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<ul class="summary-list"><li>When the enslaved population was first freed, the <keyword id="9989162" type="UNKNOWN" weightage="60" keywordseo="freedmans-bank">Freedman's Bank</keyword> was established to provide a savings and wealth-building tool.</li><li>But just nine years after it opened, the bank collapsed thanks to risky investments and mismanagement by the bank's all-white, all-male board. Black bank customers lost millions in deposits.</li><li>I know from my own family's history that the Freedman's Bank collapse is to finance what the Tuskegee experiments are to healthcare — the spark that lit the fire of mistrust.</li></ul><p>The 2008 housing market crash <a href="https://www.cnn.com/2010/LIVING/10/19/inam.housing.foreclosure.money/index.html" target="_blank" rel="noopener">hit African Americans hardest</a>. Predatory lenders targeted poor and minority homeowners with high-interest refinancing options and balloon payment structures. In addition, Black and Latinx households were nearly 50% more likely to face foreclosure than their white counterparts, <a href="https://www.theatlantic.com/business/archive/2015/06/black-recession-housing-race/396725/" target="_blank" rel="noopener">according to a report from the US Department of the Treasury</a>. </p><p>This was not the first time Black people were exploited financially.</p><h2>The broken promise of Freedman's Bank</h2><p>A section of the 13th Amendment originally promised 40 acres and a mule to newly freed slaves. This proposal faced violent backlash from Southerners and their northern supporters, so it was eliminated from the legislation. Instead, the final bill President Lincoln signed included a provision to establish the Freedman's Savings and Trust Company in New York City in March, 1865.</p><p>Black Americans could open an account for as little as a nickel; interest was paid on deposits of $1 or more. More than 100,000 Black people became customers. They included Black Union soldiers who had earned money in exchange for their military service in the Civil War, and skilled laborers such as cooks, barbers, seamstresses, and carpenters. The bank's headquarters moved to Washington, DC in 1867, and eventually 37 branches were opened across the South.</p><p><a href="https://review.chicagobooth.edu/finance/2020/video/150-year-old-bank-failure-may-still-be-haunting-black-communities" target="_blank" rel="noopener">According to research</a> by Constantine Yannelis, assistant professor of finance at the University of Chicago's Booth School of Business, and his partner, Luke C. D. Stein, assistant professor of finance at Babson College, the short-term effects of being properly banked included raised incomes and literacy levels, and allowed the formerly enslaved population to accumulate wealth through land ownership.</p><p>It also allowed individuals to smooth out the seasonality of farming by building up a cash cushion. Historians believe this is likely due to limitations on how much money could be withdrawn from the bank at one time, so that bank customers were forced to save. This also facilitated the fraud that was to come.</p><h3>When Freedman's Bank closed</h3><p>A short nine years after opening, the Freedman's Bank closed in 1874. The bank's deposits had been invested into risky, speculative ventures, and the First National Bank had offloaded its liabilities onto Freedman's Bank books with the express consent of an <a href="https://www.blackenterprise.com/us-backed-bank-robbed-ex-slaves-57-million/">all-white, all-male board</a> of trustees. The board had modified the bank's original charter, ending the requirement that the deposits be invested only in <a href="https://blog.oup.com/2007/02/black_history_m2/">government-backed securities</a>. The board also didn't notify their customers about this revision to the charter.  </p><p>Over 60,000 depositors lost over $3 million (in today's dollars, that's $68.2 million). Frederick Douglass, who was brought on board as the bank's president and invested $10,000 of his own money to prop up the bank, quickly resigned after recognizing the extent of the bank's losses.</p><p>Douglass noted that the collapse of the Freedman's Bank "was equivalent to adding another 10 years of slavery to the Negro man." The Federal Deposit Insurance Corporation did not exist until 1933, but, concerned about a race riot, Congress authorized bank customers to receive up to 62 cents for every dollar lost. <a href="https://blog.oup.com/2007/02/black_history_m2/">Most weren't able to collect</a>.</p><h2>The Freedman's Bank collapse destroyed Black people's trust in financial systems</h2><p>My grandmother had a bank account. I remember watching her at the beginning of the month, seated at her dining room table, writing out checks and putting them in their respective envelopes. I got to "help" by sealing the envelopes and putting on the stamps.</p><p>In the 1960s and '70s, there weren't many bank branches in our neighborhood on the south side of Chicago. Moreover, <keyword id="6368751" type="UNKNOWN" weightage="60" keywordseo="banks">banks</keyword>' business hours were limited, so if you needed cash you had to plan on going on your lunch hour, or wait in long lines on Saturday morning. ATMs didn't exist. Most people used currency exchanges.</p><p>My grandmother also kept cash in her house — new, crisp bills in denominations of $5, $10, and $20. I never knew how much, and I didn't dare ask. I did know that it was enough to cover "an emergency." However, that wasn't the only reason to have cash. My grandmother didn't trust banks. </p><p>Born at the end of World War I, my grandmother didn't experience the demise of the Freedman's Bank firsthand. Her grandparents were slaves in Georgia, who then relocated to Chicago during the early days of the Great Migration, refugees in their own country. Even if the family didn't experience a loss of funds directly, they would have heard about Freedman's Bank closing. The collapse of that bank echoed across distance and generations. It left many African Americans with a distrust of financial institutions. In short, in the African American community, the Freedman's Bank collapse is to finance what the Tuskegee experiments are to healthcare.</p><p>Combined with the <a href="https://www.businessinsider.com/personal-finance/us-laws-policies-kept-black-americans-from-owning-homes-2020-9" target="_blank" rel="noopener">history of redlining</a>, housing covenants and zoning laws, predatory lending and inequitable mortgage rates, as well as other <a href="https://www.businessinsider.com/personal-finance/what-racism-has-cost-black-americans-black-tax-2020-9" target="_blank" rel="noopener">federal- and state-sanctioned rules</a> barring Black people from living in certain neighborhoods and generating wealth, it's no wonder that, <a href="https://www.brookings.edu/blog/up-front/2020/02/27/examining-the-black-white-wealth-gap/">according to the Brookings Institution</a>, in 2016 white families had on average a net worth of $171,000 while Black families had a net worth of $17,150.</p><p>Instead, the wonder is that, nevertheless, Black families have persisted, waiting for the time when it becomes clear that, as a former president once stated, "A country cannot succeed when a shrinking few do well and a growing many barely make it."</p><p><em>This story is part of <a href="https://www.businessinsider.com/category/inside-the-racial-wealth-gap" target="_blank" rel="noopener">Business Insider's "Inside the racial wealth gap" series</a>.</em></p><ul class="read-more-links"><li>Read more "<keyword id="9905444" type="UNKNOWN" weightage="60" keywordseo="inside-the-racial-wealth-gap">Inside the racial wealth gap</keyword>" stories:</li><li><a href="https://www.businessinsider.com/personal-finance/us-laws-policies-kept-black-americans-from-owning-homes-2020-9">Segregation has been embraced, mandated, and maintained in the United States by law and policy — here's how</a></li><li><a href="https://www.businessinsider.com/personal-finance/black-millionaires-on-building-wealth-2020-9">What 3 self-made Black millionaires want Black Americans to know about building wealth</a><a></a></li><li><a href="https://www.businessinsider.com/personal-finance/what-racism-has-cost-black-americans-black-tax-2020-9">Racism has cost Black Americans $70 trillion since the start of slavery — here's how that cost breaks down</a></li><li><a href="http://businessinsider.com/personal-finance/civil-rights-leaders-racial-wealth-gap-2020-9">Civil rights leaders at the head of the NAACP and the National Urban League say Americans get 2 things wrong about the racial wealth gap</a></li></ul>

Black Americans' rocky relationship with banks can be traced back to an institution that promised wealth but collapsed after just 9 years

<p class="source"><span>Stephen Freedman</span></p><p>One of the largest financial firms in the world is positioning itself to be the greenest bank on Wall Street.</p><p><a href="https://www.ubs.com/us/en.html">UBS</a>, which manages over 2.7 trillion Swiss francs, has made sustainability the cornerstone of its business. As such, the bank has taken a number of steps to be the go-to firm for sustainable and impact investment offerings.</p><p>These investment solutions, which aim to deliver outsize returns and remedy societal and environmental ills, are becoming more and more popular among financial firms. But UBS is leading the pack.</p><p>The Swiss-based bank told Business Insider its sustainable investments grew by about 40 billion Swiss francs in 2016. Those investments now make up about 35%, more more than $970 billion Swiss francs, of the bank's "total invested assets."  </p><p>On April 3, the firm's American investment bank, UBS Wealth Management Americas, announced the appointment of Stephen Freedman as its head of sustainable solutions. In his new capacity, Freedman will be tasked with spreading awareness about sustainable investing among the firms financial advisers.</p><p>Freedman told Business Insider that sustainability is integral to driving profit, especially in the long-term. </p><p>"There is this misconception that there is a trade-off," Freedman told Business Insider. "A firm has to pick between either sustainable investment solutions or the most profitable investment solutions, but the fact is sustainable investments <em>are</em> profitable investments."</p><p>Freedman says that UBS' European presence gives it a leg up over some American banks in the sustainable investment space, because that's the region where the investment trend first gained traction. </p><p>In January, at the World Economic Forum in Davos, Switzerland, the bank<span> presented a white paper titled "</span>Mobilizing Private Wealth for Public Good<span>." There, UBS outlined how to "channel private wealth towards the United Nations Sustainable Development Goals," which cover issues such as health, hunger, and the environment. </span></p><p><span><span>The firm also pledged to invest $5 billion in sustainable development-related investment options over the course of the next five years. </span></span></p><p>That pledge followed UBS' partnership with sustainable investment fund Rethink Impact, which is the largest fund of its kind. The joint-venture raised over $110 million to tackle issues relating to the UN's sustainability goals, which cover issues relating to health, climate change, and hunger.</p>             <h3>NOW WATCH: <a href="http://www.businessinsider.com/henry-blodget-ray-dalio-bridgewater-interview-part-1-2017-4">Bridgewater's Ray Dalio on when a downturn might come</a></h3>                                    Please enable Javascript to watch this video

