Why Japan Stands Virtually Alone in Keeping Interest Rates Ultralow

TOKYO — because the FRS has repeatedly pushed up yank interest rates in an endeavor to tame rampant inflation, nearly each major financial organisation within the world has disorganised to stay up the pace. so there’s the Bank of Japan.

The yen is in free fall. Inflation by some measures is that the highest in decades. and traditional knowledge says a rate increase might ease each problems. however the Bank of Japan — ne’er one to follow the group — has remained unwaveringly committed to its ultralow interest rates, dispute that creating cash costlier currently would solely suppress already weak demand and set back a fragile economic recovery from the pandemic.

Prime Minister Fumio Kishida voiced sturdy support on for the Bank of Japan’s financial policy, as the yen fell to a 32-year low against the dollar, a plunge that has contributed to cost will increase in an exceedingly country unaccustomed to them and place a lot of pressure on his unpopular administration.

He offered his backing daily before the Bank of Japan’s governor, Haruhiko Kuroda, created clear in comments to Parliament that the bank wouldn’t jibe anytime soon. All the members of the bank’s policy board, Mr. Kuroda said, agree that “under the present economic conditions, it’s acceptable to continue financial easing.”

His principle is simple. Japan desires smart inflation — the type created by spirited client demand. however it’s gotten unhealthy inflation — the kind created by a powerful greenback and provide shortfalls relating to the pandemic and also the war in Ukraine — which is why the bank ought to keep the course.

The divergent economic circumstances within the u. s. and Japan have diode to drastically totally different monetary policies, a niche that has helped drive down the yen as investors look for higher returns elsewhere.

In the u. s. — where the economic recovery has been speedy and wages are rising chop-chop — the Fed is seeking to squash inflation by strangulation demand. It believes it can do the goal partly by discouraging payment through higher interest rates, although some distinguished economists have warned that going too way might be heavy for the economy.ImageJapan’s economy has barely came to its prepandemic levels.Credit…Noriko Hayashi for The big apple Times

In Japan, however, there’s broad agreement that — a minimum of for currently — a rate rise would do a lot of damage than good. the japanese economy, the world’s third largest, has barely returned to its prepandemic levels, and wages have stagnated despite a marketplace therefore tight that state remained below three p.c throughout the pandemic’s worst months.

“In order to bring inflation in Japan down, you’d have to be compelled to slow demand rather sharply, and that’s tough as a result of demand was already type of weak relative to different economies,” aforementioned Stefan Angrick, a senior social scientist at Moody’s Analytics in Japan.Inflation F.A.Q.Card one of 5

What is inflation? Inflation could be a loss of buying power over time, that means your greenback won’t go as way tomorrow because it did today. it’s generally expressed because the annual amendment in costs for everyday merchandise and services love food, furniture, apparel, transportation and toys.

What causes inflation? It may be the results of rising client demand. however inflation may also rise and fall supported developments that have very little to try and do with economic conditions, such as restricted boring and provide chain problems.

Is inflation bad? It depends on the circumstances. quick worth will increase spell trouble, but moderate price gains can result in higher wages and job growth.

How will inflation have an effect on the poor? Inflation can be particularly onerous to shoulder for poor households as a result of they pay a much bigger chunk of their budgets on wants like food, housing and gas.

Can inflation have an effect on the stock market? speedy inflation generally spells hassle for stocks. money assets normally have traditionally fared badly throughout inflation booms, whereas tangible assets like homes have command their price better.

While inflation pressures within the u. s. are generally distributed, in Japan they need primarily hit necessities like food and energy, that demand is glad mostly through imports.

Inflation in Japan (excluding volatile fresh foods prices) has reached three percent, the govt. reportable on Friday, the very best since 1991, excluding a short spike relating to a 2014 tax increase. however stripped of food ANd energy, Japanese costs in Sept were simply 1.8 p.c higher over the last year. within the United States, that variety was 6.6 percent.

The reasons for the low Japanese figure are various and not well understood. specialists have found explanations in stagnant wages and also the hurtful effects on demand from an aging, shrinking population.

