Posted on

Preventing the Rising Threat of Financial Fraud

Corporations and banks have boosted their security infrastructure and employee training to avoid getting hit by financial fraud, including cybercrime, but individuals and families often are less prepared and, as a result, are a softer target for criminals.

“They’re not giving due consideration to the scores of ways they’re vulnerable and fraud can happen,” says Mona Manahi, head of personal CFO services for Geller, an independent multi-family office firm.

Several stats back this up, including a 30% rise in consumer scams reported by the Federal Trade Commission and a rise in mail fraud by criminals getting access to credit cards and checks reported by the U.S. Postal Service this past spring. A UBS survey found 63% of U.S. family offices reported being targeted by cyber threat actors.

The “great wealth transfer” to a younger generation is also putting large amounts of cash into the hands of millennials and Generation Z, “and they tend to be a little bit more lax in their trustworthiness,” Manahi says, citing how much younger people share information on social media and use electronic payment services.

“What’s happening now feels like a big paradigm shift, and people really need to pay attention,” she says. “It’s like a perfect storm.”

But families can protect themselves often with simple steps, such as wiring big amounts of money through credible financial institutions instead of putting a check in the mail. Manahi and Scott Bush, Geller’s chief client officer, detailed a range of fraud-prevention measures recently with Penta.

Avoiding Cyber Threats

The rise of technology in people’s lives has given criminals more sophisticated ways of commiting crimes, enabling them to target wealthier individuals and families.

A decade ago, criminals might have put a skimmer on a gas station credit card machine to glean data from just about anyone. Today, criminals break into household wireless networks to access email and phone communications that tell them where a family spends money, why they spend it, and where they can find pools of capital to tap, Bush says.

“What’s changed is that the more organized, very high-quality criminal networks have started to realize that they get better bang for the buck if they focus on ultra-high-net-worth families,” Bush says.

Most families allow all their personal financial information to be accessed through the same wireless network they use for watching Netflix or checking email, believing it’s safe because the network is password protected.

“What they often don’t think about is when their children give that same password out to that server to their friends so they can use the Wi-Fi or they plug in the gaming console or they allow all of the people that are helping them maintain the house access to the Wi-Fi so that they can plug their phone in when they’re working at the house,” Bush says.

A simple way to avoid a password getting into the wrong hands is to have two networks in the house, one for personal financial information and another for access to wireless services that anyone can use.

Also, despite lots of education on the topic, most people continue to create weak passwords that criminals can easily decipher, especially once they’ve learned the names of family pets and children, or other personal details.

“If you can focus on securing your household and securing how you manage your personal information, there’s a high likelihood that bad guys just will decide to go somewhere else,” Bush says.

Breaking the ‘Fraud Triangle’

Wealthy families often believe they can keep tight control over their finances if fewer people are involved. But that strategy can lead easily to theft that can go undetected for years. This past December, for instance, a 74-year-old Texas woman pleaded guilty to a scheme of embezzling at least US$29 million from a Dallas charitable foundation and other companies owned by a family, according to the U.S. Department of Justice.

Manahi brings up this incident in an article for Geller on how families can lower their risks by breaking “the fraud triangle,” a term coined by a Brigham Young professor Steve Albrecht decades ago to refer to the three elements needed to execute a fraud: motive, opportunity, and rationalization. Families can’t address a criminal’s motive or rationalization, but they can remove the opportunity. That greatly reduces the potential for fraud, Manahi says.

Often, that means not giving a single personal assistant, or bookkeeper in the Dallas case, too much access or authority to your finances. One of the simplest controls families can put in place is “segregation of duties,” she says. For example, don’t allow one person to have authority to set up a vendor for payments, execute on those payments, and then reconcile the movement of cash in a checking account.

“Regardless of what their structure is, [every family] should have a very clear set of protocols related to how capital moves,” Bush adds. There should be double or even triple authentication for cash transfers, and everybody who works with the family should be aware of “who has the right to move capital and where it might move to.”

Families should also create an employee manual that clearly outlines security and safety protocols. “Just letting [employees] know that there is awareness, that security is an issue, and they are accountable for it is a great way of creating an environment that is secure,” he says.

Also, families should put systems and processes in place to consistently track where money is spent, how it’s spent, and how it relates to a predetermined budget. Then you or an employee can flag when things are out of line. The idea is to show that “the family cares and that at any time, activity can be inspected,” Bush says.

Even the most diligent families can let down their guard during the summer months or the winter holidays, particularly when they are traveling to far-away or remote locations, which is not unusual for a wealthy family. “They’ll be on safari and all of a sudden there’s a flurry of activity in their account when they’re not available,” Bush says.

Having formal protocols in place to ensure no single person can move money will help. Any protocols should also include instructions for what to do in case of an unusual transaction.

“Not only segregating the responsibilities during that time, but also educating [employees] on what they should be looking for and reviewing and increasing their responsibility during that time,” Manahi says.

Posted on

Efforts to Rein In AI Tap Lesson From Social Media: Don’t Wait Until It’s Too Late

Social media was more than a decade old before efforts to curb its ill effects began in earnest. With artificial intelligence, lawmakers, activists and executives aren’t waiting that long.

Over the past several months, award-winning scientists, White House officials and tech CEOs have called for guardrails around generative AI tools such as ChatGPT—the chatbot launched last year by Microsoft-backed startup OpenAI. Among those at the table are many veterans of the continuing battle to make social media safer.

Those advocates view the AI debate as a fresh chance to influence how companies make and market their products and to shape public expectations of the technology. They aim to move faster to shape the AI landscape and learn from errors in the fight over social media.

“We missed the window on social media,” said Jim Steyer, chief executive of Common Sense Media, a child internet-safety organisation that has for years criticised social-media platforms over issues including privacy and harmful content. “It was late—very late—and the ground rules had already been set and industry just did whatever it wanted to do.”

Activists and executives alike are pushing out a range of projects and proposals to shape understanding and regulation to address issues including AI’s potential for manipulation, misinformation and bias.

Common Sense is developing an independent AI ratings and reviews system that will assess AI products such as ChatGPT on their handling of private data, suitability for children and other factors. The nonprofit plans to launch the system this fall and spend between $5 million and $10 million a year on top of its $25 million budget to fund the project.

Other internet advocacy groups including the Mozilla Foundation are also building their own open-source AI tools and investing in startups that say they are building responsible AI systems. Some firms initially focused on social media are now trying to sell services to AI companies to help their chatbots avoid churning out misinformation and other harmful content.

Tech companies are racing to influence regulation, discussing it with global governments that are both wary of AI and eager to capitalise on its opportunities. In early May, President Biden met with the chief executives of companies including OpenAI, Microsoft and Google at the White House. OpenAI CEO Sam Altman has spent weeks meeting with lawmakers and other leaders globally to discuss AI’s risks and his company’s idea of safe regulation.

Altman and Microsoft President Brad Smith have both argued for a new regulatory agency that would license large AI systems. Tesla CEO Elon Musk, who on Wednesday announced the official launch of his new AI startup, said in May that the government should convene an independent oversight committee, potentially including industry executives, to create rules that ensure AI is developed safely.

The Federal Trade Commission also is taking a hard look at AI. It is investigating whether OpenAI has “engaged in unfair or deceptive practices” stemming from false information published by ChatGPT, according to a civil subpoena made public this past week. Altman said OpenAI is confident that it follows the law and “of course we will work with the FTC.”

