TheChek News Flow

When you think of Canada Goose, you probably picture its trademark fur-trimmed parka, which is designed to keep people warm in sub-zero temperatures.

But today, the $1.5 billion winterwear company’s logo can actually be found on sneakers, T-shirts, socks and more. “We don’t just make outerwear anymore,” CEO Dani Reiss tells Fortune.

Soon, you’ll even be able to buy Canada Goose for your home.

But the leap from the safety of clothing retail—the space the brand has operated in since 1957—to the highly competitive market of homewares is a gamble, experts tell Fortune.

Canada Goose’s rapid expansion

Since taking the helm of his grandfather’s company in 2001, Reiss has scaled Canada Goose from relative obscurity into a globally recognized brand with 68 stores around the world, including in sweltering spots like Miami and Australia.

“We began with lightweight down in 2011, leveraging our reputation for extreme warmth to approach this new category with purpose,” Reiss explains.

Since then, it has ventured deeper into apparel, with its first knitwear collection hitting stores in 2017, followed by footwear in 2021.

Now, its non-heavyweight down products make up nearly half of Canada Goose’s revenue, according to Reiss. So it’s easy to see why the company is looking to continue emulating the success it’s experienced outside of parkas with eyewear, luggage, and even homeware looking ahead.

However, it’s not a guaranteed easy win for the brand, say marketing experts.

The marketing agency Live & Breathe has worked for decades with retailers like Morrisons, Real Techniques and World Duty Free on launching campaigns and brand extensions.

As its chief strategy officer Ben Alalouff points out, previous Canada Goose product launches—from trail boots to light gilets—have all tapped into the brand’s core messaging to get outdoors wearing Canada Goose.

“You don’t necessarily think about Canada Goose when you’re at home,” he says. “You look at the website, you look at the socials and it’s all about premium outerwear. There’s nothing about having a cozy or premium home… It’s building from scratch, so that could be a problem.”

The other elephant in the room is that many people splurge on Canada Goose because it’s a premium product. Dipping its toes into new categories to boost its bottom line could cheapen the brand.

Julio Hernandez, who leads KPMG’s global customer advisory practice, tells Fortune that “there’s graveyards out there of companies that have tried to do that and haven’t done it successfully.”

“We used to have a very famous brand here in the United States, a beer company called Schlitz,” he highlights.

During the 1970s, in an attempt to cut production costs and keep up with growing demand, Schlitz’s owners reformulated its recipe. “Almost overnight they lost their their following,” Hernandez says.

Likewise, consumers who splash out on Canada Goose expect a certain quality.

“The fact is you go on their website, they’ll tell you what’s the temperature rating etc. There’s some science behind that—it’s like ‘oh man, these guys really know what they’re doing,’” Hernandez adds.

“Is that ‘they really know what they’re doing’ [going to] translate into a new mug? I don’t know.”

Canada Goose wants to be like Apple

Canada Goose wouldn’t reveal the exact homeware products it’ll be releasing. However, its previously released limited edition heavy-weight blankets could serve as a hint.

“Canada Goose probably has enough of a pedigree to take a baby step,” Alalouff says, adding that picnic accessories, blankets, and candle holders would tie its new indoors collection with its existing outerwear reputation.

“Take that small step rather than that huge leap of immediately saying, ‘OK, we are now a homeware brand.’ You’re not, you’re an outdoors brand,” he adds. “Test the waters and then over time, you play a bigger part in your consumer’s lifestyle.”

Either way, diluting the brand isn’t something Canada Goose’s CEO is concerned about as it forays into homeware, eyeware, warm-weather clothing, luggage and more.

“I think about it, but I’m not worried about it,” Reiss says. “The reason I’m not worried about it is because I look at other brands out there in the world and some of the strongest brands in the world are much, much bigger than us.”

Instead of thinking like a fashion brand, he tells Fortune he’s looking up to the likes of Rolex, Range Rover and Apple for inspiration.

“These are the kinds of brands I look at that are big, and they’re not in my, in our industry,” the 50-year-old exec explains, adding that they’re “great examples of building a brand the right way.”

“We became a leader of what we do, by doing our own thing. We chose to stay being made in Canada, when everybody else in Canada—even in North America, and in many cases in Europe—were leaving the West to go manufacturing in lower-price environments…. That decision made us the company we are today. So that’s why I look at brands outside of this space.”

Plus, even after more than two decades at Canada Goose’s helm, Reiss asserts that he’s still thinking about the brand’s growth “in generations, not quarters.”

But ultimately, Alalouff warns that brands that think too ahead of themselves could end up in an early grave.

“Strategically, you can do whatever you want if you’re a cool enough brand and you have enough buy-in,” he argues. “But to think that you are going to play this incredibly wide impact on someone’s life, unless you’re the likes of Apple, is a toughie.

“As soon as a brand starts to think about itself as more than just something useful in a moment of a consumer’s life and starts to think about itself as something that matters all the time, that’s when you start to think a bit too much of yourself and start to get into trouble.”

Oil company YPF, the country’s central bank and flag carrier are among the assets targeted by plaintiffs

With a record $16bn US court judgment in hand, representatives of former shareholders in Argentina’s state-controlled oil company YPF have embarked on a long journey to get the cash-strapped country to pay up for seizing their stakes.

A previous attempt to extract funds from Buenos Aires in another case, led by hedge fund Elliott, took about 15 years and famously featured the seizure of an Argentine vessel in international waters before a settlement was finally reached under then-president Mauricio Macri’s administration in 2016.

This time the battle to enforce the judgment in the case, largely financed by litigation funding juggernaut Burford Capital, has been waged in strident legal filings, with plaintiffs accusing Argentina of “brazen procedural gamesmanship” in attempting to frustrate recovery efforts.

Argentina’s current president libertarian Javier Milei is at the opposite end of the ideological spectrum from the leftwing administration of Cristina Fernández de Kirchner, which oversaw Argentina’s stand-off with Elliott and the 2012 expropriation of YPF at the centre of the case. Milei has said he wants to re-privatise YPF and other state companies, and has signalled a willingness to pay the judgment if Argentina’s ongoing appeal against it fails.

But the dispute between Argentina and its former investors is as bitter as ever, court papers reveal. They also give a glimpse of more dramatic moves that may be to come, with plaintiffs seeking permission to examine large swaths of Argentina’s state-owned assets, from its flag carrier to its main consumer bank.

Lawyers for the plaintiffs claim the ostensibly independent companies are in fact stuffed full of underqualified political appointees and are “alter egos of the Republic” — a legal term that denotes they are not just owned, but also controlled, by the Argentine administration and indistinguishable from it. Such a determination would theoretically ease the path to seizures by agencies working for Argentina’s creditors.

People close to the Argentine administration, which is appealing against last year’s judgment, said they were confident of winning a reprieve from higher courts and said plaintiffs were involved in a fishing expedition designed to embarrass the country. They added that there were no substantial assets within the US’s jurisdiction regardless.

In filings to the court, the country’s lawyers have denied the entities in question are “alter egos” and said previous rulings by US courts have supported their claim that they are operationally separate from the state.

Plaintiffs are asking the court for permission to examine the following state-owned assets to see just how closely they are intertwined with current and previous governments.