Perhaps the most important contributor, however, could be a public fully grown wont to stable prices. Producer prices — a live of inflation for companies’ merchandise and services — have climbed nearly ten percent over the last year. however Japanese companies, not like their yank counterparts, are reluctant to pass away those extra prices to consumers.

That means that a lot of of the present inflation pressure is coming back from the sturdy greenback and provide problems moving imports — factors outside Japan and thus outside the Bank of Japan’s control. beneath those circumstances, bank officers “know full well that driving up interest rates isn’t about to attenuate those worth pressures — it’s simply going to push up business costs,” aforementioned Bill Mitchell, a academic of social science at the University of urban center in Australia.

The Bank of Japan introduced its current financial easing policy in 2013, once the prime minister at the time, Shinzo Abe, pledged sturdy measures to stimulate economic process that had stagnated for decades.

The set up enclosed unleashing a torrent of state payment and reshaping the structure of Japan’s economy through initiatives like encouraging a lot of girls to affix the work force.

But the foremost necessary component was creating cash low cost and without delay available, a goal the Bank of Japan achieved by bottoming out interest rates and vacuuming up bonds and equities. Mr. Kuroda pledged that it’d maintain those policies till inflation — that had been nearly nonexistent — reached two percent, tier economists believed was necessary to carry wages and expand the country’s anemic economy.ImageWeak client demand has created officers at Japan’s financial organisation cautious of raising interest rates. Credit…Noriko Hayashi for The big apple Times

Nearly a decade later, Japan’s old commitment to exploitation ultralow rates to stimulate growth has made its economy significantly liable to the harm that rate will increase will cause.

Between 2014 and 2022, per information from the Japan Housing Finance Agency, the share of variable-rate mortgages rose to 73.9 p.c from 39.3 percent as home buyers, convinced that rates wouldn’t go up, heaped into the riskier, however cheaper, money products. A change in disposition rates would increase payment costs, crimping already tight unit budgets.

A rate increase might conjointly build it harder for Japan to service its own giant debt, that in 2021 stood at virtually 260 p.c of annual economic output. The debt considerations became even a lot of salient because the government has provided monumental financial support to businesses and households to counteract the economic harm from recent world events. whereas disagreement exists over whether or not Japan’s debt is sustainable, nobody desires to risk finding out.

“Fiscal policy and financial policy are joined at the hip, and that’s what’s creating it so tough for the Bank of Japan to create a move,” aforementioned Saori Katada, AN knowledgeable on Japanese money policy at the University of Southern California. She other that policymakers feared that a wrong move might unleash a “doomsday scenario.”

The weak yen has bestowed a difficult electronic messaging downside for the japanese government.

The currency’s depreciation has contributed to tidy profits for export-heavy firms like Toyota, whose merchandise became cheaper for shoppers overseas. Mr. Kishida has conjointly said he expects a budget yen to draw international tourists, who began to come this month once a virtually three-year absence caused by Japan’s tough pandemic border restrictions.

But the currency’s weakness has been a problem on the finances of households and smaller businesses and will have a dangerous impact on public sentiment, aforementioned sequence Park, a academic of social science at theologiser Marymount University in l. a. who studies Japan’s financial policy.

The Bank of Japan has said the effect of the weak yen is principally positive. however on Wednesday, Mr. Kuroda told a parliamentary budget committee that the speedy depreciation had become a “minus.” Japan’s finance minister, Shunichi Suzuki, on Th known as the fall’s speed “undesirable” and pledged “appropriate” action.ImageInflation has reached three p.c in Japan, less than in several different countries however still the very best in decades.Credit…Noriko Hayashi for The big apple Times

In September, the Finance Ministry conducted a one-time yen-buying operation, its 1st in over 2 decades, but the trouble did nothing to prevent the currency’s slide. This week, investors were searching for signs of a smaller “stealth” intervention by the govt. to shore the yen. A sharp move higher by the yen on Fri raised speculation that Japan had after all intervened.

It’s unclear whether or not raising interest rates would even arrest the yen’s plunge. Rate will increase by other central banks have done very little to guard their own currencies against the muscular dollar. and also the political perils of sharp economic moves were created clear on once Liz Truss stepped down as Britain’s prime minister six weeks into the job.