Looming large over all this activity is the growing feeling among many activists and lawmakers that years of efforts to regulate or otherwise change social-media companies including Facebook parent Meta Platforms, Twitter and TikTok were unsatisfactory. Facebook was founded in 2004 and Twitter in 2006, but widespread discussion about regulation didn’t really take off until after discoveries of Russian interference and other issues in the 2016 U.S. election.

“Congress failed to meet the moment on social media,” Democratic Sen. Richard Blumenthal said during a congressional hearing on AI in May. “Now we have the obligation to do it on AI before the threats and the risks become real.”

Though social-media executives in recent years called for more regulation, no new U.S. federal laws have been set that require companies to protect users’ privacy and data or that update the nearly three-decade-old rules for how platforms police content. In part that is because of disagreements among lawmakers over whether companies should do more to moderate what is said on their platforms or whether they already have overstepped into stifling free speech.

Some of the activists who are veterans of those battles say two major lessons from this era are that the companies can’t be trusted to self-regulate and that the federal government is too gridlocked to pass meaningful legislation. “There’s a massive void,” Steyer of Common Sense Media said.

Yet he and others say they are encouraged by the willingness of AI companies to discuss major issues.

“We’re seeing some of the people from trust and safety teams from social media are now at AI companies,” said L. Gordon Crovitz, co-founder of NewsGuard, a company that tracks and rates news sites. Crovitz, former publisher of The Wall Street Journal, says these people seem much more empowered in their current roles. “The body language is ‘we’ve been freed.’”

Large language models such as GPT-4 are trained on anything that can be scraped from the internet, but the data contain large chunks of hate speech, misinformation and other harmful content. So these models are further refined after their initial training to weed out some of that bad content in a process called fine-tuning.

NewsGuard has been talking to AI companies about licensing its data—which Crovitz calls a “catalog of all the important false narratives that are out there”—for fine-tuning and to bolster AI models’ guardrails against producing just those types of misinformation and false narratives.

Ravi Iyer, a former product manager for Meta, is now at the University of Southern California’s Marshall School of Business and developing a poll that tracks how people experience AI systems. He hopes the poll will influence how AI companies design and deploy their products.

“We need to know that’s a choice platforms can make and reward them for not making the wrong choices,” Iyer said.

The Mozilla Foundation, a nonprofit that builds the Firefox internet browser, said it is building open-sourced models as alternatives to large private AI models. “We need to build alternatives and not just advocate for them,” Mark Surman, Mozilla’s president, said.

Steyer described the AI ratings system being built at Common Sense as the most ambitious in the nonprofit’s history. Tracy Pizzo Frey, a consultant who previously worked for Google and is helping craft the system, said there is no set way to evaluate the safety of AI tools.

So far, Common Sense is looking at seven factors, including how transparent companies are about what their systems can do and where they still have shortcomings. The nonprofit may factor in how much information companies provide about their training data, which companies including OpenAI view as competitive secrets.

Frey said Common Sense won’t ask for proprietary data but needs information that helps parents and educators make informed decisions about the use of AI. “There are no rules around what transparency looks like,” Frey said.

Posted on

Europeans Are Becoming Poorer. ‘Yes, We’re All Worse Off.’

Paris cafe. Image: Shutterstock

Europeans are facing a new economic reality, one they haven’t experienced in decades. They are becoming poorer.

Life on a continent long envied by outsiders for its art de vivre is rapidly losing its shine as Europeans see their purchasing power melt away.

The French are eating less foie gras and drinking less red wine. Spaniards are stinting on olive oil. Finns are being urged to use saunas on windy days when energy is less expensive. Across Germany, meat and milk consumption has fallen to the lowest level in three decades and the once-booming market for organic food has tanked. Italy’s economic development minister, Adolfo Urso, convened a crisis meeting in May over prices for pasta, the country’s favourite staple, after they jumped by more than double the national inflation rate.

With consumption spending in free fall, Europe tipped into recession at the start of the year, reinforcing a sense of relative economic, political and military decline that kicked in at the start of the century.

Europe’s current predicament has been long in the making. An ageing population with a preference for free time and job security over earnings ushered in years of lacklustre economic and productivity growth. Then came the one-two punch of the Covid-19 pandemic and Russia’s protracted war in Ukraine. By upending global supply chains and sending the prices of energy and food rocketing, the crises aggravated ailments that had been festering for decades.

Governments’ responses only compounded the problem. To preserve jobs, they steered their subsidies primarily to employers, leaving consumers without a cash cushion when the price shock came. Americans, by contrast, benefited from inexpensive energy and government aid directed primarily at citizens to keep them spending.

In the past, the continent’s formidable export industry might have come to the rescue. But a sluggish recovery in China, a critical market for Europe, is undermining that growth pillar. High energy costs and rampant inflation at a level not seen since the 1970s are dulling manufacturers’ price advantage in international markets and smashing the continent’s once-harmonious labor relations. As global trade cools, Europe’s heavy reliance on exports—which account for about 50% of eurozone GDP versus 10% for the U.S.—is becoming a weakness.

Private consumption has declined by about 1% in the 20-nation eurozone since the end of 2019 after adjusting for inflation, according to the Organization for Economic Cooperation and Development, a Paris-based club of mainly wealthy countries. In the U.S., where households enjoy a strong labor market and rising incomes, it has increased by nearly 9%. The European Union now accounts for about 18% of all global consumption spending, compared with 28% for America. Fifteen years ago, the EU and the U.S. each represented about a quarter of that total.

Adjusted for inflation and purchasing power, wages have declined by about 3% since 2019 in Germany, by 3.5% in Italy and Spain and by 6% in Greece. Real wages in the U.S. have increased by about 6% over the same period, according to OECD data.

The pain reaches far into the middle classes. In Brussels, one of Europe’s richest cities, teachers and nurses stood in line on a recent evening to collect half-price groceries from the back of a truck. The vendor, Happy Hours Market, collects food close to its expiration date from supermarkets and advertises it through an app. Customers can order in the early afternoon and collect their cut-price groceries in the evening.

“Some customers tell me, because of you I can eat meat two or three times per week,” said Pierre van Hede, who was handing out crates of groceries.

Karim Bouazza, a 33-year-old nurse who was stocking up on half-price meat and fish for his wife and two children, complained that inflation means “you almost need to work a second job to pay for everything.”

Similar services have sprung up across the region, marketing themselves as a way to reduce food waste as well as save money. TooGoodToGo, a company founded in Denmark in 2015 that sells leftover food from retailers and restaurants, has 76 million registered users across Europe, roughly three times the number at the end of 2020. In Germany, Sirplus, a startup created in 2017, offers “rescued” food, including products past their sell-by date, on its online store. So does Motatos, created in Sweden in 2014 and now present in Finland, Germany, Denmark and the U.K.

Spending on high-end groceries has collapsed. Germans consumed 52 kilograms of meat per person in 2022, about 8% less than the previous year and the lowest level since calculations began in 1989. While some of that reflects societal concerns about healthy eating and animal welfare, experts say the trend has been accelerated by meat prices which increased by up to 30% in recent months. Germans are also swapping meats such as beef and veal for less-expensive ones such as poultry, according to the Federal Information Center for Agriculture.

Thomas Wolff, an organic-food supplier near Frankfurt, said his sales fell by up to 30% last year as inflation surged. Wolff said he had hired 33 people earlier in the pandemic to handle strong demand for pricey ecological foodstuffs, but he has since let them all go.

Ronja Ebeling, a 26-year-old consultant and author based in Hamburg, said she saves about one-quarter of her income, partly because she worries about having enough money for retirement. She spends little on clothes or makeup and shares a car with her partner’s father.

