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According to sources, the Hong Kong developer and retailer has held discussions about investing in the brand founded by designer Matthew M. Williams.

Does Hong Kong entrepreneur Adrian Cheng have his eye on Matthew M. Williams and his 1017 Alyx 9SM label?

According to sources, Cheng has held discussions about investing in the Milan-based fashion concern.

The likelihood of a deal could not immediately be learned.

Reached via an intermediary last week, Williams declined all comment.

While Williams is most often in the media spotlight as creative director of Givenchy in Paris, he also dotes on 1017 Alyx 9SM, which he now shows in Milan during men’s fashion week.

Established in 2015, the coed label propelled the American designer to become a key ringleader of the burgeoning luxury streetwear scene.

The brand 1017 Alyx 9SM is known for its an industrial-tinged, utilitarian allure; buzzy collaborations with the likes of Nike, Moncler and Audemars Piguet, and its signature roller-coaster buckle, which appears on apparel, bags and shoes.

“It’s a life project, and it’s so personal. It’s named after my daughter,” Williams told WWD in a 2021 interview.

The numbers in the brand moniker reference the designer’s birth date and an abbreviation of the brand’s first studio on Saint Mark’s Place in New York City.

Cheng is the third-generation scion of one of the biggest business dynasties in Asia — spanning from property development and department stores to blockchain start-ups.

Primarily known for his ambitious retail projects as chief executive officer of New World Development and founder of K11 Group, Cheng is also a fashion enthusiast who sits front row at Paris Fashion Week and is among Chanel’s rare male couture clients.

He makes investments via various vehicles, including C Capital, a hedge fund he cofounded in 2017. Since then C Capital has invested in more than 60 “disruptive businesses in the consumer, technology and blockchain sectors globally,” according to its website.

Its portfolio includes Casetify, Bandier, Beautycon, Shein, Moda Operandi, Dazed Media, Not Just a Label and Tagwalk.

New World Development is a vast enterprise with tentacles that stretch into education, health care, insurance, aircraft-leasing and crypto. But its three main businesses are property development, hospitality and retail, including 27 New World department stores, the giant Chow Tai Fook chain for jewelry and watches, plus luxury distributor Luxba Group.

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Mossad chief David Barnea reveals Israel and its international partners foiled 27 attacks planned by Iran, and warns any attack 'against Israelis or Jews, by Iran or its proxies' will lead to an Israeli response

Mossad Director David Barnea expressed concern Sunday that Russia would provide Iran with weapons that would endanger Israel.

Speaking at a conference held at Reichman University, Barnea said that any attack "against Israelis or Jews, by Iran or its proxies," would lead to an Israeli response.

"Any harm done to any Israeli or Jew, in any way whatsoever, and I mean in any way whatsoever, via proxy or Iranian alike, will elicit a response against the Iranians who dispatched the terrorists and the policymakers who authorized the terror units to carry out the plots, from the bottom all the way up to the top," Barnea said.

The Mossad chief added that five factors were driving Iran's "over-inflated self-confidence" and leading to an increase in its so-called pursuit of terror. He listed Tehran's drone sales to Moscow and oil sales to China, its regional agreements with countries like Saudi Arabia, the suppression of the Mahsa Amini protests and Iran's "success in its outrageous hostage diplomacy" among these drivers.

While speaking on arms sales between Moscow and Tehran, Barnea said that "We are concerned that the Russians will meet Iran's demands to supply it with weapons and raw materials that will put Israel at risk."

Barnea also disclosed that Israel, with the help of its international partners, managed to stop more than two dozen Iranian attacks.

"This past year alone, we have worked together with our partners in the Israeli intelligence community and worldwide to disrupt 27 teams that have tried to mount attacks in Europe, Africa, Southeast Asia, and South America. The plots being pursued by these teams were orchestrated, masterminded, and directed by Iran. Each plot disrupted has involved terrorists, weapons, and a target," he said.

The Mossad chief also weighed in on Iran's use of proxies, which he said enables Tehran to act against Israeli with the ability to distance itself from operations. "Iran and its leaders are trying to sell the world the image of an enlightened country, in the hope of joining the family of nations and earning a position of respect," Barnea said.

He added that "this goal and state-sponsored terror are not compatible with one another, but use of proxies enables Iran to hide behind a story."

National Unity Party MK Gadi Eisenkot addressed conference attendees after Barnea's remarks, and cautioned that Israel "does not have a concept of national security" – something he views as a deficiency. He claimed that acts as an "escape" for Israel's leadership and impacts the state's policies on countering terrorism.

Eisenkot added that in the Israeli government – which he described as the IDF's top commander – there are ministers who are "completely detached from reality." The lawmaker said that it is necessary to establish an official concept for national security to act as a compass for security officials and decision-makers involved in Israel's long-term planning alike.

Fannie and Freddie ignore much of what borrowers owe, allowing them to qualify for huge mortgages.

Home prices in the San Francisco Bay Area have plunged amid rising mortgage interest rates. The total value of the city’s homes has fallen by roughly $60 billion since last summer, causing about 1 in 8 recent sellers to take a loss, real-estate website Redfin reported last week.

