FT :Europe’s battery problems show the governments need to up their game

The chill that has suddenly fallen over Europe’s battery industry captures the essential shortcoming of EU green industrial policy. Even as leaders are clear-eyed about the central importance of domestic economic strength to their geostrategic independence, they still do not seem to will the means to their stated ends.

In the tangle of policies making up the EU’s industrial strategy, batteries actually stand out as a relative success. The European Commission includes them in “important projects of common European interest”, making it easier to kick-start manufacturing with public subsidies. A flurry of factories, both indigenous and offshoots of Chinese and Korean battery makers, have opened across the region. Capacity was until recently forecast to grow robustly.

So news that European battery projects are being scrapped or seriously scaled down is an important sign of things going wrong, especially as the disappointments do not appear to be due to Europe’s well-known but slow-to-fix handicaps on technology, raw materials and energy costs. The issue is, rather, that slowing electric vehicle sales have undermined expectations of market demand for the battery capacity that was to come on stream. 

This exemplifies a broader problem: a private sector deeply lacking in faith that its political leaders can move from words to action.

Those leaders have committed to phasing out new internal combustion engines over the next decade, while vowing not to let Chinese imports wipe out domestic carmakers. If both were credible, EU car manufacturers would be investing hand over fist to meet imminent EU demand for some 10mn EVs a year. That they are not — with the fallout for batteries and other parts of the supply chain — proves they do not believe the political goals will be met.

None of the many things Europe does get right is enough to turn this around. Setting targets (even legally binding ones), regulating away polluting activities or subsidising production: these are necessary, but evidently do not produce confidence that the market for green tech will be there. Nor, much, do protectionist tariffs in isolation. 

This lack of faith holds back everything from renewable generation (will the grids be there to offload peak power?) to electrolysers (will there be enough buyers of green hydrogen?). Fundamentally, policy needs to make the private sector trust demand at scale will be there. That is what China has long been adept at ensuring, and is the true cause of the US Inflation Reduction Act’s huge effect on factory building.

The EU needs to do the same, in its own way. This is not primarily about joining a subsidy race. But it does require enlisting fiscal policy, tax design and credit policy so as to forge new or fledgling markets into solid existence.

On fiscal policy, at least do no harm. A return to the demand-sapping budget consolidation of the last decade is sure to damp private investment plans. Why expand if no one will buy your extra production? The quid pro quo for any budget cuts prompted by the new fiscal rules, then, must be more EU-level funding to sustain long-term demand for green tech: EV leasing schemes, green infrastructure, grid construction, household electricity storage and so on.

Then twist taxes more to favour the new markets you aim to create, and commit to keeping them that way. Norway’s extraordinary adoption of EVs was achieved by granting them exemptions from onerous taxes on conventional cars, plus traffic privileges (access to bus lanes and cheap parking). The EU can follow suit in areas such as the tax treatment for corporate cars.

Renewable energy projects are being cancelled because once-attractive financing profiles look unviable with today’s interest rates. But central bankers have the tools to prevent inflation-fighting from setting back the transition. The European Central Bank could surgically loosen financial conditions for green investment by adapting its “targeted long-term repurchasing operations”. These offered banks loans at terms below the policy rate to the extent they expanded lending to the economy. A green TLTRO could reward banks for lending growth to projects within the EU’s green taxonomy.

This would fulfil, not violate, the ECB’s mandate, which requires it to support the EU’s general economic policies so long as it safeguards price stability — it would do this by keeping its main policy rate where it needs to be. There is no reason for green investments to fall victim to the economic cycle.

There is no reason, in truth, why Europe shouldn’t see a green investment boom. But the private sector needs to know that governments, too, mean business.

FT : Battery maker’s surge raises hope of turnaround for EV vehicles sales

Battery maker’s surge raises hope of turnaround for EV vehicles sales
QuantumScape’s deal with VW is a rare bright spot in a tough market for electric transportation

The slowdown in demand for electric vehicles is temporary, US battery executives insist, as strong clean car sales in the second quarter in North America suggest drivers remain eager to go green.

This week, battery maker QuantumScape’s shares surged 52 per cent following its disclosure of a $130mn payment from Volkswagen for technology royalties.

Shares in QuantumScape, which makes solid-state batteries rather than conventional EV lithium-ion batteries, had fallen since going public in 2020 via a blank-cheque company.

The announcement was a rare bright spot this year for US battery makers, whose lofty valuations have crumbled amid slowing EV sales and increasing competition for Chinese suppliers such as BYD and CATL.

“I would be foolish to say that I am not worried about the Chinese competitors,” Siva Sivaram, QuantumScape’s chief executive, said in an interview.