UBS wants to be Wall Street's greenest bank

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>REUTERS/Peter Nicholls/File Photo</span></p></div><p></p></div></div></p><ul class="summary-list"><li>Eric Freedman of US Bank Wealth Management says he's guiding his real estate investments away from big metro areas on the coast and toward the Midwest, where there's more potential for growth.  </li><li>He told Business Insider that he sees trends supporting that view in both the office and residential markets. </li><li>Freedman says investing in real estate for diversification is a smart strategic move, even though some of the best-known real estate markets in the US are becoming tougher places to get good returns. </li><li><a href="https://www.businessinsider.com/prime?module=article&amp;area=summary">Click here for more BI Prime stories</a>.</li></ul><p>Sometimes people have to leave the big city to settle down someplace a little quieter. That's essentially what Eric Freedman - the <a href="https://www.businessinsider.com/investment-themes-and-opportunities-from-170-billion-us-bank-cio-2019-8">chief investment officer for US Bank's $170 billion wealth management division</a> - is doing with his investments.</p><p>Freedman says he's seeing smaller cities in the Midwest as some of the most appealing investment options in the real estate market, replacing the largest and wealthiest cities in the country.</p><p>He argues that Midwest cities are an attractive option because demand is climbing and prices are on the rise as they've successfully diversified their economies away from heavy industry or manufacturing. By comparison, major coastal cities don't have the same opportunities for growth and returns on investment.</p><p>Yet while there are a number of geographical areas he's avoiding, he says he's certain of the overall role real estate can play for the bank's clients.</p><p>"We do like core real estate as a part of a diversified portfolio," he told Business Insider in an exclusive interview. "Houses and commercial properties do have some inflation protection inherent in them."</p><p>In an exclusive interview with Business Insider, Freedman identified two long-lasting patterns in the real estate market that guide his investment decisions.</p><h3>Office trends</h3><p>Freedman said businesses are finding it more appealing to set up shop in smaller cities instead of gravitating to huge coastal cities like New York, Seattle, and <a href="https://www.businessinsider.com/san-francisco-housing-market-facts-rent-2019-5">San Francisco</a>. He says Minneapolis is "very business friendly" while Pittsburgh has a "transformational" approach to attracting businesses.</p><p>The companies are being drawn by tax incentives as well as those lifestyle benefits. He adds that those larger cities often have infrastructure constraints that lead to problems like <a href="https://www.businessinsider.com/us-cities-with-most-traffic-2019-2019-2">more traffic</a>, which is less of a problem in a city of a few hundred thousand than in one of several million.</p><p><em><strong>Read more</strong>: <a href="https://www.businessinsider.com/stock-market-investing-recommendations-for-trade-war-according-to-ubs-2019-8" data-analytics-position="1">The American consumer is a rare bright spot as trade-war tensions rage. Here's how UBS says stock traders can take advantage.</a></em></p><p>"You're seeing companies that are looking for more improved and more balanced lifestyles for their employees, plus better affordability of buildings, of land, and places to expand," he said. "That's been a fairly consistent trend over the past three, four, five years especially."</p><p>That means businesses are forming there at a faster clip than they are in the largest metro areas. Freedman says there is also a supply problem, as the market for office real estate in big cities "tend to be very, very picked over." He also has concerns about investing in funds that focus too heavily on those places.</p><p>"There have been a lot of real estate funds that almost have to buy some of the quote-unquote 'big ugly deals," he added. </p><h3>Residential trends</h3><p>Freedman is tracking a simple phenomenon when looking at investments in the residential market: As the largest cities grow bigger and more expensive up, <a href="https://www.businessinsider.com/best-places-for-millennials-to-buy-homes-2019-7">people move to smaller ones</a>, where the pattern often repeats. So he's targeting "second and third tier" cities - loosely defined as places with fewer than a million people.</p><p>He says the most promising cities for residential real estate investment can be found in the Midwest, with examples includingColumbus and Cincinnati, Ohio; Indianapolis, Indiana; and Pittsburgh. Elsewhere he mentions Coeur d'Alene, Idaho and Raleigh-Durham, North Carolina as appealing spots.</p><p>Those are a good alternative to heavily-populated areas, especially on the West Coast.</p><p>"Multifamily as well as parts of the residential markets are seeing some levels of <a href="https://www.businessinsider.com/miami-condo-surplus-nyc-penthouses-los-angeles-mansions-real-estate-2019-7">overbuild and overpricing</a>" in cities like Seattle and San Francisco, Freedman says. "A lot of the Middle America states are benefiting from some of that."</p><p>In his view those patterns are likely to continue for years, and set up real estate in those markets for continued gains.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/taste-test-kfc-popeyes-fried-chicken-fast-food-2016-9">We did a blind taste-test of KFC and Popeyes fried chicken - here's the verdict</a></h3>        <div>                    </div>    </div>

The investment chief of US Bank's $170 billion wealth management business breaks down why he's betting heavily on Midwest cities like Minneapolis and Pittsburgh

<ul class="summary-list"><li>Average rent in <keyword id="11892836" type="UNKNOWN" weightage="60" keywordseo="new-york" source="Orion">New York</keyword> just hit a new all-time high of $4,000 per month.</li><li>That's nearly all of the city's median pre-tax income.</li></ul><p><keyword id="12473967" type="UNKNOWN" weightage="60" keywordseo="rents" source="Orion">Rents</keyword> are rising faster than wages in New York — and that means locals are breaking the bank to call the Big Apple home. </p><p>Not even Covid-19 could slow New York down. As the city bounces back from the pandemic's economic toll, residents are returning to NYC and it's pushed rents to new highs. </p><p>In the last six months, rents in Manhattan have surpassed historical highs, but in May they reached a new milestone — median rent soared to $4,000, according to appraisal firm Miller Samuel for <keyword id="14072656" type="UNKNOWN" weightage="60" keywordseo="douglas-elliman" source="Orion">Douglas Elliman</keyword>.</p><p>For New Yorkers earning the city's <a href="https://datacommons.org/ranking/Median_Income_Person/CensusCountyDivision/geoId/36061?h=geoId%2F3606144919">median income</a> of $52,409 a year, that average rent works out to nearly  92% of their pre-tax pay. Needless to say, that's way above what financial experts recommend budgeting for housing.</p><p>"New York City has rebounded beyond anyone's expectations," Brown Stevens, CEO of Bess Freedman, told Insider. "Even though prices have ticked up and interest rates are higher, people feel safer because of the high vaccination rate and the new Mayoral administration."</p><h2>The city may be on the up and up, but wages are not</h2><p>In May, the median rental price in Manhattan grew 25.2% from the previous year. The increase was driven by record demand from the city's prospective buyers. During the month, the amount of new leases increased 48% from 2021 levels. At the same time, the vacancy rate remained below 2% for the sixth consecutive month. </p><p>Although the city's housing boom has helped to stimulate the local <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword>, it's bad news for renters grappling with affordability. </p><p>That's because New Yorkers are becoming increasingly cash strapped.  </p><p>"For many New York workers, the minimum wage has been capped at $15 an hour since the end of 2018 and – as prices have gone up with inflation – the economic squeeze impacting working families has worsened," Latoya Joyner (D-Bronx, 77th AD), chair of the Assembly Labor Committee, said in a press <a href="https://alignny.org/press/workers-lawmakers-business-leaders-rally-for-minimum-wage-raises-in-new-york/">statement</a>. "As a result, New York's low-income workers have been increasingly trapped in a cycle that pushes them further down the economic ladder and into poverty."</p><p>To address the issue, a coalition of workers, labor unions, community organizations, and business leaders have launched a campaign to increase New York's minimum wage. Under the name <a href="https://www.raiseupny.com/">Raise Up NY</a>, the groups have introduced legislation that "answers the demands of working New Yorkers who need and deserve better compensation." </p><p>Through Senate Bill S3062C, the coalition wants lawmakers to index annual minimum wage increases to a formula that correlates with the rising cost of living. The bill has yet to be voted on, but if passed, will ensure two million New Yorkers receive raises averaging $2,000 each year, thus pushing minimum wage to $20.45 by 2025.</p><p>"Now, more than two years into a pandemic-related economic crisis, rent, inflation, the cost of gas and groceries, and billionaires' wealth have all gone up," Sen. Jessica Ramos, sponsor of the bill and the chair of the Senate Labor Committee (D, WF – SD13), said in a press statement. "The only thing that hasn't kept pace is our wages."</p>

Welcome to the typical NYC apartment: It costs $4,000 a month and is too expensive for the average New Yorker

