FT : Allianz chief calls for stricter fintech rules after Wirecard scandal

Allianz chief calls for stricter fintech rules after Wirecard scandal
Oliver Bäte says regulation is a ‘major problem’ and similar high-profile cases are likely in future

The chief executive of Allianz, Europe’s largest insurance company, has called for stricter regulation of the areas where technology meets finance in the wake of the Wirecard scandal.

Oliver Bäte said in an interview with the Financial Times that this year’s collapse of the German payments company, which at one point was Europe’s largest fintech, is a symptom of a wider problem. There were likely to be similar cases in the future, he added.

“I think we have a major problem with regulation,” he said. “We need regulation for what people do rather than what they call themselves.”

European regulators treated Wirecard as a tech company rather than a financial services provider, resulting in less oversight over a sprawling business that was processing credit card payments around the world.

The company filed for insolvency in June after revealing a multiyear fraud and a €1.9bn hole in its accounts.

BaFin, Germany’s financial regulator, had direct authority over Wirecard Bank only, a relatively small and notionally independent subsidiary of the Munich-based holding company.

Mr Bäte said: “I think there’s a huge question around who is going to finally have the guts to look at the whole system and say, in a digitalised world, where is the financial risk and how do we get control of it? At the moment I don’t see anybody doing that.”

He highlighted several areas that he said needed particular attention. One is “dark pools” — trading venues that are not open to the public but account for huge volumes of trading in some assets.

“We continuously create . . . trading mechanisms where people can hide and trade outside of transparency,” he said.

He also called for changes to the way technology companies are taxed, with closer links to where their data and customers come from.

“We have not been able to tax properly,” he said. “That’s the thing I would start with . . . I’m flabbergasted by the fact that apparently we as a society cannot get our heads around it.”

The insurance industry, he believes, has room to make improvements, following its experience with coronavirus this year.

Insurers have paid out billions of euros in claims relating to the pandemic, and the Allianz chief executive said the company’s customers were happy with its service. But there has been controversy over the issue of business interruption insurance, with insurance companies resisting claims from customers around the world.

Mr Bäte said the problem lay in the wording of the policies. “You can’t really understand, when you are a business owner, your business interruption policy. It is incomprehensible.”

“If you cannot understand what you are insured for or against without the help of a lawyer, then we as an industry have a problem,” he added.

>>> U.S. CDC Advisory Committee on Immunization Practices Recommends Vaccination

U.S. CDC Advisory Committee on Immunization Practices Recommends Vaccination with Moderna’s COVID-19 Vaccine for Persons 18 Years and Older (update)

Announced that the U.S. Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices (ACIP) voted today to recommend the use of the Moderna COVID-19 vaccine in people 18 years of age and older under the Emergency Use Authorization (EUA) issued by the U.S. Food and Drug Administration (FDA). The committee is comprised of independent health experts. 11 ACIP members voted in favor of the vaccine and 0 members voted against.

Today’s ACIP recommendation follows the December 1, 2020 ACIP recommendation for a Phase 1a rollout in which the first priority for COVID-19 vaccines is given to healthcare personnel treating patients and residents in long-term care facilities. This ACIP recommendation will be forwarded to the Director of the CDC and the U.S. Department of Health and Human Services (HHS) for review and adoption.

The ACIP advises the CDC on the populations and circumstances for which vaccines should be used. The Committee based its recommendation on clinical evidence supporting the Moderna COVID-19 Vaccine including data from Moderna’s 30,000 participant Phase 3 study and ACIP’s interim guidance on the allocation of initial vaccine doses. The Moderna COVID-19 Vaccine was authorized for distribution and use under an EUA on December 18, 2020. The EUA for the Moderna COVID-19 Vaccine is in effect for the duration of the COVID-19 EUA declaration justifying emergency use, unless terminated or revoked. Moderna will continue to gather additional data and plans to file a Biologics License Application (BLA) with the FDA requesting full licensure in 2021.

Under Operation Warp Speed, the U.S. Department of Defense (DoD), in partnership with HHS and the CDC, will manage allocation and distribution of the vaccine in the United States. Approximately 20 million doses will be delivered to the U.S. government by the end of December 2020. The Company expects to have between 100 million and 125 million doses available globally in the first quarter of 2021, with 85-100 million of those available in the U.S.