The company’s development of solid-state batteries will give EV cars longer range and faster charging times versus the lithium batteries made by Chinese or other competitors, Sivaram argued. But Wall Street analysts have said solid-state batteries have an uncertain path to commercialisation.

The deal with Volkswagen gives QuantumScape about one to two months of free cash flow, Morgan Stanley said in a July 11 report. Volkswagen previously invested $300mn in QuantumScape and controls about 25 per cent of the voting power at the company, Morgan Stanley said, adding that there is no specific timeline for the potential mass production of its battery cells.

“The automotive business has these big ups and downs,” Sivaram said about the sluggish EV sales. “Yes, there is surely a blip. We just have to ride out these blips.”

Tesla, the world’s largest EV company, this month reported a second consecutive decline in quarterly vehicle sales.

But after “a shaky start” to the year, North American EV sales increased 10 per cent in the first six months of 2024 versus last year, according to Rho Motion. Ford said this month its EV sales were up 72 per cent in the first half of the year, making it the second-largest EV seller after Tesla.

Still, battery business valuations have fallen from the market’s 2021 heyday. Silicon-based battery developer Sila Nanotechnologies, which was valued at $3.3bn in a 2021 funding round, raised $375mn in a June fundraising that Joe Fath, a portfolio manager at repeat investor TRowePrice, said was “clearly a down round”.

“The folks who are participating, there is conviction and belief that all ground transportation is going to go electric,” Gene Berdichevsky, co-founder and CEO of Sila, told the Financial Times. Another of Sila’s repeat investors, Sutter Hill Ventures, made some of the first investments in chipmaker Nvidia and remains on its board, Berdichevsky said.

In EV sales, “we are in an air pocket right now,” said Fath, but he added that the lower valuation for Sila “is not a knock on their progress. It is a knock on the world we were in versus the world we are in today. When you go through environments like this, you have to have a stronger stomach.”

FT : Goldman challenges Fed’s demand it hold more capital after stress test

Goldman challenges Fed’s demand it hold more capital after stress test
Bank appeals against regulator’s conclusion that it would lose more than $40bn in worst-case scenarios

Goldman Sachs has lodged an appeal with the US Federal Reserve challenging its result in the regulator’s most recent “stress test”, which is set to force the Wall Street bank to hold a greater amount of capital, according to people familiar with the matter. 

The appeal advances the issues that Goldman chief executive David Solomon expressed publicly two weeks ago, when he argued the Fed’s results did not reflect the work the bank had done to make its business more stable. 

Goldman and the Fed declined to comment. 

The Fed’s stress result, which included that Goldman would lose more than $40bn from loans in a series of economic doomsday scenarios, would require the bank to hold a higher amount of capital relative to its assets. Capital is kept in store by banks to absorb potential losses but is also used for dividends and stock buybacks. 

The result will mean Goldman’s capital holdings rise more than some analysts had anticipated, given that the bank has pared back its business of investing its own capital in less liquid and riskier private assets. Goldman is also typically subject to some of the highest capital requirements due to its large trading business. 

The appeal process starts with banks submitting a letter to the Fed that lays out the areas in which it disagrees with the outcome. The Fed would then recheck the test for any errors. 

Goldman faces long odds in its appeal effort. Since the Fed started to allow banks to appeal against their results in 2020, eight lenders have done so but all have been rebuffed. Goldman challenged its results once four years ago. 

The Fed’s stress test was mandated by Congress as part of the Dodd-Frank post-financial crisis reforms, and is used to decide how much capital banks must hold against their assets. 

The Fed typically discloses in August the names of any banks that appealed against their stress test result and whether they were successful. 

Bank capital has emerged as a hot topic in the past 12 months after the Fed proposed an implementation of new banking regulations, the so-called Basel III Endgame reforms, that would require large US banks to hold considerably more capital. 

The proposal set off an aggressive lobbying campaign from the banking industry. Fed chair Jay Powell has since said the central bank, which is also one of the main US banking regulators, would make material changes to its proposal. 

Miss Tweed : How long can Richemont stay independent?

How long can Richemont stay independent?

Now that a triumvirate is in place at Richemont with a powerful CEO and a new boss at Cartier and at Van Cleef & Arpels (VCA), the group’s two biggest brands, the most pressing governance question investors would like an answer to is who will be chairman once Johann Rupert is no longer there.

Rupert is 74 years old and appears to be in good shape. If he’s suddenly unfit to rule, shareholders hope he will not cling to power like some overaged U.S. politician. If Rupert had a heart attack tomorrow, who would be in charge at Richemont? His 37-year-old son Anton Rupert Junior, the one people simply call Anton?

