WSJ :The Long Nights and Drug Addiction That Drove a Banker to Insider Trading

The Long Nights and Drug Addiction That Drove a Banker to Insider Trading
John Femenia says he conceived of the scheme while high on stimulants and working late as an investment banker

John Femenia ran an insider trading ring that netted him and his friends millions of dollars before they went to prison. It all started with long hours as an investment banker and a crippling addiction to Adderall.

Femenia was a 28-year-old investment banker working for Wells Fargo WFC -1.44%decrease; red down pointing triangle when he tipped off his friends about confidential deals that the bank was working on. His friends would buy shares of companies that were in line to be acquired, reap the profits when the deals were announced and then kick back some of the gains to Femenia.

In two years, Femenia and his friends made more than $11 million trading off of confidential information, prosecutors said. He spent about three years in prison.

He says he came up with the scheme while he was abusing Adderall, which he started taking to deal with his long hours at Wells Fargo. The Wall Street Journal reported in December on the widespread use of ADHD medications on Wall Street and the psychological changes it causes in abusers.

“I got an Adderall prescription to be able to work long hours and stay focused,” the now-43-year-old Femenia said. “But it changed the person that I was while I was on it. This is a no-joke drug. It’s medical-grade meth.”

Since getting out of prison in 2018, Femenia has built a life in the suburbs with his wife and two children and launched a real-estate lending business. But Femenia says his crimes will always be a google search away. Instead of burying the past, he wants to warn others about how prescription drug abuse can upend lives and destroy careers.

“I blame myself for what happened,” he said. “I was the one who willingly took Adderall. But I honestly don’t think I would have gotten into trouble and made those choices if I didn’t take it.”

Life as a PowerPoint jockey
Femenia grew up on Long Island and was a good kid by his own account. He was an Eagle Scout who enrolled in the Merchant Marine Academy. After graduation, he served in the Navy reserves and spent years working on ships and boats in the Pacific Ocean. While working in the engine room of an oil tanker, he grew interested in finance and decided to go to business school.

At Columbia Business School, Femenia set his sights on Wall Street. His classmates warned him about the long hours in investment banking and talked about using Adderall (an amphetamine) to stay focused and work hard.

Femenia started working as an investment banker in 2009 at Wells Fargo, first in North Carolina and then in New York City.

The hours were immediately difficult for him. He says he was a “PowerPoint jockey” doing the grunt work of an investment banker from 9 a.m. until midnight, at least six days a week.

Even though he didn’t think he had attention-deficit hyperactivity disorder, Femenia soon got an Adderall prescription through a doctor who didn’t ask too many questions.

“I got psyched out after seeing people work these 18-hour days and all nighters and I thought, ‘I can’t do this without help,’” he said.

About a year later, he found another doctor who wrote him a second prescription. He was taking around 80 milligrams a day—twice the maximum daily dosage. He knew he was addicted and tried to quit several times, but the withdrawal symptoms were so strong that he couldn’t get out of bed and get to work. He kept on taking the pills.

The Adderall had made him frenetic, aggressive and willing to take new risks—a common occurrence when it comes to drug abuse.

“Once someone has an addiction, the part of their brain that helps them make good decisions literally gets turned off,” said Samuel Glazer, a psychiatrist in Manhattan who has counseled several Wall Street bankers about substance abuse.

The insider trading ring
One night in 2010, while working late and high on Adderall, Femenia looked through some of the bank’s internal folders on a shared computer drive. He saw that project folders that were changed over the weekend were likely to be tied to live deals.

“My mind on Adderall would go off on these tangents and come up with elaborate schemes, and that’s really how it all began,” Femenia said.

At the time, Femenia was on the hook for tens of thousands of dollars on a friend’s mortgage he had cosigned because the friend was struggling to pay.

Femenia told his friend to buy the shares of a company that he thought had a good chance of eventually being acquired. He enlisted another friend from college to buy the stock, too. Femenia’s friends netted north of $500,000 in profit from trading on the deal, according to court records.

The scheme went on for about two years, and Femenia’s childhood friend used a shell company with a corporate bank account to buy and sell stock. Femenia says he didn’t know the full scale of the ring and received hundreds of thousands of dollars in kickbacks.

The biggest score was in 2012, when Femenia found out about Chicago Bridge & Iron’s $3 billion purchase of Shaw Group. Around 10 people connected to Femenia bought Shaw stock and call options in the weeks before the deal, according to court records. The day the deal was announced in July, the Shaw Group’s stock doubled. All in, the ring netted $7 million in profit, court records show.

After the announcement, Femenia’s childhood friend and the friend’s girlfriend wired more than $1 million to a precious-metals dealer in Manhattan to buy 550 gold bars. They flew to Las Vegas the next day and laundered more than $100,000 through a casino.

But the FBI was on their trail. Agents showed up on Femenia’s doorstep and told him they knew he was sharing confidential information and asked him to help their investigation. Femenia first slammed the door on them. Then he started cooperating.

Femenia was arrested in December 2012 and later pleaded guilty to five charges of fraud and money laundering in 2013. He reported for a five-year sentence at a federal penitentiary in 2015. Eight other co-conspirators did jail time, too.

Getting clean
When he checked in for his first day in jail, he brought a bottle of Adderall with him, but correctional staff told him he couldn’t keep the drugs. He said he spent two weeks in jail withdrawing from the drug, and it took over a year to stop craving it. Eventually, he shaved off 20 months through drug rehab and standard good behavior.

He said he still finds it hard to talk about his past with his friends and family because he was determined to start a new life for himself and his wife after prison.

“Every single day I reflect on what I did,” Femenia said. “I still get angry with myself. But I figured out how to make money again, and I figured out how to do it against really bad odds. And I’m happy about that.”

He said his message to people who are taking Adderall only to try to thrive on Wall Street is to stop before it’s too late.