Still, some speculators have bet that the Bank of Japan can fold beneath the gathering pressure and lift rates.

The bank is unlikely to flinch, academic Mitchell said.

“They’re type of runproof to Western philosophical pressure,” he said, adding, “They have worked out, sensibly, that the most effective strategy at the instant is what they’re doing: Hold the fort.”

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The Race Is On to Find the U.K.’s Next Prime Minister

‘We don’t need any more Cirque du Soleil’

Liz Truss is out as Britain’s prime minister, ending a 44-day tenure punctuated by market turmoil and a humiliating U-turn on nearly all her major policies. The country’s news media had a field day with her departure, but the leadership vacuum created by her exit leaves real questions about what lies ahead for Britain’s economy and business community.

The U.K.’s already embattled economy needs government stability, fast. After initially improving on the Truss news, the pound and British government bond yields gave up their gains. Markets are already wary of what the next prime minister — who would be its third this year (potentially; more on that below) — will put forth, though it’s unlikely that person would propose anything like Truss’s highly unpopular and unfunded tax cuts.

The next leader will face a daunting set of economic problems: inflation that’s above 10 percent, rising interest rates, growing government borrowing, spiraling energy prices and a cost-of-living crisis.

Who will replace Truss? The ruling Conservative Party is planning a lightning-fast process of picking a new leader, with the goal of having someone in place within a week. Potential candidates include Rishi Sunak, the former chancellor who lost to Truss last time; Penny Mordaunt, who came in third; and former Prime Minister Boris Johnson, who resigned this summer under pressure from lawmakers.

There are other potential causes for concern. Cybersecurity experts are worried that an online component of the selection process could be vulnerable to hacking. And some political commentators worry that picking yet another prime minister without a general election would result in a leader without a true political mandate.

Businesses have had enough of the chaos. “We don’t need more Cirque du Soleil,” said the chief of BusinessLDN, a trade group. What the corporate community is now hoping for, a senior executive at a big multinational told DealBook, is stability and moderation.

Whoever becomes prime minister is unlikely to go beyond the cautious approach of tax increases and spending cuts that Jeremy Hunt, who has been chancellor of the Exchequer for a week, has promised. Going beyond that risks inviting another backlash from the markets, this person predicted: “It’ll be about getting the economy under control and getting spending down.”

An aside: The Economist’s latest lead editorial, comparing Britain’s economic straits to Italy’s, generated no small amount of derision — particularly from Italians — over both the facts and the cover art.
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HERE’S WHAT’S HAPPENING

Instacart delays its I.P.O. plans. Worries about jittery markets prompted the food delivery company to push back its timeline for going public, The Times reports. The company had planned to publicly disclose its financial data, a key step to a public offering, this week.

Courts block challenges to President Biden’s student debt relief plans. A federal judge in Missouri rejected a lawsuit by six Republican-led states, while Justice Amy Coney Barrett of the Supreme Court turned back one by a Wisconsin taxpayers’ association. Both suits were likely dismissed on technical grounds, rather than on the merits of their arguments; other lawsuits are still pending.

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

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.
ImageAt the Arbikie Distillery. Global demand for whisky has been growing.
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.
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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.”

Biden Says 22 Million Americans Have Applied for Student Loan Debt Relief

DOVER, Del. — President Biden said Friday that 22 million Americans had applied for federal student loan relief since his administration opened the program this week, and he accused Republicans of hypocrisy for trying to block the initiative.

In a speech at Delaware State University, a historically Black school, Mr. Biden tried to draw sharp distinctions with Republicans less than three weeks before the midterm elections.

“Republican members of Congress and Republican governors are doing everything they can to deny this relief, even to their own constituents,” Mr. Biden said, a day after courts rejected two legal challenges to the measure that could cost the federal government hundreds of billions of dollars.

But later on Friday, the Court of Appeals for the Eighth Circuit temporarily blocked the government from discharging debt under its relief plan until the court rules on an emergency request by Republican-led states in the legal dispute.