That’s unlikely. Rupert has said several times that Anton, who bears the same name as his grandfather, would not become an executive at the group. In a Nov. 2020 call with investors on the creation of the now dissolved joint venture among Richemont, Farfetch and Chinese online giant Alibaba, Rupert stressed that Richemont was not for sale. “I have made it clear that it is neither my wish nor my recommendation that any of them (his children) will have a direct executive role such as executive chairman,” Rupert told investors, explaining the group had traditionally been run in a collegial way. “Richemont today is too complex for one individual to run,” he explained, adding that his children planned to remain shareholders in the long term.

CONTINUITY
In a 2022 interview with the Swiss newspaper Finanz und Wirtschaft, Rupert said he had a succession plan but refused to disclose details, stating that revealing it would put undue pressure on the chosen successor.

“My son has never been an executive,” Rupert said. “He has never drawn a salary or a fee, and we have stated that he will not be an executive. Anton is on the board to make sure that my colleagues can rest assured that they are not going to be raided by somebody with a short-term horizon. Anton is a mere member of the board who gives continuity and stability. And he is not planning to become an executive.”

A mere member of the board? Surely, Anton is more than that. Like his father, Anton is part of Compagnie Financière Rupert, the limited partnership that owns 10.18 percent of the group’s equity and 51 percent of its voting rights thanks to so-called “B” shares. Anton has been a member of Richemont’s board of director since 2017. He’s part of the board’s Strategic Security Committee and was on the Nominations Committee until April 2022.

Rupert said the non-executive directors on the board were aware of the succession plan and were in agreement with it. He told Finanz und Wirtschaft: “The moment you disclose it, the designated person immediately is under scrutiny beforehand. The people on the board who should know, the non-executive directors, they know who that individual is. And these directors are unanimous.”

Well, have you tried disagreeing with Rupert? That’s part of the problem with the governance at Richemont. Rupert says the company is run in a collegial manner but it’s actually very top-down, with Rupert still calling the shots on every important matter.

Since June 1, Richemont is officially run by former Van Cleef & Arpels CEO Nicolas Bos, who as group CEO directs all matters at every brand, and particularly at Cartier and VCA. His predecessor Jérôme Lambert, now Chief Operating Officer, did not have that latter power. Bos reports to Rupert and it is expected that he will likely remain CEO for many years and build a strong power base within the group. In the near future, he will make more management changes at Richemont, as Miss Tweed explained last week.

“I’m not stepping back, but I am asking Nicolas to assume some of the direct line reporting that I used to handle,” Rupert said, referring to Cartier and VCA.

The South African billionaire has tried many times to distance himself from running Richemont. In 2013, Rupert took a one-year sabbatical to read books and travel. In 2016, he told investors that his job was about managing people. “I’m an air traffic controller of egos,” he said.

One day he’s there and the next day he’s not. That’s why Rupert needs a powerful CEO to run the group.

In May, he created the Chairman’s Committee to ensure the free flow of information between the chairman and the group’s Senior Executive Committee. This committee consists of the chairman, the deputy chairman, the group CEO and the lead independent director, according to the group’s latest annual report. Richemont never replied to Miss Tweed’s email asking who the lead independent director was.

For many years, shareholders have been asking Rupert about his succession plan. No one ever got an answer. The minute Rupert is no more, the only family member who will be the group’s controlling shareholder will be Anton. Rupert may have chosen a successor as chairman, but the more pressing concern is what will be his son’s powers. If he will not be chairman, what will his role be?

VULNERABLE
Once his father is no longer there, Anton will be in a vulnerable position. LVMH CEO and controlling shareholder Bernard Arnault knows that all too well. Once the patriarch is out of the picture, it’s the time to pounce. Arnault waited for Hermès legend and CEO Jean-Louis Dumas to pass away in 2010 to make a raid on the company and build a sizeable stake. In reaction, the Hermès family banded together and created an internal shareholder structure that locked them in for three decades and effectively prevented LVMH from taking over.

If Arnault decides to make a surprise move like he did with Hermès after Dumas died, Anton does not have dozens of cousins and other family members who can rally around him. From a governance point of view, the disproportion between the power Rupert has and the size of his stake will always remain a weakness. The Rupert family effectively owns only a little over 10 percent of Richemont’s equity but continues to call the shots. Some institutional shareholders are not particularly happy about that.

Activist investors Bluebell Capital Partners sought to exploit this two years ago and use it as an argument to get board representation. In the end, their plan failed, but they made a lot of money in the process – which was their goal. Bluebell also urged the Swiss regulator to force Richemont to be more transparent and publish details of the succession plan agreed by the board — also to no avail. How long can Rupert resist shareholder pressure to keep that plan under wraps? The valuation of the company depends not only on its performance but also on who will become chairman, what his powers will be and what will be done to prevent Richemont from being a target for any potential suitor.