Barrons : Barron’s Weekend Summary: A panel of market experts says the S&P 500 c

Barron’s Weekend Summary: A panel of market experts says the S&P 500 could gain almost 10 percent in 2021

* Cover story: Barron’s surveyed 10 market strategists and chief investment officers at large banks and money-management firms on the outlook for 2021 and averaged their year-end S&P 500 forecasts, which range from 3800 to 4400—the group expects the index to rise by roughly nine percent next year, to about 4040, and says the US economy should grow by five percent in 2021, its fastest rate since 1984.
* Tech Trader: The tech industry had a strong run in 2020, but next year will be a different story, says columnist Eric Savitz, who offers a number of predictions: The IPO market will be bigger; cloud company valuations will contract for their highs; reopening the economy will help a range of companies, including INTU, YELP, GRPN, BKNG, EXPE, ABNB, and LYFT, while UBER may be weighed down by its food delivery unit; low interest rates and a huge pool of capital will mean more dealmaking; and among big tech, MSFT and AMZN may be the safest bets.
* Trader: Christopher Harvey, US equity strategist at Wells Fargo Securities, suggests buying stocks with high “Covid beta,” those most sensitive to the market’s rise and fall based on good or bad coronavirus news—such as DRI, MGM, and WHR—because they will benefit the most when life returns to normal.
* Interview: Barry Ritholtz and Josh Brown of Ritholtz Wealth Management talk about what they’re doing with their money, what others are doing with their money, and the charms of direct indexing; “Academic research shows it’s much, much harder to be a successful stockpicker, a market timer, or trader than it appears, and you’re better off owning the globe and trying not to get in your own way,” says Ritholtz.
* Profile: Christopher Lees, co-manager of the JOHCM Global Equity fund, says that real estate investors know to “beware good houses in bad neighborhoods,” an idea that also holds for equity markets, where neighborhoods are influenced not by school quality nor commute times, but by market cycles, macroeconomics, and secular trends.
* Features: 1) Positive on Comcast: The media giant seems to be getting crushed by DIS and NFLX, as well as cable rival CHTR, and the stock trails peers, yet shares could pick up steam “as investors come to realize that Comcast’s diverse portfolio—including broadband, film studios, streaming, and theme parks—is well suited to a post-Covid-19 world”; 2) Barron’s picked its top 10 stocks for 2021, a list that has a value bent and includes two returning companies, Berkshire Hathaway and GOOGL; the eight new ones are AAPL, ETN, GS, GHC, KO, MSGE, MRK, and NEM; 3) For investors who want to buy Bitcoin directly through a traditional brokerage account, the options are still limited—more importantly, there is no Bitcoin exchange-traded fund, and there may not be one for years, leaving US investor to buy the cryptocurrency on apps such as Robinhood, Coinbase, and SQ, though users must be watchful for fees.
* Follow-Up: 2021 could be a banner year for bank mergers if vaccines curb the pandemic, and both community and regional banks are apt to accelerate their deal making, heating up a trend that has been going on for decades; RF and CADE could fetch hefty premiums for banks seeking to grow in the Southeast, with PB and BXS possible buyers; With more than 13 million customers, Robinhood could be one of the top initial public offerings of 2021, valued at $20 billion or more, but the company will have to get past recent regulatory actions, expand its revenue sources, and help turn investors into savers.
* European Trader: “The European economy will continue to suffer from the effects of the coronavirus pandemic in the first half of 2021. And while Brexit will mostly hurt the UK, it will have an economic cost for Europe broadly, even if the country signs a trade deal with the European Union before December 31.”
* Emerging Markets: China, South Korea, and Taiwan, which account for two-thirds of the global equities index, flipped the script on developing markets in 2020, quelling the Covid-19 pandemic, while the West struggled—BABA, TSM, Tencent, and Samsung Electronics, the four biggest companies in the emerging markets index, are “world-class pathbreakers.”
* Commodities: Oil futures are on track to end the year significantly lower, as the pandemic’s economic restrictions reduced energy demand—West Texas Intermediate crude is down nearly 22 percent year to date, while Brent crude oil is set to lose almost 23 percent this year for its biggest yearly loss since 2015.
* Streetwise: Answering the question of whether DKNG and SQ shares will shine again in 2021, says columnist Jack Hough, requires predicting when the pandemic will shift, whether policymakers will help or hurt demand for stocks, and whether investors will favor growth or value a year from now—an essentially impossible task.