YPF

Following the expropriation that led to the litigation, Argentina now owns 51 per cent of the shares in energy company YPF, split between the country and some provinces. The remaining 49 per cent are privately held. The group is listed in Buenos Aires and on the New York Stock Exchange.

The plaintiffs argued that previous governments had used the company to give jobs to “political hacks” and set local fuel prices, showing how it is really an arm of the state. They have also separately asked the court to order Argentina to transfer the nation’s shares in YPF to its creditors.

The company, which has a market capitalisation of $10.7bn, holds valuable oil and gasfields in Argentina, including in the massive Patagonian shale formation Vaca Muerta.

But the easiest YPF assets for the plaintiffs to reach would be its New York law-governed corporate bonds, said Sebastián Maril, a director at consultancy Latam Advisors, noting that some of the bonds are guaranteed by bank deposits in the US generated by YPF’s oil exports.

He added that the bonds’ price “could collapse” if YPF was deemed an alter ego of the state, whether or not the plaintiffs succeeded in seizing them. “The judgment creditors want that risk to push Argentina to sit down and negotiate.”

People close to Argentina contend that no such assets would be in reach of creditors and said YPF shares in the country were “absolutely immune” from seizure. They added that no settlement negotiations were being considered while the appeal was pending.

Argentina’s central bank

Plaintiffs argued the central bank is “used as a tool of the state”. They said the fact that Milei has repeatedly pledged to shut down the monetary authority shows the government was ultimately wholly in charge of the organisation. “It’s what he wrote in his own recent book,” lawyer Randy Mastro argued at a hearing in May, apparently referring to Milei’s 2023 book on his plan to fight Argentina’s chronic inflation.

In response Argentina maintained that control over the central bank was not “so extensive that it amounts to day-to-day business control”.

A country’s central bank reserves — of which cash-strapped Argentina has very little at the moment — enjoy strong immunity from seizure in most jurisdictions, including the US, legal experts say.

However, a recent decision by Milei’s government has made it difficult to ascertain the location of some of Argentina’s central bank reserves and what legal protections they have from seizure. Last month, economy minister Luis Caputo said the central bank had sent a portion of its $4.7bn worth of gold to an undisclosed location abroad.

While Caputo said the aim was to “generate returns”, opposition politicians claim the gold may be used as collateral for a loan needed to pay foreign bond holders next year and that it increases risks it could be seized. Former economy minister Martín Guzmán described the manoeuvre as “pawning grandma’s jewels”.

People close to Argentina said US courts had already ruled that the central bank reserves were out of reach.

Argentina’s airline

Fully state-owned airline Aerolíneas Argentinas has become a flashpoint in Argentine politics under Milei, who tried and failed to win congressional approval to privatise the typically lossmaking company earlier this year.

The airline, which controls 60 per cent of Argentina’s domestic market and runs some international flights counts 84 planes in its fleet. However, the majority are leased.

In a motion to the court, lawyers for the plaintiffs in the YPF case claim “the Republic staffs Aerolíneas with political appointees who have been criticised for their lack of airline experience and poor management”, citing former president Macri’s description of it as “an employment factory” for leftwing political activists.

Rodrigo Borrás, secretary of ground crew union APA, which represents many Aerolíneas staff, called those arguments “unserious”.

“This isn’t the first time vulture funds have tried to go after Argentina’s interests in this way,” he said, citing Elliott’s ultimately frustrated attempt to seize an Argentine naval vessel while in port in Ghana in 2012. “It won’t work.”

Bank, energy and telecoms

Arsat, Argentina’s state-owned telecommunications company, provides mobile and internet infrastructure across the country, while state-owned Enarsa focuses mostly on importing and distributing energy, and building infrastructure. Analysts said it was unclear what assets they might hold overseas.

State-owned Banco Nación is Argentina’s largest retail bank. It has branches abroad, including in New York and Miami, where the plaintiffs will hope to find information showing that the Argentine state holds accounts used for foreign trade transactions.

All three companies are also targets for privatisation under Milei.

Kids are mimicking the semi-professionals they see on their phones, imbibing ideas about beauty rooted in deep desires and capitulations.

Midday on a Thursday this summer in New York, I walked up Broadway in SoHo, toward Sephora, hoping that I wouldn’t see something. I had been reading—in the Times, the Washington Post, the Guardian, The Atlantic—about the tweens of Generation Alpha, and how they have gone wild for expensive beauty products. Apparently, these highly online children were buying and using things that even I, an indulgent grown woman, find too splurgey to experiment with: forty-eight-dollar Sol de Janeiro body butters, sixty-nine-dollar Drunk Elephant polypeptide moisturizers, twenty-six-dollar Tarte lip glosses. Local correspondents—i.e., friends who visit Sephora more often than I do—also reported regular swarms of preteens. I asked one friend, who has twelve-year-old twin daughters, if the Sephora-tween phenomenon was overhyped, a creation of the press and TikTok. “Oh girl, it is one hundred percent real, and it blows my mind,” she wrote back.

Before my SoHo visit, I created a blank-slate TikTok account and selected “beauty” as my only interest. Then I scrolled. Within minutes, I’d been shown a video documenting a nine-year-old’s skin-care routine and a branded post featuring a child influencer with the caption “Night time skincare for 6 year olds.” Soon I was watching a pair of elementary-school-age girls applying Drunk Elephant products and the video of an angry kid with the caption “POV: You tell your 9 year old she can’t use retinol.” (Retinol can help with acne, but is primarily known as the gold-standard anti-aging ingredient.) I went to Sephora’s Web site and looked up some of the products that the store carries from Drunk Elephant, a “clean” skin-care brand that was acquired by Shiseido, five years ago, for eight hundred and forty-five million dollars. At the bottom of the product pages, there were user questions and reviews. Below a sixty-dollar eye cream, the first user-submitted question asked: “is this ok for an 11 year old?” Two questions down: “can I use this at 13 if I’m only using a very little bit?” Next question: “is this ok for a ten year old, my skin does get dry and my undereyes sometimes get super dry, any other recamandations are good too! : )))).”

But the Internet, I told myself, can provide evidence to confirm almost any hypothesis. If I just went to a Sephora, especially on a weekday at 11 a.m., I would be reminded that people who buy expensive moisturizer are usually people who have jobs. As I walked up Broadway, I spotted, just ahead of me on the sidewalk, a preteen with braces, squealing at a college-age girl—an older sister, I assumed—that she was only going to buy one thing. The preteen walked in just before I did, picked up an eighty-dollar Vitamin C serum from the Drunk Elephant display, and skipped off as the college girl affably rolled her eyes. I approached a pair of employees and asked them if they saw a lot of tweens in the store. They let out simultaneous groans. “Girl,” one said. “They come in with their little lists, from TikTok, they know exactly what they want, and they laugh at you. Like, if you tell them they don’t need a serum, they will literally laugh.” Did their parents try to put the brakes on, I asked? “Oh, they’re by themselves,” the employee said. “They are unaccompanied. They have Apple Pay, and when they pull it up it’s Amex Platinum.”

I sampled a lip gloss halfheartedly and took a lap around the store. Most people here could vote, I observed with vague relief. But, as I opened the front doors back into the heat wave, a gaggle of new tweens happily buffeted me, vigorous ducks bustling past a rusted buoy in the sea.