Arnault is quite good at finding cracks in a fortress to make it surrender. He’s a past master at exploiting disagreements between shareholders to gain control. Had Richemont agreed to merge with Kering three to four years ago when the conditions were propitious, there would not be the succession conundrum there is today. But who knows? Maybe Kering CEO François-Henri Pinault will emerge as the white knight Richemont needs to counter LVMH’s approach.

ARNAULT
Last month, Arnault revealed that he had personally taken a minority stake in Richemont. As Miss Tweed wrote at the time, if he wanted to make a bid for Richemont, he would not have let the world know about it. However, the fact that he went public about it was clearly a nudge, a way for him to let Rupert know that he was open to discussions should he be interested in an eventual alliance.

Rupert may say that the board is in total agreement with the person he chose to be Richemont’s new chairman. But what if shareholders – and people like Arnault — do not agree with his choice? If Anton is going to be Richemont’s main family controlling shareholder but have no power — as his father indicated — that situation is unlikely to hold for very long. When Anton becomes the group’s sole family shareholder, the South African scion will have some tough decisions to make.

What if Anton himself does not agree with his father’s choice of chairman for the group? Anton, who has sat on Richemont’s board since 2017, has never been allowed to build any power within the group. But as a controlling shareholder, he will have power de facto and he will be entitled to use it over any decision the group makes, including the choice of a new chairman.

Usually, a chairman acts as a counterbalance to the CEO. But at Richemont, the chairman is the person who makes most of the decisions. Arnault himself is chairman and CEO of LVMH and his family owns some 48.6 percent of LVMH directly and indirectly and has 63.4 percent of the voting rights. No one at LVMH challenges his authority. Arnault, 75, has no intention of stepping back and extended the age limit for his role at LVMH to 80 two years ago. It’s quite possible he will push it further to 85.

Contrary to Rupert, Arnault has gradually installed his children in key roles and encourages them to build legitimacy as future leaders of the group. In January, Frédéric Arnault became head of LVMH’s watches division. In April, he and his brother Alexandre, who is number two at Tiffany & Co., joined the board of directors, sitting alongside Delphine Arnault, Dior CEO, and Antoine Arnault, who is chairman of Loro Piana and in charge of LVMH’s image and environment issues. Delphine is also a member of LVMH’s executive committee. Only Jean Arnault, 26, who runs Louis Vuitton’s watches, is not yet on the board.

The fact that Rupert has not given Anton the opportunity to build a strong track record within the Richemont group puts him in a weak position. If Anton had started at Richemont in his early 20s and been properly coached – like all of Arnault’s children - he would be CEO of a brand by now or in charge of a division. Instead, in 2018, Anton helped the group buy Watchfinder & Co, which is now making losses. He was also involved in the negotiations to convince Farfetch to acquire Yoox-Net-A-Porter, which also proved to be a huge loss of time and money.

The South African scion seems to have difficulty lifting the weight of his family’s heritage and expectations off his shoulders. His father shouted at him so much as he grew up that it must have stifled his self-esteem and confidence, people close to the group say. A charming, well-educated and generous person, Anton has gotten into trouble several times in the past. In 2008, he made headlines when he crashed his father’s 1995 Ferrari F50. Ditto in 2015, when his neighbors complained about excessive noise at his home at De Waterkant in Green Point, Cape Town.

THE SISTERS
Unlike the Arnault family, Anton’s two sisters are not involved in any of Richemont’s business operations. Hanneli, 39, is a bright young lady who founded her own exotic leather goods brand called Okapi. She also set up a quaint multi-brand fashion shop in Cape Town called Merchants on Long that specializes in African designers’ clothes and accessories sourced in Africa. There is also Caroline, 41, who keeps a much lower profile than her siblings and has been involved in filmmaking and charity work.

Hanneli and Caroline are not partners of Compagnie Financière Rupert, the limited partnership that controls Richemont. This seems odd considering Rupert says he wants to empower women at his group. Hence, from a legal point of view, Caroline and Hanneli will not be able to help Anton if he is attacked. The two sisters, like Anton, have stakes in other family entities including the Anton Rupert Trust and the Anton Rupert Descendants Trust. These entities hold stakes in Reinet Investments S.C.A, a Luxemburg-based fund with interests ranging from British American Tobacco to real estate and biotechnology.

In its annual report, Richemont makes a good effort at presenting Anton, underlining “his knowledge of and insight into tech start-ups.” The group stresses that the young man “has had extensive exposure to all of the group’s businesses.” It adds: “He brings valuable insight into changing consumer behavior in digital marketing and web-based commerce.”

