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<keyword id="21465981" type="General" weightage="20" keywordseo="Blackstone-owned" source="keywords">Blackstone-owned</keyword> <keyword id="22889483" type="General" weightage="20" keywordseo="diamond-grading-firm" source="keywords">diamond grading firm</keyword> <keyword id="22889482" type="General" weightage="100" keywordseo="International-Gemmological-Institute" source="keywords">International Gemmological Institute</keyword> (India) Ltd, has filed preliminary papers with capital markets regulator Sebi to float Rs 4,000 crore through an <keyword id="19913114" type="General" weightage="20" keywordseo="initial-public-offering" source="keywords">initial public offering</keyword> (<keyword id="19898327" type="General" weightage="20" keywordseo="IPO" source="keywords">IPO</keyword>). The initial share-sale is a combination of a fresh issue of <keyword id="20035340" type="General" weightage="20" keywordseo="equity-shares" source="keywords">equity shares</keyword> worth Rs 1,250 crore and an Offer-For-Sale (OFS) valued at Rs 2,750 crore by promoter BCP Asia II TopCo Pte Ltd, an affiliate of <keyword id="20144468" type="General" weightage="20" keywordseo="blackstone" source="keywords">Blackstone</keyword>, according to the draft red herring prospectus (DRHP). The company proposes to utilize the proceeds from the fresh issue for the <keyword id="19901090" type="General" weightage="20" keywordseo="acquisition" source="keywords">acquisition</keyword> of IGI Belgium Group and IGI Netherlands Group from promoter and general corporate purposes. International Gemmological Institute (India) Ltd provides services related to the certification and accreditation of natural diamonds, laboratory grown diamonds, <keyword id="21702345" type="General" weightage="20" keywordseo="studded-jewellery" source="keywords">studded jewellery</keyword> and coloured stones. IGI is the world's second largest independent certification and accreditation services provider based on revenue for CY2023 among global peers for diamonds, studded jewellery and coloured stones certifications, with a global market share of approximately 33 per cent, according to the Redseer Report. Axis Capital, Kotak Mahindra Capital Company, Morgan Stanley India Company and SBI Capital Markets are the book running lead managers to the issue.

Blackstone-owned International Gemmological Institute files for Rs 4,000-cr IPO

<div class="KonaFilter image-container"><div class="image on-image">AP Photo/Vincent Yu</div></div>White diamond sells for record $30.6 million at Hong Kong auction; blue diamond fetches $16M
HONG KONG (AP) - A white diamond the size of a small egg sold for $30.6 million at a Hong Kong auction Monday night, edging out the previous record for such a stone set just six months ago.
Two phone bidders competed for the 118-carat rock from Africa in six minutes of measured bidding until one dropped out in the Sotheby's jewelry auction, part of fall sales of art and collectibles by the firm and its rivals.
The twice-yearly ritual in the southern Chinese city draws wealthy collectors from mainland China and other Asian countries and has made the city one of the world's busiest auction hubs.
The "flawless" oval diamond, mined and cut two years ago, was hammered down for 212 million Hong Kong dollars ($27.3 million), just under the low end of the $28 million to $35 million estimate range set by Sotheby's. Total price including commission came to $30.6 million.
That was more than the previous record of $26.7 million for a white diamond set in May at Christie's in Geneva.
The stone, which weighed 299 carats when it was found in the rough in 2011, is the largest and most significant such diamond graded by the Gemological Institute of America. Sotheby's says it was discovered in southern Africa but won't name the country because the seller wishes to remain anonymous.
The auction's other highlight was a 7.6-carat flawless, round, vivid blue diamond that sold to a phone bidder for HK$125 million ($16.1 million) before commission, less than the $19 million estimate.
The two gems were among 330 lots of rare jewelry that fetched a total of $95 million.
"Hong Kong has in the last few years pulled itself up alongside Geneva and New York as one of the three major selling centers at auction" for <keyword id="6368047" type="COMPANY" weightage="60" keywordseo="diamonds">diamonds</keyword>, said Quek Chin Yeow, deputy chairman of Sotheby's Asia and an international diamond expert.
But he added that the results should not be taken as an indicator of how wealthy Asians are being affected by economic trends such as China's slowdown. That's because such stratospheric prices can only be afforded by the super rich, who he said are mostly immune from such fluctuations.
The world record price for a jewel at auction was set in 2010, when London jeweler Laurence Graff paid $46 million for a "fancy intense pink" diamond weighing 24.8 carats.
That record could be blown away in November, when Sotheby's puts a pink 59.60-carat diamond on the block that's expected to fetch more than $60 million in Geneva.
<div class="nc_footer">
Copyright (2013) <keyword id="176712" type="COMPANY" weightage="60" keywordseo="Associated-Press">Associated Press</keyword>. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
</div>

Giant White Diamond Sells For $30 Million

<ul><li>As many as 35 major retail brands set up shop in 14 tier-2 cities between Jan-Sep 2023.</li><li>E-commerce boom, tech-savvy consumers, growing aspirations drive growth in tier-2 cities.</li><li>The total retail stock in top tier-2 cities stood at 29 million square feet, as of September 2023. </li></ul>Last year, H&amp;M opened its store in Ranchi, GAP too opened its doors to Guwahati; and Rare Rabbit did the same in Kochi. It’s not just top apparel chains that are going deeper into Bharat, fine dining restaurants like Royal Train Cuisine too have set up shop in Lucknow and Wow chain is wooing Chandigarh. In summation, as many as 35 major retail brands expanded their footprint to 14 tier-2 cities between January to September 2023, says a report by real estate services and investment firm CBRE. This flurry of activity has triggered a retail space boom in 14 cities that include Chandigarh, Jaipur, Indore, Goa, Mangalore, Kochi, Lucknow, Patna, Ranchi, Guwahati, Bhubaneshwar, Vizag, Mysore, and Coimbatore. Chains like Armani Exchange, Malabar Gold &amp; Diamonds, Tanishq, Marks &amp; Spencer, Starbucks, Pizza Express, Under Armour are now catering to a growing set of consumers in these cities. “Domestic and international fashion brands are looking to expand in non-metro cities, fueled by a well-aware and well-travelled consumer set,” said <keyword id="20208672" type="General" weightage="20" keywordseo="ram-chandnani" source="keywords">Ram Chandnani</keyword>, MD, advisory &amp; transactions services of CBRE India. Changing consumption patterns are affecting the retail dynamics in these cities, the report says. E-commerce trends also point to a highly-aspiring consumer base in these cities, which has brought in an influx of quality retail supply. “A striking example of evolving consumer patterns in these cities is the fact that 50% of online urban shoppers were residing in these tier-2 and tier-3 cities. A percentage that’s projected to reach nearly 60% by 2030,” the report adds. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">City </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">New retail brand entrants in Jan-Sep 2023 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Chandigarh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Dayal Opticals, Khan Chacha, Wow Momos, Wow China, Rare Rabbit </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Jaipur </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tasva, Under Armour, Mango, Rare Rabbit </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Lucknow </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">The Sleep Company, Pizza Express, Theobroma, Royal Train Cuisine </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Patna </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Croma </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Indore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tasva, Style Up </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Goa </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Armani Exchange </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Kochi </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Campus, La Pino’z Pizza, Bluestone, Tasva, Rare Rabbit </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Coimbatore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Taneira, The Sleep Company, Style Union </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Visakhapatnam </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Starbucks, Taco Bell, Being Human </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Mysore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Croma, Tanishq, Fashion Factory, Bluestone </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Mangalore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Reliance Smart, Malabar Gold &amp; Diamonds, BlueStone, Tasva, R&amp;B </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Guwahati </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">GAP, Zudio, Croma, Forever 21 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Ranchi </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">H&amp;M, Marks &amp; Spencer, Max, Homecentre </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bhubaneswar </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Zudio, Marks &amp; Spencer </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source: CBRE The mall &amp; high-street boom As high-end retailers make a beeline for tier-2 city business, the retail developments in the cities also picked up pace. The total retail stock in these 14 cities stood at 29 million square feet, as of September 2023. Amongst them, Jaipur, Lucknow, and Chandigarh each boast retail stock ranging between 3-7 million square feet. In the three months between July and September 2023, around 2.4 million square feet was added in the 14 cities. Most of it was added in Chandigarh, Jaipur and Lucknow. Also, a similar amount – again 2.4 million square feet – was absorbed across these cities, led by Kochi, Jaipur, and Goa. “The e-commerce boom, tech-savvy consumer base, growing aspirations and surge in discretionary purchasing are defining the retail growth in tier-II cities. Most non-metro cities are established trade and business hubs and are now witnessing multinational corporations and start-ups setting up offices as well,” said Anshuman Magazine, chairman &amp; CEO, India, Southeast Asia, Middle East &amp; Africa of CBRE. The retail developments have a healthy mix of malls and high streets. But, they too are evolving from vanilla stores in high-streets to malls by top-end developers. A lot of high-end malls have also come up in recent times like Nexus Elante Mall in Chandigarh; World Trade Park Mall in Jaipur; DLF Mall in Panjim and more. “Investment-grade developers are setting up large-sized contemporary malls in these cities, which are seen as an entertainment destination and not just as a place to shop,” adds Magazine. SEE ALSO <a href="https://www.businessinsider.in/business/news/the-rising-affluence-of-small-town-consumers-driving-demand-for-premium-products/articleshow/103918026.cms">The rising affluence of small town consumers driving demand for premium products</a>