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>CNBC</span></p><p class="caption">Eric Freedman, CIO of US Bank Wealth Management</p></div><p></p></div></div></p><ul class="summary-list"><li>Eric Freedman - who handles $170 billion as the chief investment officer of US Bank Wealth Management - is most positive on parts of the market that have been neglected, or that have extremely long-term trends working in their favor.</li><li>He says focusing on those two themes could help investors steady the ship during and after the latest bout of extreme volatility.</li><li>The critical trends that Freedman is focusing on include US demographics and productivity.</li><li>Unpacked below are the areas of the market that Freedman currently favors.</li><li><a href="https://www.businessinsider.com/prime?module=article&amp;area=summary">Click here for more BI Prime stories</a>.</li></ul><p>As investors either <a href="https://markets.businessinsider.com/news/stocks/stock-market-today-yield-curve-inversion-triggers-recession-fears-2019-8-1028446749">flee the market</a> or hunt harder than ever for opportunities, Eric Freedman - who manages $170 billion as the CIO of US Bank Wealth Management - is looking for ways to keep the ship steady.</p><p>He isn't giving up hope for the economic expansion. But with so many parts of the market looking overvalued and threats seeming to rise by the day, he told Business Insider he's focusing on areas that have either been neglected, or that offer undeniable long-term stories that could last for decades.</p><p>Here's a segmented rundown of his current investment picks:</p><h3>Mid-cap stocks</h3><p>In stocks, that starts with a couple of areas investors where investors have shown a clear lack of enthusiasm.</p><p>Mid cap stocks have lagged behind their larger rivals all year: <a href="https://markets.businessinsider.com/index/s&amp;p_400_midcap">The S&amp;P Mid Cap 400 index</a> hasn't risen as much as the <a href="https://markets.businessinsider.com/index/s&amp;p_500">benchmark S&amp;P 500</a> and has been unable to reach the record highs it reached a year ago. </p><p>"We think it's under-followed, we think it's under-loved," he said. "It's really misunderstood amongst a lot of investors."</p><p><em><strong>Read more</strong>: <a href="https://www.businessinsider.com/money-management-portfolio-advice-from-rebecca-rothstein-peter-mallouk-2019-8" target="_blank" rel="noopener">2 of America's best wealth managers for the ultrarich say they've found the perfect way to blend US and international investment. Here's how they're constructing client portfolios.</a></em></p><p>In his view, they're the right choice for investors who see rising trade tensions as a threat to large caps and are also worried about the dangers facing small caps, which are <a href="https://www.businessinsider.com/stock-market-analysis-investors-ignoring-a-weak-spot-in-small-caps-2019-3">less profitable</a> and might lack financial durability in a potential recession.</p><p>"You tend to have companies that are well managed, that are gaining more of a global perspective, and have diversified revenue streams," he said. "That's almost the best of both worlds."</p><h3>US-based healthcare and growth stocks</h3><p>His top sector pick - healthcare - has also struggled this year. Companies in the sector are bringing up the rear in the US market, but Freedman says long term trends make them a good bet because the population will continue to age, supporting years of growing demand for health care products and services.</p><p>"Areas like biotech, areas like health care services, we think are interesting," he said. "They've really underperformed."</p><p>He's also thinking longer-term when he says he remains optimistic about <a href="https://www.businessinsider.com/17-stock-picks-to-buy-safe-from-trade-war-baml-2019-8">growth stocks</a>, which have crushed their more conservative value peers throughout the bull market.</p><p><em><strong>Read more</strong>: <a href="https://www.businessinsider.com/stock-picks-30-companies-set-to-soar-goldman-sachs-2019-8" data-analytics-position="3">GOLDMAN SACHS: These 30 stocks are poised to pop on earnings after a week of brutal trade-war news</a></em></p><p>"We don't think that growth is going to surrender and roll over anytime soon," he said. Freedman notes that trends in economic productivity are a big challenge, and businesses will have to spend a lot of money to try to overcome them. He calls that supportive for growth stocks.</p><p>"CFOs are going to invest in things that make their companies more efficient and faster, and those tend to be productivity enhancements," he said.</p><p>Evaluating stocks regionally, though, Freedman has more of a consensus view. He expects US stocks to maintain their lead over other areas and thinks emerging-market stocks still have downside risk.</p><h3>Structured credit</h3><p>In his quest to find yield for clients, he says that structured credit is also an area that's promising because it's big index funds overlook it.</p><p>"We do think there's still some value to be found in structured credit without taking on a lot of risk," he said. "they tend to be under owned just because they're not obviously owned by indexers."</p><p>He added that non-agency mortgages from private institutions, not from Fannie Mae, Freddie Mac, or Ginnie Mae, also have an appealing "scarcity value."</p><p>While he thinks it's vital to own fixed income assets, in a lot of other areas Freedman says investors are reaching for yield and taking on too much risk: commercial mortgage backed securities, bank loans, and especially leveraged loans.</p><p>"Leveraged loans have been routinely overbought," he says. "While the returns have been fine, we think from here what you're paying for relative to what you're going to get is a really low return and a higher risk type of proposition.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/electric-bikes-made-custom-repurposed-parts-2019-8">These one-of-a-kind e-bikes are made from repurposed parts - we took a ride on one to see what it was like</a></h3>        <div>                    </div>    </div>

A chief wealth adviser overseeing $170 billion revealed to us where he's putting client money as a turbulent environment rocks markets

<ul class="summary-list"><li><keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">Bitcoin</keyword> is now a legal tender in <keyword id="11931676" type="UNKNOWN" weightage="60" keywordseo="el-salvador" source="Orion">El Salvador</keyword>, three months after President Bukele announced the idea at a Miami crypto conference.</li><li>The rollout this week was rocky and was met with heavy skepticism from the Salvadoran public. </li><li>Photographer Camilo Freedman was there to document what the Bitcoin rollout looked like. </li></ul><p>This week, El Salvador became the first country to accept <a href="https://www.businessinsider.com/el-salvador-buys-400-bitcoin-plans-to-buy-more-2021-9">Bitcoin</a> as legal tender. The rollout - just three months after it was first proposed - was far from smooth, and many people here remain skeptical. </p><p>The radical experiment in cryptocurrency was designed to dynamize the economy, and make it cheaper for 3 million Salvadorans living abroad to send remittances back home. </p><p>But in stores and at markets around the capital, San Salvador, the rollout was plagued with glitches. Those who tried to use Bitcoin, mostly to get the $30 dollar incentive from the government, found that the infrastructure that had cost millions in public spending was not functioning.