The Purse

Welcome to our #123 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we highlight a report by J.P. Morgan Private Bank about female-led high-growth businesses.

Whilst female-powered businesses have attracted a record £5.05bn in equity investment (2021), the data shows that female founders give up a larger percentage of their ownership than male founders.

However, we know that women need stronger networks made up of operators and expert advisers plus they continue to experience more push back (than their male peers) every time they negotiate.

***

And you can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Jana

Report: female-led high-growth businesses and ownership

The data shows that when female founders give up a larger percentage of their ownership than male founders

J.P. Morgan Private Bank has released the results of its second-annual Top 200 Female-Powered Businesses report, as per Business Leader.

Female-powered refers to high-growth companies that are founded or led by women, majority-owned by women, or have a management team that is at least 50% female.

And whilst female-powered businesses have attracted a record £5.05bn in equity investment (2021), the data shows that female founders give up a larger percentage of their ownership than male founders.

Here are the key facts from the report:

* The rate at which women own less of their companies as equity investments increase is almost twice that of men, a 25% reduction compared to 13%.

* These 10,647 businesses are contributing significantly to the UK’s economy, reporting record sales of £84.7bn and a total headcount of almost 700,000, meanwhile attracting £5.05bn of equity investment in 2021.

* Whilst more than 30% of high-growth companies powered by women reported increasing employment more than 20% over the last decade, employment growth versus men during the most recent filing period decreased nearly 42% (a testament to Covid-19 disproportionately impacted women).

* Sector-wide, although digital sectors make up many companies powered by women in 2021, it was within industries such as clothing, clothes shops, healthcare products and e-commerce that female-led businesses excelled against the wider market.

Based on research…

…gender bias continues to cloud the fund raising process which is why women-founded startups are often deemed a ‘bigger risk’ than those led by their male counterparts.

We know that ‘old school’ investors tend to negotiate harder with female founders. They often undervalue their business and claim a higher equity stake.

Women also tend to experience far more push back when negotiating (in general). This may be because women setting a higher valuation (to retain more equity), for example, goes against the gender norm of ‘just being nice’.

And the data backs this up. Research suggests that women who negotiate are more likely to be refused than their male peers. Women are aware that there is a social penalty for being deemed 'too pushy’ and are often labelled as ‘aggressive’.

Female founders also need stronger networks made up of operators and experts who can advise on how to win over investors. And importantly, to know when to walk away from the wrong investor so they do not give up more equity than they should.

What next?

* (Re) Listen to The Purse Podcast interview with Jill Pay about UK female entrepreneurship and The Gender Index.

* (Re) Listen to The Purse Podcast interview with Jordan Dargue about female angel investing and female founders

News in Brief

Financial news

* The US Federal Reserve tightening expectations climbed following recent jobs report. Market is now pricing for Funds Rate to be 3.48% end of December.

* Strong US jobs confirm July 75 basis points Fed rate hike. Payrolls rose 372k in June – remaining strong relative to prior month's 384k figure and surpassing consensus expectations at 265k.

* German 10 year inflation expectations have collapsed as stagflation worries now give way to recession worries.

* The Euro sank to a 20 year low against the US Dollar as investors pared bets on the European Central Bank interest-rate hikes given the growing risk of a recession in the region. The Euro fell as much as 0.9% to 1.0331, its weakest level since December 2002.

* The pound climbed Thursday as UK Prime Minister, Boris Johnson resigned. Investors are now weighing up the future of the UK’s economic leadership and plans to tackle inflation, which is running at a 40-year high.

* UK’s ‘unsustainable’ debt could reach 320% of GDP in 50 years, OBR warns. Taxes ‘must be raised to offset mounting cost of ageing population and falling fuel income’.

* The UK’s employment market is losing steam, in a sign of the challenge that will face the next government to strengthen the struggling economy.

* Biotech stocks have added $200bn+ in market value over past 3 weeks after sector sentiment got a boost from reports Merck & Co. was interested in cancer drugmaker Seagen. The Nasdaq Biotech Index has rallied roughly 20% since the first report of a potential tie-up.

Crypto: bitcoin, ethereum, DeFi & NFTs

* Bitcoin, ethereum jump as crypto market stages mini rally. A day after the U.S Independence day, bitcoin was up 5% (over 24 hours) and is currently trading at $21,200+ today (Sunday). Ethereum (ETH), gained 9% to $1,148 and is currrently trading at $1,187+.

* The Treasury has given the White House its framework for future international cooperation on crypto. As the department announced on July 7, it has responded to the provisions of US president Joe Biden's March executive order on digital assets, which called on agencies to create a series of reports. 

* Bitcoin burdens balance sheets of Tesla, Block, MicroStrategy. Major stocks led by crypto bulls Elon Musk, Jack Dorsey and Michael Saylor are together down more than $2 billion on their bitcoin to date.

* Investors waiting to deploy vast tablecoin reserves, analysts say. Major stablecoin supplies point to an abundance of patient investors ready to scoop up cheaper cryptocurrency prices.

* Justin Sun says he's ready to spend $5bn on acquisitions as crypto firms struggle.

* Ethereum name service domain bought for $315,000 in second-biggest ever sale. The ENS name 000.eth was sold for 300 ETH ($315,000).

Coffee Break? Read This

* Leaders, stop rewarding toxic rock stars

* 7 ways to build greater trust in all of your partnerships

* Ever say “I’ll be happy when …?” Here’s why you need to stop doing that — now

We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.

The Purse Ltd. Copyright 2022 & All Rights Reserved.

The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial adviser.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit jointhepurse.substack.com

Welcome to our #122 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we spotlight our interview with Michele Wucker who is a strategist, speaker, and best-selling author. She coined the term ‘gray rhino’ as a call to take a fresh look at how we respond to obvious, probable, impactful risks.

And she recently released the sequel, You Are What You Risk: The New Art and Science of Navigating an Uncertain World.

We talk to Michele about risk, what is it and why is it important. Michele explains the difference between a ‘gray rhino’ and a ‘black swan’, we discuss the financial markets today, how women and men think and act on risk. And why it is that women actually take more risks….

Listen to the full interview here.

***

And you can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Managing risk, how women and men respond to risk and why women are good at risk-taking

We interviewed Michele Wucker, the ‘risk expert’ on The Purse Podcast

When it comes to money and investing, women are not risk averse despite the money myths media likes to perpetuate.

And although (overall) women invest less than men, this is changing. Fast.

The pandemic has accelerated the shift in the number of women opening investment accounts, investing in equities and in cryptocurrencies. Not to mention more women stepping into angel investing, starting their own VC funds and raising rounds of funding.

Women invest.

According to financial expert Barbara Stewart, the majority of women are risk aware meaning they like to take in more information before making an investing decision. A high percentage of women however, are risk takers and risk seekers.

This is important.

***

We interviewed Michele Wucker on The Purse Podcast about risk and how women manage their money.

Here is a short extract from the interview (we have edited down the response for ease of reading only):

Question: Can you explain how women and men think and act on risk? Does gender actually play a role? And to what extent are women and men byproduct of our society, gender norms, and bias..?

Michele’s response

…So there's a couple things going on-obviously men and women are not exactly the same. Partly because we have very different experiences.

I'm five foot three and a half. If I go down a dark alley at 3:00am, it's not the same as a six foot-something tall man going down that same alley.

Objectively, it is not the same risk.

Similarly, as we spoke just a moment ago, about women speaking up in meetings, in some ways it's riskier; it's harder, it might not be worth the effort, but on the other hand, women get better at it. So eventually perceive it as less (risky).

So there is research that shows that there are certain areas where men are likely to be more risk-seeking and that's in dangerous driving (the speeding), the drunk driving, imbibing substances that are dangerous when you're not supposed to, risky sexual behaviour and so on. Basically, you’re more likely to see men taking those risks.

There's also research that shows that women are more likely to take these social risks, to step up. But as I said, if you know there's this gap between perception of a risk, how it feels and what the risk actually is women who are in a gender atypical role, like a woman police chief, for example, or a woman university president (although that's becoming much more common thankfully)…

… if women make a misstep in that job, they are likely to get punished more than a man in the same job because it is gender typical.

So the consequences are much higher (for women). Women are much more likely to get promoted into ‘glass cliff’ situations where company is teetering on the edge.

And in many ways men are ‘chicken’ to do it. Or in some cases, it's the only time that men will let women do that. And so those are very difficult circumstances.