The plan cancels $10,000 in debt for those earning less than $125,000 per year, or $250,000 per household, and $20,000 for those who received Pell grants for low-income families. For tens of millions of people, that level of relief would wipe out their federal student loan debt. The government plans to accept applications until Dec. 31, 2023.

“In less than a week, just close to 22 million people have already given us the information to be considered for this life-changing relief,” Mr. Biden told a crowd at the university, where more than 75 percent of the students receive Pell grants.

The president compared the student debt relief plan to the $2 trillion tax cuts that Republicans passed in 2017 and the loan forgiveness that businesses received during the pandemic. He specifically called out some of his most staunch critics, such as Representative Marjorie Taylor Greene, Republican of Georgia, and Senator Ted Cruz, Republican of Texas.

Ms. Greene and her husband received a $180,000 loan from the Paycheck Protection Program that was subsequently forgiven, but called student loan forgiveness “completely unfair”; Mr. Cruz referred to a hypothetical recipient of student debt relief as a “slacker barista who wasted seven years in college studying completely useless things.”

“Who in the hell do they think they are?” Mr. Biden asked, drawing cheers.

The Education Department has estimated that the program will cost $379 billion over its lifetime, which is more than 30 years.

Mr. Biden said the cost was affordable and noted his administration’s record of deficit reduction. Treasury Department figures showed that the federal budget deficit fell from $2.8 trillion a year ago to $1.4 trillion for the 2022 fiscal year, largely thanks to waning pandemic emergency spending.

How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.
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The Biden administration began accepting applications for the debt relief on Monday, and millions of borrowers made submissions as the new portal went live. The Education Department had said it would not cancel any loans until Sunday at the earliest, before the appeals court issued its stay.

Mr. Biden enacted the debt forgiveness program by invoking a 2003 federal law that allows the education secretary to modify financial assistance programs for students “in connection with a war or other military operation or national emergency.” The Biden administration has argued that the pandemic constitutes such an emergency.

Although the lawsuits were expected, legal experts had expressed doubts that those trying to halt the program would have standing to sue.

This week, a federal judge appointed by President George W. Bush dismissed a lawsuit brought by Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina. The judge said the states had not demonstrated that they were injured by the debt forgiveness. But the Court of Appeals for the Eighth Circuit granted a temporary stay on Friday.

Separately, Justice Amy Coney Barrett rejected a challenge to the policy that had been brought by a taxpayers’ association in Wisconsin.

More legal challenges are looming. The Biden administration had been racing to ensure that the program is operational before its opponents found a judge who would freeze it, and it has already faced some backlash for scaling back its initial ambitions.

In late September, the Department of Education indicated that some Federal Family Education Loans could no longer be consolidated into direct federal loans, which are eligible for forgiveness. This change would prevent potentially hundreds of thousands of borrowers who thought they were eligible for student loan forgiveness from having their debts cleared.

Did You Start Your Career During the Pandemic?

For the thousands of young people who started their first ever jobs during the pandemic, there was little opportunity to experience the familiar rites and rituals of early adulthood. They navigated periods of economic chaos, from the Great Resignation to soaring inflation. Some graduated on Zoom, celebrated in their childhood bedrooms and then opened their laptops again to start remote jobs.

The New York Times is reporting on the experience of young people who started their first jobs during the pandemic. We’d like to hear about your experience.

We won’t publish any part of your submission without contacting you first. We may use your contact information to follow up with you.

‘It’s a tragedy.’ French winemakers face devastation after worst weather in 30 years

One of France’s biggest export industries is facing a devastating blow after an unusually severe frost earlier this month damaged vineyards across the country, heaping pain on winemakers already reeling from the pandemic and US tariffs.

The frost has affected 80% of vineyards in France’s primary wine growing areas, according to the European Committee of Wine Companies. “This is expected to cause a yield loss ranging from 25% to up to 50% in some regions,” the trade body told CNN Business on Wednesday.

The destruction spread across the Rhone Valley, Bordeaux, Burgundy, Champagne, Provence and the Loire Valley, said Anne Colombo, president of the Cornas appellation, a wine-growing area in the Rhone region.