Weak spending and poor demographic prospects are making Europe less attractive for businesses ranging from consumer-goods giant Procter & Gamble to luxury empire LVMH, which are making an ever-larger share of their sales in North America.

“The U.S. consumer is more resilient than in Europe,” Unilever’s chief financial officer, Graeme Pitkethly, said in April.

The eurozone economy grew about 6% over the past 15 years, measured in dollars, compared with 82% for the U.S., according to International Monetary Fund data. That has left the average EU country poorer per head than every U.S. state except Idaho and Mississippi, according to a report this month by the European Centre for International Political Economy, a Brussels-based independent think tank. If the current trend continues, by 2035 the gap between economic output per capita in the U.S. and EU will be as large as that between Japan and Ecuador today, the report said.

On the Mediterranean island of Mallorca, businesses are lobbying for more flights to the U.S. to increase the number of free-spending American tourists, said Maria Frontera, president of the Mallorca Chamber of Commerce’s tourism commission. Americans spend about €260 ($292) per day on average on hotels compared with less than €180 ($202) for Europeans.

“This year we have seen a big change in the behaviour of Europeans because of the economic situation we are dealing with,” said Frontera, who recently traveled to Miami to learn how to better cater to American customers.

Weak growth and rising interest rates are straining Europe’s generous welfare states, which provide popular healthcare services and pensions. European governments find the old recipes for fixing the problem are either becoming unaffordable or have stopped working. Three-quarters of a trillion euros in subsidies, tax breaks and other forms of relief have gone to consumers and businesses to offset higher energy costs—something economists say is now itself fuelling inflation, defeating the subsidies’ purpose.

Public-spending cuts after the global financial crisis starved Europe’s state-funded healthcare systems, especially the U.K.’s National Health Service.

Vivek Trivedi, a 31-year-old anaesthesiologist living in Manchester, England, earns about £51,000 ($67,000) per year for a 48-hour workweek. Inflation, which has been about 10% or higher in the U.K. for nearly a year, is devouring his monthly budget, he says. Trivedi said he shops for groceries in discount retailers and spends less on meals out. Some colleagues turned off their heating entirely over recent months, worried they wouldn’t be able to afford sharply higher costs, he said.

Noa Cohen, a 28-year old public-affairs specialist in London, says she could quadruple her salary in the same job by leveraging her U.S. passport to move across the Atlantic. Cohen recently got a 10% pay raise after switching jobs, but the increase was completely swallowed by inflation. She says friends are freezing their eggs because they can’t afford children anytime soon, in the hope that they have enough money in future.

“It feels like a perma-freeze in living standards,” she said.

Huw Pill, the Bank of England’s chief economist, warned U.K. citizens in April that they need to accept that they are poorer and stop pushing for higher wages. “Yes, we’re all worse off,” he said, saying that seeking to offset rising prices with higher wages would only fuel more inflation.

With European governments needing to increase defence spending and given rising borrowing costs, economists expect taxes to increase, adding pressure on consumers. Taxes in Europe are already high relative to those in other wealthy countries, equivalent to around 40-45% of GDP compared with 27% in the U.S. American workers take home almost three-quarters of their pay checks, including income taxes and Social Security taxes, while French and German workers keep just half.

The pauperisation of Europe has bolstered the ranks of labor unions, which are picking up tens of thousands of members across the continent, reversing a decades long decline.

Higher unionisation may not translate into fuller pockets for members. That’s because many are pushing workers’ preference for more free time over higher pay, even in a world of spiralling skills shortages.

IG Metall, Germany’s biggest trade union, is calling for a four-day work week at current salary levels rather than a pay raise for the country’s metalworkers ahead of collective bargaining negotiations this November. Officials say the shorter week would improve workers’ health and quality of life while at the same time making the industry more attractive to younger workers.

Almost half of employees in Germany’s health industry choose to work around 30 hours per week rather than full time, reflecting tough working conditions, said Frank Werneke, chairman of the country’s United Services Trade Union, which has added about 110,000 new members in recent months, the biggest increase in 22 years.

Kristian Kallio, a games developer in northern Finland, recently decided to reduce his working week by one-fifth to 30 hours in exchange for a 10% pay cut. He now makes about €2,500 per month. “Who wouldn’t want to work shorter hours?” Kallio said. About one-third of his colleagues took the same deal, although leaders work full-time, said Kallio’s boss, Jaakko Kylmäoja.

Kallio now works from 10 a.m. to 4.30 p.m. He uses his extra free time for hobbies, to make good food and take long bike rides. “I don’t see a reality where I would go back to normal working hours,” he said.

Igor Chaykovskiy, a 34-year-old IT worker in Paris, joined a trade union earlier this year to press for better pay and conditions. He recently received a 3.5% pay increase, about half the level of inflation. He thinks the union will give workers greater leverage to press managers. Still, it isn’t just about pay. “Maybe they say you don’t have an increase in salary, you have free sports lessons or music lessons,” he said.

Mathias Senn, right, a butcher in Germany’s wealthy Black Forest region, couldn’t find local applicants to replace four workers who are preparing to retire, so he hired an apprentice from India, Rajakumar Bheemappa Lamani. PHOTO: DOMINIC NAHR FOR THE WALL STREET JOURNAL

At the Stellantis auto factory in Melfi, southern Italy, employees have worked shorter hours for years recently due to the difficulty of procuring raw materials and high energy costs, said Marco Lomio, a trade unionist with the Italian Union of Metalworkers. Hours worked have recently been reduced by around 30% and wages decreased proportionally.

“Between high inflation and rising energy costs for workers,” said Lomio, “it is difficult to bear all family expenses.”

Posted on

It’s a Barbie world for interior design

Barbie Dreamhouse Vertical Ice Cream Stripes Pastel Pink Wallpaper from Bobbi Beck

As the Barbie movie opens in Australian cinemas this week, the interior design world is bracing itself for an onslaught of pink. Known as ‘Barbiecore’, the style is predominantly mid century in a distinct shade of bright pink. A lot of pink. While the film made headlines for apparently causing a global shortage of the colour, it turns out global paint supplier Rosco was already running low on product when production began.

Ryan Gosling and Margot Robbie star in the Barbie movie. Image: Shutterstock

Starring Australian actor Margot Robbie in the title role and Ryan Gosling as Ken, the film is listed as PG-13. And just as the audience for Barbie is not necessarily kids, so too is the interior style. Once confined to little girls’ rooms, saturated pink is now moving out of the bedroom and making itself at home through the house.

On The Same Wavelength Wallpaper in Pink Candy from Sorbet Dreams

Hardcore lovers of pink can go all in with varying shades of the colour, like Dulux’s Signature Pink or team it with Barbie’s classic brights, such as Dulux Blue Astro. Those who once possessed a Barbie Dreamhouse will know that architecturally, the style is open (walls are very much optional in Barbie’s world), with a nod to mid century design.

While there’s not many who are ready to fully commit to living in a Barbie world, there’s much joy and even comfort to be had even when dipping your toe into this style.

Come on Barbie, let’s go party.

Good Vibes coffee table and Checkerboard Dhurrie in Rose from Fenton & Fenton

 

Revive palette from Dulux
Posted on

Construction costs ease but labour supply problems persist

Last week’s data from the Cordell Construction Cost Index (CCCI) revealed the cost of building materials is finally beginning to slow, but construction woes are not over yet.