But the fantastic economist, Julie Nelson, who's written a lot about this (she's got a background in statistics), looked at dozens of studies that have been done over the years with the headline saying that women are ‘risk averse’.

And she found that some of these were not hugely statistically significant. So you're getting big headlines that are repeated throughout the media based on some fairly tenuous results. So that's one problem.

The second problem is that a lot of those, she said, look at averages of women's risk preferences. And when you look at ranges, she found that there's a 95% overlap.

So this whole idea of men and women being different is something else.

The other thing that is true is that women have different financial needs and financial constraints. There are lots and lots of studies showing that women lose $1m over their lifetime because of their career and financial choices.

And that's not necessarily out of risk aversion. It's out of the choices that women have to make.

Historically women getting married is basically taking a huge risk by putting their financial and other future needs into the hands of someone else.

And today it's interesting: I talk with women and they think that getting married is the bigger risk that not getting married, which is a huge social change from when earlier generations were involved.

There is an area that I think needs a lot more work and that's in a situation where women and men don't have all the information about a situation. And in those situations, women are going to step back, get the information and not leap before they've looked as much as makes them feel comfortable.

And so there is a difference there, but as women and men go up the ladder and have similar amounts of information and experience, the research shows that they make similar choices.

So there are lots and lots of nuances to this.

And I hear professional women all the time saying: ‘oh, I'm so risk averse’. And then they tell me what they've done in their life. And I say, ‘what seriously? You think that is risk averse. You being the first in this, the first in that.’ And there's a stereotype that goes with it.

There’s a term called ‘stereotype threat’: sometimes when we expect we're supposed to deal with risk in a certain way, we actually might make decisions that don't align with how we might approach it without that stereotype.

So it's a very, very rich topic and something that I think every single woman needs to think about, needs to talk about with other women.

Every time you hear a woman use the ‘risk averse’ term, say, let's talk about risk aware. Let's talk about risk savvy. Let's talk about not putting yourself down.

Let's have a real conversation…

***

Listen to the entire interview with Michele Wucker here.

What next?

* (Re) Listen to the interview with Barbara Stewart on The Purse Podcast about Women & Risk.

* (Re) Listen to the interview with Barbara Huson on The Purse Podcast about Rewiring for Wealth.

News in Brief

Financial news

* (In total return terms): we’ve just seen the biggest H1 decline for the S&P 500 in 60 years, Deutsche Bank has calculated. It dropped 20.6% and suffered worst first half since 1970. And the Nasdaq 100 finished first half down 30% (most since 2002).

* MSCI’s All-Country World Index has tumbled by 20% since the start of 2022, as shares have been hammered by recession worries. According to Reuters, that’s its worst opening six months to a year since the index was created in 1990, wiping $13trn off share values.

* Britain’s FTSE 100 index has fared better, down over 3% so far this year, with oil companies rallying.

* According to the Bank of America (BoA): government bonds are on course for the worst year since 1865.

* Federal Reserve’s Chairman, Jerome Powell says the bigger risk is insufficient action to quell inflation. There is concern that high inflation becomes entrenched that inflation expectations become unanchored.

* Eurozone inflation surged to 8.6% in June from 8.1% in May (a fresh record) vs 8.5% expectex which has bolstered calls for an aggressive European Central Bank hike. Data reflect an escalating squeeze on households across Eurozone, where France, Italy and Spain reported new all-time high this week.

* Average UK house prices face slowdown despite hitting record high. Weakening economy, cost-of-living squeeze and rising interest rates are cooling market, index shows.

Crypto: bitcoin, ethereum, DeFi & NFTs

* Bitcoin just posted its second-worst quarterly performance since inception. It’s been a brutal three months for bitcoin investors as the leading cryptocurrency lost more than 56% in value in Q2 2022. (Bitcoin is down 70%+ since November).

* Bitcoin falls below $19,000 on Thursday as pressure mounts on crypto firms. Investors are also worried about rampant inflation which is forcing global central banks to raise interest rates.

* Coinbase sinks as Goldman downgrades to sell after 75% rout. Coinbase Global is continuing to struggle due to ‘continued downdraft in crypto prices and the resulting fall in industry activity levels’, according to a research note from Goldman Sachs.

* Crypto hedge fund Three Arrows Capital (3AC) falls into liquidation as market crash takes its toll.

* MicroStrategy buys an additional $10 million worth of bitcoin. Michael Saylor’s firm MicroStrategy purchased an additional 480 bitcoin at an average price of $20,817.

The Purse Podcast

We cover the following in our conversation:

* What is risk

* The Gray Rhino vs the Black Swan

* The financial markets

* Women & managing (systemic) risk

* Female founders & VC

* What are the Gray Rhinos retail investors should watch out for

* And more

Please enjoy! Listen on Apple Podcasts & Spotify+

Coffee Break? Read This

* Roe v. Wade’s Demise Is a Turning Point for Corporate America

* The pandemic has changed us. Now companies have to change too

* We need stories from older mothers – and from women who don’t want children too.

We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.

The Purse Ltd. Copyright 2022 & All Rights Reserved.

The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial adviser.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit jointhepurse.substack.com

Welcome to our #121 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we focus on a study about more women taking out loans to cover maternity leave (plus 23% of women are convinced they will never return to the financial position they were in prior to giving birth).

This comes as the cost of living crisis in the UK continues: inflation is expected to reach 11%+ in Q4 of this year.

***

And you can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Jana

Maternity leave: more women are taking out loans to cover costs

Women are often financially disadvantaged throughout their life

According to a study by Credit Karma, more women are taking out loans to cover maternity leave, as reported by HuffPost.

Here are the results from the study:

* 26% of women go into debt to cover maternity leave - averaging £2,800 in borrowing. That's a £560 increase from 2018.

* 23% are convinced they will never return to the financial position they were in prior to giving birth.

* Loans are being used to pay for essentials like:

* groceries (42%)

* bills (32%)

* baby clothes and supplies (26%)

* A new mother accrues an average of £1,770 loan interest in just six months of leave if they have a student loan.

* Maternity leave can also impact women’s credit score, setting them back an average £17,000 in interest over the course of their lifetime.

And even after maternity leave, 44% of women say they are working less hours than they like because it does not make sense financially to work longer with the costs of childcare.

The new research comes as the cost of living crisis in the UK continues, with inflation rising to 9.1% (CPI) in May and is expected to be at 11%+ in Q4 of this year.

Akansha Nath, head of partnerships at Credit Karma UK said: ‘Women are often disadvantaged financially throughout their life, and the responsibility to give birth plays a huge role in this gender disparity’.

In the UK, employees can legally take up to 52 weeks maternity leave and can be paid for up to 39 weeks. And two thirds of UK organisations offer enhanced maternity pay if employees have been at the company for a minimum amount of time.

What can women do?

* Start financial planning for your baby: split out essential expenditure vs non-essential expenditure

* Take advantage of saving offers, increase credit score & consolidate debts.

* Build up an emergency fund for unplanned spending (3-6 months+)

* Check for employer benefits and government schemes including national insurance credits.

News in Brief

Financial news

* Global financial markets snapped a losing streak on Friday, registering their first weekly gains this month as fears of a looming recession prompt investors to rethink how aggressive central banks will need to be in order to tame high inflation.

* Global stock markets are still not cheap when measured by the Warren Buffett metric: The global market cap to GDP ratio has dropped to 114% but is still above the 100% threshold.

* Government bonds rally on fears of global economic slowdown. Disappointing eurozone business activity data and comments from Federal Reserve chair add to cloudy outlook.

* To put things into perspective: The S&P 500 is set for the worst first half since the Nixon era in 1970, Bloomberg has calculated.

* S&P 500 may have another 24% to fall, 150 years of market history shows. That’s according to Societe Generale, which calculates the benchmark gauge may need to tumble as much as 40% from its January peak in the next six months to hit bottom. The sell-off might in the early stages.

* Berenberg sees a recession in the US and Europe as base case for 2023. Aggressive Federal Reserve reaction to rise in US inflation to 8.6% Year-on-Year in May & new spike in gas prices in Europe have tipped the balance – fall in GDP in US & Europe has now turned from a serious risk into our base case.

* The Bank of Japan (BoJ) has overtaken the Swiss National Bank (SNB) to take the lead in the global race to print money. BoJ's total assets have swelled to 137% of GDP. SNB's balance sheet equals 'only' 135% of Swiss GDP.

* The European Central Bank (ECB) balance sheet hit another all-time high as Christine Lagarde keeps printing money (QE) despite record-high inflation. Total assets rose by €7bn to €8,827.9bn. ECB balance sheet now equal to 82.4% of #Eurozone's GDP vs Fed's 36.6%, BoE's 39.6%, BoJ's 136.3%.