“Taking this stuff on a consistent basis will alter your personality and decision-making,” he said. “Do whatever you need to do to get off it. It doesn’t matter if you need to take a couple of weeks off. Do whatever you need to do.”

WSJ : How Porsche, Volvo and Rivian Are Injecting Unique Driving Styles Into Sel

How Porsche, Volvo and Rivian Are Injecting Unique Driving Styles Into Self-Driving Cars
Automakers are using software and AI to make vehicles of tomorrow more collaborative, working alongside passengers

A Porsche programmed with aggressive, sporty moves; a Volvo tuned to a more cautious pace; an autonomous Rivian that takes the scenic route, on-road or off.

In the future, cars won’t only drive autonomously: Using software and artificial intelligence, their makers will give them distinct driving styles.

Already, chip maker Nvidia is developing AI-based tech to help automakers create personalized driving systems that reflect their brands, says Ali Kani, Nvidia vice president and general manager of automotive.

To function most effectively and distinctively, these self-driving cars will need to take in not just the behavior of vehicles around them, but elements such as geolocation, weather, traffic, and road type and condition. These new self-driving systems must also operate with utmost certainty. “When ChatGPT gets things wrong, we laugh,” Kani says. “If this is done wrong, someone could die.”

Unlike today’s advanced driver-assistance systems, which generally disengage when a driver intervenes, the cars of tomorrow will ideally be collaborative, working alongside occupants. “So far, car companies have given us systems that make us safer,” says Alex Roy, an autonomous-vehicle expert and partner at New Industry Venture Capital, a venture-capital and private-equity firm. “But none has given us the systems that help make us better drivers, to amplify the driver’s will behind the wheel.”

Here’s how three automakers are reimagining self-driving vehicles:

Porsche

Porsche wants owners of its future self-driving cars to feel the thrill of the racetrack—without the risk. To make this possible, the German sports-car manufacturer says it first must perfect how these vehicles react on the road.

The brand is testing a fleet of prototypes—aided by virtual models that simulate millions of hours of driving on tracks—to figure out how sharply fully autonomous vehicles could accelerate, brake, turn and shift lanes in the years to come. This could allow Porsche’s future hardware and software to make on-road transitions more aggressively, more precisely and closer to its vehicle’s limits, than other carmakers’ autonomous vehicles.

If the programming is too restrictive and won’t let the car approach its limits—squealing its tires or flirting with the edge of the road—that “eliminates the point of owning that car,” says Roy of New Industry Venture Capital. For a Porsche owner, “what’s primary is fun,” he says.

Still, such driver-assistance systems would include functions that automatically brake to prevent collisions, warn of objects in blind spots, and keep even sporty cars in their lane to ensure safety for all on the road, according to Porsche. Vehicles that can steer and brake better are intrinsically superior at avoiding obstacles.

The automaker has a long way to go to reach full autonomy, but it is already piloting driver-assistance systems that safely enhance performance with its adaptive cruise control known as InnoDrive. The system allows vehicles to automatically accelerate or decelerate to a set speed—all while maintaining a fixed distance from the car ahead, remaining in its lane, and even coming to a complete stop if needed.

Depending on what drive mode it is set in—Normal, Sport or Sport Plus—InnoDrive can change how aggressively it changes speed to match the car in front of you, or how much gravitational force it will allow occupants to feel going into a turn, such as a freeway on-ramp, according to Porsche spokesman Calvin Kim.

Porsche can even adapt InnoDrive to be model-specific, allowing distinct vehicle lines to behave differently from each other. For example, the 911 sports coupe could be tuned to behave more aggressively than the Macan compact SUV.

“What’s a dream sports car?” Roy asks. “It is a car that you can drive as fast as you want, that won’t let you crash.”

Volvo

The nearly century-old Swedish automaker pioneered the use of three-point seat belts, rear-facing child seats and side-impact protection systems, among other lifesaving innovations.

As it hones its self-driving cars, it says safety will remain top priority.

Volvo will use data collected by its Accident Research Team, which has visited tens of thousands of crash sites in the past six decades, to train its autonomous vehicles. Data on road type and condition, driver behavior and response of vehicle safety systems would help its vehicles prepare for and avoid accidents.

“We see data as a new safety belt,” says Alwin Bakkenes, head of software engineering at the company.

In the lead-up to full autonomy, Volvo’s systems will work in conjunction with drivers, inviting them to steer and make adjustments on their own, says Bakkenes. “This provides a better customer experience and enhances safety because we keep our drivers in the loop.”

Additionally, Volvo’s AI will be able to decipher natural language commands. “An owner could say, ‘Could you please overtake this car?’ Or, ‘Could you hold back a bit more because I feel uncomfortable with how that car in front is driving,’ ” Bakkenes says.

Volvo is also developing means for its autonomous cars to communicate clearly with other road users, to ensure their safety. This includes signaling—with lights, sounds, text or other means—to people at a crosswalk that they have been detected and when it is safe to cross.

Rivian

Electric, all-wheel-drive startup Rivian Automotive wants to inject more adventure into its future autonomous vehicles by inspiring people to go places.

That means “automating the boring stuff” such as highway driving or commutes, and making exciting experiences “more fun or accessible,” says Wassym Bensaid, chief software officer at Rivian.

When off-roading, this could include using cameras, radar and online mapping data to detect the type and passibility of terrain. The systems could then automatically select the proper drive modes and display—on the vehicle’s screens or windshield-projected displays—instructions on how to traverse the trail, according to Bensaid. It could even help explore trails or roadways that are inadequately or incorrectly mapped, and update existing cartography, he says.

When hauling a mountain bike or kayak, instead of passengers needing to find a loop route, or a ride back to the vehicle, the Rivian could drop passengers off at one end, then drive autonomously to the other end and wait to pick them up.