Our Founding Fathers probably wore makeup at some point—in eighteenth-century America, upper-class men and women both did. Then, in the Victorian era, a broad moral skepticism about cosmetics took hold, an attitude that dominated until the early twentieth century, when putting on a face began to be seen as daringly cosmopolitan, and the makeup industry as we know it was born. By the end of the Second World War, makeup had become wholesome, even patriotic, albeit decidedly feminine. Cosmetics companies began marketing directly to teen-agers, and by the time I was in elementary school, in the nineties, a series of cheap drugstore brands—Bonne Bell, Wet n Wild, Jane, CoverGirl—offered a smooth, normalized ride from Dr Pepper-flavored lip balm, in third grade, to frosted blue eye shadow at the eighth-grade dance. As a kid, I read old novels—“Gone with the Wind,” “Little Women”—in which makeup was what girls tried on when they were flirting with adult wickedness. All of this was extremely exciting to me. My own mother barely wore makeup, and she didn’t hover over my free time, but, when I first started locking myself in the bathroom and caking on eye shadow from her gift-with-purchase Clinique palettes, the vague aura of taboo was an essential part of this activity’s appeal.

The nineties is also when Sephora, a French company, pioneered a new model of self-service in cosmetics shopping. Rather than buying products at a drugstore and trying them on at home, or testing higher-end wares under the supervision of department-store salesladies, one could, at Sephora, sample products freely. In other words, kids who would have attracted glares for mixing all the lip glosses at a Lancôme counter could go to a Sephora and play around in peace. Sephora opened its first U.S. store in 1998, in New York, and it came to Houston, where I grew up, not long after. I asked for a Sephora gift certificate that Christmas. My aunt, I recall, was mildly shocked: Sephora was right by the Victoria’s Secret in the mall, and the stores seemed aimed at the same audience (women, not eleven-year-olds) and at the same goal—making oneself alluring to men. But, really, I just wanted to shop at Sephora. I spent hours compiling a wish list, and ultimately winnowed it down to a single treasure, passing over the baby-blue Hard Candy nail polish and the Benefit Moon Beam highlighter and acquiring a disgusting pink frosted lip gloss from the brand Urban Decay.

Underneath this ecstasy of hypothetical and actual consumption was all the dire and prototypical gender stuff, obviously. I had wanted to be pretty since the moment I grasped that being so meant more easily procuring affection from my peers and approval from my superiors—something that’s as true in pre-K as it is in the workplace. By age eleven I understood, from reading magazines, that prettiness involved commitment in the form of ritual maintenance and consumer buy-in; glowing skin, I assumed, was attained exclusively through regular use of Bioré pore strips and Noxzema astringent face pads. Like most kids that age, I wanted to understand and participate in the future that I knew was ahead of me. I couldn’t drive, earn my own money, go to real parties, or have exciting love affairs like the ones in “Dirty Dancing” or “Grease.” But I could do face masks and put on blue mascara, and thus begin my education in the clusterf*ck of pleasure, obligation, trap, and advantage which is contemporary girlhood.

Presumably, most Sephora tweens today are similarly getting a lip gloss or two on their birthdays, and not regularly strolling up to the SoHo flagship to purchase three hundred dollars’ worth of Drunk Elephant on Apple Pay. (I asked Sephora about the company’s strategic relationship to Gen Alpha both as a consumer demographic and a sometimes disruptive presence in stores; the company declined to comment.) But these tweens are also living within the context collapse and compulsive instrumentalizing of everyday life that defines the age of the smartphone. They are on the same social-media networks as adult makeup and skin-care influencers; they are watching and even making the same types of videos, many with the same items. My peers and I were ineptly smothering our faces in drugstore eye shadow. These kids are mimicking the camera-tuned luxury aesthetic of semi-professionals whose makeup tutorials they’ve seen on their phones.

One TikTok video stuck with me especially. It featured a twentysomething influencer wearing the same bubble-crown headband that I’d seen on basically every one of the hundreds of children and adults who I’d found, with a single flick of my finger, ministering to their face for an audience of strangers. The video was addressed to “10 year olds at Sephora.” “Like, skin care in general,” the influencer said, before rubbing an ice roller over her cheekbones. “Why are you guys so obsessed with it? Like, I’m obsessed with it, but that’s because I want my skin to be perfect. A ten-year-olds’ skin is already perfect. I’m literally jealous of your guys’s skin, and I feel like you don’t need all these skin-care products to make your skin look good because it already does look good.” Switching to a jade roller, she pointed out that kids don’t have wrinkles, or fine lines, or dark spots—why were they bothering? In the comments of the video, one viewer, presumably a child, explained her use of fancy products: “I get fro bday.” Another observed, “It is bc you guys bc you film your skin care and it seems cool.” This influencer, it’s worth noting, didn’t appear to have wrinkles, fine lines, or dark spots, either. I looked her up on FamousBirthdays.com. She’s twenty-six.

Five years ago, I spent a long time thinking about Instagram Face, the phenomenon of young and professionally beautiful women acquiring uncannily similar features through a set of injections and surgeries which replicated, on the canvas of algorithm-friendly faces, the beauty filters available on social-media platforms. At the time, I found this bleak phenomenon almost pleasant to contemplate; it felt interesting in the manner of a George Saunders story. The idea of a future in which it was simply assumed that adult women with disposable incomes would regularly inject neurotoxins and gel-like substances into their faces still gave off the shimmer of the novel and surreal.

This no longer feels novel. It’s not something that people even really talk about. What is there to say? Movie stars in their mid-thirties appear on red carpets with frozen foreheads, plumped lips, lifted brows. In many social strata, the regular, procedural alteration of one’s face has become more or less normalized once one is past the age of thirty—not just on the coasts, but in cities and suburbs all across the country, and not just among women: the number of men getting Botox-type injectables from plastic surgeons doubled between 2020 and 2023, to more than half a million. The total number of Botox and filler procedures performed annually by plastic surgeons roughly doubled during that period, to nearly sixteen million. The actual number is certainly much higher: these figures come from the American Society of Plastic Surgeons, which doesn’t tabulate the total number of procedures performed at medical spas. There are over eight thousand medical spas in the United States, more than the number of licensed plastic surgeons practicing in the country.

The Sephora tweens, for their part, seem to be borrowing some of the self-care language that was dominant in the adult beauty world two Presidential-election cycles ago. According to this line of thinking, taking care of your face is a way to luxuriate in personal pleasure and exert control over your life. But adults have largely moved on from all that; no one is fooling anyone by quoting Audre Lorde in blog posts about lip balm anymore. The earnest language of corporate-approved wellness disappeared from the mainstream somewhere around 2020, along with the figure of the girlboss (who often relied on that very language). The mood regarding beauty—and also culture, politics, and whatever it is we’re all doing—is raw, pragmatic, aggressive. The deference to brute material reality comes a lot faster these days.

