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Weisselberg, Trump’s CEO prepares for jail on Rikers Island by Reuters

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© Reuters. FILE PHOTO: Former Trump Organization chief financial officer Allen Weisselberg leaves a courtroom in New York on November 15, 2022. REUTERS/Yuki Iwamura

By Karen Freifield

NEW YORK (Reuters) – A longtime Donald Trump executive is expected to be sent to New York’s notorious Rikers Island prison after being sentenced on Tuesday for helping engineer a 15-year tax fraud scheme at the former president’s real estate company.

Allen Weisselberg, the former chief financial officer of the Trump Organization, pleaded guilty in August, admitting that from 2005 to 2017 he and other executives received bonuses and perks that saved the company and themselves money.

Weisselberg is expected to be sentenced to five months in prison, after paying nearly $2 million in taxes, penalties, interest and testimony in the criminal trial of the Trump Organization, which was found guilty on all counts it faced.

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The ruling will be imposed by Judge Juan Merchant, who presided over the trial in the New York State District Court in Manhattan. Weisselberg will likely serve 100 days with leave for good behaviour.

Those days probably won’t be easy for Weisselberg, 75, in a prison known for violence, drugs and corruption. Nineteen inmates died there last year.

“You’re walking into a Byzantine black hole,” said Craig Rothfield, a prison counselor who helps Weisselberg prepare for the prison.

50 year relationship

Many New York City convicts facing a year or less behind bars head to Rikers Island, which lies between the New York City boroughs of Queens and the Bronx and holds more than 5,900 inmates.

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Rothfeld spent more than five weeks at Rikers in 2015 and 2016 as part of an 18-month prison sentence for defrauding investors and tax authorities when he was CEO of WJB Capital Group Inc.

He now runs Inside Outside Ltd, which advises people facing imprisonment. Another client is Harvey Weinstein, a former Hollywood film producer who was twice convicted of rape.

After his sentencing, Weisselberg will likely be taken to Rikers and trade his street clothes for a uniform and velcro-based sneakers.

Rothfeld said he hopes to separate Weisselberg from the general population, and not put him in a residence with inmates who may not know him but who will know his boss, who is running for president in 2024.

“Certainly Mr. Weisselberg’s 50-year relationship with the former president is very much on our minds,” Rothfeld said.

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A spokesperson for the city’s Department of Corrections said the agency’s mission is to “create a safe and supportive environment for everyone who comes into our custody.”

Rikers is scheduled to close in 2027.

Star witness

Weisselberg was the government’s star witness against his employer.

He told jurors that Trump signed bonus and study checks, and other documents at the center of plaintiffs’ case, but that he was not involved in the tax fraud scheme.

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Although he is no longer CFO, Weisselberg remains on paid leave from the Trump Organization. He testified last November that he hoped to receive a $500,000 bonus this month.

Weisselberg testified that the firm pays his lawyers. A person familiar with the matter said he also pays Rothfeld. Rothfeld declined to comment.

Trump has not been charged and has denied any wrongdoing. The Manhattan District Attorney’s Office is still investigating his business practices.

Merchan will also judge the Trump Organization on Friday. Fines are limited to $1.6 million.

Weisselberg remains a defendant in New York Attorney General Letitia James’ $250 million civil lawsuit, which alleges Trump and company inflated Trump’s asset values ​​and net worth.

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Rothfeld said he advised Weisselberg not to move out of the Rikers because of the danger of violence in the grounds, and not to interfere with conversations between other guests.

“The point is to keep to yourself,” Rothfeld said.

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Economic

We need to pay more attention to skewed economic signals

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The writer is chair of Queen’s College, Cambridge and advisor to Allianz and Gramercy

Inflation was the dominant economic and financial issue of 2022 for most countries around the world, especially for advanced economies that have a consequential impact on the global economy and markets.

The effects have been seen in declining living standards, increasing inequality, increasing borrowing costs, stock and bond market losses, and occasional financial mishaps (fortunately small and so far contained).

In this new year, recession, both actual and feared, has joined inflation in the driving seat of the global economy and is likely to replace it. It’s a development that makes the global economy and investment portfolios subject to a wide range of possible outcomes — something that a growing number of bond investors seem to be aware of more than their equity counterparts.

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International Monetary Fund iYou will likely review soon Her economic growth forecasts again, predicting that “a third of the world will be hit by recession this year”. What is particularly notable to me about these worsening global prospects is not only that the world’s three major economic regions – China, the European Union and the United States – are slowing down together, but also that this is happening for different reasons.

In China, a chaotic exit from the wrong Covid-19 policy is undermining demand and causing more supply disruptions. Such headwinds to domestic and global economic well-being will continue as long as China fails to improve the coverage and effectiveness of its vaccination efforts. The strength and sustainability of the subsequent recovery will also require that the country more vigorously renew a growth model that can no longer rely on greater globalization.

The European Union continues to deal with energy supply disruptions as the Russian invasion of Ukraine continues. Strengthening inventory management and reorientation of energy supplies is well advanced in many countries. However, it is not yet sufficient to lift immediate constraints on growth, let alone resolve long-term structural headwinds.

The United States has the least problematic view. The headwinds to growth are due to the Fed’s struggle to contain inflation after mischaracterizing rate increases as fleeting and then initially being too timid to adjust monetary policy.

The Fed’s shift to an aggressive front-load of interest rate hikes came too late to prevent the spread of inflation in the services sector and wages. As such, inflation is likely to remain stubborn at around 4 percent, be less sensitive to interest rate policies and expose the economy to greater risk for accidents from additional policy errors that undermine growth.

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The uncertainties facing each of these three economic areas suggest that analysts should be more careful in reassuring us that recessionary pressures will be “short and shallow”. They need to be open, if only to avoid repeating the mistake of prematurely dismissing inflation as transient.