Ray White chief economist Nerida Conisbee said while the cost of key materials such as timber and steel had eased over the past quarter, other factors meant that delays in the building industry are set to continue.

“While cheaper materials are helping things, labour supply remains a problem with too few workers,” Ms Conisbee said. “Over the past quarter there were 33,100 job vacancies in the construction industry. This however is a reduction from the 40,000 vacancies 12 months ago.”

Those hoping that more favourable conditions means that more new housing stock would come onto the market would also be disappointed, she said. 

“While it’s great news that construction costs are slowing, there will continue to be challenges in getting enough homes built over the next two years,” she said. “Building approvals are currently at a decade low and it will take some time for the pipeline to build.” 

Population growth that has seen numbers increase by 500,000 in the past year was likely to put further pressure on demand for more homes.

“That means that in just one year, we need roughly an additional 200,000 homes,” she said. “With 173,000 homes built last year, we are falling short in just one year by 27,000 homes.

“Reaching greater affordability for buyers and renters is unlikely to happen anytime soon with such a shortfall.”

Posted on

The New Workday Dead Zone When Nothing Gets Done

The 4 p.m. meeting is cancelled because half the team can’t make it. You send an email with what would have been the main discussion points, and the replies roll in through the evening and into the next morning. A consensus that could have been reached before dinner now forms the following day.

The hours that bookend the traditional close of business have become a dead zone at many companies, but employees aren’t just blowing off work to relax for the rest of the day. Workers say the 4-6 p.m. flex time they use to take a turn in the kids’ carpool, hit the gym or beat traffic often requires a third shift at night to finish the day’s tasks. They resent it when leaders assume they aren’t putting in eight or more hours of work, and they’re loath to relinquish the freedom to set their own schedules.

Despite the return of teeth-grinding commutes and overpriced lunches, lots of workers are sticking with the Covid-era habit of clocking out early and making it up later. By 4 p.m. on weekdays, golf courses are packed, according to a Stanford University study, as are many New York City restaurants.

Microsoft researchers have documented what they call a “triple peak” phenomenon in which workers’ keyboard activity spikes in the morning and afternoon, then a third time around 10 p.m. The tech giant predicts this pattern is here to stay.

In a recent, one-month sample of Microsoft Teams software usage, the share of virtual and in-person meetings scheduled between 4 p.m. and 6 p.m. was down 7% from a year earlier, despite widespread office returns.

Bosses can drag employees back to their desks, but good luck keeping them there until the end of a 9-to-5 workday or beyond. The 4-6 p.m. dead zone is one reason so many executives are cranky about hybrid work. They say it’s the hardest time to reach people, and things would be easier if everybody were present and accounted for in person, even though many workers seem to be leaving offices earlier, too.

The Price of Flexibility

Fungible hours are great for those doing the fungeing. For managers and co-workers, one person’s hiatus can be another’s headache.

“A lot of companies have taken a loose approach under the belief that we’re all adults, so everyone will be self-disciplined and stay motivated at whatever time they’re working,” says Albert Fong, vice president of product marketing at Kanarys, a maker of diversity-training software. “That’s just not true.”

Flexibility can be a trap that fuels our always-on work culture, Fong adds. Instead of powering through a late-afternoon gathering and being done for the day, he often finds himself refreshing his mobile inbox all evening or opening his laptop on Sunday to catch up on messages from colleagues who work whenever.

Colette Stallbaumer, general manager of Microsoft’s Future of Work initiative, sums it up: “How do we make it so that my flexibility isn’t your challenge?”

Ana Paula Calvo, an associate partner at McKinsey & Co., says she considers how shifting her hours can affect others. She sometimes works at night or on weekends to make up for bolting to daycare many weekdays at 5:30 p.m. At the start of any new project, she does a norm-setting session to let her team know there’s no pressure for them to work off hours.

“People know that if I get back to them at 11 at night, that doesn’t mean I’m expecting them to reply right away,” she says.

It Can Wait—Or Maybe It Can’t

Accommodating employees’ personal appointments—happy-hour yoga, a teen’s tuba lesson—can be necessary to recruit and retain top talent, several business leaders tell me. They add it sure makes getting a quorum at meetings tough, though. Others, especially child-free workers, complain that their workdays have become longer and less predictable since it became widely acceptable to take breaks during normal business hours.

Maria Banach, a pharmaceutical operations director in Oregon, says she sometimes wants to call a huddle to handle a problem, only to learn that someone on the team has gone offline for a couple of hours. That might not seem very long, but her co-workers are spread across several time zones and their overlapping business hours are limited. Issues can linger overnight when one or two people step away early, Banach says, and every day is precious. The drugs her company manufactures expire 17 days after production.

“Scheduling meetings has become difficult, and I’ve learned: Do it in the morning and never on Friday,” she says.

Some executives have accepted, even embraced, the reality that little gets done from 4-6 p.m. Anthony Stephan, chief learning officer of Deloitte U.S., says recorded tutorials are now a centrepiece of the firm’s professional-development program. Getting employees together for an end-of-the-day training session is seldom an option any more, he says. They hone new skills when they feel like it.

Stephan, a father of five, holds himself to a hard stop at 5 p.m. He initially worried that others would keep hustling after he called it a day, but he now realises others are winding down early or right on time. For emergencies, he tells his team to put #criticalnow in an email subject line. Most things can wait until after his 5:15 a.m. workout the next morning, he figures.

At Komet U.S.A., a South Carolina-based maker of dental equipment, meetings after 4 p.m. or on Friday afternoon are against company policy, except in special circumstances. Chief Executive Mercedes Aycinena, promoted to the top job last year, introduced those calendar blocks last fall after polling the staff.

Aycinena, who has about 100 employees, usually leaves the office at 5 p.m. to spend time with her three children and then resumes work later as needed. She lets subordinates shift their hours, too, and credits flexibility with helping reduce turnover from 50% to 15% over the past year.

“I hate meetings after 4,” she says. “My brain is done.”

Posted on

From ‘Succession’ to ‘The Crown,’ This Year’s Emmy-Nominated Shows Will Give You Serious House Envy

British royalty, billionaire media moguls and wealthy vacationers filled the screens of this year’s Emmy-nominated TV shows.

We may not covet the characters’ tangled, twisted relationships in “Succession,” which swept the nominations, or the backstabbing (and actual stabbing) in “Only Murders in the Building,” up for best comedy. But their lavish penthouses, castles and beach resorts could certainly stoke some house envy.

Here, Mansion Global highlights some of the real-life lavish homes that set the backdrop to some of this year’s fictional favourites.

“Succession” — 27 Nominations, Including Outstanding Drama Series

The open-plan great room is flooded with light from walls of windows.
BESPOKE REAL ESTATE

If “Succession,” the HBO series that’s high on drama and high-net-worth characters, exudes anything, it’s luxury—and that goes for its filming locations as much as anything else.

Take this uber-contemporary waterfront home in the Hamptons, the exclusive pocket of New York’s Long Island favored by wealthy New Yorkers, which is on the market for $55 million. The angular and glass-covered house was featured in Season 3 of the award-winning series, starring as the beachfront mansion owned by billionaire investor Josh Aaronson, played by Adrien Brody, and visited by Kendall and Logan Roy.

Built in 2018 in the hamlet of Wainscott, the property has a giant open-plan living, dining and kitchen space, where the home’s jaunty inverted roofline translates inside to an upside-down teak pyramid in the centre of room.

The custom kitchen occupies one end of the space with a statement marble backsplash—which made an appearance in the show. At the other end is a towering stone fireplace—you’ll spot that during the episode, too.