Style and technology have reinforced this shift in convoluted loops. A few years ago, body-positive influencers began taking Ozempic, as fashion swung back toward the early-two-thousands aesthetic of lingerie tops and exposed hip bones. With only a faint sheen of irony, the aesthetic referenced a nadir of progressive values in pop culture, a time when tabloids published upskirt photos on their covers while Disney stars pledged their virginity until marriage. The return to that mood is undergirded by a broader, Internet-influenced reactionary conservatism: a post-2020 impatience with “woke” ideals, and the influence of proudly misogynistic online male communities—incels, pickup artists, men’s-rights activists, etc.—that have been gathering power since the early two-thousands. These red-pilled men argue that women “hit the wall” around or before our thirties, when we supposedly lose our only source of power, which is our looks. This idea has worked its way into the collective consciousness as a simple social fact. When Anne Hathaway went on a press tour in 2023, at age forty, she was aggressively celebrated for—this was a shock to people—not looking old. I recently saw a picture of thirty-one-year-old Miley Cyrus, on X, captioned, “She is the definition of ‘aged like fine wine’. ”

During the past year, instead of sleeping, I often found myself scrolling Reddit in search of tips about how to get a baby to do so. Reddit’s algorithm then served up other forums that it deemed, with some accuracy, relevant to me. I ended up reading a lot of posts about skin care, often written by women my age who were afraid, in so many words, that they were hitting the wall. I saw an Instagram influencer in her early twenties getting Botox. A different influencer posted, “just turned 23 and decided to wait on getting any Botox so I’m forcing myself to stay consistent with my retinol.” An eighteen-year-old asked if they should get jawline Botox because their face was puffy. “i know there are some people whose face might change a bit in their early to mid twenties,” they wrote. “i’m not sure if that’s worth the wait and I should just get botox now.”

Botox and fillers are intended to make a person look younger. But, if they’re deployed by people in their twenties, or younger—in 2023, almost forty-four thousand people aged nineteen or under got Botox or filler from plastic surgeons—injectables often make people look older. In trying to halt the aging process, or maybe just mimic the look that is now associated with being rich and on camera, heavily injected twentysomethings bring on the future they were attempting to prevent. It is a dire ouroboros: yet even to observe it, as I’m doing now, reinforces the damage of the norms that have prompted it in the first place, by further scrutinizing these mostly female faces, and concluding that they have failed to carry out their purpose—to look pleasing and young. In this, the Sephora tweens and the twentysomethings getting Botox have something in common: they’re talked about as though they are aberrations, when, in fact, they’re a logical part of a damningly cohesive whole.

Not quite twenty years ago, Nora Ephron, at the age of sixty-five, published a book of essays titled “I Feel Bad About My Neck: and Other Thoughts on Being a Woman.” In one essay, she wonders why people write books claiming that it’s better to be older than to be younger, when, she insists, this is clearly not the case. At her age, she writes, your memory sucks, you can’t ride a bike very far, you’re irrelevant at work, and if you’re having sex at all, it is not the sex of your dreams. “Plus, you can’t wear a bikini,” she adds. “Oh, how I regret not having worn a bikini for the entire year I was twenty-six. If anyone young is reading this, go, right this minute, put on a bikini, and don’t take it off until you’re thirty-four.”

I was in my early twenties when I read that book, and I took her advice to heart, dressing in the spirit of the bikini for as many occasions as I could. It occurred to me this spring, at age thirty-five, when I bought my first-ever sensible swimsuit, that I had unconsciously abided by Ephron’s deadline. Like seemingly half the women in Brooklyn, I happened to be reading Miranda July’s novel “All Fours” at the time, and had dog-eared this quote: “So much of what I had thought of as femininity was really just youth.” These days, children want to look like tweens, tweens want to look like teen-agers, teen-agers want to look like grown women, and grown women—dreaming of porelessness, wearing white socks and penny loafers and hair bows—evidently want to look like ten-year-old girls.

Beauty, or our idea of it, is always rooted in deep desires, capitulations, and pathologies. It makes certain things so obvious. How we spend the present trying to secure the future, and thus squander what’s in front of us. How we fail to appreciate what we may later understand as an experience of unbelievable plenty: unlined skin, spare time on Saturdays, an Earth with a climate that can grow coffee beans. And then, when we glimpse the actual future, we pretend it’s not actually coming, or that we can invent our way into a world where it never will.

Having suffered a series of legal and regulatory setbacks in recent years, the cryptocurrency industry is pouring millions of dollars into the upcoming election. To what end?

Amonth is a long time in politics. As a lacklustre Democratic Presidential campaign has transformed into the Kamala Harris Show, Donald Trump’s reëlection bid has turned into the Crypto Show. After picking J. D. Vance, a former venture capitalist and cryptocurrency booster, as his running mate, Trump appeared at a Bitcoin conference in Nashville, where he promised to create a “strategic bitcoin stockpile” and turn the United States into “the bitcoin superpower of the world.” He also pledged that he would fire Gary Gensler, the chair of the Securities and Exchange Commission, who has criticized the crypto industry for a “record of failures, frauds, and bankruptcies,” and who is the nemesis of many crypto bros.

Of course, it’s richly comedic to see Trump, a technophobe who, in 2019, said that the value of bitcoin was “based on thin air,” now promoting himself as its biggest champion and trying to cash in on it politically and personally. At the Nashville event, according to CNBC, dozens of crypto boosters, including the Winklevoss twins and Kid Rock, paid five hundred thousand dollars apiece to attend a private roundtable with the former President. A few days later, a company that Trump owns listed online a “limited” run of gold sneakers emblazoned with a Bitcoin symbol and the words “TRUMP CRYPTO PRESIDENT.” The high-tops were listed at five hundred dollars per pair. (According to one report, they subsequently appeared on eBay at prices of up to twenty-five hundred dollars, with one listing tagged at $69,999.)

What could be more predictable? In 2022 and 2023, Trump issued a series of N.F.T. trading cards featuring drawings of him in superhero costumes. Earlier this year, the latest edition of cards was pulled from sale after their prices plunged. But, behind the familiar sight of Trump trying to pad his campaign war chest and enrich himself, there is a bigger and more consequential story unfolding. The crypto industry, having suffered a series of legal and regulatory setbacks in recent years, including the conviction and imprisonment of some of its leading figures, is making a determined effort to gain relief from S.E.C. oversight at the same time that it is making inroads into mainstream finance. (Earlier this year, Fidelity, BlackRock, Invesco, and other firms launched exchange-traded funds whose value is tied to the price of bitcoin.) If this industry maneuver succeeds—and it may well do so if Trump wins in November and Republicans sweep Congress—the long-term consequences could be calamitous.

To understand the current situation, it’s necessary to go back a couple of years, when the industry was in crisis. In December, 2022, Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX and a major political donor, was arrested. Subsequently, he was convicted of defrauding FTX customers out of more than $1.7 billion and sentenced to twenty-five years in prison. In November, 2023, Changpeng Zhao, the founder and C.E.O. of Binance, the world’s largest cryptocurrency exchange, pleaded guilty to failing to counter money laundering on the exchange, and was sentenced to four months in prison.

The confirmation that criminality was at the heart of crypto trading was, of course, a big setback for the industry at large. But an even bigger threat came in the form of Gensler and his campaign to treat many crypto assets as investment securities, like stocks or bonds, which would make them subject to strict investor-protection laws and government oversight. The crypto industry had long argued that investing in crypto is more akin to buying commodities, such as precious metals and pork bellies, which are regulated by the Commodity Futures Trading Commission, a much smaller agency than the S.E.C. and one that historically has been less focussed on individual investors.