* Barclays expects recession in the Eurozone as straighter monetary policy & reduced fiscal space in high-debt countries increase risk of 'doom loop' as in summer of 2011: house prices could fall in countries with overheated markets, according to Barclays. Financial stability risks are also a concern.

* The FTSE 100 closed up by 2.6% on Friday, clawing back ground in a turbulent week for the markets.

* UK consumer confidence falls to lowest level since records began. Mood gloomier than at height of pandemic or in 2008 financial crisis as inflation hits household pockets ie 9.1% CPI in May.

* UK mortgage lenders told they can scrap affordability rule for buyers. Bank of England (BoE) feels other measures will play stronger role in guarding against household debt.

Crypto: bitcoin, ethereum, DeFi & NFTs

* To put things into perspective: A Bitcoin crash of 74% as at present is nothing unusual. In history, there have already been 4 collapses in which the leading cryptocurrency went from peak to trough by 80%+. (see current bitcoin price).

* Bitcoin’s tight relationship with tech stocks (fuelled by declines in both amid US Federal Reserve hikes & high inflation), drops amid crypto rout. Bitcoin’s 20 day correlation with the Nasdaq 100 has fallen from ~0.88 in early May to the low-0.30’s now, according to Bloomberg.

* Solana, Ether lead gains in relief rally (adding 9.7% in market cap), but traders say macroeconomic concerns remain (see current price of ETH).

* Almost $4 billion in Bitcoin miner loans coming under stress, Bloomberg says. Analysts say an increasing number of loans are underwater.

* BlockFi secures $250 million bailout from FTX. The crypto lender says the deal ‘bolsters our balance sheet and platform strength.’

* Shiba Inu's SHIB jumps amid speculative frenzy, BONE Proposal. SHIB rose by nearly 48% in value since last weekend before a sell-off Thursday morning.

Coffee Break? Read This

* TED video: In praise of slowness

* TED video: The habits of happiness

* Roe v Wade: US Supreme Court ends constitutional right to abortion

We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.

The Purse Ltd. Copyright 2022 & All Rights Reserved.

The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial adviser.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit jointhepurse.substack.com

Welcome to our #120 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we spotlight our interview with Vicky Pryce, who is Chief Economic Adviser and a board member at the Centre for Economics and Business Research (CEBR) in the UK.

We talk to Vicky about the UK & global economy, the surge in inflation, wages, the risk of stagflation and whether we are headed for a recession.

Listen to the full interview here.

There is no question, we are in a tough economic climate right now. Make sure you take the time to absorb as much information as you can, so you make good decisions for yourself financially.

***

And you can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Jana

The state of the UK & global economy. And inflation is rising but are wages?

Economist, Vicky Pryce talks about the UK & global economy and what to expect in the years ahead.

We recently interviewed Vicky Pryce on The Purse Podcast.

Vicky Pryce is Chief Economic Adviser and a board member at the Centre for Economics and Business Research (CEBR). 

She was previously Senior Managing Director at FTI Consulting, Director General for Economics at the Department for Business, Innovation and Skills (BIS) and Joint Head of the UK Government Economic Service. Before that she was Partner at the accounting and consulting firm KPMG after senior economic positions in banking and the oil sector. 

We talk to Vicky about the UK & global economy, inflation, wages, the risk of stagflation and whether we are headed for a recession.

The following is an extract from the interview which has been edited in parts for ease of reading (only):

***

Question: Can you share a summary of where the UK and global economy is right now? And what's happened to get us to where we are today?

Vicky’s answer:

We have seen a slow down in the pace of recovery.

We had done reasonably well as the world economy was coming out of COVID and it looked like it was going to continue through 2022.

In most countries, we had gone back to pre-pandemic levels by the end of 2021.

China recovered much earlier than anyone else and so did the US. But it was much more difficult in places like Europe which was still struggling with loads of restrictions. The easing of those restrictions happened a bit later in some countries.

But overall we were getting back to some sort of normality.

The one worry that everybody had was that inflation was picking up because supply could not meet the demand for so many months. And we had supply chain problems.

We had an increase in energy costs, we had food prices go up.

But this was more or less to be expected because there would be a period where supply and demand would not be in balance.

Central bankers (and everyone else) were just waiting for that to sort itself out. And then of course, we had the war in Ukraine and the Russian invasion that took place in late February.

And that changed the picture significantly.

There is a real slowdown in that pace of growth and people are talking about stagflation, not growth anymore.

We expect to see very little improvement in activity and high inflation, which many fear will be very difficult to control.

Question: So let's talk about inflation because we're at 9% CPI as of April (UK). And I remember we talked about whether inflation was going to be transitory or not. And certainly the narrative that we were hearing in the UK (and globally) was that inflation was going to be transitory ie nothing to worry about.

So what's going on there? And can we get it back down to the target 2%, because that's what the Bank of England (BoE) is ultimately aiming for. Is that realistic? Some believe that we're unlikely to ever get back to 2%.

Vicky’s response:

When you look at some of the folks that are still there now, including from the International Monetary Fund (IMF), the Bank of England (you mentioned), they expect we get back to target ie 2% inflation, in the next couple of years.

In fact, by 2023 we will be more or less there or just above it. And a year later we may well be below it.

It is not so much the raising of interest rates… but the general slow down in confidence in business and consumer intentions: this is not looking particularly good right now, as well as the ‘cost of living crisis’ which everyone has to bear right now globally.

Therefore a slowdown in demand is the real worry behind the developments that we are seeing at present.

Interest rates may accelerate that, but there is already a trend which suggests we are going to see quite a substantial slow down in growth over the next year or so.

And if that is the case, inflation will inevitably start coming down as well (in theory).

So, yes: getting back to (the 2%) target may well happen, even if we don't see dramatic increases in interest rates.

That of course depends hugely on the assumptions being met which includes an end of the war at some point (but it looks like it is going to last a lot longer), and a return to some normality in prices, particularly oil prices.

There is an attempt to make up for some of the Russian oil from production in the Middle East and that quite a lot of supplies of liquefied natural gas (that was coming and going to the Far East in the past), diverted to places like Europe which is so dependent on gas from Russia.

And all that may ease some of the pressures that we're seeing right now, in addition to seeking alternative sources. Both in fact for energy, but also for food.

I think this is going to take quite some time. And then perhaps some of their assumptions may not be met and we may see high prices for longer than people are expecting.

And if that is the case, returning to target may take a little bit longer. But the most important thing right now is that the economy continues to function.

Rather than just focus on bringing inflation under control, (if the cost of doing so is too great), we should be slightly more relaxed about it and look more at growth, employment.

But right now, we're in a position of crisis yet again.

Question: Are we seeing an increase in wages?

Vicky’s answer:

There is definitely an increase in what people are getting paid right now to make up (in part) for the rise in inflation.

But in the UK, wages are not going up in line with inflation.

If you look at the latest data, (if you exclude bonuses), wages have increased by just under 5%, which is not particularly high given inflation is 9%+ in this country (and likely to go up). The Bank of England expects inflation will be over 10% later this year.

So there is a real squeeze in income.

And it is worth pointing out that this is unequally distributed. If you look at bonuses added to the overall wages, then they are doing okay: they are, more-or-less, keeping up with inflation.

But of course, bonuses are being given in particular parts of the economy, mainly the financial sector and perhaps business services.

Sectors such as hospitality and tourism are picking up in terms of wages very slowly but they are still way below the rate of inflation ie I get in very little in terms of increases in pay.

If you look at the public sector (UK), you still have all sorts of constraints in terms of how much of an increase workers can get. There has been a freeze for a while (or at least a partial freeze).

The likelihood of wages going up to be in line with inflation, is not great. And we are starting to see a number of areas where social and industrial unrest is taking place.

If we consider Europe, it is even worse. In fact, wages are rising much more slowly than expected.

Of course, employment in Europe overall is higher. It is 6% or 7% on average (which is not bad). But of course, in the UK unemployment is 3.7%, which is similar to the US so the stress isn't as great in terms of staff shortages that we've got here. So wages are not rising anything like as fast.

And if that's the case, we don’t have an inflationary spiral that would come as a result of having persistent high prices, because demand for wages is a bit more subdued.

So what you have is high inflation, but no real push from wages at the moment. This could of course change quite significantly, but this is not happening right now.

