Los Angeles, United States of America (USA)- According to Forbes, Lakers forward, LeBron James, and four-time NBA champion as well as the League’s No. 2 career scorer, has become the first active NBA player to have a net worth of US$1 billion.
Despite earning close to US$400 million in salary during his NBA career with the Lakers, Cleveland Cavaliers and Miami Heat, James’ off-court earnings far eclipse that. Forbes estimate James, 37, has brought in more than US$900 million from business investments and endorsements.
These include his entertainment group, SpringHill, which he sold a minority stake in for US$725 million. SpringHill has produced shows such as The Shop and a docuseries on Naomi Osaka, as well as the film Space Jam: A New Legacy, in which James starred.
He also has a one percent stake in Fenway Sports Group, which owns Liverpool FC, and the Boston Red Sox and recently agreed to buy the NHL’s Pittsburgh Penguins. James also bought a 10 percent stake in Blaze Pizza for less than US$1 million in 2012, which Forbes says is now worth US$30 million.
The 37-year-old’s real estate portfolio is estimated to be worth US$80 million and includes a US$10 million property in his hometown of Akron, Ohio, and two homes in Los Angeles worth a combined US$60 million.
His predecessor, Michael Jordan, whose net worth Forbes has pegged at US$1.7 billion, didn’t reach billionaire status until 11 years later after he retired.
Meanwhile, yesterday the Golden State Warriors and Boston Celtics opened the 2022 NBA Finals, 7 tier games, with the Celtics striking the first blow with a 120 – 108 comeback victory in Game 1.
Klay Thompson, who scored 15 points for Golden State, admitted it is tough to lose in such a way but said that despite the loss, he is optimistic about his team’s chances in this series.
“It’s never fun and it hurts on the big stage, obviously. As Draymond said, there’s no reason to panic. I like our chances still. We will go home and we will digest what happened. I know we will be better Game 2 (sic),” said Thompson.
Now, after entering the NBA Finals and having played 12 games in 23 days across the Eastern Conference semifinals and finals, Boston will now get another three days’ rest and prepare to play again at the Chase Center in San Francisco in Game 2 on Sunday night, where they will have an opportunity to put a stranglehold on the games with another victory.
Technology layoffs show high-flying sector not immune from slowdown – CBC News
Canada’s technology sector has grown rapidly in recent years, as homegrown startups and foreign giants set about hiring hundreds of thousands of well-educated and talented workers. But that expansion has recently slowed to a crawl, as high inflation, interest rate hikes and a downturn for cryptocurrency have taken a lot of optimism out of the sector.
Chris Albinson, CEO of Waterloo-based incubator Communitech, says the pullback in the U.S. is more pronounced because there are more of what he calls “go for the moon” companies with dubious fundamentals suddenly finding themselves unable to adapt to the new reality.
Canadian tech companies are faring comparably better at the moment because generally speaking they are much better stewards of capital, he says, but that doesn’t mean there isn’t anxiety.
“There are some founders that were 18 years old when the last recession happened,” he told CBC News. “There’s going to be stress on the system, but I think they’re ultimately going to come out of that much stronger.”
Valuations for tech giants like Meta, Amazon, Apple and Netflix have cratered in recent weeks, and where once there was a fierce war for talent, many tech giants are implementing hiring freezes and even cutting staff.
U.S. streaming giant Netflix announced Thursday it’s cutting another 300 jobs, the second time in as many months it has announced layoffs of that size.
Crowdsourced website layoffs.fyi has documented more than 20,000 tech job cuts in the past two months alone, mostly in and around major U.S. technology hubs like Seattle and San Francisco.
While cutbacks in Canada are less dramatic, they are happening.
Canadian financial tech unicorn Wealthsimple laid off 13 per cent of its staff last week, citing “unprecedented” levels of volatility in explaining the cut of roughly 160 positions. “Many of our clients are living through a period of market uncertainty they’ve never experienced before,” CEO and founder Michael Katchen told staff in announcing the news.