In September, 2022, Gensler said, in a speech in Washington, that he believed “the vast majority” of crypto tokens were securities, and he quoted Joseph Kennedy, the first head of the agency, who averred, “No honest business need fear the S.E.C.” In the following months, the S.E.C. sued some leading crypto firms, including Binance and Coinbase, the largest U.S. crypto exchange. The agency accused the two companies of operating unregistered securities exchanges, and other violations. The companies denied any wrongdoing and tried to get the cases dismissed before trial. In March of this year, a federal judge in New York ruled against Coinbase and said that most of the case could go ahead. In June, a judge in Washington, D.C., said that most of the Binance case could go ahead, too. Last December, a federal judge in New York said “there was no genuine dispute” that four crypto tokens sold by Terraform Labs, a South Korean crypto company, were securities under U.S. laws.

The S.E.C. has also suffered setbacks on that key issue. In July, 2023, a federal court in California ruled that XRP, a token created by the San Francisco-based crypto company Ripple Labs, wasn’t a security when it was sold to the public on a crypto exchange. And in June of this year, the S.E.C. closed an investigation into Ethereum, the second-biggest blockchain network after Bitcoin. But, in the main, the agency had made progress in the courts. “People in the crypto industry are doubling down on political contributions,” Dennis Kelleher, the president of the public-interest group Better Markets, told me. “They can see the trend of losing to the S.E.C. in court. The legal walls are closing in, and they want Congress to say digital assets are not securities, so the S.E.C. has no jurisdiction over them. That’s the big ask.”

Video From The New Yorker

Swift Justice: A Taliban Courtroom in Session

The scale of crypto-industry donations is startling. According to Bloomberg, three crypto super PACs, including the biggest one, Fairshake, have raised a hundred and seventy million dollars from donors including Coinbase, Ripple, and the venture-capital firm Andreessen Horowitz. The flood of crypto money isn’t just going to Trump’s Presidential campaign. It’s also going to House and Senate campaigns. And whereas most of it seems likely to be directed at defeating Democrats who have been critical of crypto, including Senator Sherrod Brown, of Ohio, and Senator John Tester, of Montana, some is also going to other Democrats.

In a primary election last week in Arizona’s Third Congressional District, Yassamin Ansari, a Democratic member of the Phoenix city council, whose campaign had been boosted by ads paid for by a crypto super PAC, defeated Raquel Teran, a former chair of the state Democratic Party. Given all the crypto cash that is sloshing around, it may not be a coincidence that more than a dozen House Democrats recently signed a letter to Jaime Harrison, the chair of the Democratic National Committee, asking the committee “to take a forward-looking approach to digital assets and blockchain technology.” It remains true, however, that the crypto industry’s biggest political boosters are Republicans.

After Trump’s appearance at the recent Bitcoin conference, Senator Cynthia Lummis, of Wyoming, announced that she is proposing legislation to establish a “strategic Bitcoin reserve,” made up of about a million bitcoins. (Robert F. Kennedy, Jr., another crypto booster, is also advocating for this.) Again, there is comedic value here. The crypto bros, many of whom style themselves as libertarians, often argue that one of the great things about Bitcoin is its independence from governments. Here comes a Republican senator proposing to spend more than sixty billion dollars of taxpayers’ money (given the current price of bitcoin) to acquire about five per cent of the entire stock of the cryptocurrency.

Advertisement

Under Trump’s more modest proposal, the U.S. government would simply hold on to all the bitcoins that it accumulates via seizures by law-enforcement agencies. What economic good would keeping hold of these bitcoins do? “The tangible benefit is that it will get bitcoin maxis to vote for Trump,” James Angel, a financial economist at Georgetown, told Wired. “If you believe in Trumpism, that would be the benefit.”

While many crypto bros would surely benefit if the U.S. government gave bitcoin and other crypto assets its imprimatur, the industry’s main goal is to bring crypto assets into the mainstream world of investing while keeping regulation of them as light as possible. Kelleher said that we’ve seen where this story leads. He reminded me that, in 2000, Congress passed the Commodity Futures Modernization Act, which effectively exempted from regulation certain financial derivatives: contracts whose value is tied to the price of an underlying asset. During the ensuing years, the issuance of mortgage derivatives, such as credit-default swaps, increased enormously. Many big banks ended up being financially exposed to them, sometimes unknowingly. When the real-estate market cracked, the value of the underlying mortgage securities collapsed, and the whole edifice came tumbling down, eventually prompting a taxpayer bailout.

A possible defense of crypto is that we’ve already been through a punishing collapse in the price of digital assets, and it didn’t have much impact on the broader financial system. (In 2021 and 2022, the value of bitcoin plunged by more than two-thirds.) But, as Kelleher also noted, that crash occurred in an environment where regulators had insisted that crypto and crypto assets be kept at arm’s length from the rest of the financial system. “Imagine if a crash happened when crypto was deregulated but also fully integrated and interconnected with the banking system,” Kelleher said. “There would be countless derivatives whose value was tied to the bitcoin price, and these liabilities would be all over the balance sheets of the banks. Then we’d be back to where we were in 2008.”

That may be the very worst-case scenario, but the larger point stands: we’ve seen the dangers of light-handed financial regulation. In the case of mortgage securities, at least the argument could be made that they were supposed to serve a larger social purpose: expanding homeownership. If anyone has discovered an overweening social purpose for cryptocurrencies and other crypto assets, they’ve kept it well hidden. But don’t try telling that to the Mar-a-Lago crypto convert. He’s got an election campaign to finance and some sneakers to sell.

Par Delphine Dechaux le 10.08.2024 à 09h00

500 fortunes. Ils ont chacun leur haras en Normandie, près de Deauville, au cœur de l’élevage français des pur-sang. Certains sont des figures légendaires du sport hippique, d’autres se lancent avec passion. Tour de piste.

The week saw the second-biggest raise of the year, as Anduril Industries’ monster raise ranks behind only xAI’s massive $6 billion in May. Aside from that, the week saw some big rounds from cybersecurity, travel and of course, biotech.

1. Anduril Industries, $1.5B, defense: Anduril Industries matched its own record for the largest defense tech round ever. The Costa Mesa, California-based startup locked up a $1.5 billion Series F that values the company at $14 billion — a 69% jump from the $8.5 billion valuation it received after its massive $1.5 billion Series E in late 2022. The round was co-led by Founders Fund and Sands Capital. The company will use some of the new proceeds for the development of Arsenal-1 — a more than 5 million-square-foot production space designed to produce tens of thousands of autonomous military systems annually. After a slow start to the year, funding to defense tech startups has picked up dramatically in the past few months. Just last month, Helsing, which develops artificial intelligence software for defense, raised approximately $489 million in funding led by General Catalyst that values the company at $5.4 billion. After Anduril’s huge round, defense tech startups now have raised $2.5 billion in 2024, per Crunchbase data. Last year, such startups collected only $2 billion total.

2. Groq, $640M, semiconductor: AI semiconductor and software startup Groq started the week off with a bang when it announced it had locked up a $640 million Series D round at a valuation of $2.8 billion. The round was led by funds and accounts managed by BlackRock. The Mountain View, California-based firm is helping develop ways to optimize AI and lessen the vast amount of computing power that is currently needed to do that. The new round almost triples the company’s valuation from its Series C in 2021. Founded in 2016, the company has raised $1 billion, per Crunchbase.

