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Gen X workers may face the biggest unemployment crisis: Generation

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Gen X workers, who are-, may be bearing the brunt of a global unemployment crisis as the pandemic adds to existing challenges for older workers, according to a new report.

Rapid digital adoption during the pandemic has accelerated the automation of jobs and worsened underlying ageism, making it harder for mid-career workers to secure roles, according to the report from Generation, a non-profit employment organization.

In a global study entitled “Meeting the world’s midcareer challenge,” the firm found that entry-level and intermediate workers between the age of 45 and 60 face increased barriers due to biases among hiring managers, as well as reluctance among workers to learn new skills.

Generation’s CEO said the report had, for the first time, “put a number on ageism.”

It’s very clear that once you reach a certain age, it just becomes much harder to access a job opportunity.

Dr Mona Mourshed

CEO, Generation

“This is a demographic that is absolutely in need and it’s very clear that once you reach a certain age, it just becomes much harder to access a job opportunity,” Mona Mourshed told CNBC Make It.

Ageist misconceptions prevail

The study, which was conducted between March and May 2021, surveyed 3,800 employed and unemployed people from 18 to 60 years old and 1,404 hiring managers across seven countries.

Despite the varied international jobs landscape — from the U.S. to the U.K. and India to Italy — the findings were broadly the same: 45- to 60-year-olds are the most overlooked employee bracket. Indeed, for the past six years, mid-career individuals have made up a consistently high percentage of the long-term unemployed.

Most notably, the research found that hiring managers across the board considered those who are 45-years-old and above to be the worst cohort in terms of application readiness, fitness and previous experience.

Among their top concerns were a perceived reluctance among older workers to try new technologies (38%), an inability to learn new skills (27%), and difficulty in working with other generations (21%).

It comes in spite of evidence that older workers often outperform their younger peers. Indeed, almost nine in 10 (87%) hiring managers said their hires who are 45 years and above have been as good as — or better — than younger employees.

Mourshed said the findings highlight underlying biases at play in the workplace.

“It is often the case that like identifies with like when it comes to ‘isms,'” she said.

For instance, she explained, there is a tendency among hiring managers to opt for hires in their age group. Meanwhile, C.V.-based interviews can make it hard for candidates to demonstrate their skills, she added.

Re-engaging a lost workforce

Training could provide one solution to the issue. Still, the report also highlighted a reluctance to pursue training among jobseekers who are 45 years and above.

More than half (57%) of entry-level and intermediate-level job seekers expressed a resistance to reskilling, while just 1% said training increased their confidence when looking for work. Often, that is due to negative experiences of education, conflicting personal duties, and lack of available programs and financial support for mid-career workers, said Mourshed.

Given that it is 2021, intergenerational workforces must be a reality.

Dr Mona Mourshed

CEO, Generation

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Global sentiment remains tepid, growth, data in focus

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LONDON — European markets closed lower on Friday as global investors continued to weigh the prospect of slowing economic growth.

The pan-European Stoxx 600 closed down by nearly 1%, having earlier been up by as much as 0.7%. Travel and leisure stocks added 1.1% to lead gains while basic resources fell 4%. The Stoxx 600 also saw a weekly decline of 1%, down for the third straight week.

Shares in Asia-Pacific were mixed on Friday after taking losses for much of the week as concerns about China’s regulatory crackdown and slowing global growth weighed on risk sentiment. China Evergrande Group shares continued to plummet amid fears over its debt problems.

Stateside, stocks dipped on Friday as investors remained cautious due to a resurgent Covid virus, and a Federal Reserve meeting next week.

Investors in recent days have been reacting to softer U.S. inflation data which tempered expectations of imminent tapering of asset purchases by the Federal Reserve, and weak retail sales figures from China, which suggested a slowdown in the global economic recovery.

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Data on Friday showed that U.K. retail sales fell unexpectedly in August, dropping 0.9% month-on-month against a Reuters average forecast for a 0.5% rise. The fourth consecutive monthly decline marks the longest negative streak since records began.

In corporate news, French automaker Renault announced Thursday that it will ax up to 2,000 engineering and support jobs in France amid a mass transition toward electric vehicles.

In terms of individual share price movement on Friday, Sweden’s Dometic Group rose 1% after agreeing to a $677 million deal to buy U.S. drinkware manufacturer Igloo.

At the bottom of the European blue chip index, British-listed mining giant Anglo American fell 8.2% after UBS and Morgan Stanley both downgraded the stock and cut their price targets.

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Suspicious bets made before Goldman’s $2.2 billion acquisition of GreenSky

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Sam Edwards | Getty Images

The day before Goldman Sachs announced its $2.2 billion purchase of fintech lender GreenSky, someone placed options trades that immediately soared in value, moves that market participants say indicates advance knowledge of the deal.

On Sept. 14, the trader bought 8,000 options that would only pay off if the price of GreenSky rose above $10, according to the market participants. The options were out of the money —  meaning that GreenSky was trading well below the strike price —  and cost just a nickel per share.

After news of the deal hit, the value of the contracts, each allowing for the purchase of 100 shares of GreenSky, skyrocketed. The trader made an astounding 3,900% gain in a single day, the market sources say. That means a $40,000 bet would’ve turned into about $1.6 million.