Big brands, chain stores boost retail developments in tier-2 cities

Welcome back! Hopefully you didn't get too wild if you had a boozy brunch on Sunday. A few restaurants added fees for <a style="text-decoration: underline;" href="https://www.businessinsider.com/vomit-fees-added-to-restaurant-brunch-bills-bottomless-mimosas-2023-10">parties that don't drink responsibly</a>. In today's big story, we're looking at why strong earnings results from some big banks <a style="text-decoration: underline;" href="https://www.businessinsider.com/wall-street-hiring-up-at-jpmorgan-citi-as-layoffs-loom-2023-10">weren't necessarily the big win</a> markets were hoping for. What's on deck: <ul><li>Markets: Weight-loss drugs are about to turn the <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-ozempic-wegovy-glp1-weight-loss-drugs-investing-2023-10">stock market on its head</a></li><li>Tech: The ways Elon Musk and Steve Jobs are alike and different, <a style="text-decoration: underline;" href="https://www.businessinsider.com/how-elon-musk-steve-jobs-similar-different-management-style-biography-walter-isaacson">according to their biographer</a>. </li><li>Business: We crunched the numbers to figure out <a style="text-decoration: underline;" href="https://www.businessinsider.com/salary-increases-raises-2024-jobs-negotiate-inflation-employees-wage-growth-2023-10">how big your raise</a> is likely to be next year. </li></ul>But first, earnings season is here.If this was forwarded to you, <a href="https://www.businessinsider.com/subscription/newsletter/insider-today">sign up here.</a><h2>The big story</h2>Trouble brewing<a href="https://www.businessinsider.com/subscription/newsletter/insider-today"></a><a href="https://www.businessinsider.com/jpmorgan-ai-strategy-execs-new-data-analytics-team-2023-6"></a><div type="image" title="Jamie Dimon" height="2433" width="3244" msid="104475792" hostid="261" sizebytes="182350"></div>On the surface, earnings season got off to a great start.JPMorgan, Citigroup, and Wells Fargo's third-quarter results beat analysts' expectations. Notching wins from some of the nation's biggest banks was a welcome change after a brutal few months for the stock market.But beneath the surface, all is not well. And that could spell trouble for the broader market hoping for a banner earnings season to help it <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-santa-claus-rally-fed-inflation-economy-yardeni-2023-10">finish the year on a positive</a>. Jamie Dimon, JPMorgan's CEO and arguably the world's most recognizable banker, was direct. "This may be the most dangerous time the world has seen in decades," he said in a <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/stocks/jamie-dimon-dangerous-world-geopolitics-wars-debt-federal-reserve-2023-10">press release announcing the bank's earnings</a>.Among the risks: the effects of the Fed tightening its balance sheet; stricter capital requirements on lenders; high interest rates; growing US debt; and conflicts in Ukraine and Israel. To the final point, Dimon said during JPMorgan's earnings call that geopolitics is an "extraordinary issue" the bank has to deal with. It's a threat he's <a style="text-decoration: underline;" href="https://www.businessinsider.com/jpmorgan-jamie-dimon-russia-ukraine-geopolitics-economy-rates-energy-prices-2023-9">consistently called out</a>.<a href="https://www.businessinsider.com/wall-street-hiring-up-at-jpmorgan-citi-as-layoffs-loom-2023-10"></a><div type="image" title="jane fraser" height="750" width="1000" msid="104475795" hostid="261" sizebytes="55608"></div>But perhaps there's solace on the job front! JPMorgan and Citi both reported headcounts were up 7% and 1%, respectively. So there's that.But here, too, <a style="text-decoration: underline;" href="https://www.businessinsider.com/wall-street-hiring-up-at-jpmorgan-citi-as-layoffs-loom-2023-10">there's more to the story</a>, writes Emmalyse Brownstein. Many of those new hires were on the tech side of things, which raises questions about the type of work they might ultimately automate away. Citi CFO Mark Mason acknowledged the bank's investment in tech would help it reduce head count as part of <a style="text-decoration: underline;" href="https://www.businessinsider.com/news-today-september-14-citigroup-reorg-big-banks-2023-9">the firm's massive reorg</a>.JPMorgan, meanwhile, seems keen to become a key figure in the AI arms race. Dimon pointed to the bank's proprietary data as a differentiator. He also highlighted <a style="text-decoration: underline;" href="https://www.businessinsider.com/jpmorgan-ai-strategy-execs-new-data-analytics-team-2023-6">JPMorgan's firmwide chief data and analytics officer</a>, Teresa Heitsenrether.Dimon has previously acknowledged that AI will make some roles obsolete. Despite this, he believes it will improve the <a style="text-decoration: underline;" href="https://www.businessinsider.com/jpmorgan-ceo-jamie-dimon-ai-day-shorter-work-week-2023-10">quality of life</a> for the next generation of workers.The job outlooks for the rest of the Street look no better. Reports of cuts at <a style="text-decoration: underline;" href="https://www.ft.com/content/b451d88d-9e3f-4af0-9bb5-27acac9b7d30?FTCamp=engage/CAPI/app/Channel_Refinitiv//B2B" target="_blank" rel="noopener">Goldman Sachs</a> and <a style="text-decoration: underline;" href="https://www.reuters.com/business/finance/barclays-begins-culling-3-its-dealmakers-sources-2023-10-04/" target="_blank" rel="noopener">Barclays</a> have already surfaced. And Credit Suisse <a style="text-decoration: underline;" href="https://dol.ny.gov/system/files/documents/2023/10/credit-suisse-securities-usa-llc-credit-suisse-services-usa-llc-credit-suisse-and-credit-suisse-asset-management-llc-2022-0215-6-12-2023-through-9-30-2023.pdf" target="_blank" rel="noopener">notified the New York Department of Labor</a> about a reduction at its US headquarters. Even bank CEOs feel a shift in vibe due to the macro dynamics.On Citi's earnings call, CEO Jane Fraser said she noticed a change in attitude from clients during a busy month of meetings."I'm struck how consistently CEOs are less optimistic about 2024 than a few months ago," Fraser said.<h2>3 things in markets</h2><a href="https://www.businessinsider.com/ozempic-wegovy-cost-could-put-companies-out-of-business-blackstone-2023-10"></a><div type="image" title="Wegovy injection pens" height="3465" width="4621" msid="104475797" hostid="261" sizebytes="202312"></div><ul><li>Welcome to the stock market's Ozempic era. The weight-loss drug is doing more than just shrinking users' waistlines; it's upending entire companies. While the healthcare industry is the most obvious candidate for disruption, everything from food companies to airlines <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-ozempic-wegovy-glp1-weight-loss-drugs-investing-2023-10">could be next</a>. Meanwhile, there's a debate over whether employers <a style="text-decoration: underline;" href="https://www.businessinsider.com/ozempic-wegovy-cost-could-put-companies-out-of-business-blackstone-2023-10">should pay for workers' weight-loss drugs</a>.</li><li>Junk-rated debt is looking more and more like… junk. The risk of non-investment grade US companies refinancing or outright defaulting on their debt is growing, according to a Moody's report. High interest rates and tight financial conditions spell trouble for the <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/bonds/junk-bonds-default-risk-trillion-corporate-debt-refinance-interest-rates-2023-10">$1.87 trillion of junk-rated debt</a> maturing over the next five years. </li><li>Ending on a high note. One market veteran predicts stocks will rally for the final stretch of the year due to a <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-santa-claus-rally-fed-inflation-economy-yardeni-2023-10">strong earnings season</a>. Tech stocks, in particular, <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-ai-tech-bond-crash-israel-hamas-wedbush-2023-10">could see a big boost</a> that leads to double-digit gains before year-end, according to a research note from Wedbush Securities. </li></ul><h2>3 things in tech</h2><a href="https://www.businessinsider.com/how-elon-musk-steve-jobs-similar-different-management-style-biography-walter-isaacson"></a><div type="image" title="Walter Isaacson identified some similarities between Elon Musk and Steve Jobs in his book on the Tesla CEO." height="1080" width="1440" msid="104475798" hostid="261" sizebytes="41770"></div><ul><li>Elon Musk vs. Steve Jobs. A biographer spent years following both tech figures. He revealed the <a style="text-decoration: underline;" href="https://www.businessinsider.com/how-elon-musk-steve-jobs-similar-different-management-style-biography-walter-isaacson" target="_blank" rel="noopener">key similarities and differences</a> between the two famed techies.</li><li>Strange Amazon job posting: the company could be fishing for "opportunistic" hires. The company <a style="text-decoration: underline;" href="https://www.businessinsider.com/amazon-job-posting-cybersecurity-hiring-2023-10">accidentally published a job opening</a> for a director of security engineering. But the job description said the listing would be used "to push through opportunistic candidates to have conversations with security leaders."</li><li>AI is coming to Microsoft Outlook to help write better emails. The tool is called Microsoft 365 Copilot and would help create "polished and professional" <a style="text-decoration: underline;" href="https://www.businessinsider.com/gen-z-how-to-write-email-outlook-ai-could-help-2023-10">suggestions for emails</a>. A group of customers are currently testing the feature, and it'll be more widely available in November.</li></ul><h2>3 things in business</h2><a href="https://www.businessinsider.com/salary-increases-raises-2024-jobs-negotiate-inflation-employees-wage-growth-2023-10"></a><div type="image" title="Large hand holding a small bag of money that is disappearing" height="1500" width="2000" msid="104475800" hostid="261" sizebytes="345238"></div><ul><li>How big your raise will likely be next year. By crunching the numbers, employers appear to be on track to <a style="text-decoration: underline;" href="https://www.businessinsider.com/salary-increases-raises-2024-jobs-negotiate-inflation-employees-wage-growth-2023-10">increase their salary budgets</a> by about 4% next year. Although that's a bit lower than this year, inflation is expected to slow to only 2.6%.</li><li>The boom in luxury goods is over. Consumers are <a style="text-decoration: underline;" href="https://www.businessinsider.com/luxury-recession-boom-consumer-spending-lvmh-stock-price-us-economy-2023-10">starting to pull back</a> on their multiyear high-end spending spree. Luxury brands had previously been seen as "recession proof." But high-income consumers are no longer boosting their profits during uncertain economic times.</li><li>Mind tricks that retailers use to make discounts seem bigger than they are. They're advertising <a style="text-decoration: underline;" href="https://www.businessinsider.com/inflation-sales-walmart-amazon-discounts-arent-good-deals-2023-10" target="_blank" rel="noopener">the percentage that an item is discounted by</a>. But a percentage discount doesn't mean you're getting a good deal if the original price was already greatly inflated.</li></ul><h2>In other news</h2><ul><li>Ex-clients of Willie Gary — who Jamie Foxx will portray in a movie — claim he's a <a href="https://www.businessinsider.com/jamie-foxx-new-movie-the-burial-attorney-willie-gary-true-story-2023-10">creep who screwed them out of millions</a>.</li><li>Tensions are boiling over at America's elite colleges as they <a href="https://www.businessinsider.com/tensions-escalate-colleges-harvard-penn-yale-over-war-israel-hamas-2023-10">respond to the Israel-Gaza war</a>.</li><li>These are the <a href="https://www.insider.com/questions-to-ask-yourself-before-breaking-up-with-your-partner-2023-10">three questions you should ask</a> yourself before breaking up with your partner.</li><li>The rise of AI data centers has led to fortunes, massive energy usage, and <a href="https://www.businessinsider.com/ai-data-energy-centers-water-energy-land-2023-10">changing rural America</a>.</li><li>These are the 20 safest cities <a style="text-decoration: underline;" href="https://www.insider.com/safest-cities-in-the-us-ranked-wallethub-2023-10">in the US</a>.</li><li>Prominent bankruptcy judge recused from cases and is <a style="text-decoration: underline;" href="https://www.businessinsider.com/prominent-bankruptcy-judge-recused-under-investigation-after-undisclosed-romantic-relationship-exposed-2023-10">under investigation</a> after exposure of undisclosed romantic relationship.</li><li>How to hack your Starbucks app to get <a style="text-decoration: underline;" href="https://www.businessinsider.com/tiktokers-teach-how-hack-starbucks-app-discounted-drinks-lattes-coffee-2023-10">discounted coffee</a>.</li><li>Schonfeld has <a style="text-decoration: underline;" href="https://www.businessinsider.com/schonfeld-millennium-deal-far-from-certain-adia-blackstone-investors-2023-10">multiple suitors</a> beyond rival Millennium looking to invest in the $13 billion hedge fund.</li></ul><h2>What's happening today</h2><ul><li>It's National Dictionary Day! This is the day that Noah Webster was born. He's considered the "father of the American dictionary."</li><li>PETA plans to hold a vegan cheese giveaway outside the World Dairy Summit in Chicago. Supporters will hold signs that say "Not Your Mom, Not Your Milk."</li><li>Happy birthday, Naomi Osaka! Angela Lansbury, Sue Bird, Oscar Wilde, and Bryce Harper were also born today.</li></ul><h2>For your bookmarks</h2>Flight attendant essentials<a href="https://www.insider.com/flight-attendant-target-items-carry-on-packing-essentials-2023-10"></a><div type="image" title="CiCi always packs her own snacks in a snack box." height="900" width="1200" msid="104475802" hostid="261" sizebytes="70626"></div>A flight attendant revealed the five items she never flies without. Tennis balls and cotton rounds are among <a style="text-decoration: underline;" href="https://www.insider.com/flight-attendant-target-items-carry-on-packing-essentials-2023-10">her flight must-haves</a>.The Insider Today team: <a href="https://www.businessinsider.com/author/dan-defrancesco">Dan DeFrancesco</a>, senior editor and anchor, in New York City. <a href="https://www.businessinsider.com/author/diamond-naga-siu">Diamond Naga Siu</a>, senior reporter, in San Diego. <a href="https://www.businessinsider.com/author/hallam-bullock">Hallam Bullock</a>, editor, in London. <a href="https://www.businessinsider.com/author/lisa-ryan">Lisa Ryan</a>, executive editor, in New York.