</p><p>The new Bitcoin ATMs, which were meant to convert the cryptocurrency into cash, weren't working, and there were widespread problems downloading the Chivo crypto wallets. In the capital, 1,000 people took to the streets to protest, holding signs demanding that the government focus on El Salvador's real issues, like the increasingly high cost of living, human rights concerns, and an epidemic of <a href="https://drive.google.com/file/d/1U6d8M8h0RgZmZ0jx4gdhnAeu-pn_o3CN/view">disappeared women</a>.</p><div type="image" title="A street protest with signs" height="2677" width="4011" msid="86072759" hostid="261"></div><p>"People are rejecting the implementation of Bitcoin because it hasn't been done in a way that would benefit the working class," said Xenia Barrera, one of the protesters.</p><p>After an initial investment of $28 million for 550 Bitcoin coins, the volatile Crypto market dipped on the first day, costing the government $3 million. On Thursday morning, the local Diario El Mundo newspaper reported that there were still technical issues with the government's Chivo wallet<strong>.</strong> </p><p>The U.S. dollar has been El Salvador's official currency since 2001 and it remains the main currency. </p><p>When President Nayib Bukele first announced the plan for Bitcoin in June - his most important economic policy since taking office in 2019 - he did it in Miami, in English, in a video announcement at the "Bitcoin 2021" cryptocurrency conference. </p><p>Days later, the national Congress approved the plan with barely any public debate. Instead, Bukele appeared on a social media hangout where he talked up the plan to Crypto-enthusiasts. </p><p>"Every restaurant, every barber shop, every bank - everything can be paid in U.S. dollars or Bitcoin and nobody can refuse payment," he said during the hour-long hangout, <a href="https://www.nytimes.com/2021/06/09/world/americas/salvador-bitcoin.html?.?mc=aud_dev&amp;ad-keywords=auddevgate&amp;gclid=Cj0KCQjwssyJBhDXARIsAK98ITRYA7w4_8OnCk0Q9tTnoo7C0cyLLl16VaGjTFdjMofDSe4keKH4KdwaArwtEALw_wcB&amp;gclsrc=aw.dsgclsrc=aw.ds">the AP reported</a> at the time. </p><div type="image" title="People are seen moving about on a street." height="2651" width="3971" msid="86072760" hostid="261"></div><div type="image" title="Vegetable sellers sit by the carts." height="2651" width="3971" msid="86072761" hostid="261"></div><p>In El Salvador, where less than half of the population has Internet access, the announcement was met with less fanfare. According to a poll performed by the Universidad Centroamericana José Simeón Cañas, about 7 of every 10 Salvadorans oppose the Bitcoin law, which requires businesses to accept Bitcoin as a payment and shields Bitcoin transactions from the capital gains tax.</p><p>People said they fear that Bitcoin's volatility will endanger their salaries, pensions, the ability to access products and services, and even the remittances themselves, which make up around 16% of the country's GDP. </p><p>On an even more basic level, in a country where around 70% of the population doesn't have a bank account, the fact that Bitcoin is not tangible - it's not money you can hold it in your hand - scares people. </p><p><strong>"</strong>The implementation of Bitcoin places a risk on the liquidity of the country," said Tatiana Marroquin, a Salvadoran economist. "El Salvador already has had to get a $200 million dollar loan for Bitcoin to go into circulation. The same amount of money that could power a public hospital for a year.<strong>" </strong></p><p>Jennifer, a 17-year-old girl who sells vegetables in a street market, noted that Bitcoin remains inaccessible to people who can't pay for Internet access. </p><div type="image" title="A party at a bar, as seen from the street." height="2684" width="4020" msid="86072764" hostid="261"></div><p>"It's not made for people like us. It's rich people that can invest in it," she said. </p><p>Of course, for the country's wealthy minority, things appear different. It's also a boon for foreign crypto investors, who are now eligible for permanent residency in El Salvador.  When the currency went live on Tuesday, there were parties at upscale clubs around the capital. One party, in the city's financial district, packed with tourists who had traveled from everywhere between Miami to Oslo to reach El Salvador to watch as the Bitcoin law went into effect. </p><p>"This is the future," said one of the partygoers, who asked to be identified only by his first name, Raul. "We're just excited to see what's going to happen, get a grasp on what's going to be reality for us."</p><p>He described President Bukele, a former businessman, as a "game changer" for the country's <keyword id="11893346" type="UNKNOWN" weightage="60" keywordseo="politics" source="Orion">politics</keyword>.</p><h2>Bitcoin Beach</h2><p>In the beach town of El Zonte, about 60 miles from the Salvadoran capital, Bitcoin has been around for a while. Here, surfers, tourists, and locals pay for their snow cones, pupusas, and even some basic services such as electricity, using Bitcoin.</p><p>Known as the "Bitcoin Beach Project," the first Bitcoin teller machine was installed here after an anonymous donor made a charitable donation in the cryptocurrency. One of the first shops to accept it was one run by "Mama Rosa," whose son Jorge Valenzuela helped spearhead the initiative.</p><p>Karla Carranza, who works a coffee shop in El Zonte, says she's saving the Bitcoin tips she gets from tourists. </p><p>"This is just something I save, and hopefully one day it will turn to more money," she said. </p><div type="image" title="A dog is seen on a beach." height="2651" width="3971" msid="86072768" hostid="261"></div><p><strong><div type="image" title="A woman accepts money while working behind a counter." height="2651" width="3971" msid="86072770" hostid="261"></div></strong></p><p><strong><div type="image" title="xx" height="2651" width="3971" msid="86072773" hostid="261"></div></strong></p><p><strong><div type="image" title="A woman carries a bucket on her head." height="2651" width="3971" msid="86072776" hostid="261"></div></strong></p><p><strong><div type="image" title="A woman behind a counter." height="2651" width="3971" msid="86072779" hostid="261"></div></strong></p><h2><strong>The ghost of a currency change past </strong></h2><p>One reason behind the widespread distrust of Bitcoin is that El Salvador has been through something like this before, and it ended badly.</p><p>In 2001, the Salvadoran Congress passed the Monetary Integration Law, which made the U.S. dollar a legal tender, even as the Salvadoran Colon remained in circulation. But then, the Colon was pulled out of circulation, and prices for basic necessities soared. </p><p>The fact that the vote was made hastily and without public debate infuriated Salvadorans.  </p><p>The Bitcoin rollout struck many as frustratingly similar, with Congress discussing the law for only three hours before the vote.</p><p>As Jose Martinez<strong>,</strong> a street vendor in downtown San Salvador, put it: "We were lied to with the dollar, they took the Colon from us, and now this is just going to suck up our dollars."</p><p>For him and others, it seems absurd that Salvodorans are not expected to trust a coin that they will never be able to see or feel.</p>