3. Abnormal Security, $250M, cybersecurity: Abnormal Security closed a $250 million Series D that now values the San Francisco-based cybersecurity startup at $5.1 billion. The new round was led by Wellington Management. The new valuation is a more than 28% uptick from the $4 billion valuation Abnormal got when it raised a $210 million Series C led by Insight Partners back in May 2022. Founded in 2018, Abnormal looks to stop attacks and find compromised accounts across email and connected applications through leveraging machine learning and AI to understand human behavior. The startup has raised nearly $546 million total, per the company. Abnormal also says it recently surpassed $200 million in annual recurring revenue. After a down 2023, cybersecurity startups are once again seeing the cash. In the second quarter of 2024, cyber startups saw a robust $4.4 billion invested, according to Crunchbase data. The dollar figure represents a 63% increase from Q1, which saw $2.7 billion roll to startups in 173 deals. It was the best quarter for funding in the sector since Q1 2022 and a 144% increase from Q2 2023.

4. Flyr, $225M, travel: Travel startup Flyr raised $225 million in equity and $70 million in debt in a new funding round. The equity portion was led by WestCap and reportedly values the startup at $900 million. The Santa Monica, California-based startup develops software for the travel industry, such as airlines. Founded in 2013, the company has raised $482 million, per Crunchbase.

5. IDRx, $120M, biotech: The big biotech raise this week went to a Plymouth, Massachusetts-based startup. IDRx, a clinical-stage biotech developing cancer treatment with precision therapies, raised a $120 million Series B led by Commodore Capital, RA Capital Management and Blackstone multiasset investing. Founded in 2022, the company has raised $242 million, per Crunchbase.

6. DevRev, $100M, artificial intelligence: Palo Alto, California-based DevRev, which develops AI for customer support and other uses, raised $100 million from Khosla Ventures and other investors. The round reportedly values the company at $1.15 billion. Founded in 2020, the company has raised $150 million, per Crunchbase.

7. Shinobi Therapeutics, $68M, biotech: Shinobi Therapeutics, a South San Francisco, California-based biotechnology company developing immune evasive iPS cell therapies, raised a $68 million Series A extension from Mitsubishi UFJ Capital and Yosemite. Founded in 2023, Shinobi says it has raised $119 million.

8. MBX Biosciences, $64M, biotech: MBX Biosciences, a clinical-stage biopharmaceutical company focused on the development of precision peptide therapies for the treatment of metabolic disorders, announced a $63.5 million Series C financing led by Deep Track Capital. Founded in 2019, the Carmel, Indiana-based company has raised more than $238 million, per Crunchbase.

9. Muon Space, $57M, space: Mountain View, California-based Muon Space, which designs and operates low-earth orbit satellite constellations, raised a $56.7 million Series B funding led by Activate Capital. Founded in 2021, the company has raised nearly $92 million, per Crunchbase.

10. Red Queen Therapeutics, $55M, biotech: Red Queen Therapeutics came out of stealth with a $55 million Series A from Apple Tree Partners. The Cambridge, Massachusetts-based biotechnology company develops antiviral treatments.

While the biggest raises came from the U.S., there was a large AI round in Asia

Shares of the lodging company fell more than 10% this week after the company reduced its financial guidance, but its fundamentals and market position remain strong.

Plenty of medals were won at this year’s Paris Olympics. Airbnb arguably deserved one, too. The company created temporary housing supply for 400,000 spectators in private homes throughout the City of Light, showcasing the power of its platform.

Wall Street isn’t giving Airbnb any medals these days.

Investors have soured on the lodging platform as growth has slowed, as evidenced by the company’s disappointing third-quarter financial guidance. The shares fell more than 10% on the week, to $115. The stock is trading for just over half of the peak it reached in early 2021, after the company’s spectacular initial public offering. Most Wall Street analysts have Neutral or Sell ratings on the shares.

The selloff offers a good entry point for investors in a company that dominates the short-term rental market worldwide, with eight million active listings, more than $80 billion of annual gross bookings, and $11 billion of annual sales.

“The setup is good,” says Richard Clarke, a Bernstein analyst. “Airbnb should continue to gain share from hotels and become ever more global. There is huge optionality with the business.” He has an Outperform rating and a price target of $174 for the stock, a 51% increase from its current value.

Airbnb CEO Brian Chesky has acknowledged that Airbnb has done little outside its core business and says that the company plans to change that. Clarke sees opportunities in travel experiences, like tours and cooking classes, which the company plans to roll out in 2025; sponsored listings allowing hosts to pay for better placement; the introduction of a loyalty program; and a property-management business.

Plus, plenty of open space remains in the world for the San Francisco-based company, as most of its business is in five countries: the U.S., France, the U.K., Australia, and Canada.

Airbnb stock isn’t a bargain, but it is cheaper now than at any time since its IPO. Shares are trading for about 26 times projected 2024 earnings of $4.23 a share, and 23 times estimated 2025 profits of $4.60 a share. These are conservatively calculated earnings estimates that include the expense of the company’s sizable stock compensation.

As an intermediary between hosts and guests, Airbnb doesn’t require much capital. It generates significant free cash flow and the industry’s best margins. The company has ramped up its stock repurchases with $1.5 billion so far this year, and doesn’t pay a dividend.

The stock trades in line with the valuations of hotel leaders Hilton Worldwide Holdings and Marriott International, and at a premium to online travel providers Booking Holdings and Expedia.

Airbnb has a formidable balance sheet with nearly $10 billion of net cash and short-term investments, almost 15% of its current market value of $73 billion. Net cash could double over the next three years depending on the level of buyback activity.

While Airbnb’s second-quarter earnings topped expectations, third-quarter guidance was a disappointment. Airbnb sees 8% to 10% revenue growth, about four percentage points below expectations, and no year-over-year growth in pretax cash flow, against estimates of about a 10% gain. It cited higher marketing spending and “slowing in demand from U.S. guests.”

Analyst Brad Erickson of RBC Capital Markets wrote that “kicking up marketing spend at a moment when demand is softening tends to be the ultimate backbreaker for an Internet stock in our experience.”

Chesky wouldn’t provide any guidance beyond the current quarter, in keeping with company practice. “You get a fear factor,” Clarke says. “Investors over-extrapolate short-term trends.”

“We feel that our growth strategy will more than offset any transitory macro trends,” says Ellie Mertz, Airbnb’s chief financial officer. A key reason for Airbnb’s high profit margins is strong consumer brand recognition, she says. About 90% of the traffic to the website comes directly, meaning Airbnb pays relatively little to drive consumers to its platform.

To stay ahead of rivals, Airbnb has improved the traveler experience. The company has culled 200,000 listings and added a guest favorite icon on rentals that have garnered high scores from travelers. That’s all part of its efforts to improve reliability, which Chesky admitted is the main reason travelers choose hotels over Airbnb.

Like other founder CEOs such as Mark Zuckerberg of Meta Platforms and Elon Musk of Tesla, Chesky, 42, is an asset who brings a passion to the business.