“The Crown” — Six Nominations, Including Outstanding Supporting Actress in a Drama Series

An ornate bedroom inside Burghley House.
Getty Images/500px

Several U.K. estates were featured in “The Crown,” a Netflix original that garnered six Emmy nominations this year, including nods for Outstanding Drama Series and Outstanding Supporting Actress in a Drama Series for Elizabeth Debicki’s portrayal of Princess Diana. Burghley House—a 16th-century manse in Lincolnshire, England, about 130 miles north of London—is one of the largest surviving houses of the era, as well as an example of the great Elizabethan “prodigy” houses, built to honour Queen Elizabeth I. Indeed, it was her Lord High Treasurer, William Cecil, who helmed the project, built between 1555 and 1587.

The estate was featured in the most recent season of the show, but it’s no stranger to the screen, having also been seen in films like “Pride & Prejudice” (2005) and “The Flash” (2023), and even had a turn on “Antiques Roadshow.” The Cecil family put the home in a trust some years ago, and the property is now open to the public, who can tour its extensive gardens and art collection, and is still the site of the Burghley Horse Trials, set to begin this year on Aug. 31. “The Crown” has received 69 Emmy nominations since its first season in 2016, winning 21 times.

Burghley House is a 16th-century English country house near Stamford, Lincolnshire.
PA Images via Getty Images

“House of the Dragon” — Eight Nominations, Including Outstanding Drama Series

A real-life island castle off the coast of Cornwall, England, is used to set the scene in “House of the Dragon.”
Getty Images/imageBROKER RF

In “House of the Dragon,” HBO’s blockbuster prequel series to “Game of Thrones,” Driftmark is an island in Blackwater Bay and the ancestral seat of House Velaryon who rule from the castle High Tide.

Away from Westeros, the rugged and rocky outcropping, and the historic castle that stands on top of it, is St. Michael’s Mount, found in the sea off the coast of Marazion in Cornwall, in South West England.

The awe-inspiring spot is currently home to the St. Aubyn family, who have a 999-year lease to live in the castle and run the visitor business. And unsurprisingly, given its grandeur, the mount has been used as a filming location for the 1979 film “Dracula,” the 1983 James Bond film “Never Say Never Again,” the 2003 film “Johnny English,” and in the 2012 adventure movie “Mariah Mundi and the Midas Box.”

“The White Lotus” — 23 Nominations, Including Outstanding Actor in a Drama Series

The fictional resort this season was filmed at the real San Domenico Palace in Taormina, Sicily.
Courtesy of Four Seasons

Season 2 of HBO’s “The White Lotus” took both its cast and viewers to the scenic Sicilian town of Taormina. While the White Lotus—where the show’s affluent, eccentric guests are seen dining, lounging and creating chaos—is a fictional resort, the season was filmed at the real San Domenico Palace, which is a Four Seasons hotel.

Formerly a 14th-century convent, the historic building has been reimagined into a five-star resort offering a cliff top infinity pool, Italian gardens and Michelin-starred dining. Though, much of the monastery’s structure has been preserved, including the original frescoes. With views of the Ionian Sea, Mount Etna and the ancient Greek theatre Teatro Antico di Taormina, the hotel provides for an idyllic Italian getaway, with hopefully less theft and death than that of “The White Lotus.”

Much of the monastery’s structure has been preserved.
Peter Vitale/Courtesy of Four Seasons

“Beef” — 13 Nominations, Including Outstanding Limited or Anthology Series

The 50-foot pool.
DPP REAL ESTATE

An extravagant mansion that happens to be one of Los Angeles’s most popular shooting locations made a cameo in the show’s fifth episode, when main characters Amy (played by Ali Wong) and her husband, George (Joseph Lee), book a luxury rental.

In their everyday life, the main characters of this revenge-filled black comedy live in a suitably dark house filled with concrete and dim lighting—a stark contrast to the sun-drenched vacation home lined in window walls overlooking the Santa Monica and San Gabriel mountains. In real life, the mansion is located in the San Fernando Valley and once belonged to Frank Sinatra. The characters and their daughter, June, lounge in the pool, with the airy, white Mid-Century Modern home in the backdrop. Besides “Beef,” Miley Cyrus made the striking home and cinematic views the backdrop of her latest album “Endless Summer Vacation,” which dropped earlier this year. The six-bedroom mansion, which was also featured in “Mad Men” and “Dreamgirls” (2006), went up for sale again in April for $16.5 million.

A Los Angeles home linked to both Frank Sinatra and Miley Cyrus has been re-listed for $16.5 million.
DPP REAL ESTATE

“Only Murders in the Building” — 11 Nominations, Including Outstanding Comedy Series

Evan Joseph Photography

The Selena Gomez, Steve Martin and Martin Short comic murder mystery “Only Murders in the Building” takes place almost entirely within the fictional Arconia and the surrounding Upper West Side neighbourhood. In reality, filming took place at the Belnord. Completed in 1908, the luxury residence occupies a full block at Broadway and West 86th Street.

The building has a starring role, showcasing apartments within its 213 units, as well as its famous inner courtyard (one of the largest in the city) and its facade. Originally designed by Hiss and Weekes in the Italian Renaissance Revival style, it was reimagined in 2018 by Robert A.M. Stern, who updated and opened up the apartments while preserving the public spaces. There are currently 13 active listings at the Belnord, listed by Douglas Elliman Development Marketing and priced up to $13.85 million for a four-bedroom on the 11th floor of the 13-story building.

A actual bedroom suite at the Belnord. Evan Joseph Photography
Posted on

For These Influential Families, Life is Like ‘Succession’—but With More Wine and Far Less Drama

IN ITALY, THEY have a saying about family-run companies, shared by an Italian winemaker I know: “The first generation builds it, the second maintains it and the third destroys it.”

I’m happy to report that under the stewardship of this winemaker and his sister—the second generation to run their winery—his family business is flourishing. How do some families fit the personal with the professional to create successful intergenerational businesses, while others do not? I talked with three prominent California wine families who seem to have figured it out.

Ramey Wine Cellars, Healdsburg

It was never a given that David Ramey’s children, Claire and Alan, would take over the family winery. “You can’t force it. It had to be natural,” said the elder Ramey, who has been making notable wine in California for 45 years, for other wineries as well as his own.

Founded by Ramey and his wife, Carla, in 1996, Ramey Wine Cellars produces a range of high-scoring wines, notably single-vineyard Chardonnays. David Ramey said, “We had a defining moment in March 2020 when a French company wanted to buy the winery.” While both Claire, now 32, and Alan, 31, were already committed to the winery, by collectively choosing to turn down the offer, they reaffirmed that commitment to their parents.

Both siblings hold the title co-president; each focuses on different aspects of the business, though all decisions are made jointly and their duties often overlap. Both Ramey children and their father taste all the wines together with Cameron Frey, vice president of winemaking, and Lydia Cummins, associate winemaker, and make final blending choices. But David Ramey is no longer at the forefront and no longer has an office at the winery. The second generation is making decisions, from pricing to production to experimenting with new wines, and that’s fine with their dad. “If you are going to do it, you’ve got to start to cede control to the younger generation,” he said.

Bien Nacido Vineyards, Santa Maria Valley, Santa Barbara County

The Miller family has been farming in California’s Central Coast for five generations. When fourth-generation brothers Steven and the late Bob Miller planted the Bien Nacido Vineyards in 1973, the Central Coast wasn’t highly regarded. Today, the 640-acre vineyard is considered one of the greatest in California and the source of some of the state’s most notable Pinot Noirs, Chardonnays and Syrahs.