This is one of the reasons why people think that perhaps inflation is transitory, because it will not take hold the way it did back in the 70s and early 80s.

And if the assumptions about an end to the war and so on are correct, we expect inflation to fall quite sharply.

***

Click here to listen to the full interview with Vicky Pryce.

News in Brief

Financial news

* MSCI-All Country World Stocks Index: stocks and bonds are having their worst returns in history. Growing fear of a global economic slowdown (& 70s style stagflation).

* Global equities posted their worst week since the darkest days of the pandemic in March 2020. The S&P 500 dropped by 5.8%. And the FTSE All World dropped 5.6% as rising interest rates threatens outlook.

* On Wednesday, the US Federal Reserve raised interest rates by 0.75%, the biggest hike since 1994. The Fed said its ‘commitment to restoring price stability — which is necessary for sustaining a strong labour market — is unconditional’. (Interest rates may go up to 4.8% this year). US inflation is 8.6% for May, core CPI up 6%.

* On Thursday, the Bank of England (BoE) raised interest rates by 0.25% to 1.25%, as it warned that UK inflation will rise to 11% by October this year.

* Oil prices fell sharply on Friday over concerns that central banks’ actions could slow economic growth and squeeze crude demand.

* To put things into perspective: ARK Innovation ETF has crashed 77% from ATH as the non-profitable tech bubble has burst.

Crypto: bitcoin, ethereum, DeFi & NFTs

* The value of crypto market has dropped below $1 trillion as bitcoin

tumbles to 18 month low after latest DeFi lender blowup. Celsius paused withdrawals, swaps and transfers on platform (citing market conditions).

* Bitcoin drops below key $20,000 threshold (for the first time since November 2020). The crisis in digital assets deepens as crypto market benchmark falls sharply (See the current price of bitcoin).

* The price of ethereum has dipped below $1,000 taking declines this year to more than 70% (see the current price of ethereum).

* Crypto fund Three Arrows Capital (3AC) faces potential insolvency after lender liquidation. According to three sources, the liquidation totalled at least $400 million.

* Meta partners with Balenciaga, Prada, and Thom Browne and launches digital fashion marketplace.

* Coinbase cut its workforce by around 18%+. BlockFi cut its staff by roughly 20%.

The Purse Podcast

We cover the following in our conversation:

* The UK & global economy

* Inflation: can we get it down to 2%?

* Slow economic growth & stagflation

* Are we headed for a recession?

* And more

Please enjoy! Listen on Apple Podcasts and Spotify+

Coffee Break? Read This

* How companies should invest in a downturn

* Why endurance running makes sense for women.

* Can workers cram five days worth of work into four days? Mothers already do

We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.

The Purse Ltd. Copyright 2022 & All Rights Reserved.

The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial adviser.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit jointhepurse.substack.com

Welcome to our #119 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we spotlight our podcast interview with Mary Ellen Iskenderian, who is President and CEO of Women's World Banking, a global non-profit devoted to giving more low-income women access to financial tools and resources they need for both security and prosperity.

Because we cover so many important topics about women’s wealth, financial inclusion and how financial services can serve the female customer better, we have published a short extract from the interview in this week’s newsletter.

Listen here for the full interview.

***

And you can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Jana

Women’s financial inclusion and why it matters

Mary Ellen Iskenderian talks about women’s financial inclusion and how the financial services industry can serve the female customer better

We recently interviewed Mary Ellen Iskenderian on The Purse Podcast.

Mary Ellen is President and CEO of Women's World Banking, a global non-profit devoted to giving more low-income women access to financial tools and resources they need for both security and prosperity.

Prior to Women’s World Banking, Mary Ellen worked for 17 years at the International Finance Corporation, the private sector arm of the World Bank.

Mary Ellen recently published her new book: There’s Nothing Micro About a Billion Women: making finance work better for women.

We talk about (including) Mary Ellen’s new book, women’s lived experience as it relates to money and power, financial inclusion, how big the opportunity is and what banking institutions need to do to serve the female customer better.

The below is a short extract from the interview.*

*Question: how would you describe women's lived experience as it relates to money and power in today's world? And what's working well and what's not working so well for women?

Mary Ellen’s response:

I immediately think of a piece of work that the World Economic Forum publishes every year on gender gaps.

And they look at what is the gender gap in 193 countries; it is pretty much around the world. And in terms of access to health, access to education, the gap is on the whole quite small, and we're nearly there.

I think there have been some gaps that opened up during COVID, but in relative terms, much progress, much smaller gaps.

But it's when you get to things like economic participation and political participation. …it's just stunning when they say it will take 270 years to close this gap at the current rate of change.

At some level that's all you need to know; that if we are so far away from getting to where power really lies, that probably speaks to how important access to finance is.

And perhaps why it's so difficult for women to reach parity.

I think in terms of lived experience, which at the end of the day, really is the most important, in many countries- there are some fairly restrictive, social and cultural norms that make it particularly hard to close those gaps.

Because digital technology (which has been a total game changer for the delivery of financial services to low income people, to people who are very remote)…

…getting that cell phone in their hands, a smartphone, ideally (internet-enabled), has made an enormous difference in reaching people with financial services.

But in countries that have real restrictions around allowing women's ownership of that technology, it's quite difficult to make that kind of change.

If there is a silver lining or maybe a slightly sparkly lining of COVID, it would be that so many services, so many private sector and government services have been brought online.

So much of COVID relief was made digitally. And you saw women taking up that technology, getting access to those COVID relief payments.

It took that crisis to sort of blow through some of those social and cultural norms. India made their first round of COVID relief payments, only payable to women and only digitally.

And so you saw the country that has the largest gender gap in mobile phone ownership, in the first three weeks of the pandemic: 25m new accounts were opened digitally, primarily for women, so that they could take advantage of the receiving that COVID relief payment.

So I think for us now, the really exciting part: women are formally or by all of the technical definitions, included in the formal system by virtue of having a mobile money account or a bank account opened.

How do we make sure we keep them included?

We design products they want, or the ones that they will use, that they feel confident enough and that we have given them enough instruction in how to use the product; how to navigate the cell phone in order to really take advantage of this ‘lift’ in digital and financial access that COVID has presented.

Question: can you explain what financial inclusion is and how it specifically relates to the female market?

Mary Ellen’s response:

The very formal definition by the World Bank, the IMF, by regulators around the world of being financially included, implies that you have a bank account or now a mobile money account in your own name.

But as you and your listeners can appreciate- just having those things… could hardly really be about what being included in the financial system should consist of.

We really think at Women's World Banking (and this is the case that I make throughout the book), that having access to an affordable way to make payments and to send money to relatives is an essential part of inclusion.

Having a safe place to save and that is an enormously important piece of this inclusion puzzle.

Certainly having access to the ability to borrow is not a sufficient reason, but it definitely goes into that list of things that one needs the ability to borrow, to make a large purchase.

Or if you see an opportunity in your personal life or your business life to be able to get the funds together to take advantage of that opportunity is key.

And then the last piece, and I think it's often forgotten: products like insurance to manage risks and mitigate risks so that a family doesn't lose everything they've built because of natural disaster or the illness of the breadwinner.

So having that full suite of products is so critical. And then I think we push it a little bit further to say having the knowledge and confidence to use those products.

And to navigate the technology that you might need to use those products to their full extent is an increasingly important part of inclusion, as so much of our financial lives moves into the digital world.

And then lastly, I personally feel very strongly that inclusion also implies that you're treated with a certain amount of dignity; that you are not preyed upon and subject to use the various interest rates or predatory collection processes for a loan or banking fees, that you weren't necessarily told about or that you didn't understand; that you're treated as a valued customer and so inclusive.

So the definition.. really does imply joining the community as a valued member of the formal economy.

Question: Now, if you had to quantify the cost of financial exclusion of women, how would you do that? And how big is this opportunity from both the societal and business perspective? Because this is significant.

Mary Ellen’s response:

And that's one of the most exciting parts of the recent research, and was a real driver for me in writing the book, that it used to make me a little crazy (when I first got involved with Women's World Banking)…

…how many people would really double down on the use of the word ‘micro’ and not see how these very small loans, albeit that millions and millions of people, could not see the macro implications of that.

And so it's been really gratifying to see, no one less than the IMF and the World Bank, and a whole range of research organisations, in country themselves say, no, not at all.

Financial inclusion is to use an IMF term, ‘macro critical’ and bringing the most excluded people into the formal system is really the only way that we're going to be able to attack this issue of inclusive growth; growth will continue to exacerbate inequalities if we don't bring the most excluded.