The vehicle could also suggest scenic, off-the-beaten-path routes, and then use its suite of exterior cameras, onboard Wi-Fi signal and augmented-reality displays to project “a rich in-cabin experience that blends with the environment,” Bensaid says. This could include showing occupants layers of historical imagery, geological data or pathway options as they traverse the landscape.

“It could even record scenes and landmarks around the car, edit them into a video, and post them to your social,” he says.

FT : Pollution from Big Tech’s data centre boom costs US public health $5.4bn

Pollution from Big Tech’s data centre boom costs US public health $5.4bn
Research suggests the price of treating illnesses related to building of computing infrastructure in the US is on the rise

Big Tech’s growing use of data centres has created related public health costs valued at more than $5.4bn over the past five years, in findings that highlight the growing impact of building artificial intelligence infrastructure.

Air pollution derived from the huge amounts of energy needed to run data centres has been linked to treating cancers, asthma and other related issues, according to research from UC Riverside and Caltech.

The academics estimated that the cost of treating illnesses connected to this pollution was valued at $1.5bn in 2023, up 20 per cent from a year earlier. They found that the overall cost was $5.4bn since 2019.

The issue is set to be exacerbated by the race to develop generative AI, which requires huge computing resources to train and power fast-developing large language models.

Microsoft, Alphabet, Amazon, and Meta have forecast AI spending could exceed $320bn this year, up from $151bn in 2023. Meanwhile, OpenAI and SoftBank last month unveiled plans for a massive $500bn US AI infrastructure joint venture called “Stargate”.

The findings from UC Riverside and Caltech were derived by using a widely used modelling tool from the US Environmental Protection Agency. The EPA model translates the estimated air quality and human health impacts into a monetary value.

The estimates suggest Google generated the largest health costs of $2.6bn over the five years between 2019 to 2023, followed by Microsoft, at $1.6bn, and Meta, at $1.2bn. Each company’s associated public health cost rose year-on-year. Other firms, such as Amazon, were not included in the analysis as they do not release key data needed to model their impact.


Data centres cause pollution through high electricity use, often sourced from fossil fuels. Back-up generators, needed in case of an outage, are commonly powered by diesel, which also contributes to air pollution. Meanwhile, the waste from the hardware such as chips can release harmful chemicals into the environment.

Big Tech’s impact on public health was calculated by distributing Google and Microsoft’s North American electricity consumption figures over their US data centre locations and using their public sustainability reports. For Meta they used its disclosed per-location electricity usage data, which the first two companies do not provide.

The analysis does not account for the purchase of market-based instruments that are meant to represent investments in new renewable energy in the US and that tech companies buy to offset the pollution from their electricity consumption. These instruments include renewable energy certificates.

Instead, the research focuses on the pollution generated in the specific area where the data is being processed, in an accounting approach known as “location based”.

“Unlike carbon emissions, the health impacts caused by a data centre in one region cannot be offset by cleaner air elsewhere,” said Shaolei Ren, associate professor at UC Riverside.


Google, Meta and Microsoft said their usage of back-up generators was below the estimated levels for the research, which is based on a median estimate of usage from publicly disclosed levels. The companies did not give detailed, per-location figures for their usage of back-up generators.

Google added that the health cost estimates were overstated and that it did not “account for our clean energy purchases in the local markets where we operate” and therefore “promotes an inaccurate emissions estimate generated under false pretences, undermining the progress of clean energy resource growth and creating a false narrative of health harms.”

The company added that its purchases enable it to achieve, on average, around 64 per cent carbon-free energy.

Microsoft said it was focused on “delivering significant local, economic, social and environmental benefits to the communities where we operate”.

Meta said it complies with air quality requirements and remains committed to “maintaining net zero greenhouse gas emissions for our global operations, building innovative and sustainable infrastructure, reporting transparently on our sustainability goal progress, and supporting the communities where we operate.”

Due to where data centres are located, such as West Virginia or Ohio, the health impact disproportionately affected lower-income households, according to the research.

Ren said there was an opportunity for tech groups to reverse the trend of a “growing public health threat” by strategically placing their data centres in less populated locations to have less impact.

According to a separate report by Berkeley Lab, supported by the Department of Energy, US data centre energy use represented about 4 per cent of total US electricity consumption in 2023 and is forecasted to rise to between 7 and 12 per cent by 2028, driven largely by AI workload demand.

“There is a concern around pollution as [AI] is energy intensive and people are using it more and more,” said Antonis Myridakis, a lecturer in environmental sciences from Brunel University London. “It is an important factor contributing to air quality and public health, it is not something we can ignore.”

FT : Investors told of golden age of US-Saudi co-operation at Miami conference

Investors told of golden age of US-Saudi co-operation at Miami conference
Trump is strengthening bonds with the oil-rich kingdom as he strains ties with other traditional allies

Billionaires attending an investment conference in Miami hosted by Saudi Arabia were told of a new dawn of co-operation between the oil-rich kingdom and the US in an hour-long address by US President Donald Trump.

Yasir al-Rumayyan, governor of Saudi Arabia’s sovereign wealth fund, hosted the top executives of finance giants BlackRock, Citadel and many others as part of an annual effort to attract billions in new investment.

But Trump’s attendance, which was announced just days before the conference, underlined the importance of the kingdom to the president and his inner circle.

Moguls including Leonard Blavatnik, Sir Martin Sorrell and Marcelo Claure waited hours for an audience with the star speaker due to heavy security. Many passed the time by taking selfies with the president’s cost-cutting tsar Elon Musk.

Trump appeared at the conference just days after his envoys met Russian President Vladimir Putin’s foreign minister for talks in Riyadh aimed at ending the war in Ukraine. Saudi Crown Prince Mohammed bin Salman has close ties to both leaders, and Riyadh has previously helped negotiate a US-Russia prisoner swap.

The exclusion of Ukraine from those talks has fractured US relations with Europe. But Trump’s presence at the Saudi conference shows ties between Washington and Riyadh remain firm as the president helps promote the kingdom’s economic development on a world stage.