The Millers sold grapes to famous names such as the late Jim Clendenen of Au Bon Climat, Bob Lindquist of Qupé and many others, but it took the fifth generation—Nicholas and Marshall Miller, together with their father, Steven Miller—to go ahead and finally produce their own Bien Nacido-designated wines and to open a tasting room. The family produced their first Bien Nacido wine in 2007, and just two months ago, the Millers opened the Gatehouse at Bien Nacido tasting room at the vineyard.

The younger generation continues to expand the business. For example, they just launched the nonalcoholic wine brand Hand on Heart, in partnership with Iron Chef Cat Cora. The secret to their success? “We are a very experienced team, and we understand each other deeply,” said Nicholas Miller.

K&L Wine Merchants

With three retail wine stores spread out between the Bay Area and Los Angeles and two more slated to open early next year, plus a large online sales operation, K&L Wine Merchants is one of the best-known names in retail wine in California and also one of its most dynamic.

K&L was founded in 1976 with one store and two partners: Clyde Beffa, Jr., a former dairy rancher, and Todd Zucker, who got his start in the insurance business. Today, the K&L empire is owned and operated by two generations of Beffas and Zuckers.

In the early years, the founding partners divided responsibilities, with Zucker in charge of liquor and Beffa handling the wine. As the wine side grew, Zucker transitioned to accounting and finance. Since joining in 1997, Zucker’s son Brian, focused on technology and marketing, has developed software critical to the expansion of K&L.

Beffa has turned much of the wine buying and wine-buyer oversight over to his son Clyde “Trey” Beffa III, who joined the company in 1997. The elder Beffa still buys a lot of the Bordeaux for K&L, however. “He’s kind of a control freak,” said Trey of his father. The two Beffas share a fondness for Bordeaux, but their tastes diverge. The father prefers older Bordeaux, whereas the son likes to drink Bordeaux when it is relatively young. “Before it begins to decline,” Trey explained. “I like a little more fruit in my wine.”

Posted on

The Luxury Tower Built for New York’s Elite Still Sits Half Empty

When the Related Companies set out to build Hudson Yards, a roughly 28-acre mega-project on Manhattan’s far west side, its goal was lofty: The developer wanted to turn a windswept railyard into the next hot destination for the global elite. That meant building and marketing a brand new neighbourhood with office towers, luxury stores, restaurants and high-end amenities.

The project’s condominium towers—15 and 35 Hudson Yards—were designed to lure moneyed buyers further west than ever before, and set a new benchmark for pricing outside of traditional high-end enclaves, with executives at Related promoting the neighbourhood as “the new Park Avenue.”

Now, roughly a decade after Related broke ground on Hudson Yards, it has struggled to make that vision a reality. At the luxury glass-and-limestone tower 35 Hudson Yards, approximately 50% of the units were still unsold as of the last week of June, more than four years after sales launched, according to an analysis by The Wall Street Journal based on sales recorded with the city’s Department of Finance. Related is slashing prices and offering incentives at the condominium, such as covering buyers’ taxes and closing costs, local agents said.

Recorded sales at 35 Hudson as of late June had closed for an average of 30% less than the original prices filed with the New York state Attorney General’s office, and active listings were discounted by up to 50%, the analysis shows. At least four large units at the building have sold for more than 40% off, records show. A four-bedroom apartment recently traded for $8.5 million, about 46% less than its projected asking price of $15.725 million, records show.

Related’s Sherry Tobak, who heads sales for the two condominiums alongside new development marketing firm Corcoran Sunshine, said the developer had been forced to reassess its expectations at 35 Hudson Yards.

“When we first opened the job, we thought we’d be able to get a higher price,” she said. “The message [from the market] was that we were overreaching a little bit.”

While many developers across the city are cutting prices amid higher interest rates, the discounts being offered at 35 Hudson Yards are bigger than developer concessions in other areas of Manhattan, according to appraiser Jonathan Miller of Miller Samuel.

“The actual housing market is not seeing anywhere near that kind of discount,” Miller said. Related disputed that characterisation, saying the building is performing in line with “its competitive set.”

Priced slightly lower than 35 Hudson, 15 Hudson Yards originally fared better, and is about 90% sold after almost seven years of marketing. Still, some 15 Hudson homeowners are listing their units for less than they paid as they look to resell in a shifting market.

In all, Related still has more than a billion dollars worth of condos left to sell at Hudson Yards, based on the initial pricing, the Journal analysis shows.

The Hudson Yards condos were always going to be a tough sell for Related, which secured the rights to develop the massive railyard site through a roughly $1 billion lease deal with the Metropolitan Transportation Authority in 2010. The far-west location—between 10th Avenue and the West Side Highway—was untested for luxury housing, and required creating an entirely new neighbourhood out of whole cloth. Retail at Hudson Yards now includes high-end stores such as Cartier, Coach and Dior and restaurants including chef José Andrés’ Mercado Little Spain. The project’s more than 10 million square feet of office space is home to tenants such as L’Oréal and Facebook parent company Meta.

To help sell the new neighbourhood it created, Related promised safety—the developer works with a private security firm to police Hudson Yards.

The reception to the new Hudson Yards neighbourhood has been mixed. While some flock there for the shopping, restaurants and tourist destinations like the Edge observatory, others have described the glass skyscrapers as soulless, with little authentic personality.

“It’s a very dramatic area that’s sprung out of nothing,” said Manhattan real-estate agent Donna Olshan. “It’s high-rise buildings, commercial real estate and a mall. It has less of a residential feeling.”

A number of suicides at the Vessel, a tourist attraction that sits at the centre of Hudson Yards, have generated negative press coverage and resulted in the closure of the walkable sculpture. A spokeswoman for Related said the company is evaluating solutions that would allow it to reopen the Vessel.

The first Hudson Yards condo tower, 15 Hudson Yards, was designed to have a downtown feel, said Tobak. Designed by Diller Scofidio + Renfro and Rockwell Group, the 88-story, 285-unit building resembles four interconnecting arcs of glass. The property has about 40,000 square feet of amenities, including a fitness centre, a pool and an open-air terrace wrapped in a 60-foot glass screen wall. Sales launched at the project in September 2016. Initial pricing filed with the attorney general’s office started at $1.92 million for a one-bedroom unit and rose to $32 million for a four-bedroom penthouse.

By contrast, 35 Hudson Yards was designed for a more uptown audience, and is “a little more classic,” Tobak said. Indeed, Related’s own founder and chairman, Stephen Ross, relocated there from another of the company’s projects, the former Time Warner Center at Columbus Circle. Designed by Skidmore Owings & Merrill, 35 Hudson Yards is 92 stories with 143 units. The building has interiors by Tony Ingrao, who also designed Ross’s Time Warner Center penthouse, and comes with amenities such as a private gym and access to the offerings of the Equinox Hotel, which is also in the building. Initial pricing filed with the attorney general started at $5 million for a two-bedroom unit and rose to $59 million apiece for a pair of penthouses.

When 15 Hudson Yards launched sales, it benefited from an upswing in the New York condo market. By the end of the first year of sales, Related had signed contracts for more than $500 million worth of apartments, nearly a third of its projected sellout for the whole tower, property records show. Foreign buyers, particularly from Asia, were a strong component of the buyer pool, thanks to marketing and trade shows Related did there, Tobak said. A large number of those buyers have since rented their units out, according to StreetEasy.