“In some regions there will be very, very few grapes [this year],” she said, adding that the frost in Cornas is the worst in more than half a century.

Winemakers tried to keep air temperatures up by lighting candles and braziers in their vineyards, but in many cases it was not enough to protect their budding vines.
A winegrower from the Daniel-Etienne Defaix wine estate lights candles in a vineyard near Chablis, Burgundy.
A winegrower from the Daniel-Etienne Defaix wine estate lights candles in a vineyard near Chablis, Burgundy.

“An important share of the harvest has been lost. It’s too early to give a percentage estimate, but in any case it’s a tragedy for the winegrowers who have been hit,” said Christophe Chateau, director of communications at the Bordeaux Wine Council.

The frost also threatens other crops, including beets and rapeseed, according to the National Federation of Farmers’ Unions. “The anguish is immense in vineyards, orchards and fields,” the organization said in a statement last week.

Not since 1991 have farms faced such a devastating weather event, according to French Prime Minister Jean Castex. Government spokesperson Gabriel Attal told journalists on Wednesday that in some areas “almost the whole annual production” of certain crops could be lost.

The French Ministry of Agriculture and Food last week activated its “agricultural calamities” program, triggering tax relief and other financial support measures for farmers. Government officials held an emergency meeting with bankers, insurers and agricultural representatives on Monday to identify additional support mechanisms.
At dawn on April 7, smoke rises from fires lit in the Loire Valley’s Vouvray vineyard to protect them from frost.
At dawn on April 7, smoke rises from fires lit in the Loire Valley’s Vouvray vineyard to protect them from frost.

“To you, the farmers, who all over France have fought tirelessly, night after night, to protect the fruits of your labor, I want to say that we give you our full support in this fight. Stand firm! We are at your side and will remain so,” French President Emmanuel Macron said on Twitter.

The crisis comes at a particularly difficult time for French winemakers, who are suffering weaker sales as a result of coronavirus lockdowns in key international markets, the collapse of tourism due to the pandemic and US tariffs related to a dispute with the European Union over subsidies to planemakers Airbus (EADSY) and Boeing (BA).

Exports of French wine and spirits fell nearly 14% to €12.1 billion ($14.5 billion) in 2020, with sales to the United States tumbling 18%, according to the Federation of Wine and Spirits Exporters of France.
Winemakers grapple with climate crisis

The frost was particularly damaging for winemakers because it was preceded by unusually warm temperatures, which meant that vines grew faster and earlier than usual, making them more sensitive to the cold.

“France encountered near record warmth from late March to early April,” said CNN meteorologist Chad Myers. That was followed by a “brutal Arctic outbreak” in Europe during the Easter weekend, Myers added.

Temperatures in the Champagne region went from near 26 degrees Celsius (80 degrees Fahrenheit) to around minus 6 (22 degrees Fahrenheit) in less than a week. “Although temperatures are closer to normal now, another cold outbreak is on the way,” said Myers.
A man checks vine buds as anti-frost candles burn in the Luneau-Papin vineyard near Nantes on April 12.
A man checks vine buds as anti-frost candles burn in the Luneau-Papin vineyard near Nantes on April 12.

Climate change has brought forward growing seasons in France and elsewhere, placing crops at higher risk of damage from cold spells. “It’s when they begin to grow that they are more fragile,” said Colombo, adding that temperature changes have also affected harvesting.

“Now we harvest in the first week of September and [20 years ago] it was the last week of September,” she said.

The National Federation of Farmers’ Unions said the episode is a “stark reminder” of the importance of preventive measures and “a risk management regime that meets the climate challenge.”

Electric robots are mapping the seafloor, Earth’s last frontier

For centuries, humans have explored the Earth’s mountains, jungles and deserts. But despite covering more than 70% of the Earth’s surface, the ocean is still a relative mystery. In fact, we know more about the surface of Mars than we do about the sea floor; just over 20% of the ocean bed has been mapped.

Getting a fuller picture would enable us to navigate ships more safely, create more accurate climate models, lay down telecommunication cables, build offshore windfarms and protect marine species – all part of what’s known as the “blue economy,” projected to be worth $3 trillion by 2030.