San Francisco’s deflating home market doesn’t necessarily reflect the whole nation, but it isn’t surprising. Easy money and excessively supportive government policy during the pandemic fueled a surge in housing prices nationwide. The withdrawal of cheap credit will doubtless cause pain, though where and how is hard to predict.

Credit scores of home buyers have generally improved since the 2000 bubble years thanks in part to changes in FICO’s calculations that reduced penalties for unpaid medical debt. A decade of historically low interest rates also made it easier for buyers to finance debt.

Yet perhaps the biggest credit boost came from Obama-era income-based student-loan repayment plans, which capped monthly payments at 10% of discretionary income. Many student borrowers consequently aren’t paying down their debt, but it isn’t counted against them when they attempt to buy homes. While credit scores are improving, it isn’t clear borrowers have become more credit-worthy.

Add to the mix government-sponsored enterprises Fannie Mae and Freddie Mac, which have fueled the housing boom by making it easier for borrowers who can’t afford to repay their student loans to take out bigger mortgages.

Here’s out it works: Mortgage lenders have typically preferred that buyers have a total debt-to-income ratio less than 36%—meaning that monthly debt payments shouldn’t exceed 36% of one’s income. As housing prices climbed, however, Fannie and Freddie allowed home buyers with higher debt-to-income ratios to qualify for government guarantees.

In the second quarter of this year, 26% of new mortgages backed by Freddie had debt-to-income ratios above 45%. Fannie now guarantees mortgages for buyers with debt-to-income ratios up to 50%. But here’s the kicker: Fannie and Freddie exclude much student debt for borrowers in Obama income-based repayment plans. This has enabled many people who can’t afford to pay their student loans to take out mortgages that are $100,000 to $200,000 larger.

Take a couple with two kids that earns $75,000 a year and has $100,000 of student-loan debt. Under a standard repayment plan, they would have to pay about $1,150 per month. Under the Obama plans they would have to pay only about $250. If they apply for a mortgage, only $250 would be counted toward their debt-to-income ratio.

This would enable them to qualify for mortgages with monthly payments $900 larger than they otherwise could if they were paying down their student loans in full. At today’s interest rates, they would qualify for a roughly $120,000 larger mortgage.

It gets better: If borrowers don’t earn enough to make their monthly student-loan payments, no sweat. Mortgage lenders can count their student-loan payment as zero—meaning they can take out even larger mortgages. What could go wrong? For taxpayers, who stand behind the mortgages and student debt, a lot.

At the same time, Fannie and Freddie have reduced the required down payments for lower-income borrowers to 3% from 20% for conventional mortgages. A freelance website designer “ready to buy a home of his own” but still in need of his parents as co-borrowers needn’t worry, Freddie’s website says. He can still qualify for a 3% down payment.

As the housing market has slowed, the nation’s biggest mortgage lenders in recent months began to chip in 2% toward the 3% down payment. Home buyers thus have to scrounge up only a few thousand dollars to buy a new home. Such accommodative policies helped fuel the run-up in prices and are now helping prop them up.

Nonetheless, the median home price nationwide has fallen 13% from its peak last autumn. That means some recent home buyers with low-down-payment mortgages could already be underwater.

Conventional wisdom holds that home owners are in better shape than they were before the 2007-2008 housing meltdown. That may be true, but the combined effects of higher interest rates and inflation could soon start to bite homeowners harder.

Home-insurance premiums are soaring, 20% on average over the last year. If homeowners have to buy a new car because their old one breaks down, their auto-loan payments will spike. Auto-loan and credit-card delinquencies are now at their highest levels in more than a decade. Struggling homeowners may pay their mortgages first to avoid foreclosure, but something may eventually give, and it may not be in housing.

One thing that’s certain is that taxpayers are now standing behind trillions of dollars in risky mortgages and student debt. The former may be saved from default only because borrowers aren’t repaying the latter.

Parent of Facebook and Instagram wants artificial-intelligence system to be as capable as OpenAI’s most advanced model

Meta META -0.26%decrease; red down pointing triangle Platforms is setting its sights on OpenAI.

The parent of Facebook and Instagram is working on a new artificial-intelligence system intended to be as powerful as the most advanced model offered by OpenAI, the Microsoft-backed startup that created ChatGPT, according to people familiar with the matter. Meta aims for its new AI model, which it hopes to be ready next year, to be several times more powerful than the one it released just two months ago, dubbed Llama 2.

The planned system, details of which could still change, would help other companies to build services that produce sophisticated text, analysis and other output. It is the work of a group formed early this year by Meta Chief Executive Mark Zuckerberg to accelerate development of so-called generative AI tools that can produce humanlike expressions. Meta expects to start training the new AI system, known as a large language model, in early 2024, some of the people said.

Plans for the new model, which haven’t previously been reported, are part of Zuckerberg’s effort to assert Meta as a major force in the AI world after it fell behind rivals. Competition in the area has sharply intensified this year, spawning divergent views on everything from which business models are best to how the technology should be regulated.