Today, about 30 units remain unsold, recorded sales show, with the building’s higher-priced apartments making up the majority of the leftover inventory. Tobak noted that that number is closer to 25 if signed contracts are factored in.

Sales at 15 Hudson Yards launched in 2016.

Some buyers who purchased early on are now struggling to unload their units in the current market. Ann Cutbill Lenane, a Douglas Elliman real-estate agent who has sold multiple units at Hudson Yards, signed a contract in 2017 to buy a $4.84 million condo for herself at 15 Hudson Yards. Now, with her children out of the house and a need to downsize, she has accepted that she’s unlikely to find a buyer willing to match that price on a resale. She has the unit listed for $4.495 million and said she expects to sell for a loss, especially since Related is currently listing units at a discount, undercutting the price she paid.

She said she feels embarrassed to be a real-estate agent losing money on a piece of property. Still, “I can’t beat myself up,” she said. “You always take a risk when you step into a new product. That’s just the nature of the beast.”

Tobak said that buyers who purchased at the height of the market at 15 Hudson Yards are now facing inevitable market realities, but recommended that they try to wait out the current cycle. “If you hold on for a little while, you’re going to make money,” she said.

When 35 Hudson Yards launched sales in March 2019, it debuted at a higher price point than 15 Hudson in a much less favourable market. “By the time 35 came up, the bloom was off the rose,” said Olshan.

Related signed contracts on about 15 of the 143 units at 35 Hudson in the first year, records show. Then, its efforts were further hampered by the pandemic, which temporarily shut down sales offices across the city. To generate activity, Related temporarily rented units at the building with an option to buy, Tobak said.

Still, Related has struggled to build the momentum needed to meet sales targets at 35 Hudson. Agents said one factor is Related’s proposal to bring a casino to Hudson Yards, which potential buyers worry could draw large crowds and make the area feel tacky. “I’m sure whatever gets built is going to be very tasteful,” said Dan Gotlieb of Digs Realty Group, who has done business at 35 Hudson. “But it’s just an uncertainty right now that’s probably also contributing to the sluggish sales.”

In response to criticism of the casino plan, Related said in a statement: “If we are fortunate enough to be one of the successful bidders for a gaming license, we will deliver a world-class resort with amenities, restaurants, retail and entertainment that will even further elevate the offerings at Hudson Yards and make the experience for the neighbourhood, residents and office tenants even greater than it is today.”

Of the 35 Hudson units currently listed on StreetEasy, many are asking significantly less than the initial pricing. A five-bedroom, roughly 4,600-square-foot unit is asking $13.85 million, 49% less than its original $27 million offering-plan price, records show. A four-bedroom, roughly 3,800-square-foot unit is asking $9.995 million, 43% less than its original projected price.

Olshan likened 35 Hudson to “a big Broadway show that just never took off.”

Real-estate agents with recent deals at 35 Hudson said they have been pleasantly surprised by Related’s level of negotiability. Alex Carini of the Carini Group said his firm recently helped a Brazilian family purchase a $9.95 million condo at the tower, a 37.5% discount from the offering-plan pricing. Related also covered the client’s closing costs, he said. In this market, he said, sellers often give a discount or cover closing costs, but rarely both.

Gotlieb said his clients, onetime renters at 15 Hudson, sat on the sidelines for years as they waited for prices to fall at 35 Hudson. “They wanted a certain kind of product and they weren’t willing to pay $10 million for it,” he said. Ultimately, they secured a four-bedroom, roughly 3,400-square-foot unit for $8.5 million, nearly 46% off the offering plan price, records show.

Retired corporate attorney Grace Kim, 50, said she felt she had “room to negotiate” when she purchased a three-bedroom apartment for her family at 35 Hudson last year.

“Mortgage rates were so high,” Kim said. “Everyone was kind of afraid to jump into the buyer’s market.”

Kim declined to comment on what she paid, but a Related spokesperson said that her unit type typically ranges in price from $6 million to $7.5 million. It is not clear what the apartment was originally priced at.

Kim said she feels comfortable with the investment, given that she plans on living there long term. “I feel like the market is going to come back eventually,” she said.

In the luxury segment of the Manhattan market—the top 10% of deals—the number of closed sales fell 39.6% in the second quarter from the same period of last year, according to a recent report prepared by Miller for Douglas Elliman. The median sales price held relatively steady, ticking up by 3.9% to $6.7 million, during that same period.

Tobak remains optimistic. She said she sees foot traffic picking up at 35 Hudson and has sent contracts out on multiple units in the past few weeks. Factoring in contracts signed, the building is closer to 60% sold, she said. Still, the developer has “less wiggle room than before” in terms of profitability.

“We’re at a decent point,” she said. “Are we making a ton of money? I don’t know.”

Posted on

ChatGPT Comes Under Investigation by Federal Trade Commission

WASHINGTON—The Federal Trade Commission is investigating whether OpenAI’s ChatGPT has harmed people by publishing false information about them, posing a potential legal threat to the popular app that can generate eerily humanlike content using artificial intelligence.

In a civil subpoena to the company made public Thursday, the FTC says its investigation of ChatGPT focuses on whether OpenAI has “engaged in unfair or deceptive practices relating to risks of harm to consumers, including reputational harm.”

One question asks the company to “describe in detail the extent to which you have taken steps to address or mitigate risks that your large language model products could generate statements about real individuals that are false, misleading or disparaging.”

The new FTC investigation under Chair Lina Khan marks a significant escalation of the federal government’s role in policing the emerging technology.

Khan, who appeared before the House Judiciary Committee on Thursday, said the agency is concerned that ChatGPT and other AI-driven apps have no checks on the data they can mine.

“We’ve heard about reports where people’s sensitive information is showing up in response to an inquiry from somebody else,” Khan said. “We’ve heard about libel, defamatory statements, flatly untrue things that are emerging. That’s the type of fraud and deception that we are concerned about.”

For critics of the FTC, the probe represented another venture into uncharted territory for an agency that has suffered recent legal setbacks in its antitrust enforcement efforts.

“When ChatGPT says something wrong about somebody and might have caused damage to their reputation, is that a matter for the FTC’s jurisdiction? I don’t think that’s clear at all,” said Adam Kovacevich, founder of Chamber of Progress, an industry trade group.

Such matters “are more in the realm of speech and it becomes speech regulation, which is beyond their authority,” he said.

OpenAI didn’t respond to requests for comment.

Marc Rotenberg, who heads a group that filed an FTC complaint over ChatGPT in March, said it might be unclear whether the FTC has jurisdiction over defamation. But “misleading advertising is clearly within the FTC’s purview,” said Rotenberg, president of the Center for AI and Digital Policy. “And disinformation relating to commercial practices is already, according to the FTC, an area within its authority.”

Rotenberg’s group filed a complaint with the FTC in March concerning ChatGPT, terming it “biased, deceptive and a risk to privacy and public safety,” and arguing that it satisfies none of the FTC’s guidelines for AI use.

The FTC has broad authority to police unfair and deceptive business practices that can harm consumers, as well as unfair competition, but critics say Khan has sometimes pushed its authority too far—as illustrated by a federal judge’s decision this week to dismiss the FTC’s attempt to block Microsoft’s acquisition of Activision Blizzard.

At the House committee hearing Thursday, Khan came under fire for her agency’s investigation of Twitter’s privacy protections for consumers. Republicans say the probe was driven by progressives angry over Elon Musk’s takeover of Twitter and his loosening of content moderation policies. And Twitter asked a federal court Thursday to terminate a 2022 settlement it agreed to with the FTC over alleged privacy violations, saying it had been subject to a “burdensome and vexatious enforcement investigation.”