This is especially important because these diverse drivers of recessionary risk make financial fragility more threatening and policy shifts more difficult, including potentially Japan. Get out of interest rate control Policy. The range of possible outcomes is extraordinarily large.

On the one hand, a better policy response, including improving the supply response and protecting the most vulnerable populations, can counteract the global economic slowdown and, in the case of the United States, avert a recession.

On the other hand, additional policy errors and market turmoil can lead to self-reinforcing vicious cycles with rising inflation and rising interest rates, weakening credit and compressed earnings, and stressing market performance.

Judging by market prices, more bond investors are better understanding this, including by refusing to follow the Fed’s interest rate guidance this year. Instead of a sustainable path to higher rates for 2023, they believe recessionary pressures will lead to cuts later this year. If true, government bonds would provide the yield and potential for badly missed portfolio risk mitigation in 2022.

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However, parts of the stock market is still weakly bearish pricing. Reconciling these different scenarios is more important than investors. Without better alignment within markets and with policy signals, the positive economic and financial outcomes we all desire will be no less likely. They will also be challenged by the risk of more unpleasant outcomes at a time of less economic and human resilience.

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Macro hedge funds end 2022 higher, investors say, while many others take big losses By Reuters

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© Reuters. FILE PHOTO: Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, US, January 5, 2023. REUTERS/Andrew Kelly

By Svea Herbst Baylis

NEW YORK (Reuters) – Some hedge funds betting on macroeconomic trends have boasted of double and even triple-digit gains for 2022, while other high-profile companies that have long been on technology stocks have suffered heavy losses in volatile markets, investors said.

Rokos Capital, run by Chris Rokos and one of a handful of so-called global macro companies, gained 51% last year. Fund investors this week, who asked not to be identified, said Brevan Howard Asset Management, the company where Rokos once worked, posted a gain of 20.14% and Caxton Associates returned 16.73%.

Haider Capital Management’s Haider Jupiter Fund rose 193%, an investor said.

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Data from hedge fund research showed that many macro managers have avoided crumbling stock markets that have been rocked by rapid interest rate increases and geopolitical turmoil, including the war in Ukraine, to rank among the best performers in the hedge fund industry. The company’s macro index rose 14.2% while the general index of hedge funds fell 4.25%, its first loss since 2018.

Equity hedge funds, where the bulk of the industry’s roughly $3.7 trillion in assets are invested, fared worse with a loss of 10.4%, according to HFR data. And while that beat the broader stock market’s loss of 19.4%, some high-profile funds posted even bigger losses.

Tiger Global Management lost 56% while Whale Rock Capital Management ended the year with a 43% loss and Maverick Capital lost 23%. Coatue Management ended 2022 with a loss of 19%.

But not all companies that bet on technology stocks suffered. John Thaler JAT Capital finished the year with a 3.7% gain after fees after a 33% increase in 2021 and a 46% gain in 2020.

Sculptor Capital Management (NYSE::), where founder Dan Och is fighting the company’s current CEO in court over his salary increase, posted a 13% drop.

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David Einhorn’s Greenlight Capital, which bet that Elon Musk would be forced to buy Twitter, ended the year up 37% while Rick Sandler’s Eminence Capital rose 7%.

A number of so-called multi-manager companies where teams of portfolio managers bet on a variety of sectors also boast positive returns and have been able to deliver on their promise that hedge funds can deliver better returns in distressed markets.

Balyasny’s Atlas Fund (NYSE: Enhanced) gained 9.7%, while Point72 Asset Management gained 10%. Millennium Management gained 12% while Carlson Capital ended the year with a 7% gain.

Representatives for the companies either did not respond to requests for comment or declined to comment.

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German automakers point to easing supply chain problems

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Sales at BMW and Mercedes-Benz jumped in the final months of 2022 as the German premium auto brands indicated supply chain problems plaguing the industry were abating.

Automakers around the world have experienced parts shortages since the pandemic, especially semiconductors, leaving many of them with large fleets of incomplete vehicles that can’t be delivered to customers.

BMW and Mercedes each said their full-year vehicle deliveries fell last year by 4.8 percent and 1 percent, respectively, due to Suppliers Bottlenecks as well as lockdowns in China and the war in Ukraine.

But supply pressures eased in the last quarter of the year, as BMW recorded a 10.6 percent jump in sales, with 651,798 vehicles delivered, and Mercedes fulfilling 540,800 orders, up 17 percent from the same period in 2022.

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BMW He said the main effects of supply chain bottlenecks and continued lockdowns were felt in the first six months of the year, adding that “sales were steadily picking up in the second half.”

Mercedes boss Ula Kallenius told the Financial Times last week that the list of problems in the auto supply chain was declining, but added that long waits for cars would continue into 2023.

“One chip is enough to be vital [ . . .] Missing, and then you can’t finish the car, even if you have everything else.

Both brands recorded strong sales growth electric car. Mercedes, which last week announced a plan to build 10,000 charging docks, said EV shipments grew 124 percent to 117,800 last year compared with its predecessor.

Similarly, BMW reported strong growth in electric vehicle sales, with deliveries of fully electric vehicles doubling last year to 215,755.

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Analysts at Bank of America said that sales of electric vehicles, including hybrid cars, reached a historic peak last November, with 1.1 million units sold. They attributed this largely to the upcoming phase-out of customer subsidies in Germany.

Participate in Mercedes BMW and BMW prices held steady Tuesday morning as investors priced in an image of an improving showing.

Rolls-Royce, a subsidiary of BMW, announced Monday that sales have hit a 119-year record, driven by strong demand in the United States, its largest market.

The luxury brand has been largely unaffected by the semiconductor pressure, mainly because it makes relatively few compounds and therefore needs fewer chips.

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