“The speech of President Trump added so much value to this,” said Rumayyan.

Richard Attias, chief executive of the event, titled Future Investment Initiative Priority Miami, said Trump’s attendance caused a late surge in interest from business leaders that forced him to turn many away.

“I may have lost many friends in the last few days,” Attias said.

The FII event was hosted at a ritzy beachfront Miami hotel, confirming a recent change in tone from Saudi Arabia to US investors. The kingdom is no longer content to merely write cheques to US companies as it focuses more on its hugely ambitious domestic development plans. It now demands they open offices in Saudi Arabia or provide capital for its mega projects such as futuristic cities in the desert and bets on healthcare, artificial intelligence, sports, and advanced manufacturing.

“The kingdom is rightly saying we are beyond the suitcase form of relations,” said one executive affiliated with the government’s development efforts, referring to US investment firms’ practice of sporadically visiting Riyadh seeking cash to invest elsewhere.

“This is not the Saudi Arabia of 20 years ago . . . You need boots on the ground.”

The Trump family has a growing business with the kingdom, which has invested $2bn with the private equity fund of Jared Kushner, the president’s son-in-law. The LIV golf tour owned by the Public Investment Fund hosts events at multiple Trump-owned golf courses.

Executives at Wall Street firms lined up to proclaim their support for Saudi Arabia’s message.

On a panel, Robert Kapito, president of BlackRock, said the world’s largest investment manager was eager to beat its rivals in making Saudi Arabia an investment hub.

“This is the largest career alpha opportunity that I have ever seen,” said Kapito of Saudi Arabia’s development plans. “For those who are competitors of mine, we are building a big office and we are going to be there first.”

“[We] are all here to leap forward with the kingdom,” proclaimed private equity billionaire Robert Smith of Vista Equity Partners.

But few firms have large-scale investment operations in Saudi Arabia, with many holding small offices mostly focused on fundraising.

On the first night of the event, Rumayyan, the head of the Public Investment Fund, hosted a private dinner at Miami’s Faena Hotel with a handpicked assortment of about 80 of the conference’s most powerful attendees.

Rumayyan travelled to Washington after the dinner to meet Trump at the White House to help broker a merger between PIF-backed LIV and the PGA Tour.

In his address at the conference, Trump repeated his claim that Zelenskyy was a “dictator,” a statement that has shocked many of America’s allies.

One executive said that while many of Trump’s claims were half-truths the audience cheered, underscoring that few business leaders have the appetite to publicly challenge the president’s most controversial policies on trade, immigration, and Russia’s war in Ukraine.

Trump made a vociferous appeal for investment in the US but few references to Saudi Arabia’s economy. Last month, Saudi Arabia’s Prince Mohammed pledged to invest $600bn in the US over four years.

“I come today with a simple message for business leaders from all across the nation and all around the world . . . there’s no better place on earth than the current and future United States of America under a certain president named Donald J Trump,” he said.

Trump did not walk back his comments on emptying Gaza of Palestinians into bordering countries, a plan rejected by both Jordan and Saudi Arabia. The kingdom insists that a Palestinian state must be part of negotiations to normalise relations with Israel.

It was left to Trump’s Middle East envoy Steve Witkoff to try to explain the US plan on a panel with Jared Kushner to an audience that included top Saudi figures including ambassador to the US Princess Reema bint Bandar al-Saud.

Witkoff said that while the president does not have “an eviction plan” for Palestinians in Gaza, “he wants to shake up everybody’s thinking”.

“[He’s] engendered discussion throughout the entire Arab world on different types of solutions that before he talked about [them] people would have never considered,” he said.

Witkoff, a property mogul like Trump, called Saudi Arabia “one of the most investable real estate marketplaces in the world as people begin to see the upside of what’s happening”.

FT : UK steelmakers face £150mn annual bill from carbon charges, industry warns

UK steelmakers face £150mn annual bill from carbon charges, industry warns
Decision to wind down free emission allowances is an ‘earthquake moment’ for producers

Britain’s steel industry has warned that it faces more than £150mn in annual costs under government plans to phase out allowances that allow manufacturers to emit greenhouse gases for free.

Ministers plan to wind down carbon allowances over 10 years from 2027, in what the sector called an “earthquake moment”. 

UK Steel, the industry trade lobby group, has warned ministers that the sector could face annual carbon costs as high as £167mn by 2037 — the expected end of the phaseout period — depending on the price of carbon.

This forecast factors in the country’s two biggest producers moving to less polluting electric arc furnaces and the industry as a whole producing about 7mn tonnes of steel a year.

“Our biggest concern is about the fact that the government is removing free allocations and how many free allocations you would receive, that would have a tremendous impact on the costs that we face,” said Frank Aaskov, director of energy and climate change policy at UK Steel. 

“It would be an absolute earthquake moment for this industry if free allocations are removed,” he added. 

The government has been consulting on plans to remove free carbon allowances for industry under the Emissions Trading Scheme (ETS) as part of plans to introduce a carbon border tax from 2027. The consultation ends on March 10.

Britain’s most energy-intensive producers currently receive a certain amount of allocations for free under the government’s ETS to ensure they can compete with rivals based in countries with weaker climate mitigation policies.

Britain’s steel industry has been under pressure to reduce its carbon footprint to help the UK meet its net zero emissions pledge by 2050. Tata Steel UK, which owns the vast Port Talbot site in south Wales, last year closed its two remaining blast furnaces as part of a government-backed deal to build one electric arc furnace. Under the agreement, ministers committed £500mn of state aid for the Indian-owned group.

British Steel, which currently operates Britain’s only two remaining blast furnaces, has been locked in talks with ministers about securing an even greater level of support.

The Chinese-owned group is considering building two smaller electric arc furnaces at its flagship Scunthorpe site in Lincolnshire. Trade unions want the company to keep operating the blast furnaces during the transition and are lobbying ministers for relief from any associated carbon costs. 