Jacqueline Au was among those let go from the Toronto-based business. She suspected something might be up when she noticed the company started spending less on her department, marketing, earlier this year. “When that happens … it’s natural for the team to think, well, what’s gonna happen to my job, if we’re not spending any marketing money?”
It was her first time being laid off, and while she said it was unpleasant, she’s enjoying the time off to think about what her next career move may be. She enjoys the technology sector, she said, but she knows that more job cuts are coming so she’ll be choosy about who she signs on with next.
“I think that this is just the beginning, I think the industry is going to have to keep trimming the fat to stay afloat,” she told CBC News. “I think there’s going to be ups and downs, but winter is here to stay.”
Vancouver-based Thinkific laid off about 20 per cent of its staff in April, and Sumeru Chatterjee was one of the 100 or so people let go. Originally from India, Chaterjee came to the U.S. to attend university and worked in various tech jobs for about a decade before making the leap to come to Canada in 2020.
“Last year, the general sentiment across the industry … was we need to grow, we need to rapidly expand our market lead to hire lots of people,” he told CBC News. “So the layoff was sort of a dramatic turn of events.”
He says the technology sector grew so quickly in the past decade largely by burning through venture capital cash to gain market share without having to worry about things like profits. “Normal business metrics like profitability and cash flow were … frowned upon almost, and I think a lot of people are reawakening to the fact that if you if you want to run a business, you need to have some fundamentals like a profitable business and customers that pay you.”
‘Surviving so you can thrive’
The mood from the stage of the Collision Conference in Toronto, where tens of thousands of technology lovers from more than 100 countries converged in person to discuss all things digital, was unabashedly positive this week. But on the sidelines, there were whispers of bursting bubbles.
“Right now everyone who is innovating and/or investing in tech or in startups is trying to understand what exactly is happening in this moment,” said Deena Shakir, a partner at venture capital firm Lux Capital, based in Silicon Valley. “We’re the topic of conversation at every partner meeting, and every lunch and coffee.”
While she pushes back on the notion that the tech sector is back in a bubble, she adds one thing that’s clearly bursting are expectations of endless growth at the expense of profitability — which is a good thing, she says.
“We’ve been advising … our companies to think long term to make sure that they have enough capital reserves to weather this storm,” she said. “Surviving so you can thrive is an important mindset to think about.”
Survival is key in the cryptocurrency space, which was rocked when a $12 billion trading platform known as Celsius froze withdrawals earlier this month. That impacted major companies like Crypto.com and Coinbase. Though they ramped up during the pandemic, they’re now laying off thousands of workers in the U.S. and Canada, and rescinding job offers.
Many crypto companies were scheduled to attend Collision in person, but Paddy Cosgrave, the conference’s founder and CEO, said many of them pulled out at the last minute. Celsius CEO Alex Mashinsky was one of those slated to attend, but didn’t.
“I can understand why [he] had to pull out,” Cosgrave said. “I think he’s got a major fight on his hands to sort this situation.”
Whatever dark cloud may be overhanging the crypto space, Cosgrave says it had no impact on overall attendance, which topped 35,000 — a zeal that makes perfect sense to him.
WATCH | Cryptocurrencies are in a freefall:
“When things become uncertain, everybody goes searching for answers,” he said. “And certainly in the last few weeks, there’s been a lot of big questions about what exactly is going on in technology and in particular in crypto.”
While layoffs may be on the short term outlook, Cosgrave says the future for technology in Canada and abroad still looks bright.
“What happens when you lay off very smart software engineers? Many of them go and start new companies, and some of those companies are already here,” he said.
WATCH | Tech sector hit with layoffs, cutbacks:
Is Canada heading into a recession? Here is what you need to know. – CP24 Toronto's Breaking News
As gas prices and food costs continue to escalate and another interest rate hike is expected next month, many Canadians are wondering if a recession is coming and how to prepare for a possible economic downturn.
Sixty-eight per cent of Canadians believe the country is heading towards a recession, while 17 per cent believe it has already arrived, according to a new survey from Yahoo Canada/Maru Public Opinion released earlier this week.
However, 15 per cent of Canadians believe the concern about a recession happening now or later is exaggerated.