And unfortunately it is very easy to document the fact that women, in every age group, every income group, every demographic category you can think of are the most excluded.

So bringing them into the system really is a fundamental factor in inclusive growth. And from a macro economic level there is a very strong case, particularly as we look at an economy that is facing potentially a global recession.

Thinking of ways to bring about growth and inclusive growth and growth deserves our urgent attention.

As far as the commercial opportunity goes, that's really very exciting.

And we've seen McKinsey and Oliver Wyman and BCG and all sorts of very lofty consulting firms put some pretty big numbers behind the opportunity that's being left on the table.

I think the data that we've seen that speaks to the broadest range of opportunities, there's $700bn of annual revenue across financial service providers that's being missed.

That is anything from $2trn in deposits that are not being made because this population is not being served.

A population that is vocally asking for a safe place to save all the way to $50bn every year in life insurance premiums, if women's lives were insured at the same level that men's lives are.

So there's just a tremendous opportunity across financial services, retail banking, certainly on the lending side, on asset management, there's some, both wonderful data and some really wonderful anecdotes on the wealth management and asset management.

This is the opposite end of the spectrum that I'm usually working at.

It says 60% of women who once they are widowed or divorced or have been in a relationship with an asset manager, will leave that asset manager in search of another client relationship person, because they never felt they were spoken to.

The client relationship manager was always focused on the husband in that conversation, not recognising who might be the ultimate holder of that wealth…

Listen here for the entire interview with Mary Ellen on The Purse Podcast.

News in Brief

Financial news

* The World Bank has warned: the global economy may be headed for years of weak growth and rising prices, a toxic 1970s stagflation combination that will test the stability of dozens of countries still struggling to rebound from the pandemic.

* US 2 year yields jump 20bps to highest level since 2008 on inflation data jump as Fed hike path repriced.

* US May Consumer Prices Increase 8.6% year-on-year, highest since 1981 vs 8.3% expected; Core CPI up 6% vs 5.8% expected.

* Hotter-than expected US inflation boosts chances for more US Federal Reserve hikes (another 0.5% rate increase is expected this week). Trader now prices in 3 half-point rate hikes and and two more small steps. Now a key interest rate of almost 3% at the end of the year is priced in.

* The ECB’s new projections see faster inflation and slower growth compared with March. Inflation in 2022 expected at 6.8% vs 5.1% prev and in 2023 at 3.5% vs 2.1%, highers 2024 inflation projection to 2.1%.

* ECB leaves rates but intends to hike rates by 25bp in July. The size of September rate hike to depends on data. Net purchases under app program to end July 1.

* The FTSE 100 took a hit of 2.1% at close of trading on Friday, after US inflation was revealed to have surged to a 40-year high of 8.6% in May this year.

* BoE could exceed rate expectations to show it is serious on inflation. MPC meeting (Thursday) to consider 0.5% rise in wake of Johnson’s cost of living support measures.

Crypto: bitcoin, ethereum, DeFi & NFTs

* Bitcoin and Ether fell on Sunday amid a broader retreat by the cryptocurrency complex in the wake of data showing US inflation hitting a fresh 40-year high. Ether declined as much as 5% to $1,445.56, its lowest level since March 2021, while Bitcoin dropped to as low as $27,264.65, its lowest since May 12.

* The long-awaited Ethereum "Merge" to proof-of-stake got one step closer to its expected August completion when the merge trial successfully went live on the Ropsten testnet on Wednesday.

* Lido developer: DAO should sell $17 million of ETH to 'prepare for bear market'

* Investors view Polkadot as an alternative Layer 1, Coinbase says.

The market cap of Polkadot’s DOT token relative to ether has been falling since November, according to the report.

* Haun Ventures leads $32 million round in Ethereum protocol Euler, a non-custodial protocol that allows users to lend and borrow digital assets. 

The Purse Podcast

We cover the following in our conversation:

* women, money & power

* economic empowerment

* financial inclusion

* how banks can serve the female customer better

* and more

Please enjoy! Listen on Apple Podcasts and Spotify+

Coffee Break? Read This

* Economics needs more socioeconomic diversity

* Weighing the risks of inflation, recession and stagflation in the US economy

* Comparing yourself to others is a sure way to misery-here’s what you can do instead.

We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.

The Purse Ltd. Copyright 2022 & All Rights Reserved.

The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial adviser.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit jointhepurse.substack.com

Welcome to our #118 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we focus on investor Michael Burry’s warning that a consumer recession in the US is looming.

And will the recent rate hikes slow the rate of inflation?

***

And you can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Jana

'Big Short' investor Michael Burry warns of looming consumer recession (US)

Will raising interest rates slow inflation?

In 2008, Michael Burry, a hedge fund manager famed for forecasting the financial crisis, has warned of a consumer recession and more earnings trouble (US), as reported by Bitcoin.com.

Investor and founder of investment firm Scion Asset Management, warned on Twitter:

‘US Personal Savings fell to 2013 levels, the savings rate to 2008 levels – while revolving credit card debt grew at a record-setting pace back to the pre-Covid peak despite all those trillions of cash dropped in their laps. Looming: a consumer recession and more earnings trouble’.

Michael Burry is profiled in ‘The Big Short,’ a book by Michael Lewis about the mortgage crisis. He is best known for being able to foresee and profit from the U.S. subprime mortgage crisis (2007-2010).

He shared two tweets: the first shows a sharp decline in U.S. personal savings. The other shows a steep rise in consumer credit outstanding.

Contrary to what is being reported in mainstream media, inflation (arguably) is not the problem, but consumer debt is.

Morever, the recent interest rate hikes (demand-side monetary policy) is unlikely to slow inflation.

In a recent Bloomberg interview, Larry Finks, CEO of BlackRock, said that he does not believe the US Federal Reserve has the tools to fight inflation.

Why? Because inflation is being driven by supply shocks not consumer demand.

Due to the constraints in global supply chains, production costs have gone up, which in turn drives up consumer prices.

Interest rate hikes, therefore do not impact supply chains.

What next? (Re) listen

* Money printing, rising inflation and what this means for your money, with Shaun Richards

* Rising inflation, slower economic growth and why UK investment is key, with Vicky Pryce.

News in Brief

Financial news

* Stocks resume weekly losses with Nasdaq 100 drops 1.1% this week. Market cap of FANGMAN gained $600bn this week.

* Jamie Dimon says there's a ‘hurricane’ coming for US economy and ‘you better brace yourself.’ Dimon attributes his pessimism to two factors: Fed’s quantitative tightening in financial markets & ramifications of Ukraine war on global commodity markets.

* The European Central Bank (ECB) to the rescue? Italy's yields keep rising. 10 year jump to 3.4%, highest since 2018. 10 year German yields jump to 1.24%, highest since 2014.

* ECB is expected to raise its key interest rate by 50 basis points during Q3, according to a new forecast by Deutsche Bank economists that breaks w/consensus of peers anticipating only smaller moves. EU inflation is now at 8.1%.

* Turkey back in the inflation age of the 1990s. CPI has jumped to 73.5%, core CPI jumped to 56%, and PPI to 132.2%.

* Germany might again become the ‘sick man of Europe’, reprising a role from two decades ago as policies that kept factories humming turn sour. Only Estonia is expected to post slower growth in 2022. Economists starting to predict a contraction this quarter.

* Meta falls 3%+ as Sheryl Sandberg is stepping down as Meta's COO after 14 years.

Crypto: bitcoin, ethereum, DeFi & NFTs

* Bitcoin shows signs of bottoming out after 9 weeks of losses. The $29,500 level is acting as major support for the world’s largest cryptocurrency. (See the current price of bitcoin & ethereum).

* Axie Infinity's AXS token rallies 19% amid Builders Program launch. Sky Mavis, the indie studio behind the Axie Infinity play-to-earn game, has announced the first 12 projects joining its Builders Program.

* Elon Musk says SpaceX will accept Dogecoin—and DOGE predictably pumps.

* Weekly NFT sales fall 13% to $167 million amid crypto bear market.

* Prada is joining top luxury brands in Web3 with Ethereum NFTs. It's releasing 100 NFTs to go along with its Cassius Hirst Timecapsule apparel drop.

* Fidelity Digital Assets to double headcount by end of year. About half of the 210 open roles focus on client services amid the company’s planned expansion.

* Crypto.‌com’s 3rd annual Digimentality Report with The Economist is out.‘Fear and Favouring of Digital Currency’ explores attitudes on crypto and shows how the pandemic spurred on the adoption of digital payments. Find out what consumers, executives, and institutional investors think.