Aaskov said that the sector’s overall emissions would still be “significant” under the new scheme, even though they would fall dramatically with the closure of the final two blast furnaces.

Some parts of the manufacturing process “such as rolling, reheating and downstream processes” would still emit significant carbon, he added. 

The industry was not against phasing out of the free allocations but was “cautious” about it happening too abruptly, he said, arguing that it needs to be managed carefully. 

“There is no plan B,” said Aaskov, adding that there were “a lot of concerns if [the carbon border tax] will provide protection against leakage”. 

The government is bringing in the “carbon border adjustment mechanism” to protect industries from unfair competition from regions with lower carbon costs. 

The government said it would “not allow the end of steel making in the UK”, adding that its recently published steel strategy consultation would examine the long-term issues facing the industry. The government had also committed up to £2.5bn to rebuild the sector.

It added that the new carbon border tax mechanism “will ensure that importers pay a fair and comparable carbon price to those faced by domestic producers, giving industry the confidence to invest in the UK knowing that their efforts to decarbonise aren’t undermined”.

>>> Barrons Weekend Summary

Cover:
-Energy has become a crucial issue in President Donald Trump's second term, as he aims to tame inflation through oil drilling and sees oil and gas as America's most powerful asset in trade negotiations. The US has abundant resources, unlike its biggest rivals like China. Trump's early moves in energy have been controversial and have not been beneficial for stocks. Some of his decisions, such as halting payments on energy loans and grants, have landed in court. Tariffs on Canadian and Mexican energy products have unsettled American companies and upset allies. The fallout and the possibility of Trump removing sanctions on Russian oil have knocked oil prices and stocks lower. Some of the best opportunities in energy align with Trump's interests, but they tend to be in areas with demand drivers beyond federal policy. Natural gas is the best positioned among energy segments. Exporting LNG is a profitable business, with Cheniere Energy's stock doubling in three years. However, the field is becoming more competitive, leading to a glut of LNG by 2027, causing Venture Global's stock to fall 30%.

Interview:
-Andrea Auerbach, the global head of private investments at Cambridge Associates, has witnessed the growth of the private-market investing industry since the early 1990s. The industry now encompasses venture capital, private equity, and private credit, with assets under management expected to reach $15T this year, up from $10T in 2021. Auerbach, who has been closely involved in the industry's expansion, has seen the industry's growth, including its recent struggles with rising interest rates. Many private asset managers are now looking to expand by tapping retail investors, including through 401(k) assets. The "democratization" of alternatives has significant implications for the industry.

Tech Trader:
-Intel shares have surged due to the Trump administration's promise to support domestic chip manufacturing and reports of semiconductor companies considering purchasing parts of Intel. However, investors should be cautious as the likelihood of transformative deals is low and Intel's challenges remain unchanged. The rally began after Vice President JD Vance vowed more chips would be made in the US, and Taiwan Semiconductor Manufacturing was considering taking a stake in Intel's chip factories. Intel stock rose by nearly 40% over five trading sessions through Tuesday. The flurry of news reports contradicted each other, with some citing Trump's support for TSMC's stake in Intel's factories.

The Trader:
-Walmart missed expectations for its full-year sales forecast, expecting a 3% to 4% growth. Despite a strong holiday quarter, the company's sales outlook is conservative due to inflation and economic uncertainties impacting consumer spending. Walmart's management believes US shoppers are resilient, but the Street is seeking more reassurance. The company's conservative sales outlook could indicate the impact of inflation on discount retail. The final reading of the University of Michigan's consumer sentiment index for February was 64.7, a 10% decrease from January, and all five index components fell this month. Existing home sales in January also came in lower than expectations. The company's conservative sales outlook may not send an upbeat message about the consumer during a time of ongoing inflation and tariff threats.
-The Consumer Analyst Group of New York (CAGNY) is holding its annual conference, showcasing updates from staples companies. The stocks of General Mills and Conagra Brands fell after their presentations, with the latter notching its worst percentage decrease in nearly three years in intraday trading. The problem is that "big food" was already "limping into CAGNY," as people are buying less branded packaged food, as their sales are still trailing overall food sales. Inflation-squeezed shoppers are doing without, trading down to private labels or buying more alternatives like fresh bakery and produce items. The stocks have stagnated, with the S&P 500 index up 23% and the Consumer Staples Select Sector SPDR exchange-traded fund up just 9% over the past year. The average packaged-food stock is down around 3% since the start of 2025, with big names like Kraft Heinz, General Mills, Conagra, and Campbell's down more than that. Berkshire Hathaway is losing money on its $9B Kraft stake.

Features:
-The firing of nearly 7,000 Internal Revenue Service employees, which began during the tax-filing season, is expected to unwind recent improvements in taxpayer services. Tax experts suggest that the cuts in the IRS workforce could lead to longer wait times on the phone, delayed refunds, and issues with resolving matters. The Department of Government Efficiency (DOGE), run by President Donald Trump's advisor Elon Musk, is responsible for the layoffs. The employees are probationary workers, who have been with the agency for less than two years. These workers are the ones the IRS has been hiring recently to improve its capabilities after years of dismal service and near-zero audit rates for complex tax returns. To avoid problems, taxpayers should know when to call the IRS hotline, get things right the first time on their tax return, and keep a paper trail in case of mishandling.
-Americans are experiencing increased anxiety about the economy due to high food prices and policy changes causing concerns about inflation. The University of Michigan's consumer sentiment index surprised to the downside in February, coming in at 64.7, a drop from December's reading of 74 and January's reading of 71.1. This sentiment could have troubling repercussions for the economy, as consumers often spend more when they feel better about the financial outlook and retrench in times of uncertainty. The Trump administration's recent policy changes have heightened uncertainties about the economic outlook. Democrats and independents were more likely to report a negative change in sentiment, while Republicans' sentiment was largely unchanged. Concerns about President Donald Trump's policies, particularly tariffs, have fueled pessimism. February's median inflation expectation for the year ahead spiked to 4.3%, the highest reading since November 2023.