But if a recession were to occur, what does that mean for Canadians and how should they prepare for it?
WHAT IS A RECESSION?
A recession can simply be defined as a sustained decline in economic activity for at least six months. This could result from a decline in consumer spending, which in turn could cause sales to drop, businesses to cut costs and ultimately more layoffs.
“I think the simple rule of thumb is two straight quarters of economic contraction and production of goods and services,” Derek Burleton, deputy chief economist for TD Bank Group, told CP24.
“So we tend to refer to gross domestic product (GDP) as being that overall measure of activity. If we have two straight quarters of decline that passes the simple litmus test of recession.”
The country’s last recession was in 2020 during the height of the COVID-19 pandemic.
IS A RECESSION COMING?
With inflation at a nearly 40-year high and the Bank of Canada expected to raise its key interest rate next month, these factors could kick start another recession.
Statistics Canada said its consumer price index in May rose 7.7 per cent compared with a year ago, the fastest pace since January 1983.
“It’s not an oil price issue or food price issue, it’s widespread inflation across the economy, that tells us and that tells policymakers the economy has just been running too hot for too long. We have an inflation issue rooted in the psychology of Canadians and among businesses, and it’s going to have to be dealt with,” BMO Senior Economist Robert Kavcic told CP24.
The Bank of Canada has said that Russia’s invasion of Ukraine, COVID-19 lockdowns in China and backlogged supply chains are fuelling “uncertainty” and higher prices for energy and food, prompting a need to increase interest rates to control inflation.
The central bank has hiked its key interest rate three times so far this year to bring it to 1.5 per cent.
But many economists, including Burleton and Kavcic, expect the central bank to raise its key rate once again by at least three quarters of a point next month to mirror the U.S. Federal Reserve’s recent interest rate hike.
Burleton said this hike could dampen consumer spending, which in turn could eventually ignite a recession.
“I mean as rates go up, the bigger the chance that economic activity will weaken next year but the Bank of Canada feels from a longer-term perspective if they can bring inflation down to their target that will serve Canadians the best over the medium to longer run. So unfortunately, it’s going to come at the cost of some output foregone over the next four to six quarters,” Burleton said.
BMO is not forecasting a recession but Kavcic said if “sticky price pressures” continue and the central bank has to continue raising rates then it will be a “big pill for the economy to swallow.”
“Our view on this is that we’re going to see economic growth really stall out through the latter stages of this year and the first half or so of next year.”
TD Bank is also not predicting a recession but said in its quarterly economic forecast that “there is a very thin margin for error if another shock hits economies.”
Burleton noted that Canadians are currently experiencing an unusual recovery after the recession in 2020 and that nothing “is a given at this stage.”
“The economy has shown me real resilience. We saw it with the April retail spending numbers. Our own high-frequency data internally…still shows resilience through May. So the economy is holding up in the first half. I guess the question is, to what extent it softens going forward.”
Burleton added that although risks are rising, he thinks a recession does not seem imminent.
HOW CAN CANADIANS PREPARE FOR A RECESSION?
In anticipation of a possible recession, 56 per cent of the respondents from Maru Public Opinion’s survey said they have set stricter priorities and reduced their spending in the past month.
Eighty-six per cent said they spent more on food this month compared to last month, while 82 per cent also said they spent more on gas.
Burleton said it’s a smart move to put away additional savings in preparation of a potential recession.
“It’s probably not a bad thing to kind of start thinking about ways to protect yourself as a household in the event (of a recession). I think the good news is that based on aggregate data of the Canadian economy, a lot of households are holding on to additional deposits and savings…and we’re counting on some of that cushion to help defend against deeper outcomes in the economy going forward.”
Sixty-three per cent of survey respondents said food is the biggest expense that they have cut down on in the past month, followed by entertainment and clothing and footwear.
The Yahoo Canada/Maru Public Opinion survey was conducted between June 17 and 19 among a random selection of 1,515 Canadian adults who are Maru Voice Canada panelists. The survey has an estimated margin of error of +/- 2.5 per cent, 19 times out of 20.