Photos: Bitcoin has a rocky rollout as El Salvador's new national currency

<ul class="summary-list"><li><strong>We're entering the 2020s with an <a href="https://www.businessinsider.com/how-rent-control-prefab-housing-can-fix-the-housing-crisis-2019-11">affordable housing crisis that shows few signs of letting up</a> and ongoing debate about whether millennials aren't buying houses at the same age their parents did because they <a href="https://www.businessinsider.com/millennials-renting-homes-instead-of-buying-2019-7">can't afford it</a> - or because they <a href="https://www.businessinsider.com/millennials-renting-homes-instead-of-buying-2019-7">just prefer not to</a>. </strong></li><li><strong>Business Insider spoke to eight real estate experts about their predictions for the housing market in 2030. We asked them who will rent, who will own, and how the housing affordability crisis could be solved. </strong></li><li><strong>More than 1/8th of millennials currently <a href="https://www.businessinsider.com/more-millennials-planning-to-rent-forever-cant-afford-housing-2019-11">believe they'll rent forever</a>, a symptom of a larger trend towards renting. Most of the experts we spoke to believe that more people will be renting in 2030.</strong></li><li><strong><a href="https://www.businessinsider.com/pitch-decks-that-helped-hot-startups-raise-millions-2019-4">Read more BI Prime stories here.</a></strong></li></ul><p>Millennials have been blamed for killing <a href="https://www.businessinsider.com/millennials-hurt-industries-sales-2018-10#casual-dining-chains-like-buffalo-wild-wings-and-tgi-fridays-1">countless industries</a>. </p><p>By 2030, the oldest millennials will be 49 and solidly middle-aged. By then, we will know if they've truly <a href="https://www.theguardian.com/lifeandstyle/2017/may/15/australian-millionaire-millennials-avocado-toast-house">killed homeownership</a>  <a href="https://www.businessinsider.com/millennials-hurt-industries-sales-2018-10#casual-dining-chains-like-buffalo-wild-wings-and-tgi-fridays-1"></a></p><p>We're entering the 2020s with an <a href="https://www.businessinsider.com/how-rent-control-prefab-housing-can-fix-the-housing-crisis-2019-11">affordable housing crisis that shows few signs of letting up</a> and ongoing debate about whether millennials aren't buying houses at the same age their parents did because they <a href="https://www.businessinsider.com/millennials-renting-homes-instead-of-buying-2019-7">can't afford it</a> - or because they <a href="https://www.businessinsider.com/millennials-renting-homes-instead-of-buying-2019-7">just prefer not to</a>. </p><p>Business Insider spoke to real estate experts about the housing market in 2030. We asked them to predict who will rent, who will own, and how the housing affordability crisis could be solved. </p><p>For a separate story, we also polled experts about what real estate brokerages and jobs will look like in a decade. You can read that <a href="https://www.businessinsider.com/predictions-for-residential-real-estate-brokerage-jobs-costs-in-2030-2019-12">full story here. </a></p><h2><strong>Rent or own?</strong></h2><p>More than 1/8th of millennials <a href="https://www.businessinsider.com/more-millennials-planning-to-rent-forever-cant-afford-housing-2019-11">believe they'll rent forever</a>, a symptom of a larger trend towards renting. And most of the experts we spoke to believe that more people will be renting in 2030.</p><p>Dror Poleg, author of Rethinking Real Estate and the cochair of the Urban Land Institute's Technology and Innovation Council, believes that we will see more renters in 2030 than we do now, but that renting may look a little different.</p><p>"We're going to see more real estate consolidated under large rental platforms that allow people to rent forever," Poleg said. </p><p>These platforms may be similar to the subscription services that are being tested by some coliving companies, <a href="https://www.businessinsider.com/uk-coliving-company-the-collective-expands-to-the-us-2019-10">allowing members to move freely between locations</a>. This will match a workforce that Brad Grewie, co-founder of Blackstone single-family rental company Invitation Homes and co-founder and managing partner of proptech-focused VC Fifth Wall, says will be more transient.</p><p>But age, and growing families, may bring millennials back to home ownership. </p><p>"I think the renting revolution is as strong as its ever been, but there always will be demand for ownership," said Ryan Freedman, general partner at Corigin Ventures. "When you reach a different point in you lifecycle, you want to be settled. You want your kids to go to school in a good school district."</p><p>Fifth Wall's Grewie agrees that homeownership is here to stay, but that Americans will come to it later. </p><p>"I still think there will be a big subset who wants to own the American Dream ... they're just doing it in their 30s instead of their 20s," Greiwe said. </p><p>The largest cohort of the millennial generation just turned 30, which may drive more demand for home purchases. </p><p>"We're very confident in our prediction of growing demand for housing, both owned and rental, for the next 5-6 years at least," said Mike Fratantoni, chief economist for the Mortgage Bankers Association. </p><p>By 2030, the youngest millennials will be 34. </p><p>"Gen Z are a smaller generation than millennials," Fratantoni said. This may drive down overall demand for housing compared to earlier in the decade.</p><h2><strong>Wall Street landlords</strong></h2><p>With renting strong, the trend of institutionalized single-family home owners, like Blackstone's Invitation Homes, purchasing more of the market will likely continue. </p><p>"I do think you're going to see increased institutionalization," Fifth Wall's Greiwe said. He no longer works with Invitation Homes. He pointed to Invitation Homes' outsized performance compared to other real estate investment trusts. </p><p>Multiple experts, including Greiwe, agreed that single-family rentals will still be largely owned by local mom-and-pop investors, even though institutional investing may take a larger portion of the market. </p><p>"There might be institutional demand, but not enough demand to move the sellers," Mortgage Bankers Association's Fratantoni said. While institutional investors will likely want to purchase more homes, the traditional buyers may not be willing to sell. </p><p>While some worry about the effect that this concentration of single-family home ownership will have on household wealth, Jared Kessler, chief executive and cofounder of residential sale-leaseback company EasyKnock, believes that it may make renting a significantly cheaper, and therefore more popular, option. </p><p>"The more institutionalized the rental market comes, there's more economies of scale, and that can be brought down to the consumer," Kessler said. </p><h2><strong>Continued migration to the big cities</strong></h2><p>Changes in housing demand will not be equally spread out. The impacts of the sharing economy, and a more transient, flexible workplace, will bring more people to the largest cities, where renting is more prevalent, according to Arun Sundararajan, Harold Price Professor of Entrepreneurship at NYU Stern and author of "The Sharing Economy." </p><p>"A significant fraction of the population will have to migrate from places with less work to places with more work," Sundararajan said. "This will have a significant impact on the residential real estate market, in part because the places where the technological change is causing the job process to diminish tend to be places with high rates of homeownership."</p><p>Sundararajan said that job opportunities will grow in large cities, like New York and the San Francisco area, while they will shrink in some small cities. Sundararajan gave Merced, California; Odessa, Texas; Lima, Ohio; and the Oxford/Jacksonville, Alabama area as some of the top examples. </p><p>With demand funneling into already-expensive metro centers, innovative transportation technology such as autonomous vehicles may make outsized impacts on housing affordability. Clelia Warburg Peters, president of Warburg Realty and a cofounder of pioneering proptech VC MetaProp, believes that by 2030, we will either be close to autonomous vehicles drastically changing the way cities work, or "we will think it funny we ever thought it was possible."</p><p>"If we move into a world where essentially there are fleets of autonomous vehicles from wherever you are to wherever you want to go, people will start to make very different choices," Peters said. This could lead to "significant shifts" in how people think about the desirability of certain areas, potentially driving down prices in the densest parts of the most expensive markets. </p><h2><strong>How tech will try to make the home more affordable</strong></h2><p>The housing affordability crisis will continue through the beginning of the decade, and potentially longer, according to most of the experts we spoke too. Within real estate, a few startups are trying to offer different kinds of ownership options, and we asked the experts what they thought of some of the models. </p><p>One large category of startups focused on affordability straddles the <a href="https://www.businessinsider.com/proptech-companies-that-are-changing-the-financials-of-home-ownership-2019-11">borders of proptech and fintech</a>, using technology to update financial products like rent-to-own, fractional ownership of homes, and home equity loans. Some of the experts we spoke to expect these  options to gain in popularity, but others were skeptical. </p><p>"It's a model that already exists, and I don't think what is limiting its growth is technological expertise," author of Rethinking Real Estate Poleg said about rent-to-own, and pointed to the model's <a href="https://www.nytimes.com/2019/08/01/business/rent-to-own-vision-lawsuit.html">reputational problems</a>. </p><p>Fifth Wall's Greiwe said that these models may be able to attract consumers, but once they do, the larger banks will copy them and put these proptech companies out of business. </p><p>"It is being driven from the proptech technology side, and unless the banks are going to adopt them, it's not going to be that impactful," Greiwe said. </p><p>While the financial world provides one opportunity to make housing more affordable, the actual construction of real estate is another place that can drive change. <a href="https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/the-construction-productivity-imperative">Construction productivity has been flat for decades</a>, and with rising material and land costs, development is even more expensive. </p><p>"For the most part, it costs the same to build luxury condos as the type of housing that you want to be affordable," Beth Mullen, CohnReznick's affordable housing industry leader, said. </p><p>Freedman of Corigin Ventures sees three main areas where technology can impact construction costs: shared communication, labor cost, and material costs. </p><p><a href="https://www.businessinsider.com/procore-office-tour-carpinteria-california-2019-6">Procore</a>, a construction project management software, is an example of where shared communication has already been successful. SoftBank-backed Katerra is an example of a company trying to save on labor costs by creating prefab and modular buildings, though the company has recently <a href="https://www.businessinsider.com/softbank-vision-fund-zume-wag-oyo-katerra-2019-11">cancelled projects and laid workers off, according to media reports</a>. </p><p>Freedman thinks that 3D printing, still in its early stages, will eventually help lower costs. He highlighted certain technologies that create localized formulas for 3D printing based off of materials that can be found near the area of construction. </p><h2><strong>Technology is not enough</strong></h2><p>Technology might make a dent in the affordability problem, but all of our experts agreed that it isn't enough on its own. </p><p>"Silicon Valley won't produce a technology solution that will solve all of our problems," Fifth Wall's Greiwe said. </p><p>Experts floated zoning changes, public-private partnerships, and regulations that require developers to build affordable housing as some of the mechanisms that could reduce costs. While tech may not solve the housing crisis, we may see more technology companies investing in affordable housing. </p><p>CohnReznick's Mullen highlighted <a href="https://www.businessinsider.com/apple-donates-over-2-billion-towards-california-housing-crisis-2019-11">Apple</a> and <a href="https://www.businessinsider.com/google-announces-1-billion-additional-investment-in-housing-across-bay-area-2019-6?r=US&amp;IR=T">Google</a>, who have pledged a total of $3.5 billion for California affordable housing this year. While they're granting money to build housing more generally, it could also help them attract support staff that can't afford San Francisco's high rents. Mullen thinks that this trend will likely continue. </p><h2><strong>How to democratize real estate</strong></h2><p>With a renting revolution holding strong, and <a href="https://www.nahbclassic.org/fileUpload_details.aspx?contentTypeID=3&amp;contentID=215073&amp;subContentID=533787&amp;channelID=311">homeownership making up the largest portion of household wealth</a>, what will a more flexible renting world mean for the future of wealth?</p><p>Some experts pointed to people making investments in other financial instruments instead of the home, but according to Poleg, it's a "moot point."</p><p>"Many of the potential young home buyers today don't have much of a net worth," Poleg said. </p><p>A few of the experts predicted that we will see new real estate financial products that will allow average investors to invest in real estate in a way that is more tied to where they live, potentially related to new renting platforms.</p><p>"I think you're going to see increased democratization of real estate," Greiwe said.</p><ul class="read-more-links"><li><strong>Read more:</strong></li><li><a href="https://www.businessinsider.com/predictions-for-residential-real-estate-brokerage-jobs-costs-in-2030-2019-12">What buying and selling your house will look like in 2030, according to 7 real estate experts</a></li><li><a href="https://www.businessinsider.com/proptech-companies-that-are-changing-the-financials-of-home-ownership-2019-11">12 proptech startups that have won millions in investor backing to upend how you pay for your house</a></li><li><a href="https://www.businessinsider.com/millennials-forecast-originate-a-majority-of-us-mortgages-in-2020-2019-12">2020 could be the first year that millennials originate more than half of all home mortgages</a></li><li><a href="https://www.businessinsider.com/how-rent-control-prefab-housing-can-fix-the-housing-crisis-2019-11">Developers have zero incentive to fix the affordable-housing crisis. Here's what one real estate exec thinks could change that.</a></li></ul>