Insider Today: Big banks' cloudy forecast

<ul class="summary-list"><li>Fungibility refers to an asset's ability to be exchanged for something else of equal value. </li><li>Some examples of <keyword id="12471495" type="UNKNOWN" weightage="60" keywordseo="fungible" source="Orion">fungible</keyword> assets include currencies, commodities, and precious stones.</li><li>Non-fungible assets are unique, requiring much more complex valuation before a sale and include things like real estate, art, and sports cards.</li></ul>Much has been made about the <a href="https://www.businessinsider.com/nft-meaning">non-fungible token</a> (<keyword id="11919795" type="UNKNOWN" weightage="60" keywordseo="nft" source="Orion">NFT</keyword>) movement. As an alternative to traditional art pieces, creators are making digital art and "signing" them using the Ethereum blockchain, ensuring each token is one-of-a-kind. These pieces of digital art are so popular, even the <a href="https://markets.businessinsider.com/news/currencies/nba-top-shots-creator-dapper-labs-to-offer-summer-league-nfts-2021-8">National Basketball Association</a> and <a href="https://www.businessinsider.com/mlb-topps-baseball-cards-nft-buy-sell-trade-online-wax-2021-4">Major League Baseball</a> have gotten into the game.But what does "fungible" even mean? <h2>What does fungible mean?</h2>Fungible refers to items or commodities that can be exchanged with other assets or commodities of the same type. For example, currency is a fungible asset because it can be exchanged for other currencies, goods, or pay for services. "Something that is fungible means that it's identical to another item and can be swapped or exchanged for that item without either participant in the swap losing any value," says Ian Kane, co-founder of blockchain based FinTech platform <a href="https://unbanked.com">Unbanked</a>. "If I give you a dollar and you give me a different dollar, we both still have $1 worth of <a href="https://www.businessinsider.com/purchase-power" target="_blank" rel="noopener">spending power</a>."On the flipside, something that is non-fungible cannot necessarily be easily exchanged for something of equal value. Art and collectibles are often considered non-fungible because of their unique properties. Because only one original exists, it has a distinctive property that cannot be easily appraised or exchanged for something like it. Note: Think of a non-fungible item like a used car. Although there are thousands of identical models created each year, the price of your used car is based on mileage, wear-and-tear, as well as any accessories it may have. <h2>Understanding fungibility </h2>In order to be considered fungible, an asset must have an agreed-upon value and be interchangeable with other items of similar value. Bitcoin is considered a fungible item because it has a measurable value across currencies, and can be bought and sold for equal value. Moreover, fungible assets can be broken up and sold in fractions, making it easier to exchange for other like-items."If you print 100 copies of the same photo, they become fungible; if we traded it, we would get the same thing in return (like a dollar bill)," says Gutter Dan, the co-founder of the NFT series <a href="https://guttercatgang.com">Gutter Cat Gang</a>. "On the same token, those 100 photos are not unique and could be duplicated or destroyed. With NFTs, the reverse is true: They cannot be duplicated or destroyed [because of the underlying] blockchain technology, and [because] each is purely unique." <h3>Fungible vs. non-fungible</h3>The key difference in fungible versus non-fungible assets can be found in how they're exchanged and traded. While fungible assets can be sold in different forms and exchanges, a non-fungible asset may require a little more time and care to be sold.For example: Let's say you're trying to sell a diamond ring. If it were a fungible good, you'd be able to sell either the diamond and metal separately - or both together - at an agreed upon price at multiple vendors for equal value. However, the ultimate value of the diamond ring is based on several criteria, including the clarity of the diamond, how the diamond is cut, and what kind of metal the ring is made of. Therefore, the price you would get from a pawn shop may be different than from a jewelry store. Because each diamond ring is unique, it is a non-fungible item. <h3>Examples of fungible assets</h3>We exchange fungible assets on a daily basis without thinking twice. When you buy groceries, get gas for your car, or go on a coffee run, you are exchanging cash for goods and services - or trading fungible items.Some examples of fungible assets include: <ul><li>Currency: Around the world and in the digital space, currencies can be cross-exchanged for one another at an agreed-upon market rate. United States Dollars can be exchanged for Euros, Japanese Yen, or Bitcoin in whole and fractional numbers. </li></ul><ul><li><a href="https://www.businessinsider.com/what-is-stock">Stocks</a> and <a href="https://www.businessinsider.com/mutual-funds">mutual funds</a>: When <a href="https://www.businessinsider.com/how-to-invest-in-stocks">investing in stocks</a> and <a href="https://www.businessinsider.com/how-to-invest-in-mutual-funds">mutual funds</a>, investors spend cash to get a financial instrument of the same value at the time of purchase. If a single <a href="https://www.businessinsider.com/stock-vs-share">share</a> of a stock may cost $5.70, the buyer knows how much they need to spend in order to gain multiple shares, knowing it can be exchanged for cash in the future. </li></ul><ul><li>Precious metals: <a href="https://www.businessinsider.com/how-to-invest-in-gold">Gold</a> and silver are traded daily at a market rate, assuring owners how much value they hold when it's time to buy. When it's time to sell, someone holding a precious metal can easily exchange it for cash based on the market rate, making it fungible. </li></ul><h3>Examples of non-fungible assets</h3>As mentioned before, while fungible items are interchangeable with each other, non-fungible assets are unique. Therefore, they must be judged across multiple criteria. Some of the factors buyers and sellers consider include provenance (or who owned the item previously), how unique it is compared to others, and how the market for non-fungible assets have changed over time. In addition, non-fungible assets can not be broken up and sold in pieces: Its value is determined by the whole of the item. Some non-fungible assets include: <ul><li>Real estate: Selling real estate requires a property to be evaluated across several different factors, such as how much comparative homes have sold for, the demand for properties in the area, and how unique the home is. Because the value is based on these evaluation points - like square footage, architecture, and interior features - real estate is considered non-fungible. </li></ul><ul><li>Trading cards: Although trading cards come in equally-priced packs, the actual contents may hold different values based on their condition, rarity, and composition. Modifiers like grading and autographs can drive the value higher. Therefore, the unique condition of trading cards make them non-fungible. </li></ul><ul><li><a href="https://www.businessinsider.com/nft-meaning">Non-fungible tokens</a>: Non-fungible assets are not limited to digital tokens. Any one-of-a-kind item that cannot be directly traded for something of the same value can be considered non-fungible, ranging from family heirlooms, digital collectibles, or art collections. Non-fungible tokens hold value based on the rarity of the item and the community driving it, and no two NFTs are exactly alike.</li></ul><h2>Fungible vs. liquid </h2>While some assets are fungible, they may not be <a href="https://www.businessinsider.com/what-is-liquidity">liquid</a>, which is different. Fungibility refers to whether an asset can be exchanged for a similar item of the same value, while liquidity refers to how easily an asset or security can be bought or sold on the secondary market."A liquid asset is something that is easily sold whereas a fungible asset is interchangeable but not necessarily easily sold," says Shaun Heng, vice president of growth operations and chief of staff at cryptocurrency tracking website <a href="https://coinmarketcap.com">CoinMarketCap</a>. "An example of a fungible but non-liquid asset would be stocks of the same class in a company that is not on a public exchange. One common stock or one preferred stock is fungible for a stock in its same class. However, it may be hard to find a buyer for stocks in a private company." While all liquid assets are fungible, not all fungible assets are liquid. If you cannot sell a fungible asset for value in short form, it isn't liquefiable. <table><tbody><tr><td>Fungible</td><td>Liquidity</td></tr><tr><td><ul><li>Holds inherent value that can be exchanged (like mutual funds)</li><li>Is interchangeable for similar items on the open market</li><li>May be a long-term asset that builds value over time </li></ul></td><td><ul><li>Can be easily traded without losing value (like currency)</li><li>Straightforward transactions: Pay a price to receive something in exchange</li><li>Value available in the short-term</li></ul></td></tr></tbody></table><h2>The financial takeaway</h2>Simply put, fungible assets are interchangeable because their value defines them. Think of currency, mutual funds, and even gasoline as fungible assets. By knowing how fungible assets work - and how they can play into your ultimate portfolio strategy - every investor can make smart decisions about how and where to invest in a combination of both.Although there's a lot of excitement about digital artwork and non-fungible tokens, experts recommend investors take their time to carefully evaluate whether jumping into the space is right for their strategy. Before getting into any asset, it's important to research the rarity of items, understand the trends, and understand the potential risk and rewards. "Whatever you are deciding to do, be sure you can take the risk," says Les Borsai, co-founder and chief strategy officer of registered investment advisor firm <a href="https://wavegp.com/">Wave Financial</a>. "Don't spend what you can't afford to lose. Make sure you are buying what you researched. Just because the returns are aggressive and quick, it's key to understand what you are investing in before you do it."<a data-type="5ffdcc97ead9691ea755d3e3">Cryptocurrency is an electronic, private type of money - here's how it works and how you can invest in it</a><a data-type="61143d4737043a45f7070cd8">Digital assets are becoming the new normal - here's how to buy cryptocurrency</a><a data-type="6132307ebd6912291f04c101">Blockchain is a digital database used to store data for crypto transactions and other assets - here's how it works</a><a data-type="613fc21a37043a76c60803d3">Ready to invest in Bitcoin? Here are 4 steps to get started</a>