FT : Brexit talks remain blocked over fishing rights

Brexit talks remain blocked over fishing rights
British officials say EU side is still not showing enough flexibility to get a deal over the line

Fishing rights in Britain’s waters continued to dog talks in Brussels over a future Brexit trade deal on Sunday, as officials weighed whether another phone call between Boris Johnson and European Commission chief Ursula von der Leyen could help to break the deadlock.

British officials insisted the EU offer on fisheries and the fair competition level playing field remained “unacceptable” and accused member states — an apparent reference to France — of not showing enough “flexibility” to get a deal over the line.

France, however, has insisted it would not be pressurised into agreeing a substandard deal, with French president Emmanuel Macron demanding firm guarantees of continued access to UK waters for his country’s fishing boats.

A British government official said on Saturday: “Talks are continuing overnight, but as things stand the offer on the table from the EU remains unacceptable.

“The prime minister will leave no stone unturned in this process, but he is absolutely clear: any agreement must be fair and respect the fundamental position that the UK will be a sovereign nation in three weeks’ time.”

British officials said on Saturday the prime minister was expected to speak to Ms von der Leyen “as planned” on Sunday to take stock of the latest talks on fisheries and the level playing field to ensure fair competition after Brexit.

But EU officials said on Sunday morning that a call was not yet confirmed and Mr Johnson’s allies said that such a conversation was not planned “at the moment”.

On fair competition, the outstanding issues mainly concern limits on state subsidies for companies. One person briefed on the talks said the point was “still difficult but not insurmountable”.

The talks on fish are seen as more problematic with both sides still some distance apart on the fishing rights EU boats should have in UK waters and the length of any transition period designed to cushion the blow for the EU fleet.

“The finishing line is visible,” said one person involved in the talks on Saturday. “But no one wants to cross it.”

Little time is left before a midnight Sunday deadline set by the European Parliament for a future-relationship deal to be struck if it is going to be ratified this year. Some UK officials now say they want the issue settled one way or another before Christmas.

Such a timetable would imply that MPs and MEPs would be asked to scrutinise and approve any deal in the few days between Christmas and the end of the post-Brexit transition period on December 31.

That has alarmed some Conservative Eurosceptic MPs who fear they will be bounced into approving a deal on the future UK-EU relationship with barely any opportunity for scrutiny.

“If a deal will fall apart on inspection, then don’t agree to it,” Steve Baker, former Brexit minister, said on Twitter.

“The idea MPs can be bounced into voting for a bad deal in the hope they will then have to support it afterwards is toxic: it would be despicable to do it. So I would not expect the government to try.” 

Meanwhile Brussels faced accusations of accepting “vicious and unprecedented cuts” to EU fishing rights, after tabling an improved offer to the UK.

The European Fisheries Alliance, a group representing fleets from coastal nations such as Belgium, France, and the Netherlands, warned on Saturday: “The shape of a deal, as [it] currently stands would give a huge blow to the European seafood sector.”

“In spite of repeated promises made, we are in the throes of being sold down the river,” said Gerard van Balsfoort, the organisation's chairman.

Clement Beaune, France’s European affairs minister, said on Saturday: “It may be hard and sometimes tough to understand, but it’s necessary to take the time and, at any rate, not to sacrifice our interests under the pressure of a calendar.”

FT : UK warns of tough restrictions for months after discovery of new Covid stra

UK warns of tough restrictions for months after discovery of new Covid strain
Dutch and Belgian governments ban flights from Britain until at least January 1

British health secretary Matt Hancock has warned that the public face tight restrictions for months as the Dutch and Belgian governments banned flights from the UK to try to halt the spread of a new strain of Covid-19 discovered in Britain.

Mr Hancock, speaking hours after the imposition of tough new curbs — particularly in and around London — warned that there could be difficult months ahead until older and vulnerable people are vaccinated.

Prime minister Boris Johnson on Saturday scrapped previous plans to allow five-day Christmas “bubbles” of multiple households in favour of a single-day exemption. Under a new tier 4, covering 16.4m people in England’s south-east, households are now banned from mixing and non-essential shops and leisure facilities have been closed.