Airbnb has dealt with other setbacks, including a new law last year in New York City, one of the company’s largest markets, that crimped short-term rentals and led to a sharp drop in business.

Consumer-friendly California began requiring that Airbnb disclose some fees related to short-term rentals in response to complaints that the company wasn’t transparent about them.

Chesky said on the earnings call that there is a place for hotels and Airbnbs. If you’re staying for a night or in some business situations, he said, “a hotel is better.” But if you’re with a group, traveling for more than three nights, or in a nonurban area, “Airbnb is better.”

Hotels still outdraw Airbnb by a ratio of nine to one. That’s a big opportunity, and a reason to stick with the well-managed industry leader after its recent setback.

Drugs used for weight loss have helped millions of people take control of their physical health. But some patients are reporting unexpected improvements to their intimate lives.

Jacqueline Smith had a healthy sex life until she began taking Ozempic to lose weight. That’s when she noticed some dramatic changes. Smith, 35, and her husband of seven years went from having sex several times a week to doing so daily, sometimes more than once.

“This put it to the point where my husband was like, ‘I need a break,’” she says.

Smith, who lives in Greenville, Ohio, has lost 67 pounds and says she’s now taking the drug on and off. When she stops, she says, her sex drive slows down a bit. “It’s not all crazy wild.”

Ozempic, Wegovy, Mounjaro and Zepbound have transformed the lives of millions of people, helping them control their appetites and lose weight that once seemed impossible to shed. They have shifted the obesity paradigm, demonstrating that the disease is rooted in biology, not willpower. Studies have also found that the drugs may reduce the risk of heart and kidney disease.

And for some patients, they have offered another benefit: a boost in their intimate lives.

‘We Have a Newfound Intimacy’

Danielle Dollar’s health was driving a wedge in her marriage. She suffers from severe polycystic ovary syndrome and endometriosis, which made it difficult to lose weight and control inflammation in her body.

Her struggle meant her husband had to pick up the slack with their three sons, especially with social activities like birthday parties. “If you don’t feel good about yourself, it’s just going to spill over,” Dollar, 41, says. “It definitely affected us romantically, our friendship, our relationship.”

Then she saw a TV ad from Ro, the telehealth company, about its weight loss program, and began taking Ozempic. Dollar has lost 85 pounds to date, and hopes to lose another 40. “The last eight months of our marriage is better than the last about 12 years of our marriage,” she says.

She and her husband, who live in Las Cruces, N.M., and have been married for 15 years, used to turn down invitations to go on group vacations because of her insecurities. But in December, they went on a trip to Puerto Rico with friends. They’ve instituted a standing Friday lunch date, usually at a local spot with a salad bar, but once a month they’ll indulge at a Mexican restaurant.

Before, she says, “it was more of me just trying to cater to him.” Now, “we have a newfound intimacy,” she added.

In online forums, people have dissected all aspects of the drugs, including how they’ve affected sex and relationships. “Anyone had their *ahem* sexual desire plummet on Ozempic?” reads one Reddit thread, while another prompts: “Anybody else dealing with an insatiable desire for sex?”

What Drugmakers and Researchers Say

While the popular medications from drugmakers Novo Nordisk and Eli Lilly indicate there is potential risk for pregnant women and those hoping to conceive, they do not indicate sexual side effects on their labels. There has been little research examining the relationship between these drugs and sexual behavior in humans.

“We actively engage in monitoring, evaluating and reporting safety information for all our medicines,” a Lilly spokesperson said in a statement, adding that if a patient experiences side effects, “we encourage them to speak with their healthcare provider.”

A spokesperson for Novo Nordisk said it would continue to monitor reports of adverse drug reactions, including sexual dysfunction. “Patient safety is of utmost importance to Novo Nordisk,” the spokesperson said.

Biology could explain changes that some people are reporting. “These drugs do work in the same places that pleasure and sexual interest are located in the human brain—male and female,” says Dr. James Simon, a reproductive endocrinologist, OBGYN and clinical professor at George Washington University.

The drugs’ effects on the brain’s reward system are drawing the interest of global researchers, who are studying potential applications such as curbing alcoholism and drug addiction. While Wegovy and Zepbound are approved by the FDA for weight loss, Ozempic and Mounjaro, which contain the same active ingredients, are approved only for diabetes treatment.

Novo Nordisk is investigating whether semaglutide, the active ingredient in its Ozempic, Wegovy and Rybelsus drugs, can treat alcohol-related liver disease. Other potential benefits are still coming to light. Some women who have struggled with fertility have reported accidental pregnancies while taking the drugs. Their experience could be attributed to improved health markers that relate to pregnancy or new research that has found tirzepatide, the active ingredient in Eli Lilly’s Mounjaro and Zepbound, can interfere with the effectiveness of oral birth control. Prescription labels for these drugs advise women to take additional precautions if using oral contraception.

The Kinsey Institute at Indiana University, which studies sexuality, gender and reproduction, said it was not aware of significant research into how the drugs were impacting peoples’ sex lives to date. “Hundreds of thousands of people are taking these drugs, so it seems important we invest in understanding how they affect this core aspect of their lives,” said Camilla Peterson, a spokesperson for the Kinsey Institute.

Better Than Sex

In some cases, desire and performance have slumped. One recent study, published in May by the International Journal of Impotence Research, found obese, non-diabetic men were slightly more likely to have a diagnosis of erectile dysfunction or prescription to a drug treating the condition after starting semaglutide than those who hadn’t taken semaglutide. The research was based on medical records and insurance claims for roughly 6,000 men between the ages of 18 to 50 that met certain medical criteria.

“We are assured that the rates of this are very low,” says Dr. Taylor Kohn, a fellow in male reproductive medicine and surgery in the Department of Urology at Baylor College of Medicine who co-authored the study.

The Novo Nordisk spokesperson said it was not involved in the study or analysis and that there was not sufficient information to know if the drugs were being used in an approved manner.

Before the study, Dr. Kohn, who was at Johns Hopkins at the time, said a few men had filtered into the urology clinic citing a dampened desire for sex after they’d started taking a semaglutide-based drug. “If you go on Reddit or [online] forums, there is this complaint floating out there of people who just lose all desire to have sex,” he says. “Fortunately, I don’t think it’s the vast majority.”

In the long-run, Dr. Kohn said that the cardiovascular benefits of the drug likely would serve to positively impact the likelihood of erectile dysfunction in certain men. “We know that if you reverse cardiovascular disease, erectile dysfunction improves as well.”

He’s planning a follow-up study to analyze the impact of semaglutide on male sexual function over time.

Los Angeles native Jared Spencer, 36, found he struggled with erectile dysfunction after he began taking the semaglutide pill Rybelsus. He has struggled with weight his entire life. He was at his heaviest—310 pounds—when he started the medication.

Within about a month, he noticed he was having “performance issues.” He started taking Cialis, the erectile dysfunction medication. He has also paused Rybelsus while taking vacations, including a romantic getaway. “You’re still somewhat in a weakened state,” he says. “It’s not like the marathon that it could be before.”

He speculates the effects of Rybelsus, like reduced hunger cravings which result in eating much less and being less energized, may have contributed to the issue.