Underwater robotic vehicles equipped with sensors are helping gather that data quicker and more cheaply than ever before. But many of these vehicles rely on batteries with a limited lifespan, and need to return to a boat or the shore to recharge, making it difficult for them to map more remote parts of the sea.

A five-year-old startup called Seatrec is rising to the challenge, founded by oceanographer Yi Chao. While working at NASA, he developed technology to power ocean robots by harnessing “the naturally occurring temperature difference” of the sea, Chao told CNN Business.
Greener and cheaper

The power module can be installed on existing data-gathering robots or Seatrec’s own floating device. This dives a kilometer down to examine the chemistry and shape of the seabed, using sonar to create a map of the surrounding area. The robot returns to the surface to send back its findings via satellite.
Seatrec’s float uses differences in ocean temperature to power itself.
Seatrec’s float uses differences in ocean temperature to power itself.

As the float moves between colder and warmer parts of the ocean, material inside the module either melts or solidifies, causing pressure that in turn creates thermal energy and powers the robot’s generator.

“They get charged by the sea, so they can extend their lifetime almost indefinitely,” Chao said.
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This underwater concrete attracts marine life and gets stronger at the same time

A basic float model typically costs around $20,000. Attaching Seatrec’s energy system adds another $25,000, Chao said.

But the access to free, renewable energy and the ability to stay in the water longer makes data gathering up to five times cheaper in the long run, according to Chao. He said the startup is making fewer than 100 devices per year, primarily for marine researchers, but the technology is easily scalable – Seatrec’s energy module can also be can be retrofitted onto existing mapping devices to extend their range.
Picking up the pace

New technologies that can extend the reach of data-gathering devices are crucial for mapping more remote parts of the deep sea, according Jamie McMichael-Phillips, director of the Nippon Foundation-GEBCO Seabed 2030 Project.

“One of the huge challenges we have is quite simply physics,” said McMichael-Phillips. “Unlike mapping the Earth’s surface where we can use a camera [or] satellites, at sea, light does not penetrate through the water column. So we’re pretty much limited to using sonar systems.”
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Launched in 2017, the Seabed 2030 Project has increased awareness about the importance of the ocean floor, and given researchers and companies a clear goal to work towards: map the entire seafloor by the end of this decade.

Some companies, such as XOCEAN, are surveying the ocean from the surface. Another startup, Bedrock Ocean Exploration, says it can provide surveys of seabed areas up to 10 times faster than traditional methods by using an autonomous electric submarine fitted with sonars, cameras and lasers; the data is then analyzed on Bedrock’s own cloud platform.
Bedrock Ocean Exploration uses an autonomous electric submarine fitted with sonars, cameras and lasers.
Bedrock Ocean Exploration uses an autonomous electric submarine fitted with sonars, cameras and lasers.
The challenge ahead

Even with the growing number of technologies accelerating seabed exploration, completing the map is still a logistical and financial challenge.
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Chao estimates that it would take 3,000 of Seatrec’s floats operating over the next 10 years to fully survey the ocean. The company has raised $2 million in seed funding to scale up production of its energy harvesting system.

But this is a drop in the ocean of the capital needed to fully survey the ocean, which is estimated to be “somewhere between $3 to $5 billion,” according to McMichael-Phillips – “pretty much the same order of magnitude as the cost of sending a mission to Mars.”

Bedrock’s DiMare believes it’s time we start investing in our own planet.

“If we want to keep Earth as a place that humans can live,” he said, “we have got to get a lot smarter about what’s going on in the ocean.”

These apps are trying to put car dealers out of business

City dwellers are used to switching between apps to decide the best way to get from A to B. Is it quickest to get the train or the bus? What about a taxi or a city bike? Which provider has the nearest e-scooter?

It can be inconvenient and time consuming. Which is why Finnish startup MaaS Global decided to aggregate all these services into one app called Whim. Available in more than 10 cities across Europe and Asia, users can access taxis, buses, bikes, e-scooters and rental cars.

“Whim’s sole purpose is to compete against car ownership,” CEO Sampo Hietanen tells CNN Business.