The company is currently building up the data centers necessary for the job and acquiring more H100s, the most advanced of the Nvidia chips used for such AI training. While Meta joined with Microsoft to make Llama 2 available on Microsoft’s cloud-computing platform Azure, it plans to train the new model on its own infrastructure, some of the people said.

Zuckerberg is pushing for the new model, like Meta’s earlier AI offerings, to be open-sourced and therefore available free for companies to build AI-powered tools.

Zuckerberg will be among a group of top tech executives attending a summit organized by Senate Majority Leader Chuck Schumer (D., N.Y.) on Wednesday to discuss how to handle AI. Sam Altman, OpenAI’s CEO, and Sundar Pichai, Google’s CEO, will also be attending.

The model under development may not close the gap with Meta’s competitors.

Meta hopes it will be roughly as capable as GPT-4, which OpenAI launched in March. GPT-4 underpins OpenAI’s moneymaking initiatives such as the recently launched ChatGPT for Business tool, and the company has been courting others to build on top of the technology as it tries to cover the enormous costs for advanced AI models. Meta’s new model also likely would come out after the expected debut of Gemini, an advanced large language model being built by Google.

Meta’s open-sourced approach has certain advantages. Zuckerberg has championed open-source AI models, which are popular for their lower cost and adaptability.

There also are potential downsides to an open-source model of the power Meta aspires to, say some legal specialists. These include increased risks around use of potentially copyright-protected information and broader access to a tool whose enhanced strength can be used to generate and spread disinformation or other bad actions.

Meta’s lawyers have raised some of these concerns as part of their review of the company’s plans.

“You can’t easily predict what the system would do or its vulnerabilities—what some open source AI systems offer is a limited degree of transparency, reusability and extensibility,” said Sarah West, a former adviser to the Federal Trade Commission who is now managing director of the AI Now Institute, a research institute that has raised concerns about big companies’ control over AI.

Large language models generally get more powerful when trained on more data. The most powerful version of the Llama 2 model that Meta announced in July was trained on 70 billion parameters, a term for the variables in an AI system that is used to measure size. OpenAI hasn’t disclosed the size of GPT-4, but it is estimated to be roughly 20 times that size, at 1.5 trillion parameters. Some AI experts say there could be other methods to achieve GPT-4’s power without necessarily approaching its size.

Deal marrying Twinkies owner with jelly maker could be finalized by Monday

Twinkies owner Hostess Brands TWNK 0.86%increase; green up pointing triangle is closing in on a sale to J.M. Smucker SJM 0.88%increase; green up pointing triangle, a move that would marry the two big names in snacks.

A deal, likely worth something in the neighborhood of $4 billion, could be announced as soon as Monday, assuming the talks don’t hit a last-minute snag, according to people familiar with the matter.

Smucker prevailed in a heated competition with General Mills, parent of Cheerios and Betty Crocker.

A sale would cap off a remarkable turnaround for Hostess, which has been through two Chapter 11 bankruptcies. Two investment firms bought the company out of liquidation a decade ago, returning Twinkies to store shelves after an eight-month absence.

Hostess then returned to the public markets in November 2016, under the ticker symbol TWNK. Its market value currently stands at about $3.7 billion, boosted by a Reuters report last month that the company was exploring a sale.

Based in Lenexa, Kan., Hostess was founded in 1930 and is behind several brands in addition to Twinkies, including Ho-Hos and Ding Dongs.

In recent years, the company has doubled down on America’s growing appetite for snacks, rolling out new products including Bouncers, golf-ball-size versions of Twinkies, Ding Dongs and Donettes, and expanding into sugar-free treats through the acquisition of Voortman Cookies.

Hostess’s sales topped $1.3 billion in 2022, up from $1.1 billion in the prior year, as it raised prices on some of its products. The company’s stock has more than doubled in the past five years, far outpacing the S&P 500 and other big food companies.

Besides its signature jellies, Ohio-based Smucker’s brands include Jif peanut butter and Folgers coffee, Milk-Bone dog treats and frozen, crustless sandwiches known as Uncrustables that have lately gained in popularity.

In August, Smucker reported that its comparable sales for the quarter ended July 31 were up 21% from the prior year, driven by higher prices and sales volumes.

Smucker has a history of doing deals to expand its portfolio and gain new pockets of growth. Its foray into pet food began in 2015 with a $3.2 billion deal for Big Heart Pet Brands, the maker of Milk-Bone dog treats and Meow Mix cat food. It later acquired Ainsworth Pet Nutrition for $1.7 billion in 2018.

Recently, Smucker has gotten a boost from strong coffee demand. The company said in August that consumers are still getting their caffeine fixes at home after spending on at-home brewing systems during the pandemic. Although offices and cafes have reopened, consumers’ new work and lifestyle habits have made at-home coffee consumption standard, it said.

Smucker said at an industry conference last week it would be interested in scooping up new businesses, potentially in coffee, pet snacks or new categories.