes show

    Federal Reserve officials in January agreed they would need to see inflation come down more before lowering interest rates further, and expressed concern about the impact President Donald Trump’s tariffs would have in making that happen, according to meeting minutes released Wednesday.Policymakers on the Federal Open Market Committee unanimously decided at the meeting to hold their key policy rate steady after three consecutive cuts totaling a full percentage point in 2024.In reaching the decision, members commented on the potential impacts from the new administration, including chatter about the tariffs as well as the impact from reduced regulations and taxes. The committee noted that current policy is “significantly less restrictive” than it had been before the rate cuts, giving members time to evaluate conditions before making any additional moves.Members said that the current policy provides “time to assess the evolving outlook for economic activity, the labor market, and inflation, with the vast majority pointing to a still-restrictive policy stance. Participants indicated that, provided the economy remained near maximum employment, they would want to see further progress on inflation before making additional adjustments to the target range for the federal funds rate.”Officials noted concerns they had about the potential for policy changes to keep inflation above the Fed’s target.The president already has instituted some tariffs but in recent days has threatened to expand them.In remarks to reporters Tuesday, Trump said he is looking at 25% duties on autos, pharmaceuticals and semiconductors that would accelerate through the year. While he did not delve too far into specifics, the tariffs would take trade policy to another level and pose further threats to prices at a time when inflation has eased but is still above the Fed’s 2% goal.FOMC members cited, according to the meeting summary, “the effects of potential changes in trade and immigration policy as well as strong consumer demand. Business contacts in a number of Districts had indicated that firms would attempt to pass on to consumers higher input costs arising from potential tariffs.”They further noted “upside risks to the inflation outlook. In particular, participants cited the possible effects of potential changes in trade and immigration policy.”Since the meeting, most central bank officials have spoken in cautious tones about where policy is headed from here. Most view the current level of rates in a position where they can take their time when evaluating how to proceed.In addition to the general focus Fed officials put on employment and inflation, Trump’s plans for fiscal and trade policies have added a wrinkle into the considerations.On the flip side of worries over tariffs and inflation, the minutes noted “substantial optimism about the economic outlook, stemming in part from an expectation of an easing in government regulations or changes in tax policies.”Many economists expect tariffs that Trump plans on launching to aggravate inflation, though Fed policymakers have said their response would be dependent on whether they are one-time increases or if they generate more underlying inflation that would necessitate a policy response.Inflation indicators lately have been mixed, with consumer prices rising more than expected in January but wholesale prices indicating softer pipeline pressures.Fed Chair Jerome Powell has generally avoided speculation on the impact the tariffs would have. However, other officials have expressed concern and conceded that Trump’s moves could impact policy, possibly delaying rate cuts further. Market pricing currently is anticipating the next reduction to come in July or September. 
    The Fed’s benchmark overnight borrowing rate is currently targeted between 4.25%-4.5%.

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    Carvana expects another ‘strong’ year after topping fourth-quarter expectations

    Carvana topped Wall Street’s top- and bottom-line expectations for the fourth quarter, while guiding for another “strong” year in 2025.
    Carvana gave a broad 2025 guidance that includes growth in both retail units sold and adjusted EBITDA.
    For 2024, the Tempe, Arizona-based company reported adjusted EBITDA of $1.38 billion and net income of roughly $404 million.

    A Carvana sign and signature vending machine in Tempe, Arizona.
    Michael Wayland | CNBC

    Carvana topped Wall Street’s top- and bottom-line expectations for the fourth quarter while guiding for another “strong” year in 2025.
    Carvana, as it has in the past, gave a broad guidance outlook for this year that includes growth in both retail units sold and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, including sequential increases in both during the first quarter.

    Shares of Carvana fell more than 10% during after-hours trading Wednesday. The stock closed at $281.82, down roughly 1%.
    Here’s how the company performed in the fourth quarter, compared with average estimates compiled by LSEG:

    Earnings per share: 56 cents vs. 29 cents expected
    Revenue: $3.55 billion vs. $3.31 billion expected

    Revenue of $3.55 billion was up 46% from $2.42 billion in the prior-year period. Full-year 2024 revenue came in at $13.67 billion, up almost 27% from $10.77 billion in 2023.
    For 2024, the Tempe, Arizona-based company reported adjusted EBITDA of $1.38 billion and net income of roughly $404 million. That includes adjusted EBITDA of $359 million and net income of $159 million during the fourth quarter. Fourth-quarter net income marks major improvement from a loss of $200 million in the same period a year earlier.
    On a per-share basis, the company reported earnings of 56 cents for the December period, compared with a loss of $1 per share during the same quarter in 2023.