Mr Hancock said the government had faced no choice after data showed that the much faster spread of Covid-19 was due to the new more virulent strain, dubbed VUI2020/12/01.

“It is an enormous challenge, until we can get the vaccine rolled out to protect people. This is what we face over the next couple of months,” he told Sky News, urging everyone in tier 4 to act as if they had the virus.

“The cases in the tier 4 areas have absolutely rocketed in the last few days — the last two weeks or so. We have got a long way to go to solve this.”



The Dutch government announced that from 6am on Sunday all flights from the UK were banned from entering the Netherlands until at least January 1.

It said it had acted after a recommendation from its public health institute and was now awaiting an “explanation of the epidemiological situation in the UK” from London.

The Belgian government said on Sunday that its own ban on flights and rail connections to and from the UK would begin at midnight.

The new variant of Covid has been identified in Denmark, the Netherlands and in Australia, according to Maria Van Kerkhove, Covid-19 technical lead at the World Health Organization. But she told BBC’s The Andrew Marr Show that it had originated in south-east England.

Keir Starmer, leader of the opposition Labour party, warned people to expect the new curbs to last a long time. “It’s a false promise to pretend these restrictions are going to be lifted or change in two weeks because I don’t think they are,” he said at a press conference.

Mr Johnson said on Saturday that the new strain of Covid-19 could be up to 70 per cent more transmissible than the previous variant.

His overnight imposition of new curbs prompted a rush of some Londoners out of the capital and crowds at stations including Paddington and Euston. Mr Hancock criticised what he described as the “totally irresponsible behaviour” of those who had chosen to leave the south-east before it entered tier 4.

The announcements prompted anger from business groups, with retailers in particular raising alarm after having hoped to salvage their worst year in living memory in the pre-Christmas rush.

Ministers have not promised any extra compensation for companies forced to shut their doors once again.

But Sir Keir urged the government to reconsider the support for companies caught by the toughest restrictions. “The one-size-fits-all support isn’t good enough for those businesses, and government is going to need to look again at the plan. It has to help businesses through.”

Meanwhile, some Tory MPs called for a recall of parliament to debate and vote on the new measures, including Mark Harper, former whip and leader of the Covid Recovery Group of backbenchers. “These changes must be put to a vote in the Commons at the earliest opportunity, even if that means a recall of the House,” he said.

John Redwood, a former cabinet minister, said: “Recall Parliament. The government should consider other ways of tackling the virus, protecting the NHS and saving more businesses and livelihoods.”

But Mr Hancock said that while there would be a vote on the plans it would not take place until January.

While Mr Johnson’s new restrictions only relate to England, they have been taken up elsewhere in the UK with Wales entering tier 4 on Saturday night and Scotland announcing a travel ban from other parts of the country.

FT ; Brussels faces fishing backlash as Brexit talks drag on

Brussels faces fishing backlash as Brexit talks drag on
European Fisheries Alliance says EU has gone too far in its efforts to secure post-Brexit trade agreement

Brussels faces accusations of accepting “vicious and unprecedented cuts” to EU fishing rights, after tabling an improved offer to the UK in a bid to overcome the last big stumbling block in talks over the two sides’ future relationship.

Brexit negotiations continued in Brussels on Saturday with EU fishing rights in UK waters the central issue still to be resolved.

With less than two weeks until Britain leaves the EU single market and customs union, with or without a deal, negotiators are under intense pressure to wrap up talks on a “comprehensive partnership agreement” in time for any accord to be ratified before the end of the year.

But on Saturday afternoon representatives of the European fishing sector said the EU was going too far in its efforts to secure an agreement.

The European Fisheries Alliance, a group representing fleets from coastal nations such as Belgium, France, and the Netherlands, said: “The shape of a deal, as [it] currently stands would give a huge blow to the European seafood sector.”

“In spite of repeated promises made, we are in the throes of being sold down the river with the offer made to the United Kingdom by the European Commission,” said Gerard van Balsfoort, the organisation's chairman.

National capitals have long suspected that the future-relationship talks — which cover everything from trade to security — would end with bargaining over fish: an issue on which the UK government is determined to show clear gains from Brexit, and one that is a matter of high political sensitivity for coastal nations. 

