WSJ : MIT Reversed Its Position on the SAT. How About Racial Preferences Next?

MIT Reversed Its Position on the SAT. How About Racial Preferences Next?
Admissions policies implemented in the 1990s restrict the number of Asian-American students.

James Freeman is right to praise the Massachusetts Institute of Technology, my alma mater, for bringing back standardized testing for admissions, which was suspended during Covid (“Go Tech!” Best of the Web, March 29). But he gives MIT too much credit. The school has not done anything to end the racially discriminatory admissions policies it implemented in the 1990s to restrict the number of Asian-American students and increase the number of black and Hispanic students.

As shown in a 2018 analysis of MIT enrollment data by Althea Nagai, the university implemented preferences and racial quotas to cap the number of Asian-American students admitted and to admit other minority students with lower academic qualifications, credentials and test scores. As a result, the admission rate of Asian Americans topped out at about a quarter of the freshman class.

In comparison, CalTech, MIT’s rival for the title of best engineering and science school in the country, never implemented racial preferences and quotas. Its percentage of Asian-American students rose steadily to above 40% by 2016, paralleling the “swift rise” in the “number of Asian undergraduates nationally,” as Ms. Nagai explains.

None of this is a surprise, given that the former MIT dean of admissions, Marilee Jones, commented that a Korean-American applicant “looked like a thousand other Korean kids with the exact same profile of grades and activities and temperament, . . . yet another textureless math grind.”

Stuart Schmill, the current dean of admissions, said nothing about ending MIT’s discriminatory admissions policy when he announced the reinstatement of standardized testing. Until he does that, no alumnus should give MIT any funding or support and the school should lose its holier-than-thou attitude.

Hans von Spakovsky

Heritage Foundation

Washington

WSJ : Neiman Marcus Gets $200 Million Investment From Farfetch

Neiman Marcus Gets $200 Million Investment From Farfetch
Farfetch to power online expansion of retailer’s Bergdorf Goodman brand overseas, while Neiman aims to put some brands on luxury platform

Online luxury retail platform Farfetch Ltd. is investing $200 million in Neiman Marcus Group, in a deal that shows how much the internet has upended luxury fashion.

The agreement initially will allow Neiman Marcus’s Berdgorf Goodman brand to expand overseas digitally by using Farfetch’s technology to power its digital business. The ultimate scope is far broader. Neiman Marcus is considering making some brands it carries—with their permission—available on Farfetch’s marketplace, the companies said. Eventually, Farfetch will use its technology to link Neiman Marcus’s stores more closely with e-commerce by arming sales people with technology that enables them to recognize online shoppers when they enter stores.

“We believe luxury customers will always want the opportunity to have a physical interaction with a human,” said Neiman Marcus Chief Executive Geoffroy van Raemdonck. “We are taking the best components of Farfetch and Neiman Marcus to enhance the experience.”

It wasn’t long ago that Neiman Marcus was the company making investments in a wired future. It bought online luxury retailer Mytheresa.com in 2014.

Behind the glitter, Neiman Marcus struggled under $5.1 billion in debt from two successive leveraged buyouts. When the Covid-19 pandemic temporarily shut its stores, the company tipped into bankruptcy in May 2020.

It had spun off Mytheresa in 2018, putting it out of reach of creditors, who waged a two-year campaign to win back the asset. An agreement was reached as part of a bankruptcy deal, and Mytheresa went public last year.

Neiman emerged from bankruptcy in September 2020 under new owners, including Pacific Investment Management Co., Davidson Kempner Capital Management LP and Sixth Street Partners LLC. Farfetch will hold a minority stake in the company, which now has $1.1 billion in debt.

Farfetch Chief Executive José Neves, a Portuguese businessman, started the company in 2008 as an online marketplace that matches buyers with sellers. It has evolved into a provider of e-commerce technology for luxury brands, including Chanel and Harrods, the British department store. It also owns Browns, which operates two luxury boutiques in London, and Stadium Goods, a sneaker and streetwear retailer and marketplace.

Based in London, Farfetch went public in 2018. For the year ended Dec. 31, it earned a profit of $1.47 billion on revenue of $2.26 billion.

In 2020, Farfetch formed a partnership with Chinese e-commerce company Alibaba Group Holding Ltd. and Swiss conglomerate Compagnie Financière Richemont SA, which owns brands from Cartier to Chloé, to provide luxury brands with greater access to the Chinese market and speed the digitization of the luxury industry.

Farfetch and Richemont, which also owns the online fashion retailer YOOX Net-a-Porter Group S.p.A, are in talks to expand their partnership, the companies have said.

The deal with Neiman Marcus will give Farfetch a foothold in the U.S. For Neiman Marcus, the partnership will make its brands more accessible to international customers, the retailer said. It operates 37 Neiman Marcus department stores and two Berdgorf Goodman stores in the U.S. but doesn’t have any locations overseas. It scaled back online operations in China in 2013.

Mr. van Raemdonck said that to bring the Bergdorf Goodman brand to shoppers around the world requires a host of capabilities from translation to payments to call centers. “All of that will be provided by Farfetch,” he said.