But it is unlikely Anton will have a strong enough power base within Richemont should Arnault make a move once his father is no longer the group chairman. And Rupert will have no one but himself to blame.

MELOS
The powerful always pounce on the weak. The ancient Greek historian Thucydides sheds formidable light on this even for today’s world. His account of the Peloponnesian war between Athens and Sparta in the 5th century BC is a must-read for anyone running a company or an organization these days.

Thucydides wrote about how Melos (today Milos), a small pacifist island in the Aegean Sea, argued that it should not submit to Athens’ rule and give it troops as asked because it was neutral. Athens responded by saying it must demonstrate its power over the Melians, otherwise it would be seen as weak. In the end, Athens killed all of the island’s men and enslaved the women and children. There is no justice between unequal powers, it argued. Might is always right and power is ultimately the only thing that matters, according to this “Melian Order.”

“The Melian Order governs the world, and it always has, since the times of Ancient Greece to Putin’s Russia and before that during Napoleon’s Europe and Hitler’s. There is no exception to this rule,”Admiral Loïc Finaz, former head of France’s War School explained during his conference on leadership at Miss Tweed’s Luxury at the Summit in Val d’Isère last year.

LVMH may not need to attack Richemont to retain its might. But clearly Arnault knows that Anton will be sitting in a vulnerable position once his father is no longer there to protect him. And he may not resist exploiting that situation to his advantage.

Business Of Fashion : Where Does Nike Go From Here?

Where Does Nike Go From Here?
With pressure mounting on CEO John Donahoe, the sportswear giant’s precise turnaround plan remains unclear. But the rehiring of Nike veteran Tom Peddie this week offered more clues on the brand’s direction.

Nike, now entering the second year of its worst slump in many years, appears to finally be addressing some of its missteps.

Earlier this week, the brand rehired Tom Peddie, a 30-year veteran of the company who retired in 2020, as its vice president of marketplace, a move designed to support the continued recalibration of its distribution strategy. It was one of the clearest signs yet that the brand was rapidly unwinding a strategy that saw it cut relationships with major retailers in a bid to focus on direct-to-consumer channels.

Solving distribution may be the easiest of Nike’s problems to solve. As executives have begun to acknowledge, the only way out of this is to release more products people want to buy, whether it’s on the SNKRS app, in their stores or at a third party retailer.

Nike has already warned that it expects sales to drop 10 percent in the current quarter, and by mid-single-digit percentages in the year ending May 2025, after rising just 1 percent in its most recent fiscal year. If that forecast bears out, it will be the company’s worst performance in 25 years. Nike’s stock is down over 30 percent this year, closing Thursday at its lowest price since March 2020.


Internally, rounds of layoffs affecting its Beaverton, Oregon base and its European headquarters in Amsterdam as part of its $2 billion restructuring plan has seen the continued removal of long-tenured, senior employees and hammered already low internal morale.

Meanwhile, a host of challenger brands new and old are chipping away at Nike’s market share in myriad categories, from athletic footwear to activewear to lifestyle sneakers. Its closest rival Adidas is set to report its highest profit margin in three years when it reports earnings for the first half of 2024 on July 31.

Chief executive John Donahoe has repeatedly said Nike’s fortunes will reverse when investment in innovation and a refreshed product pipeline kick in. But little has materialised so far by way of new or exciting franchises.

Consider the launch of the Nike Dn sneaker. Hailed by the brand as the next big silhouette when it launched in March, the chunky lifestyle shoe never really caught on with sneakerheads, despite a major marketing push, store takeovers and consumer activations in multiple cities.

A lack of compelling new products also raises doubts about how much of an Olympics boost the company is likely to receive. The games are frequently cited by Nike executives as a valuable launchpad for driving brand heat — but its not certain how valuable the tournament will be without compelling products to centre marketing around.

Meanwhile, the brand’s decision to introduce a new footwear products below $100 — revealed by Matthew Friend on the brand’s fourth quarter earnings call in June — appeared to analysts to be counterintuitive, especially when brands like Hoka and On are thriving at a price point of $150 and up.

“It’s not that the customer isn’t wanting to pay more than $100 for sneakers,” said Jessica Ramirez, senior research analyst at Jane Hali & Associates. “Nike have always had pricing power and you don’t want them to dilute the brand by being associated with cheaper sneakers than their competitors.”

A more positive spin on the tepid-seeming turnaround is that Nike has the luxury of being able to take its time to guarantee the right outcome. The company is in no danger of losing its lead in the sportswear market; with $51.4 billion in sales in its last fiscal year, double Adidas’ annual revenue.

