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Amazon shares fall after Trump bashes company for fourth time in a week

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President Donald Trump took to Twitter for the fourth time in one week to bash e-commerce company Amazon on Tuesday.

This time, the president reinforced his assessment that Amazon’s business is costing taxpayers “many billions of dollars” through subsidized rates at the United States Post Office.

“I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy,” Trump tweeted. “Amazon should pay these costs (plus) and not have them bourne [sic] by the American Taxpayer.”

Shares of Amazon turned negative shortly after the president’s tweet. At the latest reading, shares were down 0.7 percent.

The president has claimed in prior Twitter messages that the Post Office loses “a fortune” thanks to Amazon’s large shipping volumes while the company benefits from the government’s postal service.

Many would argue, however, that Amazon has been a positive for the postal service, which has suffered from bleak finances for more than a decade as other means of communication replace first class mail.

Still, Trump categorized Amazon’s relationship with the post office as a “scam” on Saturday.

The president’s extraordinary criticism of Amazon has also centered on the company’s policy of not collecting state and local taxes from the vast majority of its third-party sellers. The practice, Trump alleges, puts “many thousands of retailers” out of business, unable to survive against Jeff Bezos’ ever-growing consumer titan.

The president underscored his feelings toward the company in a tweet Monday morning, saying: “Our fully tax paying retailers are closing stores all over the country … not a level playing field!”

Amazon already collects state sales taxes on products it sells directly, but the company does not collect state sales taxes for its third-party platform outside of a handful of states. The third-party business represents roughly half of Amazon’s unit sales, according to multiple Wall Street firms.

Shares fell last week after Axios reported last Wednesday that Trump was considering changes to the retailer’s tax treatment, in part because of anger over how Amazon has hurt the commercial real estate industry because of its negative effect on brick-and-mortar retailers.



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Dogecoin rallies on Elon Musk tweet, anticipated Coinbase listing

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Dogecoin soared more than 40% early Friday after a tweet from supporter Elon Musk and as Coinbase said it would list the meme-inspired cryptocurrency.

The price of dogecoin rose to an intraday high of around 55 cents at 2:30 a.m. ET, according to data from Coin Metrics. It’s still down about 18% from a record high of nearly 67 cents only a week ago.

Musk tweeted Thursday that he was working with dogecoin developers to improve the efficiency of transactions.

On Wednesday, the Tesla CEO made a surprise announcement that his electric car firm would stop accepting bitcoin as payment due to concerns over its environmental impact.

That led to a brutal sell-off in cryptocurrencies, including dogecoin. Dogecoin had already fallen significantly after Musk’s appearance on Saturday Night Live, in which he called the digital coin a “hustle.”

Meanwhile, crypto exchange platform Coinbase said Thursday it would offer dogecoin support in the next six to eight weeks. Many crypto traders have flocked to the zero-fee investing app Robinhood to trade the meme token; now Coinbase’s move could lead to more trading activity.

Dogecoin isn’t taken very seriously by loyal bitcoin supporters. It started in 2013 as a joke, inspired by the “Doge” meme, but has since found a growing community online. Dogecoin is now the fourth-largest crypto by market value on CoinMarketCap, worth over $69 billion.

Financial experts warn that dogecoin is a highly speculative asset. It has stoked worries over a potential bubble in crypto markets — though some economists would say all cryptocurrencies are in a bubble.

Last week, Bank of England Governor Andrew Bailey warned crypto investors should be “prepared to lose all your money,” echoing a similar warning from the U.K.’s Financial Conduct Authority.

Bitcoin was marginally higher Friday, with the world’s biggest digital asset up about 0.3% at a price of $49,052. Ether, the second-biggest cryptocurrency, rose 3.6%, to $3,805.

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Slow population growth leading to lower real interest rates

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Slowing population growth across the globe could have a major impact on real interest rates, according to new research from JP Morgan.

With more old people saving for retirement and fewer young people borrowing for things like properties, cars and education, demographics are weighing heavy on interest rates in a trend that is set to continue, Jesse Edgerton, a senior economist at JP Morgan and author of the report, told CNBC.

“The slowdown in population growth, which we’ve been seeing for decades in both developed and emerging markets, is a reason to expect lower real interest rates,” Edgerton told “Street Signs Asia” Thursday.

His evidence? “The history of economic development, really,” he said.

Interest rates on the decline in developed nations

A woman holds a baby at a local park on May 12, 2021 in Beijing, China.

Kevin Frayer | Getty Images News | Getty Images

That’s because money is not being put to work in the same way, driving down returns and interest rates, said Edgerton.

“Slow population growth essentially means that there’s excess capital in the world. There’s excess money searching for yield. And all that money that people are trying to save — it’s going to push down interest rates, it’s going to push down returns on capital,” he said.

Knock-on effects for savings and investments

The shifting interest rate outlook has implications not only for savings accounts and assets like bonds, which are directly correlated to interest rates, but also equities and real estate. Falling rates could mean lower average price-to-earnings (PE) ratios, said Edgerton.

PE ratios are used to determine valuation, and high PE ratios could mean the asset is overpriced, or that investors predict strong future growth.