Neil Saunders, managing director of research firm GlobalData PLC, said aligning itself with Farfetch will also give Neiman Marcus access to younger customers and help it transform its digital business faster.

Rival Saks Fifth Avenue last year split its e-commerce and stores into two separate companies in a bid to become more competitive online.

Mr. Neves said that despite Farfetch’s push to digitize luxury, the experience doesn’t always translate well on the internet. “There is an element of physicality and human relationship to luxury shopping that cannot be replicated online,” he said.

Mr. Neves estimated two-thirds of luxury purchases will be made in stores for the foreseeable future. He said he wants to reinvent the store experience by adding more digital elements.

Mr. van Raemdonck recently toured Browns in London, where Farfetch has been putting some of its ideas into action. An app lets salespeople recognize shoppers when they enter the store and gives them access to their browsing and purchase history.

“Otherwise, when you enter a store, no one knows you, and they don’t know what you’re looking for,” Mr. Neves said. “We’re trying to elevate the experience without removing the human element.”

WSJ : Two Daughters of Putin Face Possible EU Sanctions Over Ukraine Invasion

Two Daughters of Putin Face Possible EU Sanctions Over Ukraine Invasion
Brussels also announced moves to restrict Russian coal, though measures still need approval from EU members

The European Union has proposed sanctioning two daughters of President Vladimir Putin, according to diplomats familiar with the plan, a move that would add the Russian leader’s closest family members to a growing list of individuals sanctioned in response to Russia’s invasion of Ukraine.

EU member states still must approve the sanctions, which are among dozens of newly proposed, targeted travel bans and asset freezes against Russian business people, politicians, officials and their families. EU officials announced details of other new sanctions earlier Tuesday. They include a ban on imports of Russian coal, slashing the access of Russian road carriers and ships into the bloc, restrictions aimed at oligarchs and their families, and the blocking of some high-technology machinery exports.

Mr. Putin doesn’t speak publicly about his family. He has two daughters with his former wife, Lyudmila Putina, according to the Kremlin. It isn’t known if Mr. Putin has other children, and it couldn’t be learned if the daughters being targeted in the EU sanctions were those he has publicly acknowledged.

In 2013, the couple said their marriage was over. The following year, the Kremlin confirmed that the Russian president had finalized the divorce of his wife of nearly 30 years. The Kremlin didn’t immediately respond to a request for comment about the EU sanction plans.

The president’s personal life is generally shrouded in secrecy. His separation in 2013 from his wife, a former stewardess for Russia’s national carrier Aeroflot, came in a surprise announcement in a brief appearance after a performance of the ballet “La Esmeralda” at the Kremlin theater. It set the stage for the first divorce, the following year, of a Russian leader since Peter the Great and ended years of speculation about the state of the couple’s union. Mr. Putin described the end of the marriage as a “joint decision.”

The couple’s daughters have largely kept out of public view, to such an extent that many Russians don’t know what they look like.

In 2020, presidential spokesman Dmitry Peskov told reporters that Mr. Putin doesn’t pay attention to various publications about his private life and his state of health. The Russian president usually explains his reluctance to talk about his personal life “as a matter of security and a desire to remain anonymous for his loved ones so they can live a normal life,” Russia’s state news agency, TASS reported that year.

FT : Poland blocks EU move to sign up to minimum corporate tax

Poland blocks EU move to sign up to minimum corporate tax
Warsaw move holds up implementation of landmark reform agreed last year

Poland has blocked progress of an EU directive seeking to implement the global minimum corporate tax agreed last year, setting back the bloc’s efforts to adopt the measure.

In a landmark agreement in October last year, 137 countries backed the introduction of a new 15 per cent minimum effective corporate tax rate on large businesses, known as pillar two.

The reform is set to raise global tax revenues by more than $150bn a year. The same agreement also backed forcing the world’s 100 biggest multinationals to declare profits and pay more tax in the countries where they do business, known as “pillar one”.

In order to make the deal a reality, countries need to put the minimum tax into their domestic law. The EU plans to do this via a directive and requires unanimity from all member states for the measure to go ahead.

However, on Tuesday, Poland disrupted the plans by opposing the proposed directive at a meeting of EU finance ministers in Luxembourg.

Magdalena Rzeczkowska, Poland’s finance minister, argued that the country could not support the minimum tax going ahead without first having “legally binding” assurances that reforms targeting the largest 100 companies would be enacted.

That part of the deal requires countries to agree a multilateral convention, and negotiations are running slower than the plans for the global minimum tax.

Rzeczkowska said: “We strongly believe that we should be mindful of the inadequacy of placing additional burden on European businesses under pillar two without ensuring the digital giants are fully taxed under pillar one.”

The decision sparked frustration from other member states including France, whose finance minister Bruno Le Maire has been leading negotiations on the directive as part of France’s presidency of the EU, which ends in June.

He pointed out that the deal had been supported by all EU member states, including Poland, at the international level via the OECD negotiations. The council had “addressed” Poland’s concerns by including wording that indicated the EU’s intention for the two parts of the deal to work as a package.