Nike coaxing Peddie out of retirement this week followed the hire of veteran American designer Tim Hamilton, formerly of The North Face, as vice president of men’s apparel, who joined the Swoosh in March. It now has respected names in charge of fixing its two biggest shortcomings, distribution and product.

And Nike is also taking the painful but necessary step of pulling back on the distribution of key retro franchises like the Air Force One and Dunks. Those silhouettes carried its lifestyle sneaker business over the past four years, but at the expense of newness, as Friend told analysts this month.

In their place, Nike is mining other models from its archive. The Vomero 5, a retro running sneaker, has picked up demand in recent months after and is one of the newer franchises which Nike is expected to ramp up supply of moving forward, Ramirez said. In the coming months, Nike will also flood the market with lifestyle models like the Killshot and the Field General, which more closely resemble Adidas’ successful Gazelle and Samba franchises, rather than the chunky basketball silhouettes like Dunks and Jordans. The brand also confirmed to sneakerheads delight the return of the Total 90 silhouette, a football boot turned casual sneaker which reached cult status among Nike lovers in the 2000s.

On the performance side, the newly launched Pegasus 41 running sneaker is expected to be pushed by the brand in the coming year. New products, and not just updates on retro models are also a priority.

“We expect the business contribution from new products to more than double from the start of fiscal 2024 to where we end the year in fiscal 2025,” Friend told analysts in June.

Experts believe that a successful course correction is likely. But it’s going to be a long-term process, and whether Donahoe is kept in his job to see it through is increasingly a source of speculation.

“I do think management has to change,” Ramirez said. “But if they continue to do what they’ve been doing the past three months, then there’s a path for them to get things fixed.”

>>> Weekend Papers Summary

Weekend Papers Summary

FINANCIAL TIMES
-Joe Biden has held crisis talks with the top House Democrat, Hakeem Jeffries, as he tries to silence calls from lawmakers in his own party for him to abandon his re-election bid against Donald Trump. Jeffries relayed to Biden the "full breadth of insight, heartfelt perspectives and conclusions about the path forward". The meeting was the first sign of congressional leadership movement since Biden's damaging debate performance sparked panic in the party. Biden spoke with members of the Hispanic and Asian Pacific American caucuses and will hold a virtual meeting with the New Democrats, a self-styled "pragmatic" group, on Saturday. Biden's team hoped an hour-long news conference on Thursday would end the rebellion, which brought a fundraising boost, including nearly 40,000 grassroots donations and a seven-fold rise in online donations during the press conference.
-Joe Biden has defended his candidacy despite the controversy surrounding his age and political viability. He stated that he will not step back if he struggles to complete his duties, despite the lack of indication of such a situation. Biden made a significant mistake by referring to vice-president Kamala Harris as "vice-president Trump" and Ukrainian leader Volodymyr Zelenskyy as "President Putin." Despite this, Biden hopes his performance will prevent a full-blown Democratic rebellion against his candidacy, which has been brewing since his disastrous performance in the debate with Donald Trump.
-US banks JPMorgan Chase, Citigroup, Wells Fargo, and BNY have warned that lower-income customers are experiencing financial stress just ahead of the presidential election. The banks warned about consumers grappling with lower savings and higher prices. The financial health of consumers could play a crucial role in the outcome of November's presidential vote. Consumer sentiment remains "stubbornly subdued" and fell to an eight-month low of 66, according to the University of Michigan survey. Citi's US consumer lending business, including credit cards, plunged 74% from a year ago.
-Pakistan has secured a $7B medium-term financing deal from the IMF, providing a reprieve for the government as it navigates the country's crisis-hit economy. The IMF announced a preliminary agreement with Prime Minister Shehbaz Sharif's government for a 37-month financing program under an extended fund facility. The deal is Pakistan's 24th bailout with the multilateral lender and will now go to the IMF's executive board, which is expected to approve the loan. The program aims to capitalize on the macroeconomic stability achieved over the past year by strengthening public finances, reducing inflation, rebuilding external buffers, and removing economic distortions to spur private sector-led growth.
-Unilever plans to cut around a third of all office roles in Europe by the end of next year, as the company's new CEO aims to boost growth. The FTSE 100 company, under pressure from shareholders and activist investor Nelson Peltz, has announced that up to 3,200 roles will be cut in Europe by the end of 2025. The job cuts are part of Unilever's "productivity programme" that includes slashing up to 7,500 global roles. The company employs 10,000 to 11,000 office-based staff in Europe.
-Former New York mayor Rudy Giuliani can no longer use bankruptcy proceedings to avoid a $148M judgment for defaming two US election workers. A judge threw out Giuliani's case, allowing them to pursue his homes and earnings. Judge Sean Lane ruled that Giuliani failed to provide an accurate financial picture and had not even retained an accountant. Giuliani filed for Chapter 11 protection in December after being found liable for spreading a conspiracy theory about a mother and daughter who counted votes in Georgia during the 2020 presidential election.
-Meta has lifted restrictions on Donald Trump's Facebook and Instagram accounts, despite his rhetoric against its CEO Mark Zuckerberg. The social media company stated that Trump would no longer be subject to heightened suspension penalties, as it believes the American people should have equal access to nominees for president. Trump used social media to secure the 2016 presidency and during his time in the White House. However, his Meta accounts were frozen for two years in early 2021 due to his claims of election rigging and his praise of a group of supporters who stormed the US Capitol.
-Benjamin Netanyahu has stated that Israel will maintain control over the crossing between Egypt and Gaza indefinitely, indicating a long-term military presence. The Israel Defense Forces took control of the Gazan side of the Rafah border crossing to Egypt in May and have expanded their control to include the entire Philadelphi corridor, the besieged enclave's entire border with Egypt. The Israeli prime minister has instructed negotiating teams, made it clear to US representatives, and informed the cabinet about it. Gaza's other crossings are with Israel, allowing the country to control the entire Palestinian territory's borders. Negotiators are aiming to release around 120 hostages held by Hamas in Gaza.
-Poland's Prime Minister Donald Tusk has failed to reverse parts of an abortion ban passed by the previous ultraconservative government. The conservative agrarian Polish People's party (PSL) joined the rightwing opposition and voted against a bill that would have decriminalized helping women terminate their pregnancies, including offering them emergency contraception pills. Under current rules, doctors and pharmacists can be sentenced to up to three years in prison for providing help. The outcome is a blow for Tusk, who was elected last year on a progressive platform that included pledges to reverse the ban.
-South Africa's Economic Freedom Fighters leader, Julius Malema, is facing new corruption allegations following the 2018 election. The allegations come from Tshifhiwa Matodzi, former chair of VBS Mutual Bank. Malema and his deputy Floyd Shivambu were accused of benefited from R2B ($110M) stolen from the bank six years ago. The money was diverted through front companies to buy designer wear, fund lavish parties, and pay for his son's school fees at a high-end Johannesburg private school. The allegations could cause further political turmoil following the election.