Europe:
-Investors have been rushing into European stock markets due to their undervaluation after long-time laggard returns. The MSCI EMU index of large- and mid-cap European stocks trades for about 14 times expected earnings for the next 12 months, less than two-thirds the 22 times forward price/earnings multiple on the S&P 500 index. Many investment "tourists" now find they have too much company and are taking their winnings and going home. However, more experienced global investors can still find compelling values among individual European stocks rather than broad exchange-traded funds. European stocks have outpaced U.S. stock indexes of late, despite the dominance of big technology names among the latter. Bank of America's latest survey of fund managers found that 12% of respondents were overweight European stocks, the highest percentage of accounts since last June.

Emerging Markets:
-No update

Commodities:
-Energy has become a central focus in President Donald Trump's second term, as he plans to tame inflation through oil drilling and sees oil and gas as America's most powerful asset in trade negotiations. The US has abundant resources, unlike its biggest rivals, like China. Trump's early moves in energy have been controversial and have not been great for stocks. Some of his decisions, such as halting payments on energy loans and grants, have landed in court. Tariffs on Canadian and Mexican energy products have unsettled American companies and upset allies. The fallout and the possibility of Trump removing sanctions on Russian oil have knocked oil prices and stocks lower. Some of the best opportunities in energy align with Trump's interests, but they tend to be in areas with demand drivers beyond federal policy. Natural gas is the best positioned among energy segments, followed by nuclear power, oil, solar, and wind. Cheniere Energy's stock doubling in the past three years. However, the field is becoming more competitive, and analysts predict a glut of LNG by 2027. Natural-gas producers, such as Antero Resources and Chart Industries, can benefit from increased LNG exports. The Trump administration is pro-nuclear, with Chris Wright as secretary of energy and a focus on commercializing affordable and abundant nuclear energy. The more promising stocks today are providers of fuel for nuclear plants, such as Cameco and smaller uranium miners like Uranium Energy and enCore Energy. Trump's plans to ease environmental restrictions and open up more federal land for drilling, including in Alaska, are expected to boost the industry. Solar energy is also expected to grow in the Trump years, with domestic manufacturing agendas lifting companies like First Solar. Despite the challenges, the industry is positioned to continue growing, with investors expecting increased go-public activity across the nuclear technology space in the next 12 months.

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FINANCIAL TIMES
-JD Vance has criticized Europe's "threat from within" as more serious than the threat posed by Russia and China. In a speech at the Munich Security Conference, Vance criticized the cancellation of a recent election in Romania, the prosecution of an anti-abortion protester in the UK, and the exclusion of far-right and far-left German politicians. European officials were alarmed by Vance's attempts to link US security backing for the continent to his comments about freedom of speech and democracy. Germany's defense minister Boris Pistorius labelled the criticism as "unacceptable" and compared Europe's situation to what is happening in autocracies. EU chief diplomat Kaja Kallas was surprised by Vance's "lecturing."
-European leaders at the Munich Security Conference faced threats from both east and west, including the looming threat of an aggressive Russia and confirmation of their worst fears about the direction of the US under Donald Trump. Trump announced direct talks with Putin on an end to Russia's war, while his secretary of defense Pete Hegseth stated that Ukraine's territorial integrity was an "illusory goal" and there would be no NATO membership for Kiev and no US support for its future defense against Russia. Promises of peace bought through appeasing an aggressor with its European victim's territory will do little to reassure those who have observed Russia's preparations for further war. Mark Rutte, NATO's secretary-general, has been blunt in describing the challenge Europe faces, stating that they must prepare for war.
-Hamas released three more Israeli men from captivity in Gaza after the ceasefire nearly collapsed. The Israelis were handed over to the International Committee of the Red Cross in Khan Younis, a heavily destroyed city and Hamas stronghold. The men were taken hostage during the Palestinian militant group's assault on Israel on October 7, 2023, which killed around 1,200 people. Hamas fighters displayed weapons and uniforms captured from Israeli military bases during the cross-border raid. Israel is scheduled to release over 350 Palestinian prisoners later under the ceasefire terms. The agreement nearly collapsed earlier this week after Hamas claimed Israel was violating the ceasefire by blocking entry into Gaza.
-Berkshire Hathaway, owned by Warren Buffett, has reduced its stakes in some of the US's largest banks in the last three months of 2024. The conglomerate sold nearly three-quarters of its position in Citigroup, selling 40.6mn shares worth over $2.4bn. Berkshire also continued to sell shares of BofA, an investment that dates back to the financial crisis when Buffett intervened. Berkshire had cut its stake by a further 95mn shares since mid-October, when its ownership position fell below a 10% reporting threshold. The sales in the weeks following reduced Berkshire's stake in BofA to about 8.9%.
-Trump's recent 25% tariff on steel and aluminum imports has thrown a company into crisis, including Tompkins Products, a Detroit-based family business that uses imported cold drawn aluminum bar for US auto industry components. The move will make Tompkins' main input more expensive, unless they can source everything from their US supplier. Trump has also imposed additional tariffs on China and Canada and Mexico, and announced a plan for new, "fair and reciprocal" measures on trade. Businesspeople are warning that this new trade war could drive up costs, disrupt supply chains, hurt profits, and make products more expensive for American consumers. Ford CEO Jim Farley believes the impact on the automotive sector would be catastrophic, with a 25% tariff across the Mexico and Canadian border blowing a hole in the US industry. Ken Griffin, the billionaire founder of hedge fund Citadel, believes Trump's "bombastic rhetoric" has sparked CEOs and policymakers to question America's dependence on America as a trading partner.
-Second-home ownership in Europe has reached unprecedented levels, with 15% of households in the EU owning a second home, according to a 2014 survey by the European Central Bank. Despite protests and restrictions, buyers continue to seek second homes, and none of the interventions have been a silver bullet for reconciling homeowner desires with local community needs. The situation is exacerbated by local hostility and increasing costs. Both buyers and business models are adapting and changing to meet the changing needs of the market.
-Hedge fund Citadel has placed a £305M bet against GSK, marking the largest short position against the company in over a decade. The bet, worth 0.51% of the company's stock, was disclosed by billionaire Ken Griffin's hedge fund. GSK's shares have risen 11% in the last month due to the drugmaker raising its long-term sales forecast and a rare £2bn stock buyback. However, GSK has lagged rival pharmaceutical companies due to its failure to excite investors about its pipeline of new medicines and vaccines. In the past five years, GSK shares have fallen 15% compared to the S&P 500 pharmaceutical index.
-Blackstone Group has put First Eagle Investment Management up for sale for over $4B to offload a large stake it has owned for a decade. The buyout groups, Blackstone and Corsair Capital, have hired Morgan Stanley to lead the sale process. First Eagle generates about $500M of annual earnings before interest, taxes, depreciation, and amortization, and is expected to fetch a valuation of over $4B. The company, founded in Dresden to finance local businesses, is best known as an early training ground for investor George Soros. The acquisition was financed with leverage and has pulled dividends from First Eagle.
-Uber has filed a lawsuit in California accusing rival food delivery service DoorDash of anti-competitive practices. The San Francisco-based company claims DoorDash coerced restaurants into working exclusively with it by threatening penalties or demoting them in the DoorDash app. Uber is seeking unspecified damages and a judgment that would force DoorDash to change its business practices. The lawsuit opens a new front in the battle between the companies for market share in the competitive food delivery services market that accelerated during the Covid-19 pandemic. DoorDash Drive enables restaurants and takeaway chains to operate their own branded apps and websites but has all delivery logistics handled by DoorDash.
-The Democratic Republic of Congo is urging the National Basketball Association (NBA) to end its ties with Rwanda, citing its support for rebels in the country's east. The NBA has been urged to consider whether its affiliation with Rwanda aligns with its commitment to social justice and respect for human rights. Rwanda's capital Kigali hosts all four Basketball Africa League championships, with several Rwandan entities being affiliate sponsors. The NBA has also written to Formula One motor racing about a Rwandan bid to host a Grand Prix and European football clubs to end their sponsorship deals with Visit Rwanda.
-Danielle Sassoon, the top federal prosecutor in Manhattan, has resigned following an order from Donald Trump's administration to drop the corruption prosecution of New York City mayor Eric Adams. Sassoon, who took over as US attorney for the Southern District of New York in December, was charged with accepting illegal foreign campaign contributions and doing official favors on behalf of Turkey's government. Trump denied involvement in the decision and said he knew nothing about it.