“I’ll say very clearly, I am absolutely not convinced by the Polish argument,” Le Maire said at the council meeting. All member states had worked towards finding consensus, he added, saying he “deeply regret[ed] that Poland does not understand that”.

Speaking after the meeting of the economic and financial affairs council, Valdis Dombrovskis, commission executive vice-president, said he was not in a position to interpret the motivations and justifications of Poland. But he was hopeful that there would be agreement at next month’s meeting.

“This mystery has to be brought up with Warsaw, rather than the French presidency,” added Le Maire.

Separately, Poland is engaged in negotiations with Brussels to unlock its portion of the EU’s recovery funds.

The development means that implementation of the global tax deal remains stalled on both sides of the Atlantic.

The draft legislation contained in US president Joe Biden’s build back better bill, which would align the US tax system with the international proposal on a global minimum tax, has been delayed as a result of the Democrats’ inability to gain backing from within the party.

No draft legislation has yet been brought forward in Washington and Brussels on pillar one.

However, when asked if the global tax deal was in “jeopardy” because of hurdles in the US and EU, Le Maire said that determination to pass the deal remained strong.

FT : Cryptocurrencies: UK should not be a light touch for DeFi heavy squad

Cryptocurrencies: UK should not be a light touch for DeFi heavy squad
Treasury’s ambitions for the City do not alter the case for stringent regulation of the sector

The City of London is forever trying on new mantles. In 2012, UK chancellor George Osborne spearheaded a push to make it the biggest renminbi trading hub outside China. Six years later, his successor Philip Hammond talked up the UK’s chances of leading the world in green finance. Now, the Treasury is turning its attention to blockchain. It declared an oxymoronic ambition to make Britain a “global hub” for the decentralised finance (DeFi) industry this week.

The announcement was not taken as seriously as the government would like. Chancellor Rishi Sunak billed plans for the Royal Mint to issue a non-fungible token as an emblem of the UK’s “forward-looking approach”. The reality, say lobbyists, is rather different. Earlier this year, ex-chancellor Hammond, now a senior adviser for crypto company Copper, claimed Britain had been outpaced by other finance hubs, including in the EU, in regulating the sector.

Champions of innovation have to contend with worried watchdogs. On the same day the Treasury rolled out the welcome mat, Bank of England governor Andrew Bailey was decrying cryptocurrencies as the new “front line” in criminal scams.

Crypto groups now have to pass money laundering checks to operate in the UK. More than 80 per cent of the companies that sought full registration from the Financial Conduct Authority have either withdrawn their applications or were rejected. But those businesses can still sell their services in the UK. That is likely to be bad for British consumer protection, as well as UK-based jobs.

The UK is not alone in struggling with these issues. In the US it is unclear which US financial regulator is supposed to oversee crypto businesses. Securities and Exchange Commission chair Gary Gensler this week proposed splitting oversight with another agency.

The Treasury should not be howled down for trying to spot new opportunities for the UK’s finance industry. Its plan to regulate a broader set of crypto activities is welcome. But its ambitions for the City do not alter the case for stringent regulation. This is not a sector that suits a light touch.

>>> US Gapping down


Gapping down
In reaction to earnings/guidance:

  • CGNT -28.8%, LNN -0.6%

Other news:

  • XPOF -6.9% (announced secondary offering of common stock by selling stockholders) TRIN -4.2% (announced public offering of common stock)
  • FLDM -1.3% (completes $250 mln strategic capital infusion; changes name to "Standard BioTools")
  • BIIB -1.2% (presented new data from multiple sclerosis portfolio at AAN 2022)

Analyst comments:

  • BRCC -15.1% (downgraded to Mkt Perform from Outperform at Raymond James)
  • CVNA -3.7% (downgraded to Sector Perform from Outperform at RBC Capital Mkts)
  • CFG -0.8% (downgraded to Mkt Perform from Outperform at Keefe Bruyette)

>>> US Gapping up


Gapping up
In reaction to earnings/guidance:

  • CARS +3.9%, AYI +3.8%, SUPN +3.6%

Other news:

  • RCUS +12.4% (appointed to join S&P SmallCap 600)
  • ANY +7.4% (mutually agreed to terminate merger agreement with Gryphon Digital Mining)
  • TBPH +6.8% (announced results from Study 0170)
  • CUK +4.7% (reported that March 28-April 3 was the busiest booking week in company history)
  • CSTL +4.4% (agreed to acquire AltheaDx)
  • KSCP +4.2% (announced committed equity facility with B. Riley)
  • LEV +2.6% (received order for 50 all-electric school buses from Autobus Campeau)
  • MARA +1.5% (announces bitcoin production and mining operation updates for March 2022; saw a 21% increase in self-mined bitcoin from February)
  • RHP +1.3% (invests in Opry Entertainment Group by Atairos and NBCUniversal)
  • KGC +1.3% (divests Russian assets)
  • ARGX +1.1% (Presents Interim Results from ADAPT+ Open-Label Extension Study Evaluating VYVGART (efgartigimod alfa-fcab) in Generalized Myasthenia Gravis at 2022 AAN Annual Meeting)

Analyst comments:

  • CLH +0.9% (upgraded to Neutral from Sell at Goldman)