Fungible: What the 'F' in NFT stands for and why it matters

<ul class="summary-list" style="text-align: left;"><li>The coronavirus pandemic has <a href="https://www.businessinsider.com/oil-experts-reveal-why-opec-deal-wont-boost-prices-2020-4">cratered demand for fuel</a> and sent the price of oil tumbling, falling by as much as 65% in March, relative to the start of the year. </li><li>US crude is trading under <a href="https://markets.businessinsider.com/commodities/oil-price?type=wti">$22 a barrel</a>, which is <a href="https://www.businessinsider.com/how-top-oil-companies-are-responding-to-the-price-shock-2020-3">below what many oil companies need to turn a profit</a>. That puts some firms at risk of defaulting. </li><li>A new report by Fitch Ratings reveals that defaults by energy companies are expected to exceed $30 billion this year. Energy firms account for nearly half of Fitch's "top bonds of concern." </li><li>Here is a list of the 21 highest-risk energy bonds. </li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul>There are all kinds of metrics you can use to measure the health of an industry, from stock prices to capital expenditure.Another one is debt, and that's what analysts at Fitch Ratings looked at in a report this week.They found that the default rate for high-yield bonds - those rated below investment grade - is set to rise above 4% in April, the highest level in more than three years. Energy defaults are expected to be even higher, thanks in part to a plunge in economic activity driven by the coronavirus. In the last 12 months, energy defaults reached nearly 10%, following the bankruptcy of the large oil and gas company Whiting Petroleum in March. Energy bonds were "especially impacted by the <a href="https://www.businessinsider.com/oil-experts-reveal-why-opec-deal-wont-boost-prices-2020-4">decline in crude oil prices</a> as well as <a href="https://www.businessinsider.com/oil-glut-threatens-to-drive-oil-prices-further-into-ground-2020-3">the material increase in supply</a>," Eric Rosenthal, senior director of leveraged finance at Fitch, <a href="https://www.fitchratings.com/research/corporate-finance/energy-frontier-expected-to-drive-april-hy-default-rate-past-4-13-04-2020">said in a statement</a>. <a href="http://newsletter.businessinsider.com/join/4np/power-line">Click here to subscribe to Power Line</a>, Business Insider's weekly energy newsletter.And it's only expected to get worse from here.The ratings firm projects the energy default rate to climb to 17% by the end of the year, "closing in on the record 19.7% mark set in January 2017." "Timing will play a key role," Rosenthal said in an email to Business Insider. It's possible that the "2020 rate could top the prior record depending on crude oil prices." Another way of putting it: Energy defaults are expected to exceed $30 billion this year. Read more: <a href="https://www.businessinsider.com/how-top-oil-companies-are-responding-to-the-price-shock-2020-3">How 18 oil giants from Exxon to Halliburton are cutting staff and slashing spending in response to the historic oil price meltdown</a><h2 style="text-align: left;"></h2><h2 style="text-align: left;">The riskiest energy bonds</h2>In the report, Fitch also included a list of its "top bonds of concern," or those most at risk of default. It's based on things like ratings, market information, and input from the firm's analysts, Rosenthal said. High-yield bonds in the list, which includes 45 companies, amount to about $44 billion - up from about $36 billion last month. 21 of those companies are in the oil and gas industry, and they account for 60% of that bond volume. Some of the companies at risk of "imminent defaults" include California Resources and Denbury Resources, the analysts write. Last month, Denbury announced a handful of measures to preserve liquidity, such as <a href="https://www.globenewswire.com/news-release/2020/03/31/2008987/0/en/DENBURY-RESOURCES-PROVIDES-OPERATIONAL-AND-FINANCIAL-UPDATE.html">slashing capital expenditure by more than 40%</a>. California Resources has <a href="https://news.crc.com/press-release-details/2020/California-Resources-Corporation-Reduces-Capital-to-Mechanical-Integrity-Level/default.aspx">also announced plans to reduce capital investment</a>. So far, at least 17 companies in the oilfield service, oil patch, and midstream business have filed for bankruptcy this year, according to a report by the law firm Haynes and Boone. <h2 style="text-align: left;">'Top bonds of concern' in the energy industry</h2>Here are all 21 energy companies in Fitch's list of "top bonds of concern," ranked from smallest to largest sums of outstanding high-yield bonds. <ul style="text-align: left;"><li>Chaparral Energy Inc. - $300 million</li><li>Northern Oil &amp; Gas Inc. - $341 million</li><li>FTS International Inc. - $370 million</li><li>Martin Midstream Partners - $374 million</li><li>Pride International Inc. - $535 million</li><li>Calfrac Holdings LP - $552 million</li><li>Jonah Energy Inc. - $600 million</li><li>Bruin E&amp;P Partners LLC - $600 million</li><li>Unit Corp. - $650 million</li><li>Vine Oil &amp; Gas LP - $910 million</li><li>Ultra Resources Inc. - $960 million</li><li>Summit Midstream Holdings - $1.1 billion</li><li>Sesi LLC - $1.3 billion</li><li>Oasis Petroleum Inc. - $1.7 billion</li><li>Ferrellgas Partners LP - $1.8 billion</li><li>Denbury Resources Inc. - $1.8 billion</li><li>Gulfport Energy Corp. - $1.8 billion</li><li>Callon Petroleum - $1.9 billion</li><li>Diamond Offshore Drilling Inc. - $2 billion</li><li>California Resources Corp. - $2.1 billion</li><li>Chesapeake Energy Corp. - $4.5 billion</li></ul><ul class="read-more-links"><li style="text-align: left;">Read more:</li><li style="text-align: left;"><a href="https://www.businessinsider.com/oil-experts-reveal-why-opec-deal-wont-boost-prices-2020-4">6 oil experts explain why OPEC's record-setting production cut will fail to stop prices from plummeting - and lay out what's ahead for the struggling industry</a></li><li style="text-align: left;"><a href="https://www.businessinsider.com/how-top-oil-companies-are-responding-to-the-price-shock-2020-3">How 18 oil giants from Exxon to Halliburton are cutting staff and slashing spending in response to the historic oil price meltdown</a></li><li style="text-align: left;"><a href="https://www.businessinsider.com/dividends-top-oil-majors-face-mounting-risks-cuts-analyst-says-2020-4">Dividends of 7 top oil majors face a mounting risk of being cut, a top analyst warns</a></li><li style="text-align: left;"><a href="https://www.businessinsider.com/gv-backed-orbital-insights-images-from-space-track-oil-storage-2020-4">A startup backed by Goldman Sachs is measuring shadows from space to track the world's oil supply - and it's yielding shocking numbers that no one else has</a></li></ul>Get the latest Oil WTI price<a href="http://markets.businessinsider.com/commodities/oil-price?type=WTI"> here.</a>

Energy defaults are expected to top $30 billion this year - and Fitch says these 21 bonds are at the highest risk

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Jackal Pan/Visual China Group via Getty ImagesWeWork CEO Adam Neumann</div></div></div><ul class="summary-list"><li>According to news reports, WeWork is exploring the possibility of issuing junk bonds to fulfill its funding needs after its biggest shareholder SoftBank reportedly urged the group to shelve its pending IPO plans. </li><li>The company has issued junk bonds 2018, but investors wouldn't be as receptive now given its recent slash in valuation and uncertainty around its finances. </li><li>"If the company's value is in question the whole thing unravels," said John McClain, a portfolio manager at Diamond Hill, in an interview with Business Insider. </li><li><a href="https://www.businessinsider.com/prime?module=article&amp;area=summary">Click here for more BI Prime stories</a>.</li></ul>WeWork's days of running between different groups of investors to fund itself may well have caught a snag. In a flurry of bad news this week, the company's <a href="https://markets.businessinsider.com/news/stocks/wework-pressured-by-softbank-to-shelve-ipo-report-2019-9-1028510483">IPO is potentially set to be shelved</a> on the recommendation of its largest shareholder SoftBank, and WeWork's <a href="https://markets.businessinsider.com/news/stocks/wework-taking-netflix-uber-approach-to-raise-cash-by-selling-junk-bonds-2019-9-1028511774">latest plan to issue junk debt</a> to meet its funding needs is spooking investors.Unprofitable, propped up by billions in funding from SoftBank, and with more than $1 billion in long-term debt outstanding, WeWork's plan to tap junk-bond markets to sustain itself has caused consternation. It has gone to high-yield bond investors before, but that was back in 2018, <a href="https://www.businessinsider.com/giant-tech-firms-like-uber-tesla-are-lapping-up-junk-debt-and-demand-is-growing-2018-11?r=US&amp;IR=T">when junk bonds were the hot unicorn trend</a>. As of yesterday morning in New York, the price of WeWork debt tumbled, as jittery investors sold the bonds. Its existing junk debt was yielding above 8% as investors continued to sell off holdings in the company.WeWork is now in a funding bind, having lined up a $6 billion credit line that is contingent on it raising at least $3 billion in its IPO, according to its S1 offering prospectus. Read more: <a href="https://www.businessinsider.com/heres-the-latest-wework-news-2019-6">WeWork's valuation is under fire. Here's everything we know about its IPO plans, finances and concerns around CEO Adam Neumann.</a>"The whole company is built on continuously sourcing money from different investors based on higher and higher valuations. If the company's value is in question, the whole thing unravels," John McClain, a portfolio manager at Diamond Hill, a US investment firm that manages fixed-income funds, told Business Insider in an interview. "Their borrowing model is seriously in question at this point," he added. Holders of WeWork's existing debt have already started selling off their holdings as a result of the IPO's struggle to gain traction. The company had initially hoped for a massive valuation of around $47 billion, but <a href="https://markets.businessinsider.com/news/stocks/wework-may-slash-valuation-below-20-billion-or-postpone-ipo-2019-9-1028508030">The Wall Street Journal reported on Sunday</a> that the company reportedly could slash the valuation to below $20 billion. McClain said in the case of WeWork, he had never seen a unicorn with such a high valuation seemingly have so little support from both equity and debt investors. WeWork declined to comment to Business Insider.<h2>WeWork's hunger for junk bond debt in 2018</h2>WeWork previously issued $702 million in unsecured bonds in 2018, at a hot point in fixed income markets. The company is rated B, sub-investment grade or junk, by ratings agencies Fitch and S&amp;P, meaning its debt issuance appeals to high-yield investors who are willing to take on more risk to fund a company. The company's inaugural junk bonds yielded 7.875% and attracted plenty of investor interest, <a href="https://www.businessinsider.com/giant-tech-firms-like-uber-tesla-are-lapping-up-junk-debt-and-demand-is-growing-2018-11?r=US&amp;IR=T">following in the path of other fast growing tech companies</a> like Uber, Tesla, and <a href="https://www.businessinsider.com/netflix-heres-why-investors-are-lining-up-to-buy-the-companys-bonds-2019-4?utm_medium=ingest&amp;r=US&amp;IR=T">Netflix</a> in tapping the high yield market. However, investors have become increasingly wary of cash burning companies piling on leverage amid dubious financials. Highly rated private tech companies with valuations north of $1 billion, known as unicorns, are not traditional occupants of the high yield space. But they found a sweet spot of investor demand starting last year amid low US Treasury yields and a boom in leveraged lending. The attractiveness of these companies was previously described as a "halo effect," but a lack of cogent information about a company's explicit financials can cause investor sentiment to tumble.<div data-qa="message_content">Read more: <a href="https://www.businessinsider.com/netflix-heres-why-investors-are-lining-up-to-buy-the-companys-bonds-2019-4?utm_medium=ingest&amp;r=US&amp;IR=T">Here's how Netflix remains an investment darling despite billions in outstanding debt and a junk rating</a></div><div role="group" aria-label="Message actions"></div> <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/webinar-headset-ceo-walks-through-successful-series-a-pitch-deck-2019-9">WATCH: The founder of buzzy cannabis-tech startup Headset walked us through the pitch deck that helped him raise $12 million and ink deals with Nielsen and Deloitte</a></h3> <div> </div> </div>

