Finance

Muhammad bin Salman is one of the world’s most secure autocrats. He has no need to pay off rivals or buy elections. Yet by 2030 his government will have spent almost $3trn on Vision 2030, a plan to transform Saudi Arabia’s economy. Officials are backing man-made islands, luxury hotels and electric-vehicle factories. “They will take anything that has the smallest chance of creating economic growth, even if it is in decades,” says a megaproject executive, “even fantasies and failures.” More

Two figures share a table, but not much companionship, in a Parisian café. The man looks distracted, a pipe gripped in his mouth. The woman, eyes down, shoulders slumped, nurses a glass of moss-green absinthe. The painting, unveiled by Edgar Degas in 1876, boasts several titles (“L’Absinthe”, “In a Café” and others). It also divides opinion. One viewer, appalled by the woman’s loose morning shoes and the thought of her soiled petticoats, saw the painting as a cautionary tale against idleness and “low vice”. He then changed his mind. “The picture is merely a work of art”, he later said, “and has nothing to do with drink or sociology.” More

One question looms for a manufacturer working out where to build a factory: how big is a potential location’s tariff gap with China? President Donald Trump’s latest levies, which took effect on August 7th, have shaken things up. Despite his fighting words, China appears to have a better deal than before, at least compared with other countries: the gap between tariffs applied to it and the rest of the world has shrunk. Mr Trump also promises a clampdown on “transshipment”, which would curb firms’ ability to tariff-hop. More

One question looms for a manufacturer working out where to build a factory: how big is a potential location’s tariff gap with China? President Donald Trump’s latest levies, which took effect on August 7th, have shaken things up. Despite his fighting words, China appears to have a better deal than before, at least compared with other countries: the gap between tariffs applied to it and the rest of the world has shrunk. Mr Trump also promises a clampdown on “transshipment”, which would curb firms’ ability to tariff-hop. More

“Nothing is so permanent”, noted Milton Friedman, “as a temporary government programme”. Friedman died in 2006, a couple of years before Fannie Mae and Freddie Mac, two enormous government-sponsored enterprises (GSEs) that provide liquidity to the American mortgage market, were bailed out during the global financial crisis. The firms were taken into “conservatorship”, a form of temporary government control. It has now been in place for almost 17 years. More

New York Attorney General Letitia James sued the parent company of payments network Zelle, alleging it enabled fraud.
James’ office said in a press release that scammers stole over $1 billion from Zelle users between 2017 and 2023.
In a statement, a Zelle spokesperson called the lawsuit a “political stunt to generate press” and a “copycat” of a lawsuit the Consumer Financial Protection Bureau dropped in March.

New York Attorney General Letitia James speaks outside New York Supreme Court in New York City ahead of former President Donald Trump’s civil business fraud trial on October 2, 2023.
John Lamparski | AFP | Getty Images

New York Attorney General Letitia James sued the operator of the Zelle payments network on Wednesday, alleging it enabled fraud by allowing scammers to steal over $1 billion from users between 2017 and 2023.
James’ office said in a press release that its investigation found that Early Warning Services, the owner and designer of the peer-to-peer money transfer company, designed Zelle “without critical safety features.” The release noted that the lawsuit against EWS follows a similar one dropped by the Consumer Financial Protection Bureau in March.

“EWS knew from the beginning that key features of the Zelle network made it uniquely susceptible to fraud, and yet it failed to adopt basic safeguards to address these glaring flaws or enforce any meaningful anti-fraud rules on its partner banks,” James’ office said in the release.
The lawsuit alleges that Zelle became a “hub for fraudulent activity” because the registration process lacked verification steps and that EWS and its partner banks knew “for years” that fraud was spreading and did not take actionable steps to resolve it, according to the press release.
James is seeking restitution and damages, in addition to a court order mandating that Zelle puts anti-fraud measures in place.
“No one should be left to fend for themselves after falling victim to a scam,” James said in the release. “I look forward to getting justice for the New Yorkers who suffered because of Zelle’s security failures.”
In a statement, a Zelle spokesperson called the lawsuit a “political stunt to generate press” and a “copycat” of the CFPB lawsuit.

“Despite the Attorney General’s assertions, they did not conduct an investigation of Zelle,” the spokesperson said. “Had they conducted an investigation, they would have learned that more than 99.95 percent of all Zelle transactions are completed without any report of scam or fraud — which leads the industry.”
The CFPB in December sued EWS and JPMorgan Chase, Bank of America and Wells Fargo — the three U.S. banks that dominate transactions on Zelle — alleging the companies failed to investigate fraud or offer reimbursement to users.
The regulator dropped its suit amid a growing number of cases it has dismissed under acting CFPB Director Russell Vought. More

For stewards of elite university endowments, the past year has been difficult. All eight Ivy League colleges lagged behind the S&P 500 index by at least ten percentage points in their most recent fiscal year. Those ensnared in President Donald Trump’s culture wars, including Columbia and Harvard, are writing cheques for hundreds of millions of dollars to settle disputes and regain public funding. And the endowment model itself is under strain. Devotion to alternative assets is being questioned amid high fees, revised valuations and low liquidity. Some colleges, including Yale, have sought to offload private-equity stakes in order to raise cash. More

Users on prediction market Kalshi are upping their bets that Jefferies Chief Market Strategist David Zervos will become the next Federal Reserve chair.
The move comes after sources told CNBC that President Donald Trump is considering 11 candidates to succeed current Fed Chair Jerome Powell once his term is up.

David Zervos, Jefferies
Scott Mlyn | CNBC

The chances that Jefferies Chief Market Strategist David Zervos will become the next Federal Reserve chair are jumping on prediction market Kalshi as the Trump administration considers several candidates to succeed current Fed Chair Jerome Powell once his term expires next year.
Users on Kalshi increased their bets that President Donald Trump will nominate Zervos to 15% on Wednesday after sources told CNBC that Trump is looking at 11 candidates for Fed chair, including Zervos as well as others such as former Fed Governor Larry Lindsey and Rick Rieder – BlackRock’s chief investment officer for global fixed income.

Zervos’ probability of becoming Trump’s pick tied that of former Fed Governor Kevin Warsh’s, who was once considered the front-runner for the position. At one point early Wednesday, Zervos’ chances even topped Warsh’s at 17% to 15%, respectively.
Fed Governor Chris Waller still sits in the No. 1 spot on the platform, with odds at 31%, while National Economic Council Director Kevin Hassett’s odds are now at 20%.

Arrows pointing outwards

Both Hassett and Warsh odds shot up on prediction markets after Trump talked up “the Kevins” on CNBC last week, saying they are both “very good.”
The two have advocated for lower interest rates. Powell, whose term ends in May 2026, has been a frequent target of Trump’s criticism for refusing to cut rates.
In the most recent Fed decision in July, Waller, along with Fed Governor Michelle Bowman, publicly dissented with the central bank’s decision to hold rates steady. Waller, who was nominated by Trump to the Fed in 2020, said its wait-and-see approach is “overly cautious.”
Bloomberg News reported last week, citing people familiar with the matter, that Trump’s advisors like Waller’s openness to adjust monetary policy based on forecasting, rather than current data. It also reported that Waller has met with Trump’s team about the Fed chief role but hasn’t met with the president himself.

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