According to the International Energy Agency, transport is responsible for 24% of global energy-related CO2 emissions, most of which come from passenger vehicles. If Whim can persuade users to trade their car keys for a single app offering multiple transport options, the environmental impact could be enormous, says Hietanen.
Car competition

He admits this isn’t an easy task. To succeed Whim has to be more convenient and cheaper than owning a car. “The car represents freedom of mobility,” says Hietanen — even if a city dweller barely uses it, they still keep it parked outside as a “freedom insurance.”

To compete, Whim offers rental cars and taxis, but Hietanen says that users tend to opt for public transport or micromobility (shared lightweight vehicles such as bikes or e-scooters).
The app was launched in Helsinki but is now available in several European and Asian cities.
The app was launched in Helsinki but is now available in several European and Asian cities.

Users can choose between multiple tiers of service, including a pay-as-you-go option and a 30-day season ticket, which costs €62 ($73) in Helsinki — where the app is most established — for unlimited public transport and short taxi rides. The ticket also offers car rental from €55 ($65) per day.

While Helsinki has well-developed alternatives to driving, that’s not true of everywhere. If a city “does not have a wide public transport system or a lot of rental cars or taxis in place” then it will be difficult to convince people to give up their cars, says Maria Kamargianni, associate professor of transport and energy at University College London.

She says apps like Whim represent the first step in tempting people away from car ownership, and adds that the availability of alternative transport options is likely to improve as the market matures. Research firm MarketsandMarkets predicts the global mobility service market will grow from $4.7 billion in 2020 to $70.4 billion by 2030.
MaaS movement

Other providers include Citymapper, which launched a travel pass for Londoners in 2019, and Moovit, which launched an all-in-one mobility app in Israel last year.

Whim, launched in 2016, is one of the earliest providers and has raised more than $60 million from investors such as BP (BP), Mitsubishi (MBFJF) and Toyota Financial Services. It’s available in several European cities and in Tokyo, and has racked up 18 million trips globally since launch.

But the business has been hit by the Covid-19 pandemic, says Hietanen; with fewer people traveling, revenues are lower, stalling the company’s expansion into other cities.
According to Whim, public transport and micromobility are the most popular ways to travel using the app.
According to Whim, public transport and micromobility are the most popular ways to travel using the app.

Finnish newspaper Helsingin Sanomat recently reported that the company had spent €50 million ($59 million) on failed expansion ventures. Hietanen says the money was spent on integrating multiple transportation providers, establishing market readiness in several countries, and developing the complex technology that underpins the app.

“We’ve known from the beginning that the investment needed to create this would be substantial,” he says, adding that the company has recently secured further investment.
Greener travel

Though the industry is in its infancy, Hietanen is confident the demand will be there. A recent report from the International Transport Forum (ITF) says that mobility services will be vital in meeting the needs of a growing world population and fast-paced urbanization. But for growth to happen, “people must choose it over other travel options” such as private motor vehicles.

This is already happening, says Hietanen. According to a company survey carried out in Helsinki, 12% of its users said that Whim had prompted them to give up their cars. “People want the more sustainable solution,” he says, “but they still want the freedom of being able to go anywhere, anytime.”

Unprecedented 401(k) boost: IRS increases amount you can save for retirement in 2023

 

The IRS on Friday announced a record increase in contribution limits to 401(k) and other tax-deferred retirement plans for 2023.

Starting next year, you will be allowed to contribute up to $22,500 into your 401(k), 403(b), most 457 plans or the Thrift Savings Plan for federal employees.

That’s $2,000 – or roughly 9.8% – more than the current $20,500 federal contribution limit. The jump is largely due to inflation, to which the contribution limits are indexed.
An elderly couple walk hand-in-hand in San Antonio, Texas. (Photo by Robert Alexander/Getty Images)

How much do I need to save for retirement?

The catch-up contribution in the 401(k) and other workplace plans – the amount plan participants who are 50 and older may save on top of the federal contribution limit – also will get a big boost. In 2023, it will rise to $7,500, up 15.4% from $6,500 today. That means if you’re 50 or older you can contribute up to $30,000 in 2023. And that doesn’t count any matching contributions your employer may kick in.