If you’re living in a world with lower population growth, you should expect to earn lower returns.

Jesse Edgerton

senior economist, J.P. Morgan

“I do think we should expect higher PE ratios to be the new normal in this world of lower population growth,” he noted.

And while a declining population growth is not necessarily a bad thing overall, said Edgerton, it does mean saving for retirement could become even more elusive moving forward.

“If you’re living in a world with lower population growth, you should expect to earn lower returns on your assets when you’re saving for retirement. You might be needing to set aside more,” he said.

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Ireland wants remote working to now revive its rural towns

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Terrace of historic shops and buildings, Skibbereen, County Cork, Ireland, Irish Republic. (Photo by: Geography Photos/Universal Images Group via Getty Images)

Geography Photos | Universal Images Group | Getty Images

DUBLIN — In March, the Irish government unveiled a plan to revive the country’s rural economy by enticing more people to work remotely.

A long-standing challenge for rural Ireland has been the migration to urban areas. With the shadow of the Covid-19 pandemic and what can be achieved through remote working, the Our Rural Future plan aims to incentivize more people to stay in or move to non-urban areas.

The plan commits to providing financial support for local authorities to turn vacant properties in towns into remote working hubs. This includes a plan for “over 400 remote working facilities” across the country.

Grainne O’Keeffe has first-hand experience of attracting people to a rural town. She heads up the Ludgate Hub, a co-working space and start-up support organization in the small town of Skibbereen, about 80 km west of the city of Cork in the south of Ireland.

Ludgate Hub — which is named after scientist Percy Ludgate — was set up in 2016 and was an early mover in rural start-up efforts.

O’Keeffe told CNBC that Ludgate provides a practical example of attracting founders and employees to a small town.

It operates out of an old bakery and is opening a second facility in an empty school building later this year. It has mostly attracted individuals whose start-ups allow for working remotely, including Eric Yuan-backed start-up Workvivo.

O’Keeffe said significant investments in physical infrastructure like high-speed broadband and sourcing suitable buildings are key to making any town viable for remote working.

Skibbereen is connected to high-speed broadband through a Vodafone-led venture called Siro.

“That is without doubt a game changer for every region. That is fundamental and so is having a building that is conducive to a work environment,” she said.

Rural broadband connectivity has been a regular bugbear in Ireland. The government’s National Broadband Plan is rolling out services in previously underserved areas but it has had its fair share of delays. Other operators like Eir are in the midst of their own rural rollouts while Elon Musk’s Starlink is testing in one location in Ireland.

Work environment

Garret Flower made the move from Dublin to his native county of Longford, in the midlands. He is the chief executive of software start-up ParkOffice, whose team of 15 has now gone fully remote.

“The countryside has so much to offer,” he said. “I think remote working is something that can really drive people back to the rural areas.”

But he also warned against an over reliance on home working. As lockdowns eventually ease, the availability of office space or desks in towns and villages will be a key component of any strategy, he said.

“Not everyone has an enjoyable living area to work from. You can’t put that pressure on everybody to be able to work from their home. I grew up in the family home and it was chaos. I could never have worked with everyone there in the house,” he said.

Separately, a government-funded start-up accelerator called NDRC, which is now run by a consortium of business groups around the country, is focusing on developing start-up ecosystems in more diverse areas of the country.

One of its members is the RDI Hub, a facility in the town of Killorglin in County Kerry, in the southwest of the country.

“In Kerry we traditionally have a very ingrained migration. People leave Kerry. It’s rare that you would stay, most people go away for college, most people go away to start a job. Some come back but the majority go and keep going,” said Reidin O’Connor, the manager of RDI Hub.

O’Connor is from the area originally and relocated from Dublin with her partner and children a few months before the pandemic arrived.

She said that government efforts on remote working hubs need to focus not only on workers but how they can be integrated into local communities as well.

“Hubs should be the space where you have your start-ups and your creatives working together. But you also have classes and it becomes the hive of the community and it’s where people gather,” she said.

P A Thompson | The Image Bank | Getty Images

Housing and transport

A lingering issue for the development of any region in Ireland is housing. Prior to the pandemic, the housing shortage was long a hot-button issue. But since the onset of the pandemic, the issue has become more acute with construction activity halting.

Of late, institutional investor activity in the housing market has attracted a great deal of public scorn.

Ludgate’s O’Keeffe said that rural regeneration efforts will have to contend with housing and that authorities like county councils will need to “recognize that there will be increases in populations and that there is a need for housing to be accommodated.”

O’Keeffe acknowledges that transport links between rural towns like Skibbereen and nearby cities like Cork or further afield in Dublin presents challenges too.

“It is certainly an issue that we have for us, that remoteness, but I do think digital enablement reduces physical divide,” she said, adding that reducing digital divides can help address shortcomings in physical infrastructure like transport links.

Flower said there’s a significant opportunity afoot to revitalize large swathes of the country that could be otherwise forgotten about.

“A boatload of my friends in the last recession up and left for Australia and Canada and haven’t come back. We need to put images in people’s heads that they can come back and that they can work these world class jobs in remote parts of the country.”

 

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