Still, Spencer says he’d take the weight loss over anything else. “I have a dating life now, which is something that I didn’t have before,” he says. “I’m apparently handsome.” His confidence and sleep have improved.

“If I had to give up sex entirely until this journey is over, I would do that,” he says.

‘A Complete 180’

After Amy Kane’s youngest child was born in April 2020, she struggled with postpartum depression amid the Covid-19 lockdown. At 300 pounds, she was feeling very insecure in her body.

“I didn’t even want to be touched really, in terms of even hugs and kisses and things of that nature,” she says.

But things took a turn when Kane, 35, was diagnosed with diabetes and had to make her health a priority. She started taking Mounjaro in 2022 and has lost 160 pounds. She said she and her husband, who live in Naperville, Ill., started going to couples therapy. Sometimes they’d follow their sessions with drinks. Eventually, the two quit counseling; their post-therapy drinks became a standing weekly dinner date.

Kane has been vocal about her experience, posting about it on TikTok and Instagram and even appearing on Oprah Winfrey’s March special on ABC about the “weight-loss revolution.” But she still has her own insecurities. “There’s a lot of loose skin in your private area when you lose a lot of weight,” she says. She plans to get a tummy tuck at some point.

Still, intimacy with Kenneth, her husband of eight years, has greatly improved. “A complete 180,” he says. The two now sleep, she says, cuddled up “like a newlywed couple.”

Are emerging market bonds a haven or a risk asset? A bit of both, to judge by the recent global market turmoil.

Some 60% of the asset class is composed of sovereign debt from investment-grade countries, from Poland to Saudi Arabia and South Korea, notes Edward Al-Hussainy, senior currency analyst at Columbia Threadneedle Investments.

Yields on those bonds fell as stocks around the world hit an air pocket in early August. But spreads over U.S. Treasuries, investors’ go-to benchmark, widened by about 20 basis points to 130 basis points, says Jeff Grills, head of emerging markets debt at Aegon Asset Management. (A basis point is 1/100th of a percentage point.)

That looks modest. High-yield emerging market paper widened more, sucking the oxygen out of the year’s hottest trades on turnaround stories like Argentina, Turkey, and Ecuador.

“The lower the credit rating, the bigger the selloff has been,” says Valentina Chen, co-head of emerging market debt at fixed-income specialist MacKay Shields.

Local-currency debt is treading water. But managers worry about the fading of the so-called yen carry trade: borrowing cheaply in Japan to reinvest in high-yielding Latin American markets. As the yen surged 9% over the past month against the dollar, the Mexican peso slid 6% and Brazilian real 3%.

With equities continuing to gyrate, the prevailing mood on emerging market bonds is wait and see. “Activity is muted and bid/ask spreads very wide,” Chen says.

Once some dust settles, though, pickings could be rich at the stronger end of the asset class, says Cem Karacadag, head of emerging markets sovereign debt at Barings. “I liked spreads last week,” he says. “I love them today.”

Emerging markets writ large have been fiscally responsible since the pandemic, while advanced economies gorged on debt. That makes repayment problems unlikely for investment-grade issuers, he argues.

“It would take another Covid shock or global financial crisis to move the needle on fundamentals,” Karacadag argues.

Chen is looking farther afield to corporate credits. One focus is Turkey, where a range of solid corporate borrowers are undervalued because their credit rating cannot exceed the government’s, which is well into junk territory at B+.

She also likes state-owned enterprises in the Middle East, whose credit is backed by oil gushers. Saudi Aramco, the regional giant, issued $6 billion in new debt last month.

Dip-buying looks premature to Al-Hussainy, with the prospect of a U.S. recession back on the table. Federal Reserve rate cuts will help emerging markets if they ease a “soft landing.”

They will hurt if they are a sign that the biggest economy is shrinking. “You’re making a bet on why U.S. rates are coming down,” he says. “Right now, it’s not clear.”

Then there is the small matter of a U.S. presidential election just three months from now. Donald Trump’s return to the White House, particularly with a Republican Congress, would pose multiple threats to emerging markets, Al-Hussainy says—from his proposed 10% tariff on all U.S. imports to tax cuts that could reignite inflation and put rate cuts on hold.

Samy Muaddi, portfolio manager for emerging market bonds at T. Rowe Price, is a bear on valuation. The iShares J.P. Morgan USD Emerging Markets Bond exchange-traded fund has climbed 15% from a trough in October 2022. Few bargains are left at these levels.

“We’re a few days into a correction after almost a two-year rebound,” he says.

Equity investors might think the same, or not.

US junk loan funds suffer biggest outflows in 4 years

Investors withdrew $2.5bn during market plunge on fears of economic slowdown and lower coupons if interest rates fall

US junk loan funds suffered their biggest outflows since early 2020 during the recent plunge in global financial markets, as investors fretted about the impact of a potential economic slowdown on highly indebted companies.

Investors pulled $2.5bn out of funds that invest in junk, or leveraged, loans during the week to August 7, according to data from flow tracker EPFR, with the withdrawals concentrated in exchange traded funds.

The outflows come after weaker-than-expected US jobs data at the start of August reawakened fears of a US recession, which would be likely to hurt lower-quality borrowers.

That prompted investors to dial up their expectations of interest rate cuts, with markets now pricing in four quarter-point reductions by the end of December, compared with two last month.

Leveraged loans are issued by low-grade companies with large debt piles and have floating interest payments — meaning that, unlike fixed-rate bonds, the coupons they pay to investors move up and down with interest rates.

John McClain, portfolio manager at Brandywine Global Investment Management, pointed to “meaningfully lower demand for floating-rate securities” if the market is correct about rates being cut sharply.

“Additionally we’d be getting the cuts as a result of an economic slowdown, which is bad for lower credit quality — a double-whammy for the asset class,” he added.

The $1.3tn loan market is widely perceived to have weaker credit quality overall than its counterpart in the leveraged finance world — the similarly sized high-yield bond market — making it more vulnerable in a recessionary scenario.

A Morningstar LSTA index of US leveraged loan prices on Monday fell to its lowest level of 2024 as the global sell-off in risky assets intensified, although it has since retraced some of those losses. McClain said the market reaction to July’s weak non-farm payrolls data was overdone, and could present an opportunity to increase exposure to the asset class for those who anticipate “slow and shallow cuts” by the Fed. 

More than 80 per cent of the loan fund outflows tracked by EPFR stemmed from ETFs. The weekly ETF outflows were at their highest level on record, according to EPFR.

But while falling yields might render the asset class less attractive to investors, lower interest rates should also help heavily indebted companies, said analysts. 

“There is a silver lining to rate cuts,” said Neha Khoda, strategist at Bank of America, “because while the appeal of loans as an asset class decreases, with a declining rate trajectory . . . The pressure for the lower-rated [borrowers] to meet higher interest costs also decreases and that actually is beneficial for projected defaults.”

A possible drop in rates “does on the margin help these companies out fundamentally”, said Greg Peters, co-chief investment officer of PGIM Fixed Income.

However, BofA’s Khoda said that if the economic outlook worsens substantially then this could affect the whole of the leveraged finance industry.

“If the trajectory of economic growth changes materially — like it did on payrolls Friday — then it’s not a question of floating to fixed — it then becomes a question of outflows from riskier parts of the credit market into safer havens.”