WeWork's attempt to tap junk-bond investors isn't working this time - 'Their borrowing model is seriously in question at this point'

<div class="KonaFilter image-container display-table"><div><div class="image on-image">ReutersAdam Neumann, former CEO of WeWork</div></div></div><ul class="summary-list"><li>WeWork bonds traded at record lows Wednesday and are now among the most expensive to short in the US corporate market. </li><li>$67 million of The We Company debt is on loan, around 10% of the total, demonstrating that investors have moved to short the flailing startup, according to IHS Markit data. </li><li>"The company has atrocious corporate governance and now that investors are finally doing credit work on the name, they aren't liking what they see," said Christian Hoffman, a portfolio manager at Thornburg Investment Management, in an interview with Business Insider. </li><li> <a href="https://www.businessinsider.com/prime?module=article&amp;area=summary">Click here for more BI Prime stories</a>.</li></ul>Another day, another dollar against WeWork. Investors have piled into short positions against the beleaguered unicorn's high yield junk debt to make the startup's bonds some of the most expensive to borrow in US corporate history. Some $67 million or 10% of the company's outstanding $669 million of corporate debt was on loan, a proxy for short activity, according to data provider IHS Markit. The We Company's debt hit record lows Wednesday trading at 85 cents on the dollar. Credit ratings agency Fitch Ratings downgraded the company further into speculative or non-investment grade territory earlier this week. "This is indicative of the persistent reach for yield which has pushed people into companies which don't belong in high yield," John McClain, a portfolio manager at Diamond Hill, a US investment firm that manages fixed-income funds, told Business Insider in an interview.<h2>Knock-on effect</h2>"This house of cards failing could have a knock-on effect for SoftBank and other unicorn IPOs as people start to focus more on cash flow than simply growth."The debt is now among the most expensive to short in the $9.5 trillion US corporate debt market, according to Sam Pierson, a director at IHS Markit's securities lending division. It now costs 5.5% plus the cost of new borrowing to borrow WeWork debt, which now yields almost 12%.<div class="KonaFilter image-container display-table"><div><div class="image on-image">IHS MarkitWe Company bond prices</div></div></div>"The company has atrocious corporate governance and now that investors are finally doing credit work on the name, they aren't liking what they see," said Christian Hoffman, a portfolio manager at Thornburg Investment Management, in an interview with Business Insider. "'Fake it till you make it' sometimes works, but it is a terrible underwriting strategy.""WeWork was, and continues to be, a speculative investment and demonstrates that the market isn't always efficient in pricing risk," he added. WeWork previously issued $702 million in unsecured bonds in 2018, at a hot point in fixed-income markets. Now it's CEO Adam Neumann has been removed and its IPO plans shelved. The company's inaugural junk bonds yielded 7.875% and attracted plenty of investor interest, <a href="https://www.businessinsider.com/giant-tech-firms-like-uber-tesla-are-lapping-up-junk-debt-and-demand-is-growing-2018-11?r=US&amp;IR=T">following in the path</a> of other fast-growing tech companies like Uber, Tesla, and <a href="https://www.businessinsider.com/netflix-heres-why-investors-are-lining-up-to-buy-the-companys-bonds-2019-4?utm_medium=ingest&amp;r=US&amp;IR=T">Netflix</a> in tapping the high-yield market. Investors have become increasingly wary, however, of cash-burning companies piling on leverage amid dubious financials.<a href="https://www.businessinsider.com/wework-return-to-junk-bonds-isnt-working-ipo-valuation-fears-2019-9?r=US&amp;IR=T">WeWork's recently mooted plans of issuing yet more junk debt was met with derision from investors. </a>Business Insider has reached out to WeWork and SoftBank for comment. <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/wework-ipo-scott-galloway-impact-jp-morgan-softbank-2019-9">Scott Galloway explains who gets hosed from WeWork's IPO disaster</a></h3> <div> </div> </div>

Traders are piling in to short WeWork's 'house of cards' junk bonds - and the cost of the bets are some of the of the priciest on record

<div class="KonaFilter image-container display-table"><div><div class="image on-image"><a href="https://www.flickr.com/photos/helgethomas/17198940389/">Helge Thomas/flickr</a></div></div></div><ul class="summary-list"><li>Netflix borrowed $2 billion in junk (not investment grade) bonds on Wednesday from investors hungry to get involved in the company. </li><li>Positive market conditions have made Netflix's decision to sell more debt lucrative despite its non-stop cash burning spree.</li><li>The company's $12 billion debt pile and competition from streaming rivals is of little concern to investors and isn't likely to be anytime soon. </li></ul>You would think the increasingly competitive landscape for streaming platforms would dim the appeal of Netflix to bond investors but then again Stranger Things have happened. The streaming platform is under greater pressure to deliver audience growth figures following the launch of Disney+ recently, as well as sustained challenges to the company from rivals such as Amazon <keyword id="46801" type="COMPANY" weightage="60" keywordseo="prime">Prime</keyword> and Hulu. The market for content is becoming increasingly congested as a result, with Netflix issuing guidance that it would spend around $15 billion on content this year with a free cash flow deficit of $3.5 billion, <a href="https://variety.com/2019/digital/news/netflix-content-spending-2019-15-billion-1203112090/">as reported by Variety.</a>Netflix's latest offering to credit investors - a $2.24 billion bond issue was split into a $900 million dollar deal and a €1.2 billion ($1.34 billion) tranche both due in 2029- attracted $6 billion in investor demand, highlighting the company's appeal, <a href="https://www.bloomberg.com/news/articles/2019-04-24/netflix-junk-bond-offering-is-said-to-draw-6-billion-of-orders">according to Bloomberg.</a> It takes Netflix's total debt to $12.3 billion with the company making no plans to become cash flow positive until 2021 as it continues to splurge on new content. The deal was priced at par but is <a href="https://markets.businessinsider.com/bonds/netflix_incdl-notes_201818-29_regs-bond-2029-usu74079al58">now trading up nine cents on the dollar, meaning that its actual yield has been depressed given the increased bond price.</a>The debt pile indicates that Netflix's leverage - the ratio of debt to earnings a company has - is now at 6 times, which would mark a record for the company's gross leverage, according to CreditSights, whose analysts are skeptical of Netflix's recent deal. Having high leverage means a company has more debt than assets available to pay off debts at a given time and has been a growing concern for the market as <a href="https://www.businessinsider.com/what-are-leveraged-loans-what-are-clos-and-should-you-be-worried-2019-3?r=US&amp;IR=T">leveraged debt levels have boomed in recent years. </a>Netflix is a darling of debt markets. Creditors have been piling in to lend to the junk rated company, rated Ba3/BB- (sub-investment grade).It's a continuation of the high yield (read: more risky) market's rise in prominence in recent years. Yield-hungry investors are searching for fresh options amid low interest rate offerings from global central banks making traditional options like US Treasuries less attractive. Importantly, Netflix's repeated issuance - it took out a similar $2 billion bond last October - makes it a highly liquid and attractive option, says John McClain, a portfolio manager at Diamond Hill Capital Management, a US investment firm that manages fixed-income funds."The current position for Netflix is great, the market has been starved for supply, and the Fed is effectively on a permanent pause," McClain said in an interview with Business Insider. "It makes them attractive to this market, they offer a compelling product and have been very successful compared with other unicorns." The high-yield market had been lucrative to tech stocks because financing has tended to be cheaper and more effective than selling more stock with other companies <a href="https://www.businessinsider.com/giant-tech-firms-like-uber-tesla-are-lapping-up-junk-debt-and-demand-is-growing-2018-11?r=US&amp;IR=T">such as Tesla, SpaceX and WeWork taking a similar route in recent years.</a>There are doubters. "We are concerned a misstep in its growth trajectory, while cash burn continues to mount, could result in material downside for Netflix bonds," CreditSights analysts Mary Pollock and Jay Mayers wrote in a note. "The impact of new competitors in the space is real."But, McClain said, investors have been falling overs themselves to lend to companies like Netflix for years and would probably do the same again if they came back to market later this year to help fund their cash shortfall. <a href="http://read.bi/ai-101-free"></a> <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/donald-trump-airline-shuttle-transportation-pan-am-eastern-new-york-2019-1">The rise and fall of Donald Trump's $365 million airline</a></h3> <div> </div> </div>

Here's how Netflix remains an investment darling despite billions in outstanding debt and a junk rating