With files from The Canadian Press
Bank of Canada needs more restrictive interest rates to control runaway inflation – The Globe and Mail
With every new inflation report, the job facing the Bank of Canada gets that much harder.
The alarmingly rising tide of inflation – reaching 7.7 per cent in May, the highest in an astonishing 39 years – presses the central bank to respond with bigger and faster interest-rate increases. The sweet spot for getting that grim task just right shrinks. The risk of getting it wrong – a recession – grows.
A soft landing for the economy? Sure, that’s still the dream. But as the task of stomping down inflation continues to grow, it may take more luck than skill to get there. Frankly, being delicate isn’t the top priority at this stage.
“The most important thing is to get inflation back to target,” Bank of Canada senior deputy governor Carolyn Rogers said at a Globe and Mail event a couple of hours after the release of the inflation report. “Of course, we want to do that with the least amount of unintended consequences as possible. … That’s what we’re aiming to do, that’s why we’re increasing rates. That’s why we’re doing it quickly.”
That May inflation report, published Wednesday by Statistics Canada, probably cemented a 75-basis-point (three-quarters of a percentage point) rate hike by the Bank of Canada at its next rate decision in mid-July – which would be the bank’s biggest single rate increase since 1998.
Frankly, you could make a compelling argument for even more, given the situation and the timing.
The central bank has said repeatedly it wants to quickly get its key rate at least up to levels it considers “neutral” – i.e. where its rate neither stimulates nor inhibits economic activity. It estimates the neutral rate to be somewhere between 2 and 3 per cent. A 75-basis-point hike in July would put the rate at 2.25 per cent – still toward the low end of the neutral range.
While the odds of a July increase of one full percentage point don’t look high at this stage, there are some good reasons for the Bank of Canada to look seriously at that option. Such a hike would put the bank smack dab in the middle of its neutral range, which achieves at least the first stage of the bank’s rate intentions. It can say that it has withdrawn its stimulative rates, before it shifts into summer mode following the July rate decision – a long stretch of relative public silence that lasts until the next rate decision after Labour Day.
The U.S. Federal Reserve is also scheduled to set its key rate two weeks after the Bank of Canada’s July announcement, and looks poised to make its own jump to 2.5 per cent. The Bank of Canada might want to pre-emptively keep pace with its U.S. neighbour before checking out for the summer.
Regardless of the amount, it’s increasingly clear that merely returning to neutral rates won’t be anywhere near enough. The bank will need more restrictive interest rates if it is going to apply some serious brakes to domestic demand, which is running much too far ahead of the capacity to supply it. Bottom line, the bank needs to slow the economy.
It should be possible, at least arithmetically, to do that without triggering the kind of employment slump that is a hallmark of any true recession. As Statistics Canada reported this week, Canada had nearly one million job vacancies in the first quarter, at a time of 50-year low unemployment – evidence of an enormous gap between labour supply and demand. Bank of Canada officials have said that this leaves a lot of room to dampen demand – like, a million jobs worth of room – before you start hurting employment appreciably.
“We see a path to do that. Our view is we can take some of the excess demand out of the economy, bring it back into balance,” Ms. Rogers said.
But just because the numbers work doesn’t mean that engineering such a feat is easy. Far from it. And any central banker will tell you – it’s so commonly understood that it’s almost reflex – that interest rates are a blunt instrument. They are not at all well suited to the delicate economic surgery that we’re trying to perform here. No one can really say how high, or how fast, rates must climb to hit that sweet spot where we slam the brakes on demand without slamming our collective heads into the windshield.
If you’ve been watching this game for a few economic cycles (old-guy disclosure: I have), you know from experience that by the time you’re hearing and reading the phrase “soft landing” all over the place, that possibility has almost certainly already come and gone. Far more often than not, it’s the wishful thinking of those who can see the ground fast approaching underneath them.
What’s more, the time for the Bank of Canada to worry about being gentle has passed. It just needs to get inflation on the ground – any way it can – before an awful year begins to fester into a generational problem. Yes, things have become that serious.
Brace for impact.
The Globe and Mail
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