People involved in the talks said that, in a bid to break the impasse, the EU had made an improved offer on how much of its existing fishing rights in UK waters — worth €650m per year — it was prepared to sacrifice.

Whereas the EU indicated at the end of last month that it could accept losing 15 to 18 per cent of its quota rights, that offer has now risen to 25 per cent, according to people briefed on the talks. 

This quota cut would be linked to a post-Brexit fishing transition period, during which EU boats would be assured of access to UK waters. Brussels now accepts that this transition could last six years — having previously insisted on eight. 

The proposal is still far removed from UK negotiating objectives — with Britain as recently as last month seeking an 80 per cent cut in EU fishing rights in UK waters.

The European fishing sector has warned of devastation to coastal communities if Brussels does not hold a tough line. 

“We are looking at vicious and unprecedented cuts on a wide range of stocks including our pelagic, shellfish and whitefish sectors,” Mr van Balsfoort said. He added that the situation was worsened by the fact that “fisheries negotiations with the UK are intended to start all over again after only six or seven years,” when the transitional period would end.

Brussels is also under intense pressure from EU leaders, notably French president Emmanuel Macron, not to give more ground.

Mr Macron has repeatedly said the UK cannot expect tariff-free access to the EU market while expelling boats from its fishing waters. 

EU diplomats said that national governments were concerned that some countries could be treated more favourably than others in the bargaining over exactly which fishing rights, for which species, would face the steepest cuts, straining unity at a crunch moment in the talks. 

People involved in the talks cautioned that other parts of the fisheries negotiation remained unresolved: notably the rights of EU boats to fish close to the British coast.

Barrons : Banks Have Begun to Merge Again. Next Year Could See Even More Deals.

Banks Have Begun to Merge Again. Next Year Could See Even More Deals.

After a long pause, bank merger activity has resumed. And to hear Wall Street talk, the momentum may just be beginning.

This past week, Huntington Bancshares (ticker: HBAN) announced plans to acquire TCF Financial (TCF) for $6 billion in an all-stock deal. The merger of the Columbus, Ohio–based Huntington with Detroit’s TCF will give the pair much greater scale. It was the third sizable merger of regional banks to be announced since October, following tie-ups between Raleigh, N.C.’s First Citizens Bancshares (FCNCA) and CIT Group (CIT), and PNC Financial Services (PNC) and the U.S. arm of Spain’s BBVA (BBVA).

Barron’s has been predicting a pickup in regional-bank mergers for some time. In May, we highlighted TCF as an attractive target because of its diversified loan portfolio and relatively low valuation. The deal price amounted to an 11.6% premium over TCF’s share price before the announcement.

The stage was set for regional mergers last year after two large Southern banks, BB&T and SunTrust, agreed to combine, forming Truist Financial (TFC). That $28 billion deal made regionals realize that “if they wanted to be relevant and significant…they needed to be able to stand up against the Big Four,” says Tom Michaud, CEO of Keefe, Bruyette & Woods, referring to JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), and Wells Fargo (WFC).

The coronavirus outbreak put the brakes on deal making, as banks braced for a rising tide of loan losses. But the rationale for mergers has only intensified. Coming out of the crisis, banks will find that scale matters as they seek to navigate rock-bottom interest rates and stiff competition from financial-technology firms like PayPal Holdings (PYPL) and Square (SQ).

In fact, experts say that 2021 could be a banner year for bank mergers if vaccines curb the pandemic. Both community and regional banks are apt to accelerate their deal making, heating up a trend that has been going on for decades.

There’s no shortage of candidates for mergers, either. Jennifer Demba, managing director at Truist Securities, thinks that Regions Financial (RF) and Cadence Bancorporation (CADE) could fetch hefty premiums from banks looking to grow in the Southeast. Among possible buyers: Houston’s Prosperity Bancshares (PB) and BancorpSouth Bank (BXS), based in Mississippi.

Regions Financial says that it’s focused on executing on its financial plan. Prosperity highlighted past acquisitions and said that it will “continually evaluate potential opportunities.” Cadence declined to comment, and BancorpSouth didn’t respond to a request for comment.

NY Post : Ex-Goldman Sachs exec warns of wealth gap ‘revolution’

Ex-Goldman Sachs exec warns of wealth gap ‘revolution’

One Wall Street power player is urging his fellow one-percenters to help close the growing wealth gap — or risk staring down pitchforks and guillotines.