We asked 8 real estate experts how to solve the affordability crisis in the coming decade, and if millennials will really kill homeownership. Here are their predictions for 2030.

<p><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></p><p><strong><em>Welcome to Cultivated, our weekly newsletter where we're bringing you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom. <a href="http://newsletter.businessinsider.com/join/cultivated">Sign up here to get it in your inbox every Friday</a>.</em></strong></p><p>Happy Friday, </p><p>Lots of cannabis-related news this week.</p><p>To start off, I'd like to highlight an <a href="https://www.businessinsider.com/list-of-top-dealmakers-in-the-cannabis-industry-cannacord-gmp-2019-9">exclusive list</a> we put together, taking a peek under the hood of all of the cannabis deals in the past year - from the wild RTO market in the last quarter of 2018, to the near-billion dollar mega-mergers throughout this year. </p><p>In any public offering or M&amp;A deal, there's always investment bankers making money. To figure out who's profiting on cannabis deals, we pulled data from Dealogic and did a lot of our own reporting to identify the <a href="https://www.businessinsider.com/list-of-top-dealmakers-in-the-cannabis-industry-cannacord-gmp-2019-9">top dealmakers</a> at the banks advising on these transactions.</p><p>Because THC is federally illegal in the US, most of the fees from these deals have flowed to a small group of midsize Canadian shops like Canaccord Genuity and GMP Securities. </p><p>Click the link below to check out our exclusive reporting. </p><h3><a href="https://www.businessinsider.com/list-of-top-dealmakers-in-the-cannabis-industry-cannacord-gmp-2019-9">Here are the top bankers raising money, putting together deals, and raking in millions in the global cannabis industry</a></h3><p><strong>Now, let's break down the big news in cannabis this week: </strong></p><p><em>On the SAFE Banking Act</em></p><p>The SAFE Banking Act, which would <a href="https://markets.businessinsider.com/news/stocks/marijuana-stocks-after-house-passes-safe-banking-act-2019-9-1028556656">allow cannabis businesses to access commercial banking services</a> like checking accounts and opening lines of credit, passed the House on Wednesday by a huge margin: 321 to 103, with 91 Republicans voting in favor.</p><p>While yes, there was some other important stuff happening in the House that day (Donald who?), it shouldn't be overlooked that this was the first time a standalone cannabis bill has come to a House floor vote - and passed overwhelmingly. The amount of Republican support also bodes well for a version of this bill passing the Senate, experts say.</p><p>The chair of the Senate Banking Committee, Mike Crapo, told Politico he wants a vote on the bill before the end of the year, and that he's confident about its prospects in the Senate. Even Republicans who don't support cannabis legalization, like Rep. Steve Stivers, supported the banking bill as a way to protect small businesses from dealing with large sums of cash, and all the problems that may pose. <a href="https://www.businessinsider.com/marijuana-startups-shut-out-banking-system-2018-8">We reported on some of those issues last year</a>. </p><p>Analysts are mixed on whether the bill will pass the Senate. Cowen's team of cannabis analysts said they expect the SAFE Banking Act to become law before 2020, based on the level of Republican support for the House version. Stifel analysts said the bill faces a tough pass in the Senate, and large financial institutions will still "tread lightly" if the bill is passed. </p><p>It's important to note that the SAFE Banking Act, if passed, likely would not provide enough of a legal framework for bulge bracket investment banks and institutional investors to enter the cannabis industry. It's aimed at small businesses, not capital markets.</p><p>Canna-business owners still applauded the legislation, <a href="https://www.businessinsider.com/canndescent-275-million-series-c-pitch-deck-california-cannabis-2019-9">including Canndescent's Adrian Sedlin</a>, who said the bill will help US cannabis companies from paying "usurious rates" for financing and dealing with an all-cash payroll. </p><p>As well, cannabis legalization advocates said that while the bill helps the cannabis industry, it does not go far enough in supporting the restorative justice aim of the cannabis legalization movement, which seeks to help those affected by the War on Drugs access the wealth-creating opportunities of the newly-legal industry. </p><p>I spoke with Seke Ballard, the CEO of Good Tree Capital - which pools money from accredited investors and lends to minority cannabis entrepreneurs - about the bill last week before it passed. While he said that bank financing is "a step in the right direction" for minority entrepreneurs, he cautioned that it's not a "silver bullet."</p><p>"The challenge with the banking bill is that it doesn't go far enough. And frankly, action on banking is probably the most important source of leverage for broader action. If Congress passes the SAFE Act without accompanying legislation to ensure restorative justice for the harmed individuals and communities, then how likely is it that they can generate the political support to pass the restorative justice elements separately?" Ballard told me. </p><p>Other legislation, including Rep. Jerrold Nadler's MORE Act, go much further in both protecting financial institutions as well as creating funds that would help minority entrepreneurs start cannabis businesses. </p><p>On the state front, Pennsylvania Governor Tom Wolfe announced his support for legal cannabis, and New York Governor Andrew Cuomo said he will work with his counterpart in Connecticut to come up with a legalized cannabis regime that is consistent across the region. </p><p><em>On vape-related illnesses </em></p><p>The spate of vape-related illnesses continues. On Friday, <a href="https://www.businessinsider.com/cdc-thc-vapes-may-play-role-in-lung-disease-deaths-2019-9">the CDC gave updated numbers</a> - 805 illnesses and 12 deaths - and told reporters on a call that 77% of people who were ill reported using vapes containing THC. While the CDC said THC isn't solely to blame, and e-cigarettes are not, by any means, off the hook, the CDC encouraged people to stop vaping.</p><p>The CDC also noted that most of the THC-containing products that were tied to the illnesses were obtained from "informal sources," such as people's friends or from a dealer. A recent study of 18 THC-containing vape cartridges <a href="https://www-nbcnews-com.cdn.ampproject.org/c/s/www.nbcnews.com/news/amp/ncna1059356">commissioned by NBC News</a> showed that 13 out of the 15 cartridges obtained from the illicit market contained vitamin-E acetate - a substance which has been linked to the illnesses - and ten of the illicit cartridges were found to contain the pesticide myclobutanil, which can turn into hydrogen cyanide when heated. The cartridges bought at legal dispensaries did not contain vitamin-E acetate. </p><p>Some states, including Massachusetts, have placed a temporary moratorium on vape products. Public health experts and officials warned that these bans may turn consumers back to regular old cigarettes. </p><p>I spoke to Canopy Growth's new CEO, Mark Zekulin, on the sidelines of the Concordia Summit on Monday. As the cannabis giant prepares to release vapes in Canada ("Cannabis 2.0"), Zekulin said that regulated products are safer, and allow for "tamper-resistant" and "traceable" supply chains. "More regulation is a good thing," said Zekulin. </p><p>Bank of America cannabis analyst Christopher Carey downgraded Canopy Growth from Buy to Neutral on Friday morning and said that the headline risk associated with vape-related illnesses is weighing down share prices in the sector. </p><p>Vape pen sales are down significantly since August in states with legal cannabis dispensaries, according to data from Headset, a cannabis market research firm.</p><p>We <a href="https://www.businessinsider.com/timeline-of-vape-related-illnesses-and-deaths-2019-9">have a timeline on the vape illnesses here</a>, and we're constantly updating it.</p><p>And just a quick plug: I'll be moderating a talk with Trulieve CEO Kim Rivers at the Arcview Investor Forum in New York on Wednesday. If you're at the conference, come say hi! </p><p><strong><em>More stories from around the BI newsroom:</em></strong></p><section><section><h3><a href="https://www.businessinsider.com/top-10-best-toronto-stock-exchange-companies-past-3-years-2019-9">Marijuana stocks have dominated the Toronto Stock Exchange for the last 3 years. Here are the top 10 performers.</a></h3><p>The Toronto Stock Exchange released a ranking of the top 30 performers over the last three years on Thursday. Two of the top 10 companies are cannabis companies, and two more serve the industry. </p><p>The outperformance of the industry is not a surprise, according to the vice president of global business development for TSX. Canada legalized recreational use of cannabis in 2018.</p></section></section><h2>Capital raises, M&amp;A activity, partnerships, and launches</h2><ul><li>Canadian LP Pure Global Cannabis signed a joint venture with KMT-Hansa Corp, to cultivate and process hemp-derived CBD products in Yunnan Province, China. It's the second Canadian LP to enter into an agreement with a Chinese CBD company.</li><li>Israel-based PlantEXT, which develops intellectual property and products for pharmaceutical cannabis entered into an agreement with BB1 Acquisition Corp to pursue a reverse takeover on the TSX Venture exchange in late Fall of this year. The company is looking to raise up to $7 million through a private offering. </li><li>Hawaii-based psychedelic biotech company <a href="https://www.orthogonalthinker.com/">Orthogonal Thinker</a> raised $2.5 million in funding to develop its product, Psilly, a plant-based psilocin pro-drug. Psilocin is found in "magic mushrooms". The new funding brings Orthogonal's total funding to $4 million.</li><li>Greenlane Holdings has entered into <a href="http://www.globenewswire.com/news-release/2019/09/24/1920294/0/en/Greenlane-Expands-Global-Footprint-with-European-Acquisition.html">an agreement to acquire Conscious Wholesale</a>, which sells cannabis accessories in Europe. </li><li>Curaleaf launches "ground flower pods" for medical consumers in New York. Each Curaleaf Ground Flower Pod contains 350mg of active cannabinoids, the company said. </li><li>Harvest Health &amp; Recreation is partnering with The Last Prisoner Project to help prisoners convicted on cannabis charges eventually land jobs in the new industry once they are released. </li><li>Cannabiniers - the makers of Two Roots, a cannabis-infused beer - is launching a line of THC and CBD-infused seltzers. </li></ul><h2>Executive moves</h2><ul><li>John Malone joins the Shryne Group as its new general counsel. Malone was previously at Arent Fox, LLP.</li><li><a href="https://www.businessinsider.com/4front-ceo-talks-about-whats-next-after-merger-2018-12">Massachusetts-based cannabis company 4Front</a> has added two new members to its board: Betty Aldworth, the executive director of Students for Sensible Drug Policy, and Kathi Lentzsch the CEO of Bartell Drugs. </li><li>Lewis Koski left his eponymous consulting firm, Freedman &amp; Koski, to become the COO of the Florida-based Metrc, LLC, a "seed-to-sale" tracking firm.</li><li>US cannabis company Harvest Health &amp; Recreation announced the departures of Steve Gutterman, the company's president (personal reasons) and board member Frank Bedu-Addo (to focus on personal business endeavors), the company said. Harvest is looking to replace Bedu-Addo.</li></ul><h2>Chart of the week</h2><p>This one is from our <strong><a href="https://www.businessinsider.com/list-of-top-dealmakers-in-the-cannabis-industry-cannacord-gmp-2019-9">exclusive list of the bankers raking in millions on cannabis deals</a></strong>. Here's what the cannabis league table for investment banks look like, from 2015 through September 23, 2019. As you can see, Canaccord Genuity still leads the pack: </p><p><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></p><h2>Stories from around the web</h2><p><a href="https://www-nbcnews-com.cdn.ampproject.org/c/s/www.nbcnews.com/news/amp/ncna1059356">Tests show bootleg marijuana vapes tainted with hydrogen cyanide</a> (NBC News)</p><p><a href="https://www.wsj.com/articles/sales-of-illicit-vaping-products-find-home-online-11568971802">Sales of illicit vaping products find home online </a>(Wall Street Journal)</p><p><a href="https://www.leafly.com/news/politics/vape-pen-injury-supply-chain-investigation-leafly">Journey of a tainted vape cartridge: from China's labs to your lungs</a> (Leafly)</p><p><a href="https://www.bloomberg.com/news/articles/2019-09-25/vaping-illness-signs-were-missed-or-ignored">Early signs of vaping health risks were missed or ignored</a> (Bloomberg)</p><p><a href="https://www.cnn.com/2019/09/27/health/weed-5-cbd-craze-gupta/index.html">Dr. Sanjay Gupta on medical marijuana: We are in an age of wisdom, but also an age of foolishness</a> (CNN)</p><p><a href="https://www.politico.com/story/2019/09/25/house-oks-giving-cannabis-industry-access-to-banks-1512850">How Republicans learned to love a pot bill</a> (Politico)</p><p><em>Did I miss anything? Have a tip? Just want to chat? Send me a note at jberke@businessinsider.com or find me on twitter <a href="https://twitter.com/jfberke?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor">@jfberke</a>. </em></p>

CULTIVATED: Here's who's raking in millions on cannabis deals, cannabis legislation passes the House, and more.