NEW YORK TIMES
-The Department of Justice has dropped corruption charges against New York's mayor, Eric Adams, after Manhattan's acting U.S. attorney resigned. Emil Bove III, who had ordered Manhattan federal prosecutors to seek the case's dismissal, was compelled to sign the motion himself, along with two other Washington prosecutors. Bove's reason for dismissing the case was that it would hinder Adams's ability to cooperate with the Trump administration's immigration policies. This was an unusual rationale for dismissing a criminal case, which is typically evaluated based on facts and law.
-New York City is facing a crisis of confidence in Mayor Eric Adams, prompting civic leaders and elected officials to pressure Gov. Kathy Hochul to remove him from office. The move was deemed necessary after the prosecutor overseeing a federal corruption case revealed a corrupt deal between Adams and the Justice Department. Hochul, a Democrat, is seeking views from her advisers, but five sources say she favors a deliberative approach and has not yet determined if Adams poses an urgent threat to the city's governance.
-The Trump administration has accelerated plans for widespread workforce cuts across the government, with agencies like the Environmental Protection Agency and the Agriculture Department among the latest to be hit with layoffs. The administration has focused on an estimated 200,000 probationary workers, who do not receive the same protections as many other federal employees. The Energy Department has been the hardest hit, with around 1,000 probationary employees being informed they would be losing their jobs. The administration has emphasized the importance of creating a more effective and efficient federal government that serves all Americans.
-The Trump administration has increased security requirements for migrant child sponsors, potentially making it harder for minors crossing the border to be released from federal custody and reunited with family members in the US. This move is similar to the first Trump administration's policy, which aimed to tighten vetting processes for those living with migrant children. Immigration activists argue that these requirements have fueled overcrowding in federal shelters and detention facilities. The Office of Refugee Resettlement now requires fingerprinting of all adult members of a household where a child is to live in the US.
-A federal judge denied eight former inspectors general who were fired by President Trump immediate reinstatement to their jobs, citing their lawyers' argument that their emergency request had wasted the court's time. The ruling marks a rare victory for the Trump administration in lawsuits following its attempts to slash the federal workforce, freeze funding, dismantle agencies, and install officials loyal to the president. Judge Ana C. Reyes criticized the case more on procedural grounds and allowed it to proceed on a less urgent schedule.
-Hamas has released three Israeli hostages from captivity in Gaza, extending a fragile cease-fire with Israel. The Palestinian captors forced the Israelis to give speeches in Hebrew against a backdrop of Hamas leaders' portraits. The hostages appeared frail and gaunt, with rifle-toting militants and Palestinian Islamic Jihad members nearby. The militants displayed pictures of Matan Zangauker and his mother, Einav Zangauker, alongside an hourglass and the message "Time is running out." However, the gunmen did not force the hostages to thank their captors, which shocked Israelis who saw the show of gratitude as psychological torture.
-German Chancellor Olaf Scholz accused Vice President JD Vance of unacceptable interference in Germany's upcoming elections. Scholz accused Vance of supporting a party that downplays Nazi atrocities and urged German leaders to drop their firewall and allow the Alternative for Germany (AfD) to enter their federal government. Scholz accused Vance of violating a commitment to never allow Germany to be led by fascists who could repeat the horrors of the Holocaust. He stated that a commitment to never again is not reconcilable with support for the AfD. Scholz's statement came at the Munich Security Conference.
-OpenAI's board of directors rejected a $97.4B bid by Elon Musk and a consortium of investors to acquire control of the artificial intelligence company, escalating a feud between Musk and OpenAI's CEO, Sam Altman. Bret Taylor, the board's chairman, stated that OpenAI is not for sale and the board has unanimously rejected Musk's attempt to disrupt competition. OpenAI sent a letter to Marc Toberoff, the lawyer representing Musk and the investors, stating the offer was not in the best interests of the company's mission of building AI that benefits humanity. Musk's bid was seen as interference in Altman's plan to change OpenAI's corporate structure, which aims to shift control to OpenAI's investors, including Microsoft.
-Intel is working with the Trump administration to turn over the operation of its chip-making plants to Taiwan Semiconductor Manufacturing Company (TSMC). The company is looking into splitting its manufacturing business from its semiconductor design and products business. Frank Yeary, the interim executive chairman of Intel, has spoken with administration officials and leaders of TSMC about a deal that would separate Intel's ailing manufacturing business from its semiconductor design and product business. TSMC, which produces an estimated 90% of the world's most advanced semiconductors, would assume control of Intel's manufacturing business and take a majority stake in the business alongside a consortium of investors that could include private equity firms and other tech companies. The plan is expected to help Intel pull out of a yearslong slump.