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div></div></div>FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors. <a href="http://www.financial-planning.com/news/independent_bds/charles-barkley-plug-a-slam-dunk-for-raymond-james-advisor-2691946-1.html">Charles Barkley gives a shout out to his financial advisor</a> (Financial Planning) When former NBA all-star Charles Barkley was on the floor of the New York Stock Exchange CNBC anchor Bob Pisani asked him who handled his investments.Barkley's response, "Raymond James. I'm [at] Raymond James. Birmingham, Ala. My guy's name is Glenn Guthrie. I've been with him for 27 years and I trust him with my life." <a href="http://www.investmentnews.com/article/20150217/BLOG12/150219946/longer-life-expectancies-are-killing-pension-funds">People are living longer and its crushing pension funds</a> (John Mauldin)John Mauldin writes, "It is a fairly well-defined trend. The actuarial accountants whose responsibility it is to track these things updated the life expectancy tables for a 65-year-old male, who can now expect to live an additional 21.6 years, two years longer than in the old table." By his count pensions may be underfunded by as much as $4.1 trillion because fund managers assume unrealistic earnings of 7.5-8.0%. <a href="http://wealthmanagement.com/careers/when-you-move-clients-move-too">Things to consider when contemplating a move to a new firm</a> (Wealth Management)Changing firms brings about the opportunity for better pay. However, a move can be costly if the advisor doesn't consider the interests of his/her clients. Mindy Diamond of Wealth Management six things an advisor must take into account before making the big move. <a href="http://www.financial-planning.com/gallery/fp/10-robo-advisor-moves-to-watch-2691950-1.html">The rise of the 'robo advisor'</a> (Financial Planning)The 'robo advisor' has begun to take market share from the traditional financial advisor. Financial Planning outlines the advantages and disadvantages of 10 names in the space. Names highlighted include: Schwab, Vanguard, Wealthfront, Betterment, Motif, Jemstep, SigFig, Aspiration Fund Advisor, Robinhood and Guardvest. <a href="http://www.investmentnews.com/article/20150217/TECH/150219943/3-must-dos-from-the-t3-conference">3 takeaways from the T3 Conference</a> (Investment News)The rise of the 'robo advisor' allows firms to manage thousands of clients, far more than the traditional advisor. Advisors should not fight the trend and should instead embrace change. Steve Sanduski of Investment News says these are three 'must dos' from the T3 Conference: "Implement a robo-adviser strategy, offer a "consumer grade" client interface, and educate your clients." <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/iphone-headphones-tricks-2015-2">14 things you didn't know your iPhone headphones could do</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="o2OGM3czpWcydnvhjbkDBd6feXPuExiD" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