THE NEW YORK TIMES
-President Biden defended his decision to continue running against escalating pressure from Democrats questioning his viability as a candidate, both publicly and privately. After the House minority leader visited the White House to share Democrats' concerns over his candidacy, the president held a tense virtual session with lawmakers in which he resisted a call to step aside. Representative Hakeem Jeffries, the House Democratic leader, has offered no hint of whether he shared his own conclusions with President Biden about whether he thinks the president should step aside.
-The controversy surrounding President Biden's bid for re-election has garnered significant attention from Americans. Over 23M people, a larger audience than this year's Academy Awards, tuned in to see how Biden handled his first live news conference since a poor performance at last month's debate with former President Donald J. Trump. The television audience accounted for roughly 45 percent of the 51.3 million who watched the debate, according to Nielsen. Biden's nearly hourlong appearance at the NATO summit in Washington was one of the most-watched telecasts of the year, outside of sporting events, aired across several major TV networks, with ABC, CBS, and NBC pre-empting regular entertainment programming. Millions more may have watched on digital news sites and other platforms.
-Donald J. Trump has been shifting his focus from his ideal running mate to a candidate who can help him get elected. For the past year, Trump has described his perfect running mate as someone who could easily take over as commander in chief if needed and help him draw a contrast to President Biden and Vice President Kamala Harris. However, as the curtain closes on his selection process, his public statements suggest that his thinking has shifted and he is giving more weight to political calculations. Trump has previously stated that he needs someone who can be a good president, which Biden doesn't have. This shift in focus on his running mate's ability to help him get elected is a significant shift in Trump's approach to the 2024 elections.
-Germany's immigration debate has been fueled by the recent killing of a police officer in Mannheim, Germany. The city has become known for its strict stance on deporting those who are denied asylum and commit violent crimes. The recent incident, which occurred in the leafy market square where a police officer was killed, has sparked calls for the expulsion of some refugees. The death and the fact that the man accused had his asylum claim denied years ago have been viewed as messaging mostly reserved for the far right.
-A cyberattack on AT&T exposed phone records of "nearly all" of its customers in 2022, but did not compromise the content of calls or texts. The breach included files containing records of calls and texts from over 100 million cellular customers, wireless network customers, and landline customers from May 2022 through October 2022, and records from January 2, 2023, for a small number of customers. AT&T said it was working with law enforcement to identify those involved and that at least one person had been arrested. The company has taken steps to close off the illegal access point and is working with law enforcement to identify those involved.
-After two weeks of intense battles between Israeli troops and Hamas militants in the Gaza City neighborhood of Shajaiye, residents and rescue workers combed through the wreckage on Friday. The landscape of flattened buildings strewed with dozens of bodies was left uninhabitable, according to residents who returned. Homes were all reduced to piles of rubble, bakeries and shops were destroyed, and even the streets had been dug up. Karam Hassan, a resident who had traveled back to Shajaiye to see the aftermath of the fighting, said that the scale of destruction is immense.
-US officials are optimistic about a deal to release Israeli hostages held in Gaza in return for a cease-fire, but people briefed on the talks say it will be days until it is clear whether a breakthrough has been achieved. People cautioned that previous hopes about an agreement had been dashed by both the Israeli prime minister, Benjamin Netanyahu, and Hamas. White House national security adviser, Jake Sullivan, reflected both the optimism and the caution, noting that many details still needed to be hammered out to secure a deal. He said that there are still miles to go before we close if we are able to close, and that it does not have to be far out in the distance if everyone comes in with the will to get it done.