Acquisitions are complicated transactions involving teams of bankers, lawyers and other specialists with access to market-moving information. With that many sets of eyes on a deal, information often leaks. As many as one quarter of all public company deals result in some form of insider trading, often involving out-of-the-money calls in the options market, according to a 2014 study by professors at the Stern School of Business at New York University and McGill University.

Although there have been insider-trading cases ensnaring high-profile perpetrators, instances in which people used material, non-public information in the markets, most times the activity goes unpunished, according to the 2014 study.

Goldman Sachs declined to comment for this article. A GreenSky representative didn’t respond to voice messages. The Securities and Exchange Commission and the Financial Industry Regulatory Authority didn’t immediately return calls seeking comment.

Goldman was its own financial advisor and used Sullivan & Cromwell as legal counsel. JPMorgan Chase and FT Partners advised GreenSky, who also used law firms Cravath, Swaine & Moore and Troutman Pepper Hamilton Sanders.

GreenSky’s board also retained its own bankers and lawyers at Piper Sandler and Wilson Sonsini Goodrich & Rosati. The banks and law firms declined to comment or didn’t immediately respond to messages.

‘Nobody’s that lucky’

The Sept. 14 trades weren’t the only unusually prescient bets made ahead of the Goldman deal.

Options activity for GreenSky is typically muted, with fewer than 1,000 calls making up the average daily volume. Wagers in soon-to-be-profitable $10 call options surged over the last two weeks, however, indicating that it’s possible multiple traders had knowledge of the deal.

Volumes went from 153 calls on Sept. 7 to 7,175 calls by Sept. 9, according to Jon Najarian, a veteran trader and CNBC contributor. By Sept. 13, two days before the announcement, call volumes hit 12,755. The contracts were mostly sold for a profit on Sept. 15, he said.

“When we see unusual activity like that, we tend to think that somebody had tomorrow’s newspaper today,” Najarian said. “Nobody’s that lucky. Whoever bought those calls will probably face regulators.”

The trades were so brazen — with some of the calls set to expire in just days — that whoever made them must be inexperienced, according to a former Wall Street executive with more than four decades of markets knowledge. There are ways to structure the bets that would make them less obvious to regulators, he said.

“This looks like a 22-year-old kid who didn’t know what they were doing,” he said. “But it’s a no brainer, they had inside information.”

The financial columnist Matt Levine, a former Goldman banker who has written extensively about insider trading, has a few guidelines when it comes to the prohibited activity. His first rule (“don’t do it”) is followed by a second:

“If you have inside information about an upcoming merger, don’t buy short-dated out-of-the-money call options on the target,” Levine wrote in a 2014 column. “The SEC will get you!”

With reporting contribution from CNBC’s Bob Pisani.

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JPMorgan to launch digital bank in the UK next week

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Signage outside a Chase bank branch in San Francisco, California, on Monday, July 12, 2021.

David Paul Morris | Bloomberg | Getty Images

LONDON — JPMorgan Chase is gearing up to debut its hotly anticipated digital bank in the U.K. next week.

The move will see the U.S. banking giant take on major British lenders including HSBC, Barclays, Lloyds and NatWest, as well as start-ups like Monzo and Starling.

JPMorgan will also step up its rivalry with Goldman Sachs, which launched its Marcus digital bank product in the U.K. in 2018.

New York-based JPMorgan first unveiled plans to launch its Chase brand in the U.K. earlier this year. Rather than establishing physical branches, JPMorgan will only offer its services through a mobile app.

It marks the first international expansion of JPMorgan’s consumer bank brand in its 222-year history.

The news was initially reported by the Financial Times and later confirmed by CNBC.

Sanoke Viswanathan, CEO of JPMorgan’s international consumer division, said the bank’s U.K. expansion was a “very big strategic commitment.”

“We will spend hundreds of millions before we get to break-even and get to a place where this is a sustainable business, and we’re not in a rush,” he told the FT.

Chase will initially offer checking accounts along with a rewards program. It also plans personal loans, investments and mortgages further down the line.

The U.K. is home to an increasingly crowded retail banking market. Fintech-friendly regulations have enabled challengers like Monzo, Revolut and Starling — which offer checking accounts and other services via smartphone — to flourish and become billion-dollar companies.

These digital banks have gained millions of customers between them, while some have even tried their luck at entering the U.S. market. Revolut, which now has over 15 million customers, was last valued at $33 billion, making it the U.K.’s most valuable tech start-up.

JPMorgan’s arrival in the U.K. will place further pressure on the country’s traditional lenders. State-backed lender NatWest notoriously tried and failed to take on fintech challengers with a competing digital bank called Bó.

Under CEO Jamie Dimon, JPMorgan has sought to combat the threat of fintech stars like PayPal and Square through a number of acquisitions.

As part of its effort to expand in the U.K., the bank agreed to acquire online wealth manager Nutmeg in June. Later that month, it announced a deal to buy OpenInvest, an ethically-minded investment platform based in San Francisco.

Earlier this month, JPMorgan said it plans to buy a majority stake in Volkswagen’s online payments unit.

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