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Reuters</span></p><p class="caption">Adam Neumann, CEO of WeWork, speaks to guests during the TechCrunch Disrupt event in Manhattan, in New York City</p></div><p></p></div></div>Hello!</p><p>It might have felt like the week of WeWork, with the coworking <a href="https://www.businessinsider.com/weworks-ipo-filings-show-founder-neumanns-real-estate-family-ties-2019-8">company unveiling its filing for an IPO</a> on Tuesday. There's lots to be said about the company, and my colleague Olivia Oran <a href="https://www.businessinsider.com/wall-street-insider-today-august-17-2019">has a great breakdown of all of our coverage right here</a>. We'll of course have lots more in the coming weeks and months.</p><p>But WeWork wasn't the only deal story this week. </p><p>The same day WeWork filed, C<span>BS and its sister company Viacom announced they had agreed to merge in an all-stock deal that would create a combined company with around $28 billion in revenue. Ashley Rodriguez got the skinny on w</span>hat Viacom employees are <a href="https://www.businessinsider.com/viacom-employees-say-good-spot-after-cbs-deal-2019-8">saying about the blockbuster CBS merger and think will happen next</a>.</p><p>She also reported that while Viacom CEO Bob Bakish's power grab during the merger has put some employees at ease, <a href="https://www.businessinsider.com/viacom-staffers-bob-bakish-power-grab-viacom-cbs-merger-2019-8">Wall Street has concerns about the leadership structure</a>. And she talked to <span style="color: #000000;">M&amp;A experts to break down what <a href="https://www.businessinsider.com/viacom-cbs-next-deal-media-ad-tech-other-potential-targets-2019-8">Viacom and CBS could buy next, from ad-tech to James Bond</a>.</span></p><p>On Wednesday, Becky Peterson broke the news that <span style="color: #000000;">$2.4 billion scooter startup Lime is raising more money, <a href="https://www.businessinsider.com/lime-looking-to-softbank-for-next-mega-funding-round-2019-8">and its next check could come from SoftBank</a>. Speaking of the Japanese mega-investor, it also emerged Wednesday that SoftBank invested</span><span style="color: #000000;"> $110 million in a startup trying to <a href="https://www.businessinsider.com/softbank-vision-fund-invests-110-million-into-energy-vault-2019-8">solve a problem in renewable energy with a giant brick-lifting crane</a>.</span></p><p>On Thursday, t<span>he $3.2 billion </span>cybersecurity<span> company </span>Cloudflare filed to go public, confirming Becky's earlier report that it was eyeing a September IPO <a href="https://www.businessinsider.com/cloudflare-plans-to-ipo-in-september-2019-7">just months after raising an $150 million funding round</a>.</p><p>The timing is inauspicious. Markets have been going haywire the past few weeks, and as Rosalie Chan reported, <span style="color: #000000;">Cloudflare's China business hinges on a <a href="https://www.businessinsider.com/cloudflare-ipo-s1-baidu-partnership-tech-cold-war-2019-8">partnership that's threatened by the trade war</a>. </span></p><p><span style="color: #000000;">The same day, </span>Jeremy Berke broke the news that buzzy cannabis-delivery startup Eaze is looking <a href="https://www.businessinsider.com/eaze-is-raising-50-million-for-cannabis-delivery-2019-8">to raise a new round that could value it at $400 million</a>. And Alex Nicoll had the news that <span style="color: #000000;">Andreessen Horowitz-backed Flyhomes <a href="https://www.businessinsider.com/andreesen-horowitz-backed-flyhomes-snags-141-million-in-debt-and-equity-2019-8">snagged $141 million to expand its next-gen brokerage</a>.</span></p><section><p>To finish the week off, on Friday $3.2 billion teeth-straightening company SmileDirectClub filed to go public. Lydia Ramsey identified <a href="https://www.businessinsider.com/investors-in-smiledirectclub-before-initial-public-offering-2019-8">the investors who stand to make the most</a>.</p><p>So much for a quiet August!</p><p>-- Matt</p></section><h2>Quote of the week</h2><p><span>"I learned more about healthcare in my experience in 18 months as a patient than my entire decade as an adviser." - Mariya Filipova, vice president of innovation at the health insurer Anthem, explains <a href="https://www.businessinsider.com/anthems-mariya-filipova-perspective-as-patient-and-executive-2019-8">how being </a></span><a href="https://www.businessinsider.com/anthems-mariya-filipova-perspective-as-patient-and-executive-2019-8">diagnosed with a kidney tumor 18 months ago changed her approach to her work</a>.</p><h2>In conversation</h2><ul><li><span><span>Christopher Competiello talked to <strong>Ken Fisher</strong>, the founder, executive chairman, and cochief investment officer of <strong>Fisher Investments</strong>, about </span></span>his core strategy for beating the market, <a href="https://www.businessinsider.com/stock-market-investing-strategy-ken-fisher-shares-his-approach-2019-8">why he always wants to buy "some stuff that does badly."</a></li><li>Amanda Perelli talked to <span><span><strong>Michael Bienstock</strong>, CEO of the influencer-focused wealth-management company <strong>Semaphore, </strong><a href="https://www.businessinsider.com/youtube-star-financial-adviser-semaphore-shares-business-growth-advice-2019-8">about</a></span></span><a href="https://www.businessinsider.com/youtube-star-financial-adviser-semaphore-shares-business-growth-advice-2019-8"> the tips he gives clients to kickstart their businesses</a>.</li><li>Alex Nicoll talked to <strong>Andrew Kitchell</strong>, <strong>Lyric</strong> cofounder and CEO, <strong>VTS</strong> cofounder <strong>Nick Romito</strong>, and <strong>Jim Underhill</strong>, CEO at <strong>Cresa, </strong><a href="https://www.businessinsider.com/how-real-estate-data-will-change-how-you-live-2019-8">about how data is changing the real estate business</a>. </li><li>Ben Pimentel talked to <span><span><strong>NetApp</strong> CEO <strong>George Kurian</strong>, who said</span></span> the trade war won't end this year and <a href="https://www.businessinsider.com/netapp-ceo-interview-warns-ongoing-market-uncertainty-trade-war-2019-8">the tech company is preparing for "a variety of difficult outcomes."</a></li><li>Megan Hernbroth talked to <strong>Y Combinator</strong> CEO <strong>Michael Seibel, </strong>who said <a href="https://www.businessinsider.com/y-combinator-michael-seibel-startups-distance-themselves-google-facebook-2019-8">startup founders need to distance themselves from big tech</a>.</li><li>Shana Lebowitz talked to <strong>Kathleen Hogan, </strong>HR chief at <strong>Microsoft</strong>. She described the mindset she looks for in job candidates, and explained <a href="https://www.businessinsider.com/microsoft-hr-chief-kathleen-hogan-company-culture-change-satya-nadella-2019-8">why individual success doesn't matter as much as it used to</a>.</li></ul><h2>Finance and Investing</h2><section><p><strong><a href="https://www.businessinsider.com/banks-creating-ai-working-group-2019-8">Big Wall Street banks are quietly forming a group to explore the hidden risks in AI, and it shows how much the finance industry still has to learn about the technology</a></strong></p><p>Wall Street is as competitive as it gets, but sometimes everyone benefits from working together.</p><p><strong><a href="https://www.businessinsider.com/balyasny-cut-a-10-person-team-many-who-joined-less-than-two-years-ago-2019-8"><span style="color: #000000;">Balyasny just cut 10 people running a $2 billion book. The hedge fund axed the 1-year-old team because of poor performance, sources say.</span></a></strong></p><p>It's been only about a year since Balyasny launched its Synthesis team, but it is already cutting the "quantamental" group, which combined quant and fundamental equity-picking strategies.</p><p><strong><a href="https://www.businessinsider.com/investment-themes-and-opportunities-from-170-billion-us-bank-cio-2019-8">A chief wealth adviser overseeing $170 billion told us where he's putting client money as a turbulent environment rocks markets</a></strong></p><p>As investors either <a href="https://markets.businessinsider.com/news/stocks/stock-market-today-yield-curve-inversion-triggers-recession-fears-2019-8-1028446749">flee the market</a> or hunt harder than ever for opportunities, Eric Freedman - who manages $170 billion as the chief investment officer of US Bank Wealth Management - is looking for ways to keep the ship steady.</p></section><h2>Tech, Media, Telecoms</h2><section><p><strong><a href="https://www.businessinsider.com/google-cloud-thomas-kurian-salespeople-compensation-oracle-sap-2019-8">Google Cloud has changed how it pays its salespeople, ripping a page out of the Oracle playbook</a></strong></p><p>Google's Cloud business revamped its sales team's compensation, ratcheting up the incentives - and the pressure - to maximize sales, as CEO Thomas Kurian ripped a page out of a playbook long favored at sales-driven software companies like Oracle and SAP.</p><p><strong><a href="https://www.businessinsider.com/instagram-cease-desist-letter-whos-in-town-location-tracking-app-2019-8">Facebook sends legal warning to developer who made an Instagram location-tracking app to demonstrate data issues</a></strong></p><p>Facebook has sent a cease-and-desist letter to the creator of a controversial app that lets Instagram users track their friends' locations, in what appears to be a renewed effort to clamp down on flagrant abuses of its user-data rules.</p><p><strong><a href="https://www.businessinsider.com/jeffrey-katzenberg-quibi-has-embarked-on-an-aggressive-hiring-spree-2019-8"><span style="color: #000000;">Jeffrey Katzenberg's Quibi is on an aggressive hiring spree and is luring talent from Snap and Netflix</span></a></strong></p><p>As it<span> </span><a href="https://variety.com/2019/tv/news/quibi-jeffrey-katzenberg-meg-whitman-produced-by-1203236854/">gears up</a><span> </span>to take on the video-streaming market with a 2020 launch, Quibi is going on an aggressive hiring spree.</p></section><h2>Healthcare, Retail, Transportation</h2><p><strong><a href="https://www.businessinsider.com/ancestry-ceo-margo-georgiadis-health-strategy-2019-8">Ancestry's DNA test has traced the family histories of more than 15 million people. Now the genealogy giant plans to get into healthcare.</a></strong></p><p><a href="http://www.ancestry.com/">Ancestry</a>, the family-history website, is preparing for a big move into healthcare, an area the 36-year-old firm has largely avoided.</p><section><p><strong><a href="https://www.businessinsider.com/gw-pharmaceuticals-cbd-drug-epidiolex-for-lennox-gastaut-dravet-syndromes-2019-7">A groundbreaking drug made from cannabis has brought hope for kids with rare seizure disorders. We talked to parents, doctors, and the company's CEO to find out if it lives up the hype.</a></strong></p><p>Aubrie Krowel, who's now four, had her first seizure at eight months old. They worsened as she got older, sometimes lasting as long as an hour or two.</p><p><strong><a href="https://www.businessinsider.com/uber-ceo-talks-cost-cutting-employees-2019-8">Uber spent over $200,000 on balloons - now its CEO is getting rid of them to cut costs as nervous engineers worry about layoffs</a></strong></p><p>Uber CEO Dara Khosrowshahi held an all-hands meeting on Tuesday, and the big topic under discussion was cost cutting.</p></section><p class="tagline"><a href="https://www.businessinsider.com/intelligence/40-big-tech-predictions-for-2019?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_leadgen&amp;itm_content=uber&amp;itm_campaign=40-big-tech-predictions-for-2019-2"></a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/fox-news-opinion-programs-white-supremacist-rhetoric-great-replacement-2019-5">Fox News pundits are using white supremacist language tied to 'The Great Replacement' conspiracy theory</a></h3>        <div>                    </div>    </div>