Charles Barkley trusts his financial advisor with his life

MONEYBALL AT WORK: They've Discovered What Really Makes A Great Employee

<div class="image-container"><div class="image">derekskey via <a href="http://www.flickr.com/photos/derekskey/9159256442/in/photostream/">www.flickr.com</a> creative commons</div></div>
ONE of the most perplexing questions of the early 21st century is this: how can the French, who invented joie de vivre, the three-tier cheese trolley and Dior's jaunty New Look, be so resolutely miserable? To outsiders, the world's favourite tourist destination embodies the triumph of pleasure over desk-slavery, slow food over fast, the life of the flâneur over that of the frenetic. Yet polls suggest that the French are more depressed than Ugandans or Uzbekistanis, and more pessimistic about their country's future than Albanians or Iraqis. A global barometer of hope and <keyword id="6358439" type="UNKNOWN" weightage="60" keywordseo="happiness">happiness</keyword> puts the French second to bottom of a 54-country world ranking, behind austerity-battered Italians, Greeks and Spaniards, and ahead only of Portugal.
Happiness is of course a slippery concept. Asked if they are happy, people everywhere are more than likely to say yes; far fewer say that they laugh much. Gallup, a pollster, has devised a global "positive experience index", based on whether respondents report that they laughed and smiled a lot or did something enjoyable the previous day. By such measures, <keyword id="6354785" type="COUNTRY" weightage="60" keywordseo="France">France</keyword> does better than the world average. But take out war-torn or poor countries, and measure the French against fellow rich nations, and they still turn out to be unhappier than their peers. The French report fewer "happy experiences" than those in America, Britain, Germany, Switzerland, Sweden, Canada, Norway, the Netherlands, Austria and Belgium. The land of the bon vivant is an unhappy outlier.
Claudia Senik, a French economist at the Paris School of Economics, calls this the "French unhappiness puzzle". In a 2013 study, she found that the French were not only unhappier than their level of wealth and unemployment would suggest, but also more discontented than French-speaking people in Belgium and Canada (so language is not the reason), and more miserable when they emigrated compared with non-French expatriates in the same place (so they take their gloom with them). "Unhappiness seems to be more than about life in France," Ms Senik concluded. "It is something about being French."
Naturally, Ms Senik's findings caused a stir in France, prompting Maureen Dowd, a New York Times writer who was visiting Paris at the time, to report that "joie de vivre has given way to gaze de navel". Le Monde ran three pages under the title "Liberté, Égalité, Morosité", in a bid to decode its fellow countrymen's "persistent melancholy". France, it turns out, has the highest suicide rate in western Europe after Belgium and Switzerland. An American psychiatric study showed that, among ten rich countries, the French were the most likely to have a "major depressive episode" at some point in their life. Even the French language seems to be particularly well stocked--morosité, tristesse, malheur, chagrin, malaise, ennui, mélancolie, anomie, désespoir--with negativity. Can there really be something about being French that makes for so much gloom?
<h3>Fifty shades of noir</h3>
Two periods in France's recent history have contributed most to the rich seam of misery in its culture--one after the revolution, the other after the second world war. In the quarter-century from the fall of the ancien régime in 1789 to 1814, France overthrew a monarchy, endured the Terror, and lost an empire. After this period the Romantic movement, from Baudelaire to Chopin, expressed a melancholy infused with nostalgia and ambivalence towards a society dominated by rationalist thought and bourgeois values.
In "René", a novel published in 1802, Chateaubriand introduced to the world the tortured French youth, whose "wretched, barren, and disenchanted" existence embodied what the writer called the mal du siècle. In his memoirs, Chateaubriand recognised that he had set more of a trend than he had bargained for:
<h3>If René did not exist, I would not write it again...all we hear nowadays are pitiful and disjointed phrases; the only subject is gales and storms, and unknown ills moaned out to the clouds and to the night. There's not a fop who has just left college who hasn't dreamt he was the most unfortunate of men; there's not a milksop who hasn't exhausted all life has to offer by the age of sixteen; who hasn't believed himself tormented by his own genius; who, in the abyss of his thoughts, hasn't given himself over to the "wave of passions"; who hasn't struck his pale and dishevelled brow and astonished mankind with a sorrow whose name neither he, nor it, knows.</h3>
Romantic miserabilism was experienced as a form of pleasure. "Melancholy", wrote Victor Hugo, "is the happiness of being sad." It was treated as a noble state, a higher aesthetic condition. "I do not pretend that joy cannot be allied with beauty," wrote Baudelaire in his diary. "But I do say that joy is one of its most vulgar ornaments; whereas melancholy is, as it were, its illustrious companion." Much of this tradition is firmly fixed in today's French mind. Hugo's poem "Melancholia" is required reading for French lycée students, as is Alfred de Musset's "La Nuit de Mai", whose narrator laments that "Nothing makes us so great as great sorrow."
The strange beauty of melancholy finds some echo in mid-20th-century France, which produced a second wave of miserabilism. Françoise Sagan's "Bonjour Tristesse", published in 1954, for instance, opens with the 17-year-old Cécile's lament:
<h3>A strange melancholy pervades me to which I hesitate to give the grave and beautiful name of sorrow. The idea of sorrow has always appealed to me, but now I am almost ashamed of its complete egoism. I have known boredom, regret, and occasionally remorse, but never sorrow. Today it envelops me like a silken web, enervating and soft, and sets me apart from everybody else.</h3>
Yet the ennui that marked this second period had less to do with nostalgia than nausea. In "L'Etranger", Albert Camus's protagonist, Mersault, is perhaps the world's best-known embodiment of anguish in the face of the unknowable meaning of existence, or the absurd. Post-war French theatre developed the absurd, through the plays of Camus, Jean Anouilh and the Franco-Romanian Eugène Ionescu. Samuel Beckett, an Irishman, wrote "Waiting for Godot" in French. On a chilly winter's evening in 1953 on Paris's left bank, two years before the play went on to unsettle English-speaking audiences, it was first staged at the 75-seat Théâtre de Babylone, and struck a chord with post-war Paris.
Neither Camus nor his contemporary, Jean-Paul Sartre, was ultimately a pessimist. But it is the torment of existentialism, rather than its conclusions, that captured the imagination. Indeed, the left-bank literary clique led by Sartre and Simone de Beauvoir, which gravitated to the cafés of Saint-Germain-des-Près, adopted ennui as a way of life as well as a philosophy. When Sartre handed the original manuscript of "Nausea" to Gallimard, his publisher, he entitled his novel "Melancholia".
Perhaps the best exemplar of miserabilism among contemporary French fiction writers is Michel Houellebecq, the controversial Goncourt-prize-winning novelist, in such nihilist works as "Whatever" or "Atomised". His characters invariably lead empty, often sordid, always disillusioned lives. "In the end," writes Mr Houellebecq in "The Elementary Particles", "there's just the cold, the silence and the loneliness. In the end, there's only death."
There have, of course, been periods during which the gloom lifted. It was after the double shock of the Franco-Prussian war of 1870-71 and the bloody Paris Commune, after all, that the Impressionists took their tubes of paint and brushes outdoors, delighting in light and colour. Despite a measure of fin-de-siècle anxiety, the belle époque was a moment of breezy certainty. Gustave Eiffel unveiled his wrought-iron tower in 1889. By 1900 the City of Lights drew 51m visitors to its universal exhibition, under the theme of "Paris, capital of the civilised world", and Matisse, Derain and other fauves had started to capture exuberant colour and warmth on canvas. Yet miserabilism seems to have a greater hold on the French mind today.
<h3>I doubt, therefore I am</h3>
One reason could be the French appetite for brutal self-criticism. From Descartes onwards, doubt is the first philosophical reflex. "The rationalist tradition makes us sceptical; we exist through criticism," argues Monique Canto-Sperber, a philosopher and director of Paris Sciences et Lettres, an elite university. "We treat those too full of hope as naive." In "Candide, or The Optimist", published in 1759, Voltaire mocks the folly of looking on the bright side in the face of unimaginable horrors. "Optimism", says a disabused Candide in the novel, "is the madness of insisting that all is well when we are miserable." When a French magazine recently tried to decode today's national pessimism, it concluded: "It's Voltaire's fault". "We find it more chic and more spiritual to doubt everything."