Coffee Break? Read This

* City gender parity is a long way off

* Women are doing more thankless tasks at work

* Women occupy less than 1 in 6 senior positions at London hedge funds

We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.

The Purse Ltd. Copyright 2022 & All Rights Reserved.

The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial adviser.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit jointhepurse.substack.com

Welcome to our #117 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we focus on prominent startup investors such as Sequoia Capital, Y Combinator and Lux Capital warning early stage companies of ‘dark times ahead’.

Global stock markets have plunged since November (2021) as the economic environment becomes more difficult. Surging inflation and rising interest rates is slowing growth and many expect a global recession.

***

You can review the news in brief so you stay on top of global financial, economic and investing trends.

And don’t forget to listen to The Purse Podcast interview with Sara Zulkosky, Co-Founder & Managing Partner at Recast Capital. We talk about the emerging manager market and diversity in venture. Please enjoy!

I hope you enjoy this week’s newsletter.

Until next week,

Jana

Startup investors warn of ‘dark times ahead’

Boom times are ‘unambiguously’ over as startups are told to prepare for ‘winter’

Prominent startup investors such as Sequoia Capital, Y Combinator, Lux Capital are warning early stage companies of ‘dark times ahead’, as reported by CNBC.

The global stock market has been dropping since November (2021) and tech stocks, in particular, have been hit hard. It is no surprise that the Nasdaq is on track for its second-worst quarter since the 2008 financial crisis.

Institutional investors which invest in venture funds, have pulled back from the private market, as their public portfolios continue to suffer losses.

Coming out of an extended 13 year bull market in technology; the Nasdaq gained 11 years during this time period, and the US venture capital industry has increased sevenfold from a decade earlier, this is a shock to VC investors and startups alike.

Venture capital will be harder to access and at lower valuations

‘Cheap cash’ is no longer coming to the rescue from cross over hedge funds. And VC funds will tend to hang on to their cash (for longer) in a less competitive environment (which drives down valutions).

According to Sequoia, there is no ‘quick-fix policy solution’. They do not expect a ‘swift V-shaped recovery like we saw at the outset of the pandemic’.

Sequoia has told companies to cut costs and ideally be prepared to act in the next 30 days. Job cuts and hiring freezes have already become a key focus for big public tech businesses like Snapchat and Facebook.

Deena Shakir, Partner at Lux Capital, has told CNBC that the firm has been advising startups to:

* Think long term

* Extend runway to 2+ years

* Reduce burn and improve gross margins

* Set expectations that near-term future financings are unlikely to look like what they may have expected 6-12 months ago.

Companies that raised at high valuations may be grappling with high burn rates and will be having difficult conversations with investors.

Other startups may simply not have enough cash to get them through and will be forced to raise funding sooner than expected, at a much lower valuation.

Startup CEOs are having to make difficult decisions about how to ‘stay afloat’ and ensure they have enough cash or runway.

In an email sent by Y Combinator to founders last week, they emphasised that many competitors will not plan well and therefore startups can gain market share just by staying alive.

Conversely, VC firms and angel investors who have been patient and have sufficient capital to deploy during the downturn, will find a ‘bargain’ or two.

News in Brief

Financial news

* The S&P 500 gained 6.6% this week, snapped 7-week losing streak, and posted its biggest weekly gain since November 2020.

* The US Federal Reserve Fed officials raised possibility of ‘restrictive’ policy to fight inflation.

* US annualised Q1 GDP revised down to negative 1.5% from negative 1.4% previous estimate. Growth is slowing and by more than expected.

* The European Central Bank’s (ECB) balance Sheet has hit fresh ATH. Also fits well with the inflation topic being discussed in Davos at the World Economic Forum (WEF).

* UK Chanceller, Rishi Sunak U-turns on ‘energy profits levy’ in £15bn cost of living package.

* The WEF in Davos started this week. Previous economic certainties such as free trade, globalisation, debt, inflation, and growth are under scrutiny. Is globalisation dead? What's next for inflation? How high will interest rates go? Are we headed for a global recession are some of the questions people are trying to answer.

* At the WEF, according to George Soros: with the disruption of supply chains, global inflation is liable to turn into global depression.

* After the stock market meltdown, tech-bottom signals have yet to scream ‘buy now.’ Whilst valuations look more attractive, Nasdaq 100 P/E near long-term average but the backdrop doesn’t. Allocation to tech sector is at lowest since 2006, the Bank of America survey shows.

Crypto: bitcoin, ethereum, DeFi & NFTs

* Bitcoin has beat rival Ether by most in 7 months after some market-watchers have pointed to a glitch in the process of making the Ethereum network less energy-intensive as fueling worries in the space in recent days.

* Bitcoin suffered minimal losses this week, about 0.87%, while Ethereum sank 9% to $1,792. Several so-called Ethereum killers, aka smart contract-enabled layer-1 blockchains, were among the biggest losers.

* Ethereum's merge is coming and the stakes couldn't be higher. The most important upgrade in blockchain history is slated for August. And the outcome of the Ethereum merge has huge implications for all of crypto.

* On Tuesday, the European Central Bank published a report titled "Decrypting financial stability risks in crypto-asset markets" as part of a biannual review. The report warns that crypto could pose a threat to financial stability if it remains unregulated.

* Andreessen Horowitz raises $4.5bn crypto fund to take advantage of bargains in down market.

* ‘I Still Take Salary in Bitcoin’ Miami Mayor Suarez says at World Economic Forum in Davos. He stated that the plunge of the TerraUSD stablecoin has not changed his vision for promoting the cryptocurrency industry in the city.

* The Fed finds that unbanked Americans are turning to crypto at a higher rate. 12% of Americans bought or used cryptocurrency in 2021, according to the U.S. Federal Reserve's annual survey on financial well-being.

* On Friday, Tesla/SpaceX CEO Elon Musk tweeted that SpaceX will soon start accepting Dogecoin for merchandise payments. The announcement briefly pumped the price of DOGE.

* Alexis Ren enters NFT world with Sirens, a women-led project aimed towards mental wellness and eco-villages.

The Purse Podcast

We cover the following in our conversation:

* The emerging fund manager market

* Investing in emerging managers

* Diversity in venture & maximising returns

* How do we encourage more female LPs to invest?

Please enjoy! Listen on Apple Podcasts and Spotify+

Coffee Break? Read This

* Resisting the pressure to overwork

* Age hits equally, but the gender pension gap doesn’t

* Government launches taskforce to boost women starting fast-growing companies.

We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.

The Purse Ltd. Copyright 2022 & All Rights Reserved.

The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial adviser.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit jointhepurse.substack.com

Welcome to our #116 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we focus on the ‘care economy’ valued at $648bn which is bigger than the US $510bn pharmaceutical industry.

Magnify Ventures, run by two female VCs, have recently closed a $52m fund aimed specifically at this ‘massive opportunity’.

***

And you can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Jana

The care economy: the ‘massive’ opportunity valued at $648bn (and growing)

Magnify Ventures has recently closed a $52m fund aimed at this market

According to a report from from Melinda French Gates’ Pivotal Ventures, the ‘care economy’ is valued at $648bn. And it is bigger than the US $510bn pharmaceutical industry.

The VC industry is starting to pay attention, specifically female VCs like Julie Wroblewski and Joanna Drake of Magnify Ventures. They have recently closed a $52m fund aimed at the care economy.

As reported by Forbes, Wroblewski realized how big of an opportunity it was:

‘I started to see what I thought was a very compelling and growing category for investment in venture around the care economy and family technology…I was seeing really incredible companies and entrepreneurs.’

According Nancy Folbre, an economist focused on the care economy and how it relates to gender, it is wrongly assumed that the care economy relates to healthcare (only). In fact, as a market sector it represents ‘more than half of GDP that is currently measured’.

So what is the ‘care economy’?

According to the report: ‘It sits at the intersection of several macro-forces, [like] the future of work, social determinants of health, our aging population, the sandwich generation, and at the intersection of some of the biggest trends: consumer tech, family tech, and home health care.’

It breaks down into the following categories:

* Household management: $122bn

* Cleaning

* Laundry

* Cooking

* Infant childcare: $136bn

* New parent tech

* Direct supervision

* Early education

* Long term care: $239bn

* Nursing, hospice & palliative care

* Long-care insurance

* Retirement centres

* Aging-in-place & home-based care: $151bn

* Daily essential activities

* Aging-in-place coordination

* Caregiver quality of life

* Health & safety awareness

* Transition support

* Social well-being

* Adult home care provision

Wroblewski and Drake launched Magnify Ventures in 2020. As reported by Forbes, the fund is anchored by Pivotal Ventures and will focus on early-stage companies and will look at four main sectors: parenting and family life, future of work, household optimization, and aging and longevity.