While the increases could help those hoping to power charge their retirement savings, most 401(k) participants do not save anywhere near the federal limit. Based on an analysis of the 401(k) plans it provides employers, Vanguard estimates that only 14% of participants maxed out their contributions in 2021, and only 16% of those eligible to make catch-up contributions took advantage.
Increases in IRA contribution limits too

Contributions to traditional IRAs and after-tax Roth IRAs will increase as well – to $6,500 from $6,000 currently, an 8.3% rise. But the IRA catch-up contribution limit stays the same at $1,000.

Eligibility to deduct an IRA contribution or contribute to an after-tax Roth IRA is based on income and access to a workplace retirement plan. (Here are the IRS rules.) But next year, more people will be able to take advantage.

To put any money in a Roth in 2023 your modified adjusted gross income must be below $153,000 ($228,000 if married filing jointly). That’s up from $144,000 ($214,000 for joint filers) currently.

For traditional IRAs, to get to deduct at least some of your contributions your modified AGI must be below $83,000 ($136,000 for joint filers) next year, up from $78,000 ($129,000 for joint filers) this year.

If you personally don’t have access to a workplace plan but your spouse does, then your modified AGI must be less than $228,000, up from $214,000 currently, to get some deduction for your IRA contributions.
More changes on tap

And stay tuned: The changes the IRS just announced may not be the only ones in store for next year. More may be on the horizon if lawmakers pass a popular piece of legislation that would make several changes to tax-advantaged retirement plans, especially for workers 50 and up.

That said, negotiations may change when provisions take effect. “Some of the problematic 2023 effective dates in the legislation could be pushed out a year or more, but lawmakers will be somewhat constrained by how the bills are scored for budget purposes,” said Margaret Berger, a partner in the Law & Policy Group of Mercer, a benefits consulting firm.

The retirement contribution limits weren’t the only inflation-related news from the IRS this week. It also announced the inflation adjustments that would be made to federal income tax brackets and other provisions for 2023. The upshot for anyone with earned income: A likely boost in take-home pay early next year.

3 things that will help reduce the sting of high inflation

There’s really nothing nice to say about inflation when it comes to your bottom line.

It’s hard on your wallet. It’s hard on your savings because it reduces the buying power of the dollars you socked away. And it’s hard on your paycheck, because chances are your last raise did not keep pace with headline inflation, which the latest reading puts at 8.2%.
Wallet bills – stock

How does inflation affect my standard of living?

But that same high inflation has led to a couple of changes that might offer you a little relief. And every little bit helps.

Starting next year, your paycheck could be a little bigger thanks to inflation adjustments that the Internal Revenue Service will make to 2023 federal income tax brackets and other provisions.
1. Your take-home pay may go up next year

The net effect of those adjustments is this: More of your 2023 wages will be subject to lower tax rates than they were this year. And you may be able to deduct higher amounts of income.

Here’s the skinny on that.
2. You can reduce your taxable income … and save more for the future

When you save money in a tax-deferred workplace retirement plan like a 401(k) or 403(b), you can reduce your taxable income because you get a deduction for your contribution the year you make it. The more you save, the more you cut your tax bill.

Starting next year, you will be allowed to contribute up to $22,500 into your 401(k), 403(b), most 457 plans or the Thrift Savings Plan for federal employees.

That’s $2,000 – or roughly 9.8% – more than the current $20,500 federal contribution limit, a direct result of higher inflation. Those are the biggest adjustments made to the contribution limit in decades.

More about those changes and changes to IRA contribution limits can be found here.
3. Your Social Security payments will go up

Social Security recipients will receive an annual cost-of-living adjustment of 8.7% next year, the largest increase since 1981.

The spike will boost retirees’ monthly payments by $146 to an estimated average of $1,827 for 2023.

No one will be living large on that amount, but the extra cash will offset some of the higher prices for everyday expenses that seniors incur.

Here’s more on the coming boost to Social Security checks, along with welcome news that there will be a drop in Medicare Part B premiums next year.