THE NEW YORK POST
-Elon Musk has donated a significant amount to America PAC, a political group supporting former President Donald Trump in the 2024 election. The super PAC, formed in Austin, Texas, is required to disclose its list of donors on July 15. Musk has previously stated he will not directly donate to either Trump or Biden. America PAC, a cross-industry initiative established by the World Federation of Advertisers, aims to address harmful content on digital media platforms and its monetization via advertising. The group encourages visitors to register to vote and make a plan to vote early in person or by mail. The group has spent at least $6.6M on behalf of Trump, according to the New York Times.
-Vice President Kamala Harris is on the verge of becoming the most powerful woman globally, but most people are unaware of her background. With the $240M campaign funds raised by her and Joe Biden, she may soon lead the Democratic Party and run for the first black female President in November. Harris, who was once the District Attorney of San Francisco and Attorney General, is known for her pastel pantsuits, cackle, and word salads. Talk show host Drew Barrymore even considers her "Momala" of the country.

WWD : La Perla to Restart Operations With Financial Help of Tyche Bank

La Perla to Restart Operations With Financial Help of Tyche Bank
The bank said 500,000 euros are being made available for the financially troubled innerwear company.

MILAN — La Perla is being offered a lifeline.

On Friday, Tyche Bank said 500,000 euros were being made available for the financially troubled innerwear company. The amount will allow La Perla to restart operations at its plant in Bologna, Italy.

“Our business model is aimed at supporting companies to overcome a crisis” and La Perla is identified as a typical target, said Francesco De Marco, vice general director of Tyche Bank. “It is our mission to sustain companies that have lost access to traditional credit, but that have the potential to remain on the market.”

De Marco said the bank has the expertise necessary “to evaluate and knowingly support the financial needs” of the companies addressed, and recognized that La Perla is “a business that has value and is a brand known around the world.”

Tyche Bank specializes in insolvency proceedings, impaired and UTP (Unlikely to Pay) loans, among others, and its “Special Situations” division is providing La Perla with the funds. The bank’s main headquarters are in Bologna and Messina, Sicily, and it was formed on July 1 from the merger of Tyche Spa and Banca di Credito Peloritano SpA.

As reported, in May, a Bologna court ruled in favor of putting La Perla’s Italy-based manufacturing arm and subsidiary, La Perla Manufacturing Srl, into judicial administration, which should allow the business to continue to operate and the preservation of jobs.

In February the same court declared La Perla Manufacturing Srl insolvent and appointed a trifecta of commissioners to lead the Italian subsidiary out of financial difficulties. The transaction with Tyche Bank is a first step in meeting the commissioners’ requirements.

The commissioners are also tasked with finding potential investors, following the exit in February of the brand’s owner Tennor, the private equity firm previously known as Sapinda, helmed by German businessman Lars Windhorst.

La Perla Global Management U.K., the British company that owns the La Perla brand and its global assets, in addition to owning exclusive rights to sell La Perla-branded products, has been put into judicial liquidation in the U.K. A similar procedure has separately begun in Italy, given the U.K.-based enterprise’s control over its Italian subsidiaries.

La Perla was founded in 1956 by the corsetry maker Ada Masotti. Her son, Alberto Masotti, headed the business until it was sold to private equity player JH Partners in 2007. Ownership of La Perla later passed to Silvio Scaglia in 2013, who sold it to Sapinda in 2018.