Magnify Ventures has invested in seven companies to date and the firm is focused on the B2B market too as many large employers look to implement care-based benefits to retain and attract employees.

What next?

* Read the report here

News in Brief

Financial news

* China’s coronavirus lockdowns mean its economic growth may undershoot the US for the first time since 1976, a role reversal with potential political reverberations.

* The S&P 500 falls more than 20% since January and so is in a bear market now.

* On Wednesday, the Nasdaq 100 closed an ugly session down 5.1% for worst day since May 5. The index is now down 28% from ATH.

* UK inflation hits a 40 year high at 9% in April, as energy prices soar. However the money printing during the pandemic by the central bank is what underlies the surge in inflation.

* BoE’s chief economist warns of UK’s strong ‘inflationary momentum’ and predicts that interest rates will need to continue to rise.

* Investors in the latest Bank of America Fund Manager Survey have become extremely bearish: cash levels have risen to 6.1%, the highest since 9/11.

Crypto: bitcoin, ethereum, DeFi & NFTs

* Bitcoin falls under $30,000 as traders assess stablecoin fallout. The world’s largest cryptocurrency is having worst month in a year. And Goldman Sachs says stablecoin regulation likely as it may aid stability (see the current bitcoin price).

* Bitcoin and ethereum hash rates hit all-time highs despite bear market.

* Ethereum merge coming in August 'if everything goes to plan': according to core dev.

* Swiss luxury watchmaker TAG Heuer is now accepting online bitcoin payments in a partnership with BitPay.

* Mike Novogratz breaks silence and calls Luna a ‘big idea that failed.’ Billionaire blames macro environment for cryptocurrency tumble. Galaxy founder said Luna tattoo is a reminder of ‘humility’.

* Weekly NFT sales plunge 50% to $255 million amid crypto bear market. And Bored Ape Yacht Club floor price has fallen 50% in dollar terms this month.

* Andreessen Horowitz ie a16z has published its first annual the 2022 State of Crypto Report. Read the take down by Amy Castor here.

Coffee Break? Read This

* The surprising power of questions

* How to stop overthinking and start using your gut

* I’m tired of accepting most of the domestic load. How do I tell my husband?

We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.

The Purse Ltd. Copyright 2022 & All Rights Reserved.

The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial adviser.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit jointhepurse.substack.com

Welcome to our #115 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we focus on gender lens investing and the gender lens scorecard, a tool for appraising investment funds and portfolios.

We interviewed Marypat Smucker, who is Co-Founder and Principal at Parallelle Finance, a gender lens investment research firm founded in 2019. And we share highlights from The Purse Podcast interview.

There are many data points around the persistent gender gaps in companies, sectors and in the global economy as a whole.

At the same time, research has demonstrated the many benefits associated with higher levels of gender diversity in corporate leadership.

Investors committed to sustainable investing should be seeking to capture the performance and other benefits of the gender lens approach.

***

And you can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Jana

Gender lens investing: the gender lens scorecard

Parallelle Finance have launched the gender lens scorecard-a tool for appraising investment funds and portfolios.

Key market data points:

* AUM in gender lens equity funds grew 51% in 2021 to $4bn.

* AUM in gender lens fixed income grew 75% in 2021 to 8.5bn.

There are 27 gender lens equity funds in the Parallelle Finance coverage universe. These are characterised by investment criteria around women-in-leadership and related corporate gender equality metrics.

***

We interviewed Marypat Smucker, Co-founder and Principal of Parallelle Finance about gender lens investing and the Parallelle Finance Gender Lens Scorecard.

Here are key highlights from the interview on The Purse Podcast:

Why do we need to apply a gender lens to investing?

The global gender gap is a key imbalance affecting all economies.

There are many data points around the persistent gender gaps in companies, sectors and in the global economy as a whole.

The World Economic Forum’s latest estimated time frame for closing the biggest gender gaps at the current pace of progress is still over 100 years.

At the same time, research has demonstrated many benefits associated with higher levels of gender diversity in corporate leadership.

These benefits include:

* superior performance

* better operational metrics

* improved risk and fraud management

* improve decision-making (and many other areas).

In fact, a recent MSCI report found that gender diverse companies had better records on reducing carbon emissions.

Corporate gender equality is an important element to closing those deep gender gaps in the global economy.

Investors committed to sustainable investing should be seeking to capture the performance and other benefits of the gender lens approach.

To date the available data on diversity in corporate leadership has been gender data, and now the research is starting to make a very welcome push around data on gender plus racial, ethnic, and all diversity metrics for a range of corporate measures.

Brief market overview: why is this a growth area?

There are several dynamics driving continued long-term growth.

The first of these is that gender lens is a thematic ESG strategy. And ESG has been seeing very strong AUM. This is a growth driver for gender lens as a thematic strategy.

There is also growing investor awareness of the importance of diversity, equity and inclusion in public companies. There are growing demands around this which is seen in an increasing number of shareholder proposals on diversity and equality issues.

Also, there is a unique growth and long term performance opportunity for gender lens funds.

But despite the proven benefits of gender diverse leadership, we all know that growth in these metrics has been painfully slow.

For example, Deloitte recently estimated that it will take until 2045 to achieve global board gender parity. And this is the area of corporate equality which has actually seen the best growth over the last 10 years.

C-suite female representation is lagging far behind still, and this is why gender pay gaps persist in most countries and most sectors.

Many gender lens funds were launched within the last five years when women in corporate leadership numbers were even lower than they are today.

However, with increased pressure and attention driving progress, gender lens funds are uniquely well positioned to capture for investors the benefits of growth in diverse leadership, diverse workforce and growth in pay parity.

All of these metrics still have a long way to go. But we are seeing steady launches of new gender lens funds, and we believe that this real growth opportunity is represented by the corporate gender gaps that remain, and that are being increasingly spotlighted and addressed.

The gender lens scorecard: what is it and why introduce this in the market?

It is important to note that all of these funds are investing with a gender lens.

We define gender lens equity funds as those with stated investment criteria around investing in companies with strength in gender metrics.

All of the funds in the gender lens universe have investment criteria around women in leadership. And most also have additional criteria around other metrics, including workforce equality, pay equity, and also work for spend effects and policies. So with the scorecard.

The aim to help investment advisors place their clients in gender lens funds, and to assist advisors and investors to evaluate and understand these funds.

They are all investing with a gender lens and we believe it is time for a deeper evaluation of this suite of funds.

So if an investor goes to her advisor, for example, and asks about gender lens vehicles, we want to be the resource for finding the investment vehicle that fits her portfolio.

And we especially want investors of all sizes to be able to invest with a gender lens.

The tool applies five grade levels to four categories, each comprised of scores from sub-categories and indicators.

Taken together, the categories assess both the fund and the asset management firm on gender equality in investment criteria, holdings, portfolio management team, and firm-wide leadership, as well as the fund's performance and overall ESG approach.

The catgeories are as follows:

Category 1: Fund gender metrics

* Gender lens investment criteria

* Women in leadership and workforce metrics of holdings

* Representation of women on portfolio management team

Category 2: Firm gender metrics

* Women in leadership metrics

* Firm public commitments to equality

* Advocacy for gender equality and diversity

Category 3: Fund performance

* Internal rating of fund performance vs. gender lens indexes and broad market indexes

* Third-party ratings of fund risk-adjusted performance

Category 4: Fund ESG

* Aggregation of leading ESG scores

Can you apply this tool to VC firms & VC funds?

Yes-the tool can be applied to private equity and VC firms and their portfolio.

Because of our detailed approach to a range of indicators and metrics and a combination of quantitative and qualitative measures for our categories and subcategories, the tool can be modified to score the gender lens intentionality (or not) and results (or not) of portfolio companies of a VC or private equity firm.

There are persistent gender gaps in VC and private equity, investment teams and deep gaps where these teams are directing their investment capital.

So this is definitely an area where firms could receive a score from us if they want to demonstrate their strength in this area.

What do you hope to achieve with the gender lens scorecard?

We hope to promote more capital being directed into gender lens vehicles from investors of all sizes, through all of our work. And we hope to promote and support more capital into gender lens investing.