WeWeek, how Google Cloud pays its salespeople, and Ancestry DNA's ambitions

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Trae Patton/NBC/NBCU Photo Bank via Getty Images</span></p></div><p></p></div></div>If you've ever felt the crushing disappointment of getting back on a scale and finding your weight back where you started after several months on a successful diet, you already know:</p><p>Losing weight is hard work, but keeping it off is harder.</p><p>To find out why, Kevin Hall, a researcher at the National Institutes of Health, began following contestants on the TV show "<a href="http://www.biggestloser.com/">The Biggest Loser,</a>" a reality show in which overweight people compete to win cash by losing the most relative to their initial weight. A <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3660472/">study he wrote in 2013</a> showed that after returning home, contestants were highly likely to begin slowly gaining back the weight they'd worked so hard to lose.</p><p>A <a href="http://www.nytimes.com/2016/05/02/health/biggest-loser-weight-loss.html?_r=0">recent story</a> in the New York Times looks into a more recent study by Hall, which appears to confirm his preliminary findings: Out of 14 contestants he studied, 13 have regained weight. Four contestants are heavier today than they were before the competition began.</p><p>The reason? The body fights really hard against weight loss, especially in the months and years after you finish a grueling diet and exercise plan. And this happens, at least partially, because of a series of complex biological changes that occur when you diet.</p><p>These findings aren't brand new. In fact, other researchers have been emphasizing some of Hall's main findings for years.</p><p>University of Minnesota psychologist and eating researcher <a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2015/05/04/why-diets-dont-actually-work-according-to-a-researcher-who-has-studied-them-for-decades/">Traci Mann</a>, for example, has said that a central problem of most weight loss plans is that they're designed simply to help you lose weight quickly, not to keep it off for longer.</p><p>Plus, the very act of dieting - restricting the amount of calories you take in on a daily basis - unleashes a series of shifts in the body that make it incredibly tough to keep the weight off. These are the changes on which Hall's study are based.</p><p>Some of them include:</p><h2><strong style="line-height: 1.5em; color: #000000;">1. Your hormones levels change, often making you feel hungrier no matter how much you eat.</strong><span style="line-height: 1.5em; color: #000000;"> </span></h2><p><span style="line-height: 1.5em; color: #000000;">Losing weight affects the presence of several key hormones in the body. One of them is leptin, one of several hormones that control hunger.</span></p><p>The Times reports that in the years after "The Biggest Loser," contestants reported near-constant feelings of hunger and cravings, which often led some to binge after they'd succeeded in sticking to a healthy eating regimen for several weeks.</p><p>While all of the contestants started the show with normal levels of leptin, the levels of this hormone plummeted by the time the show ended, <a href="http://www.nytimes.com/2016/05/02/health/biggest-loser-weight-loss.html?_r=0">the Times reports</a>. "By the season's finale, they had almost no leptin at all, which would have made them ravenous all the time." And as they slowly began regaining weight, leptin levels rose a little, but got stuck at about half of what they'd been at the start of the show - which would help explain why they felt such strong urges to eat.</p><p><span style="line-height: 1.5em; color: #000000;">"As you lose body fat, the amount of different hormones in your body changes," Mann <a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2015/05/04/why-diets-dont-actually-work-according-to-a-researcher-who-has-studied-them-for-decades/">told the Washington Post in 2015</a>. "the hormones that help you feel full ... decrease. The hormones that make you feel hungry ... increase."</span></p><h2><strong style="line-height: 1.5em; color: #000000;">2. </strong><strong style="line-height: 1.5em; color: #000000;">Your metabolism slows down, and more of what you eat gets stored as fat.</strong><span style="line-height: 1.5em; color: #000000;"> </span></h2><p><span style="line-height: 1.5em; color: #000000;">When you diet, you're effectively convincing your body that it is starving, Mann said. Your body responds by running as efficiently as it can (i.e. burning the fewest calories possible). This shift "would be good thing if you're starving to death," said Mann, "But it isn't a good thing if you're trying to lose weight."</span></p><h2>3. Your brain becomes more aware of food.</h2><p>In addition to all of the physiological changes that happen during a diet that make it tough to keep off weight, some people also apparently experience psychological changes that could contribute to the struggle.</p><p>"Your brain becomes overly responsive to food, and especially to tasty looking food," said Mann, "so the thing you're trying to resist becomes harder to resist."</p><p>A <a href="http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0059114">2013 study</a> showed food to people who had dieted and people who hadn't, and then compared their brain scans. Unlike the non-dieters, the dieters tended to show a heightened response in the areas of their brains linked with processing rewards, and a lowered response in the parts of their brains linked with a sense of control.</p><h2>Biological changes don't mean long term weight loss is impossible</h2><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span><a href="https://www.flickr.com/photos/121776594@N07/15677462097/in/photolist-pTn6hD-gkXf9y-9MyzJY-4wpBF8-dEWyg-8VQLfb-dejqAR-aJrjqD-4zpdnU-3fR2o-TpXTt-cHqD9-4YGqj2-8VqoLR-66oz7w-9YoqNU-9VPcbA-c6UL9W-9Kepzs-b66cr-6xZFxW-dooXhR-pHw69c-9XGjKV-5NmcFp-mBmNr-51MVZo-66jA7n-9RnAYq-FAfU4-6UgphD-ac35ng-3dHfXZ-86jREx-6quWDF-7Jv54j-bh4Kz2-jCn6m5-a6rSeh-buBFUc-4VEzRA-fXPtKt-5Z3R3b-auNqQA-9A7XsP-ps6bpJ-iDLtg-4J6sJx-7HXvnz-moLTUp">Flickr / Kevin Dinkel</a></span></p></div><p></p></div></div>None of this means a doomsday scenario for people trying to lose weight.</p><p>Instead, it points out the problems with focusing entirely on changing what you eat rather than taking into account other behavioral patterns.</p><p>These include when you eat, how much you exercise, and whether or not your friends and family members support your health goals. <a href="http://www.ucsfhealth.org/education/behavior_modification_ideas_for_weight_management/">These factors, often lumped together under the term "behavior modification,"</a> are the focus of programs like Weight Watchers, for example, and <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1762038/">they work</a> <a href="http://www.ncbi.nlm.nih.gov/pubmed/17680902">for thousands</a> <a href="http://www.americanobesity.org/downloads/Evidence_of_Behavior_modification_in_weight_control.pdf">of people</a>.</p><p>"Most of us know people - friends, family members, colleagues - who have lost weight and kept it off for years by changing the way they eat and boosting their physical activity," <a href="http://www.cjr.org/the_observatory/freedman_cjr_health_reporting.php">writes </a><a href="http://www.cjr.org/the_observatory/freedman_cjr_health_reporting.php">David H. Freedman</a>, a consulting editor at Johns Hopkins Medicine International, in a post for the Columbia Journalism Review.</p><p>"They can't all be freaks of biology," <a href="http://www.cjr.org/the_observatory/freedman_cjr_health_reporting.php">says Freedman</a>.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/pros-cons-protein-shakes-dietitian-exercise-workout-2015-3">The pros and cons of drinking protein shakes after a workout</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="ZqZ2JsczrDjVUHT2uP379dh93NsXulO9" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Most 'Biggest Loser' winners regain the weight they lost - and it reveals a disturbing truth behind many diets

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>ChinaFotoPress/ChinaFotoPress via Getty Images</span></p><p class="caption">Chinese workers process packages for Alibaba sales (among others).</p></div><p></p></div></div>For many people, selling knickknacks online is a hobby. In China, it's becoming a national policy to solve poverty.</p><p>As part of one of the more ambitious - and successful - approaches to reach President Xi Jinping's goal of <a href="https://www.forbes.com/sites/sarahsu/2016/08/19/china-wipe-out-poverty/#59d9f6907d7a">eliminating poverty by 2020</a>, China has created more than 1,000 "Taobao villages" within the last decade.</p><p>These villages are so-named because residents sell everything from dance costumes to electronics to children's toys on one of the world's largest retail sites, Taobao. Within just a few years, many communities have seen thousands of people who left for brighter futures come back to build up the local economy in these Taobao villages.</p><p>By <a href="http://www.alexa.com/topsites">last measure</a>, Taobao - a property owned by Chinese retail giant Alibaba - was the 12th most visited site on the internet. The total value of all its goods in 2013 was judged to be <a href="http://www.techweb.com.cn/internet/2012-12-03/1260039.shtml">more than $145 billion</a>, a figure that dwarfs Amazon's <a href="http://www.gurufocus.com/term/COGS/AMZN/Cost-of-Goods-Sold/Amazoncom-Inc">$88 billion</a>.</p><p>China's government has looked at those figures and seen them as an opportunity to spur economic growth in poor villages. As <a href="https://qz.com/899922/once-poverty-stricken-chinas-taobao-villages-have-found-a-lifeline-making-trinkets-for-the-internet/">Josh Freedman reported for Quartz</a>, buildings are painted with hopeful slogans, such as "<span>Through Taobao, you can escape bitter days. E-commerce runs toward the road of happiness."</span></p><p><span>For the most part, different regions sell different items. Villages in Ping county (located in northern Hebei province) sell children's bicycles, Quartz reports. In villages nestled in southwestern Yunnan province, people sell handmade decorative objects.</span></p><p><span>Approximately 1,000 of these Taobao villages have been created since 2003. They include thousands of families selling goods that, collectively, are worth millions. The effect has been almost wholly positive: Residents are able to create viable online marketplaces, which has compelled people who previously left to return.</span></p><p><span><span>"Some people from our village saw us and would think, 'How odd. These brothers are always working till late every day. What are they up to?" entrepreneur Lv Zhenhong <a href="http://www.cnbc.com/2014/09/17/inside-a-taobao-village.html">told CNBC</a>. "In the first three months of opening a Taobao store, we had no business but we kept on working and didn't give up."</span></span></p><p><span><span>Today, Lv's outdoor equipment store does $8 million in annual revenue. He says one out of every three sleeping bags sold on Taobao comes from his company.</span></span></p><p><span>A certain portion of goods from Taobao villages are sure to be counterfeits of name-brand products, many of them consumer electronics. </span><span>In December of 2016, the US Trade Representative Office <a href="http://www.businessinsider.com/r-us-returns-chinas-taobao-shopping-website-to-market-blacklist-2016-12">re-added</a> Taobao to its blacklist of "notorious marketplaces." </span></p><p><span>The move doesn't explicitly penalize the site, but it does place it in an unfavorable light.</span></p><p><span>Image issues aside, such a strategy for reducing poverty likely wouldn't have been possible 10 years ago. China has spent the better part of the last decade <a href="http://www.worldbank.org/en/news/speech/2016/10/29/the-taobao-villages-as-an-instrument-for-poverty-reduction-and-shared-prosperity">bringing billions of citizens</a> online, and its efforts have led people to both buy and sell from one another, boosting economic growth. </span></p><p><span>An estimated <a href="http://www.worldbank.org/en/news/speech/2016/10/29/the-taobao-villages-as-an-instrument-for-poverty-reduction-and-shared-prosperity">10 million people</a> find work in the e-commerce sphere, representing 1.3% of China's labor force.</span></p><p>Taobao villages won't be the only means of eliminating poverty - other large, top-down programs meant to uplift social welfare are sure to play a role, too - but they have seemed to energize China's poor with an entrepreneurial spirit.</p><p>In October of 2016,<span> Bert Hofman, a </span>World Bank economist and country director for China, <a href="http://www.worldbank.org/en/news/speech/2016/10/29/the-taobao-villages-as-an-instrument-for-poverty-reduction-and-shared-prosperity">expressed</a> a strong sense of optimism.</p><p><span>"We hope to be able to help villages in poor and remote areas in China to become Tabao villages as well, and help lift themselves out of poverty," he said. "We won't stop there: indeed, much like Alibaba is a global e-commerce platform, so can the Taobao villages become a global phenomenon."</span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/singles-day-china-how-much-money-alibaba-makes-2016-11">How a Chinese company invented a holiday and turned it into the biggest shopping day of the year</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="0xcWthNzE6UbGawwkfU9uAYUFnDv6EvB" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

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