Ex-Goldman Sachs chief financial officer Marty Chavez sounded off on income inequality during an interview with financial news site The Business of Business on Wednesday, while also taking a shot at congresswoman Alexandria Ocasio-Cortez for flaming the class-war fires.

“You don’t want the inequality to become so extreme that it leads to a revolution,” Chavez said. “So, you ought to be prepared to pay to decrease that probability of that happening.”

Chavez said he supports doing this through a universal basic income, which proposes set government payments to all US adults to keep people out of poverty and help fund small businesses and innovation.

But while the 56-year-old ex-Goldman grandee, who is openly gay and a longtime Democratic party donor, is on board with UBI, he was critical of one of the party’s most popular members.

When asked about his thoughts on AOC’s opinion that “there should be no billionaires in the US as long as there are poor families,” Chavez chuckled audibly before throwing shade at the Queens congresswoman.

“I am not in AOC’s camp, AT ALL,” chortled Chavez. “I didn’t vote for her, I wouldn’t vote for her. She’s not saying anything that makes any sense to me. At the same time, I’m a big proponent of universal basic income.”

“It isn’t an inevitable feature of capitalism that the inequality be as extreme as it’s getting,” mused Chavez. “There have been long periods of American history where there has been inequality, but it wasn’t this kind of inequality.”

wed that the income gap in the US was the highest of the world’s seven wealthiest nations. That report was published in February, before the pandemic crushed the economy, leading the largest-ever increase in the US poverty rate.

UBI, a platform of tech entrepreneur Andrew Yang’s failed bid for the 2020 Democratic nomination for president, would most likely be paid for via tax hikes to millionaires, including many of Chavez’ former colleagues.

Still, the star Goldmanite — who was considered a candidate for the CEO gig that eventually went to David Solomon — says he’s not shy about selling his richest and most powerful pals on the idea.

“This is what I say to friends you might call ‘oligarchs’,” Chavez said.

(ZH) The Biggest Questions European Investors Are Asking Before 2021

The Biggest Questions European Investors Are Asking Before 2021

As 2020 draws to a close, here’s what’s on the minds of investors for the year ahead:
  • Will Europe Ever Catch Up? Once again, this region is the laggard of the world. The Stoxx 600 ranks as one of the few major equity benchmarks still below pre-Covid levels. Whether you view that as more room for the catch-up rally or confirmation that Europe is a dud depends on whether you’re a bull or bear.
  • How Long Until Peak Earnings? Everyone knows profits are bouncing back hard, but a full recovery could take a while. JPMorgan strategist Mislav Matejka says the trajectory could be similar to post-crisis periods of 2003 and 2009-2010. He expects euro-area EPS to surge as much as 50% next year, but still be about 7% below the 2019 level.
  • Is 2021 the Year for Value? Most strategists believe the cyclical and value rally can keep going. Energy and banks are still down about 20% this year, but rallied hard since November. On the flip-side, watch miners and auto shares as both industries have nearly doubled since the lows in March.
  • The revival of animal spirits, near-zero bond yields and higher expectations for inflation all argue for higher prices for cyclical stocks, plus investors are feeling more confident with the U.S. election over and Brexit nearing a resolution. Looking at the chart below, there’s still a way to go.
  • Can Markets Survive Without Stimulus? Fragility is fast becoming a buzzword for markets that are vulnerable to investor stampedes and violent reversals. “With monetary policy taps still wide open, more fiscal stimulus likely coming, and the vaccine eventually helping to heal the underlying economy, the risks of an even bigger bubble and resulting fragility shock are real in 2021,” says strategists at Bank of America. The still-elevated VIX is one sign of unease among investors. The fear gauge has been above 20 for more than 200 days, only the fourth time that’s happened since 1990.
  • Will Nordics Keep Trouncing the Rest of Europe? It’s been a year of split performances, with biotech and renewable energy shares fueling a huge rally in Danish stocks, while Spain and the U.K. stocks languish.
  • How Big Will ESG Become? Investors are still pouring money into ethically-focused strategies like never before. This year, ESG funds saw took in $65 billion, triple the amount from 2019.
  • What Could Go Wrong? The pandemic and higher taxes are some of the biggest tail risks for investors. But strategists agree that next year will be more normal year than this one.