Our overall goal with the tool is really to provide investors with comprehensive data to understand gender lens portfolios.

And we will also move into helping people understand other portfolios through a gender lens.

We very much hope to serve the investment advisor community and the tool will be available for providers of all types of gender lens portfolios.

What next? (Re) Listen to:

* The Purse Podcast interview with Angela Atherton about gender lens equity investing and women in leadership

News in Brief

Financial news

* The Nasdaq 100 gained 3.7% on Friday, which was the best day since March but not enough to avert weekly loss of 2.4%. This week shares fell, which were extremely popular with investors until recently, such as Apple, AirBnB. Are we at peak fear?

* On Friday, the S&P 500 climbed 2.4% after the benchmark index flirted with a bear market. Friday's gain wasn't nearly enough to keep the market from its 6th straight weekly drop, the longest such streak since 2011.

* US inflation hit 8.3% YoY vs 8.1% expected but slowed from previous month's 4-decade high. Removing volatile food and energy prices, so-called core CPI still rose 6.2%, against expectations for a 6% gain.

* The UK economy contracted by 0.1% in March after flatlining in February. Pressure is mounting on the government to deliver an emergency summer mini-budget after recession fears have been heightened.

* UK inflation ‘could last for years not months’, warns economist Michael Saunders, a member of the Bank of England’s rate-setting monetary policy committee (MPC). Inflation could rise to 10%+ and it might take 2-3 years to reduce to 2%.

* Twitter plunges up to 24% as Elon Musk tweeted that Twitter deal is temporarily on hold as he examined number of spam accounts on site. Musk has been seeking Twitter investors as Tesla sheds $400bn in value. Musks added later: “Still committed to acquisition.”

Crypto: bitcoin, ethereum, DeFi & NFTs

* This has been a difficult week for the crypto community and investors. The entire crypto market crashed after UST stablecoin depegged (from the US dollar) and the Luna cryptocurrency fell to a fraction of a penny (from $85 a week ago, with a market cap of $28bn a week ago to $1.5bn today). Bitcoin and ether are both down over 30% week-over-week, hitting lows not seen since 2020, and altcoins like solana, dogecoin and cardano are faring even worse. (See the current price of bitcoin and ether).

* Thursday, May 12, 2022, was one of the most exciting and active days in the bitcoin/crypto market in months, with no shortage of volatility and fear from market participants. And there has been a mjor increase in bitcoin volume trading as investors buy the dip (US).

* The Luna cryptocurrency collapsed this week after the stablecoin UST depegged from the US dollar. Some have speculated that an attacker attempted to break UST in order to profit from shorting bitcoin. However the responsibility is on crypto developers to build a more stable system.

* Terra co-creator Do Kwon has proposed a plan on Friday to revive the network after its collapse. And it doesn't involve UST stablecoin.

* Crypto market downturn leads to steep drop in blue-chip ethereum NFTs. Blue-chip projects, such as Bored Ape Yacht Club (BAYC) and CryptoPunks, have been no exception. Trading of Bored Ape Yacht Club collectibles on OpenSea fell to its lowest point in the past month, down 63% on May 12 over a seven-day period. 

The Purse Podcast

We cover the following in our conversation:

* gender lens investing

* the gender len scorecard: what is it?

* how investors might use this tool, including VCs

* and more

Please enjoy! Listen on Apple Podcasts and Spotify+

Coffee Break? Read This

* How women can identify male allies in the workplace

* Half of older women fear having to work beyond UK state pension-study

* Why ‘love’ is the key to career success

We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.

The Purse Ltd. Copyright 2022 & All Rights Reserved.

The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial adviser.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit jointhepurse.substack.com

Welcome to our #114 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova

From The Purse

In this week’s newsletter, we focus on what investors can do to protect their money before a recession starts.

The warning signs that a recession is likely are here including surging inflation, rising interest rates, the war in Ukraine and slowing economic growth.

***

You can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Jana

Recession: what can investors do to protect their money?

Now is a good time to get ready for how to manage and invest your money

Threats to the economy has increased around the world.

From surging inflation, rising interest rates, war in Ukraine to falling economic growth, the warning signs of a recession are plentiful, as reported by the Financial Times.

In the UK, inflation is forecast to peak at 10%+ in Q4 2022 when a fresh jump in home energy bills is expected in October. The interest rate rise to 1% brings borrowing costs to levels unseen since the recession caused by the 2008 financial crisis.

Households are cutting back on spending, unemployment is expected to rise. And the UK gross domestic product (GDP) is likely to reverse in Q4 of this year.

So what can investors do to protect their money?

* Make a plan. Think long-term: investors should allocate their money based on a financial plan which takes into account their goals, time horizons and risks. It is impossible to ‘time the market’, so allocating capital or assets appropriately before the start of a recession is key. Crucially, investors should avoid ‘panic selling’ or selling their investments during a downturn, if they can help it.

* De-risk your portfolio: allocate capital to ‘safe-haven assets’ which can de-risk an investment portfolio. Traditionally gold has been regarded as a safe haven. According to data, gold has outperformed stocks during economic turmoil. Over the last few years, bitcoin has been considered a ‘store of value’ and a hedge against inflation and younger generations prefer this option (to gold). For some investors, investing in property is considered a ‘store of value’.

* Diversify your investments: a well-diversified portfolio can prevent serious losses and buffer against market volatility. A well-diversified portfolio might include fixed income, equities, alternative investments (including crypto and NFTs), private equity, and real assets (including property or physical art). The Nasdaq historially underperforms during a recession, so diversifying across other industries, sectors and asset classes is important. Conversely, many investors can buy tech stocks at a huge discount at the moment (ie 20%-60%+ discount).

* Not all recessions are the same: given the slow growth outlook, recessions may become more common but may have less impact on investment portfolios. The looming recession, for example, does not mean we are headed for The Great Recession of 2008/2009.

What next?

* (Re) Listen to Money printing, rising inflation and what this means for your money with Shaun Richards.

* (Re) Listen to Women and risk with Barbara Stewart.

News in Brief

Financial news

* The Nasdaq 100 has lost bottom line just 1.3% this week after a rollercoaster ride. Cloud stocks were the big losers, and semiconductor stocks were the winners. On Thursday, the Nasdaq ends an ugly session down 5.1%, worst day since September 2020. The Nasdaq is down approximately 22% from ATH.

* US Federal Reserve raises rates by half a percentage point -the biggest hike in two decades to fight inflation.

* US yield curve bear-steepens this week as a result of the US rate hike. US 2s/10s yield spread rose 20bps this week.

* Bank of England (BoE) warns of UK recession this year as it lifts interest rate to 1%. The highest level since 2009, and sterling hits 2-year low.

* UK forecast shows inflation peaking at 10.2% in Q4‘22. GDP expected to contract 0.25% in 2023, +3.75% in 2022.

* Billions in wrong-way ETF bets placed just before Thursday and Friday rout: almost $600m was invested into the ARK Innovation ETF, $426m into the ProShares UltraPro QQQ ETF, a leveraged product that delivers three-times the return of the Nasdaq 100.

Crypto: bitcoin, ethereum, DeFi & NFTs

* Crypto is trading like Big Tech. Bitcoin jumped after US Fed's Jay Powell quashes talk of 75 bps rate rise. But crashes shortly after. (See the current bitcoin price).

* $100bn crypto crash sends the price of Bitcoin, Ethereum, XRP, Luna, Solana, Cardano and Avalanche into free fall. The sudden crash comes amid a technology company-led stock market sell-off in the aftermath of the Federal Reserve's hawkish 50-basis point interest rate hike.

* Robinhood adds Grayscale Bitcoin and Ethereum trusts. GBTC and ETHE are investment products that trade like a stock and allow investors to get exposure to the price of bitcoin and ethereum (without owning them).

* Gucci and Starbucks go crypto to bond with customers. Gucci will allow in-store crypto payments via a QR code which allows customers to execute the payment from their crypto wallet. Starbucks is launching NFT collections to ‘allow for access to exclusive experiences and perks.’

* Moonbirds, Solana Boost NFT Market in April as Sales Jump 45%. The NFT trading volume soared last month, and May is already off to a hot start thanks to Bored Ape metaverse land.

Coffee Break? Read This

* A 3-step process to break a cycle of frustration, stress, and fighting at work

* ‘Inclusive’ language on maternity care risks excluding many women

* These are the US companies offering abortion-related benefits

We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.

The Purse Ltd. Copyright 2022 & All Rights Reserved.

The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial adviser.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit jointhepurse.substack.com