NEW YORK POST
-Luigi Mangione, the accused killer of UnitedHealthcare CEO Brian Thompson, expressed gratitude to his fans in his first public statement released two months after his arrest. The statement was featured on a new website created by the murder suspect's legal defense team to combat misinformation and offer updates on the multiple cases levied against him for the high-profile assassination in the Big Apple. Mangione, who is being held at Brooklyn's Metropolitan Detention Center, thanked his supporters for their support, which has transcended political, racial, and class divisions. He thanked everyone who took the time to write and looked forward to hearing more in the future. The statement comes just days after Mangione accepted nearly $300,000 in donations raised by more than 10,000 donors supporting his cause. Mangione is currently being held at Brooklyn's Metropolitan Detention Center.
-Mayor Eric Adams is facing pressure to resign and Gov. Kathy Hochul faces pressure to oust him for being beholden to President Trump after the Justice Department dropped his criminal case. This situation comes as Hizzoner has become increasingly isolated from once-loyal allies, with some turning against Adams and others wrestling with the choice to continue supporting the second black leader of the Big Apple. Hochul is said to have started having behind-the-scenes conversations on booting Adams from City Hall, after consulting state officials about his future. The Rev. Al Sharpton is also convening a meeting of top black elected officials in New York City and the state to weigh their next move. Democratic pundits argue that black leaders are still torn because Adams is the second black mayor, and that they are not going to spend political capital on him.
-The rising cost of eggs due to the bird flu outbreak may lead to price hikes on beef and veal products due to shrinking herd levels. Supply chain expert Joe Camberato suggests that there is a perfect storm driving up beef and veal prices. The lack of rainy storms has caused chaos in the cattle industry, with droughts and abnormally dry conditions affecting ranchers and slaughterhouses. Dry conditions reduce the amount of grass available for grazing, making farmers more reliant on feed. As demand for feed grew, prices became inflated, piling on new costs for ranchers and forcing them to shrink their herds. The New World Screwworm, discovered in Mexican cattle herds, further hampering supply. As of January, US cattle herds had shrunk 1% from the year before, hitting a 64-year low. As of this month, Washington resumed cattle imports from Mexico, but President Trump has threatened to levy hefty tariffs on the neighboring country, potentially keeping cattle prices high.

FT : Syrian refugee arrested after stabbing at Berlin holocaust memorial

Syrian refugee arrested after stabbing at Berlin holocaust memorial
A series of assaults by foreign nationals has fuelled debate about migration ahead of Sunday’s election

A Syrian refugee has been arrested after a stabbing at Berlin’s Holocaust memorial, in what prosecutors said was an antisemitic attack less than 48 hours before Sunday’s federal elections.

The 19-year-old suspect was arrested on Friday night after attacking a Spanish tourist with a knife, the latest in a series of assaults by foreign nationals that has marred the election campaign in the EU’s largest nation and fuelled a bitter political debate about migration.

Police and prosecutors said that the victim suffered life-threatening injuries after being stabbed in the neck at the Memorial to the Murdered Jew of Europe, a collection of more than 2,000 concrete slabs in the heart of Berlin that stands as a testament to Germany’s dark Nazi past.

The suspect, who lives in the eastern city of Leipzig, arrived in Germany two years ago as an unaccompanied minor and successfully applied for asylum, investigators said.

They said that the evidence so far pointed to a link to the conflict in the Middle East, and that the suspect had decided on a plan to kill Jews.

The attack comes as the far-right, anti-immigration Alternative for Germany (AfD) is set to secure a historic second-place finish in Sunday’s vote with about 20 per cent of the vote, according to pollsters.

The party has seized upon a series of attacks, including a car-ramming by an exiled Saudi doctor in the city of Magdeburg in December that killed six people and left about 200 injured. In January, an Afghan national with psychiatric problems killed a two-year-old boy and an adult in Aschaffenburg. Earlier this month, two people died and 30 people were injured after a failed Afghan asylum seeker drove into a crowd in Munich.

Germany became Europe’s largest host of Syrians and Afghans after the 2015 decision by former chancellor Angela Merkel to open Germany’s doors to about 1mn people fleeing conflict, mostly in the Middle East.

The rise of the AfD, which took about 10 per cent of the vote in the last national elections in 2021, has forced other parties to tack to the right on migration — including the centre-right Christian Democrats, who are expected to come first in the election.