Up to a point, this is an affectation of the elite. "It is in a certain Parisian milieu that there are intellectuals who are grumpy by trade," argues Jack Lang, the Socialist former culture minister: "There is a gap with the rest of French society." Yet France cherishes public intellectuals, so their influence spreads wide. It is a talking, thinking culture. Its films value dialogue over plot; its talk-shows are interminable. The French, wrote a helpful official guide for British servicemen heading to France for the 1944 liberation offensive, "enjoy an intellectual argument more than we do. You will often think that two Frenchmen are having a violent quarrel when they are simply arguing some abstract point."
The country treats its philosophers like national treasures, even celebrities, splashing photographs of them across the pages of glossy magazines. And it ensures that the canon of French thought is fed to the whole country. All pupils taking the school-leaving baccalauréat exam must study philosophy, and teenagers are examined on such cheery essay questions as "Is man condemned to self-delusion?" or "Do we have an obligation to seek truth?". So if French intellectuals are predominantly critical pessimists, miserabilism may in part be the consequence of holding them in such esteem. Were Americans to pay more attention to the writings of Noam Chomsky and Jared Diamond, perhaps they would be gloomy too.
This critical reflex reaches right into the classroom, generating a further source of negativity. In French schools, for example, the tradition is for teachers to grade harshly, and praise with excessive moderation. Under a nationwide system that awards marks out of 20, a pupil doing a dictée has points (or even half-points) deducted for every error; so a child swiftly ends up with zero. The idea is that all children can always do better. The result is a lack of what the French, borrowing English syntax, call "la positive attitude".
Fully 75% of French pupils worry that they will get bad grades in maths tests, according to an OECD study, nudging stressed-out South Korean levels (78%). A recent government-commissioned report on a small pilot experiment in some French secondary schools, where Cartesian grading had been shelved in favour of a more encouraging system, noted with some surprise that weaker pupils were absent from school less often, more confident in the classroom, and "less stressed when faced with failure".
If the French are life's critics, they are at the same time idealists, and these two make unhappy bedfellows. Thanks to the philosophers of the Enlightenment and the 1789 revolution, the concept of progress towards an ideal society has, despite periodic turmoil and bloodshed, been a powerful narrative in the French mind. The best embodiment of this is the French declaration of human rights. Unlike the American declaration of independence in 1776, which guaranteed the rights of all Americans, the French version 13 years later guaranteed the rights of all mankind.
To this day, the ambition to inspire the world with a secular republican ideal, backed by the spread of French culture and language, stirs political leaders. "France is only itself when in pursuit of an ideal," wrote Dominique de Villepin, a former prime minister, in a deliberate echo of Charles de Gaulle's reference to the country's "exceptional destiny". It is great stuff for myth-making, as De Gaulle demonstrated so masterfully after liberation from Nazi occupation. But when reality does not quite match up to ideals, self-criticism kicks in and misery results.
Left-wing French intellectuals never quite got over the failed revolutionary promise of the May '68 student uprising, nor their disillusion at the declining influence of French thought from the 1980s onwards. Others struggled to reconcile French values with the country's darker moments, notably under occupation. Today, "belief in a better tomorrow has come to an end," says Christophe Prochasson, a French historian. "There is a crisis of progress."
Put simply, the French know that they have enjoyed a fabulous way of life, and are depressed by the thought that neither the French model, nor Europe, seems able to provide the prosperity or the national grandeur it once did. The upshot is that "we are collectively animated by a sense of doom and decline," says Dominique Moïsi, of the French Institute of International Relations. "We have in mind this great nation of ours: the major power in Europe under Louis XIV and Napoleon I, the biggest allied standing army in the first world war. Now there's a sense of 'What happened to us?'."
<h3>The pleasure of pouting</h3>
France is not alone in contemplating its diminished status. Britain had a grand past too. But the post-colonial, post-industrial British do not share the French sense of national depression, partly because they never considered their empire to be part of an effort to export a culture or a model society. And, having accidentally given the world the English language, Britain feels relaxed about its global cultural influence. The contrasting decline of French, once the language of European diplomacy, high culture and polite conversation, is felt as a national wound.
Idealistic France's painful reckoning with decline is therefore quite different to the British approach of resigned muddling-through, argues Jean-Philippe Mathy, of the University of Illinois, in "Melancholy Politics". It is almost, says Mr Prochasson, the historian, a form of bereavement. "There is a very profound pessimism today due to the realisation that France is becoming a country like any other, and this is difficult."
Does it matter? Certainly, France's high suicide rate is a serious cause for concern. Dissatisfaction also makes the French a particularly fractious people to govern, ready as they are to contest, and protest, at the slightest excuse. Confidence too is elusive in a country given to pessimism, making it harder still for politicians to persuade the French to try new ways of doing things.
Yet pessimism has not stopped France from enjoying itself. French hedonism has survived miserabilism--or perhaps provided a refuge from it. Even in the immediate aftermath of the 1789 revolution, the country exhibited a "thirst for pleasure", as one contemporary newspaper report put it: "The stream of fashion, a succession of dinners, the luxury of their splendid furniture and their mistresses, are the objects that chiefly employ the thoughts of the young men of Paris." With firework displays, extravagant fashion, circuses and carousels, Paris at the time, for the rich at least, was all about enjoyment. During les années folles, upper-class American tourists took the steamer to Normandy and then the railway to Paris, drawn to France, writes Harvey Levenstein, a historian, as "a land that was free from American puritanism, where the pursuit of pleasure reigned supreme".
Nor has miserabilism discouraged the French preoccupation with beauty and taste. France does not wear its gloom like a dreary accessory. On the contrary, its culture delights in elegance, sensuality, quality and form: the exquisite hand-stitching on the haute-couture dress; the immaculately glazed tartes aux framboises lined up in the pâtisserie window. The aesthetics of daily life, the art de vivre, remains a source of both grand gestures and small stolen pleasures. It is no coincidence that the two biggest luxury-goods groups in the world are French.
Modern French culture may not have supplied great writers to rival Hugo or Molière, and Paris may lack the buzz of New York or London. But it is hard to argue that negativity has stifled French creativity. Would France have brought the world existentialism had Sartre been a cheerful fellow?
The critical impulse has promoted cultural innovation. Both cinema's New Wave and French literary theory were born of critical reconstruction of what came before. Some of France's most creative periods have followed bleak times: the flowering of painting, literature and science after its defeat in the Franco-Prussian war, or of the avant-garde in art and fashion after the horrors of the first world war. Christian Lacroix, a French designer, points out that war and revolution in France have been times of "creative reinventions, the moment new forms of luxury come into play".
Perhaps the French need dissatisfaction and thrive on doubt. "There is a certain pleasure taken in being unhappy: it's part of an intellectualism of French culture," says Ms Senik. "Malaise and ennui are to France what can-do is to America: a badge of honour," wrote Roger Cohen in the New York Times recently. Pessimism does not preclude pleasure. All that sitting around at pavement cafés, looking fashionably discontented, can be fun. Optimism is for fools; sophisticates know better. Bleak is chic--especially when opening another bottle of Saint-Emilion and reaching for the three-tier cheese trolley.
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