    Both the yearly and quarterly results were records for Carvana.
    Carvana said it sold 416,348 retail vehicles last year, up roughly 33% from the year before, for record total annual revenue of $13.67 billion in 2024. Its total gross profit per unit for the fourth quarter and full year was $6,671 and $6,908, respectively. Both metrics were up nearly $1,400 from 2023.
    “With just ~1% market share today and many opportunities to improve and expand our offering from here, we know this is just the beginning of our journey to change the way people buy and sell cars,” Carvana CEO and co-founder Ernie Garcia said in a news release.
    Shares of Carvana are up roughly 40% in 2025, adding to last year’s nearly 285% gain.

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    UnitedHealthcare is offering buyouts to employees in benefits unit, could pursue layoffs, sources say

    UnitedHealthcare is offering certain employees in its benefits operations unit the option to accept buyouts if they quit by March 3, following a tumultuous year for the insurance giant, CNBC has learned.
    If the company does not meet a resignation quota through buyouts, it will lay off employees, two people familiar with the matter said, citing an internal resource site. 
    The buyout offers come after a tumultuous last year for UnitedHealth Group, which grappled with the fatal shooting of the UnitedHealthcare CEO, a historically costly cyberattack, and rising medical costs.

    A general view outside the United Healthcare corporate headquarters on December 4, 2024 in Minnetonka, Minnesota. 
    Stephen Maturen | Getty Images

    UnitedHealthcare is offering certain employees in its benefits operations unit the option to accept buyouts if they quit by March 3, following a tumultuous year for the insurance giant, CNBC has learned.
    Those who don’t accept the offer will continue in either their current role or a comparable position, two people familiar with the matter told CNBC. If the company does not meet a resignation quota through buyouts, it will lay off employees, the people said, citing an internal resource site. 

    The company declined to share how many employees received buyout offers under the so-called Voluntary Resignation Separation Program. The benefits operations unit oversees multiple subdivisions that help manage customer service, claims, enrollment, customers’ insurance benefits and more, one person said.  
    UnitedHealthcare, the insurance arm of UnitedHealth Group, is the largest private health insurer in the U.S. UnitedHealth Group had more than 440,000 employees as of December 2023, but it does not disclose how many people work in its benefits segment or overall insurance business.
    UnitedHealth Group is the biggest health-care conglomerate in the U.S. based on revenue and its roughly $460 billion market cap, but it has tried to cut costs as medical expenses increase for Medicare Advantage beneficiaries and it deals with the fallout from the costly cyberattack against its subsidiary Change Healthcare. It has also faced renewed anger over high health-care costs in the U.S., following the killing of its insurance unit CEO Brian Thompson in December.
    Employees eligible for the buyouts include full-time or part-time U.S. workers assigned to four internal segments under benefits operations, including corporate, consumer operations, core services and provider services, according to an internal memo sent Monday and viewed by CNBC.”This voluntary option is part of our ongoing efforts to ensure our team is best positioned to meet the evolving needs of the people and customers we are honored to serve,” a UnitedHealth spokesperson told CNBC in a statement. “We continue to grow our workforce with more than 3,200 positions currently available on UnitedHealth Group’s careers site.”
    The company expects employees’ termination date to be no sooner than May 1, according to the memo. The memo said some employees who accept buyouts may need to work beyond that date, but the company does not expect to require them to work past Nov. 13. 

    Their severance packages will depend on the number of years they have spent at the company and their salary grade, and will kick in on their termination date, the memo said. The benefits provided to employees included in any potential future layoffs may not be “as favorable” as those offered to workers under the buyout program, according to the memo. 
    Workers who received the buyout offers are in shock, said the people familiar with the matter, especially after UnitedHealth Group reported its highest-ever annual revenue in 2024. The company said in its January earnings release that it generated $400.3 billion in revenue in 2024, up 8% year over year.
    UnitedHealth executives said during the company’s fourth-quarter call in January that “digital adoption” helped the company lower costs. CEO Andrew Witty called it a “modernization agenda” which includes but isn’t limited to artificial intelligence.
    He added that UnitedHealth is “just kind of scratching the surface of the opportunity.” 
    Workers were informed about the buyouts Monday during a meeting that lasted around 10 minutes and were told they will have the opportunity to ask questions in information sessions in the coming days, the people said. 
    The buyouts follow the shooting of Thompson, which unleashed a torrent of pent-up anger and resentment toward the insurance industry and renewed calls for reform. 
    That came only months after Change Healthcare, which processes medical claims, was hit by a cyberattack in February 2024 that compromised the protected health information of around 190 million people. UnitedHealth Group has paid out more than $3 billion to providers affected by the cyberattack. 
    UnitedHealth Group also laid off workers in its Optum health services division last year. 
    Shares of the company closed up 2% on Wednesday.  More