Khan responded that the agency was only interested in protecting the privacy of users and that “we are doing everything to make sure Twitter is complying with the order.”

In its civil subpoena to OpenAI, the FTC asked the company detailed questions about its data-security practices. It cited a 2020 incident in which the company disclosed a bug that allowed users to see information about other users’ chats and some payment-related information.

Other topics covered by the FTC subpoena include the company’s marketing efforts, its practices for training AI models, and its handling of users’ personal information. The FTC inquiry was reported earlier by the Washington Post.

The Biden administration has begun examining whether checks need to be placed on artificial-intelligence tools such as ChatGPT. In a first step toward potential regulation, the Commerce Department in April put out a formal public request for comment on what it called accountability measures.

The White House’s Office of Science Technology Policy is also working to develop strategies to address both the benefits of AI, such as the possibility of using it to expand access to government services, as well as harms such as increased hacking capabilities, discriminatory decisions by AI systems, and the potential for AI-generated content to disrupt elections.

Lawmakers in both parties—led by Senate Majority Leader Chuck Schumer (D., N.Y.)—also have made regulating artificial intelligence a priority for the current Congress.

In addition to concerns about potential reputational risks, lawmakers say they worry that AI tools can be abused to manipulate voters with disinformation, discriminate against minority groups, commit sophisticated financial crimes, displace millions of workers or create other harms. Lawmakers have been especially concerned about the risks of so-called deepfake videos that falsely depict real people taking embarrassing actions or making embarrassing statements.

But new legislation or other measures are likely months away, if not longer. And lawmakers must worry that any significant action they take will risk slowing the pace of U.S. innovation, in what is shaping up as a vital competition with China to dominate the markets for AI tools.

Even ChatGPT’s creators have urged more government oversight of AI development.

In a hearing before Congress in May, OpenAI Chief Executive Sam Altman called on Congress to create licensing and safety standards for advanced artificial-intelligence systems, as lawmakers begin a bipartisan push toward regulating the powerful new tools available to consumers.

“We understand that people are anxious about how it can change the way we live. We are, too,” Sam Altman said of AI technology at the Senate subcommittee hearing. “If this technology goes wrong, it can go quite wrong.”

Altman has been traveling the world talking about both the promise and perils of AI, including meeting with heads of state including French President Emmanuel Macron and Indian Prime Minister Narendra Modi.

Posted on

Michele Bullock to become next RBA governor

The Federal Government has announced that Michele Bullock will replace Philip Lowe as governor of the Reserve Bank of Australia. She will be the ninth governor and the first woman appointed to the role in the central bank’s 62-year history. Treasurer Jim Chalmers said in a press conference today that Ms Bullock will take on the role from September 18 following a consultative process with cabinet, the business community and the opposition.

The news that Philip Lowe will step down comes after 14 months and 12 interest rate hikes that have taken some borrowers off guard. However, Mr Chalmers was careful to thank Dr Lowe for his work over a long career.

“We thank Phil Lowe for more than four decades of dedication and commitment and service to the country,” Mr Chalmers said. “He goes with our respect and gratitude and dignity. I have really valued my working relationship with Phil. He is a terrific guy and he has handled himself impeccably.”

While most central banks around the world failed to predict the persistent inflation rises, most analysts point to Dr Lowe’s messaging around potential interest rate increases as sealing his fate. Prior to the rises in the cash rate that started in May 2022, Dr Lowe had told borrowers that interest rates would remain steady until 2024, leading many to believe that it was a safe time to borrow. Instead, repayments for an average mortgage have risen by $1,264 since increases began. At least 25 percent of mortgage holders are now believed to be experiencing  mortgage distress.

Speculation has been rife for weeks now that Dr Lowe’s tenure would not be extended and three front runners had emerged including Treasury secretary Steven Kennedy and Finance Department secretary Jenny Wilkinson. However, Opposition Leader Peter Dutton said he would not support candidates with close ties to government. Ms Bullock is perceived as a more independent choice. Mr Chalmers described the Michele Bullock as a “first class economist”.

“This is the right call but it is not an easy call,” he said. “This is one of the most important appointments that we will make as a government,” he said.

Prime Minister Anthony Albanese described Ms Bullock as “imminently qualified”.

“Michele Bullock is an accomplished economist with wide experience at the Reserve Bank,” he said. “I very much congratulate Michele Bullock on this appointment.”

Posted on

London’s Canary Wharf Takes Brunt of Real-Estate Pain

LONDON—Three decades ago, London remade a derelict shipping yard at Canary Wharf into a forest of glass-and-concrete skyscrapers in a bid to mimic U.S. financial hubs.

Now the 128-acre banking district east of central London is suffering a problem also plaguing U.S. cities: emptying office buildings.

Last month, HSBC Holdings, the U.K.’s largest financial firm, said it was leaving its 1.1-million-square-foot headquarters, known as the HSBC Tower, for a smaller building in central London. The move followed a decision by law firm Clifford Chance to relocate to central London and major office-space downsizings by Barclays and Société Générale, among others.

Already, Canary Wharf and its surrounding area have an availability rate of 17.1%, roughly the size of an empty Empire State Building, compared with 10.7% for central London, according to data provided by UBS.

Bonds for Canary Wharf Group—the company that owns most of the buildings in the area—are trading at a deep discount, with yields over 16%. Moody’s lowered its credit rating to junk last month.

The troubles at Canary Wharf show how the rapid rise of remote work has reverberated unevenly across global property markets. While the hollowing out of skyscrapers has become a familiar theme in U.S. cities since the pandemic, Europe’s office market has held up relatively well, as workers have been far more eager to return to the office.

But London has some problems that are familiar to American real estate.

The return-to-office rate for London stood at 65% in February, a figure that put it between New York City, which stood at 49%, and Paris, which was at 85%, according to JLL, a property-services company.

Canary Wharf has caught the brunt of the problems in London’s office market.

Work-from-home and the cost of upgrading old office space to meet environmental regulations “puts Canary Wharf at a disadvantage,” said Zachary Gauge, head of European real-estate research at UBS.

Canary Wharf was a byproduct of a changing London economy in the 1980s. Transformations in global shipping decimated the city’s sprawling blue-collar dockyards, the West India Docks. Margaret Thatcher’s government deregulated the financial industry in a move known as the “big bang,” and banks were hungry for towers that were larger than low-slung London’s standard fare.

While it wasn’t a great property investment—the original developer went bankrupt—skyscrapers sprouted through the 1990s and Canary Wharf became a rare slice of Manhattan in London.

Canary Wharf attracted tenants from London’s traditional financial district, known as the City of London, which lies several miles west. It became a global byword for urban renewal. Former New York Mayor Michael Bloomberg made it his go-to analogy when promoting plans for Hudson Yards in the late 2000s.

“Canary Wharf beat out the City in the 1990s and 2000s because it catered to American firms who wanted high-rise buildings for high-skilled labor,” said Anthony Breach, an analyst at the Centre for Cities, a think tank.

A generation later, its towers are far from new, while sleek modern skyscrapers have shot up in the buzzier streets of the City and other parts of central London.

“High rates of work from home means that employers need to offer some desirability and vibrancy to bring workers back,” said Marie Dormeuil, an analyst at Green Street, a commercial-real-estate advisory firm.

Top-end commercial-property rents in London’s more fashionable West End rose 8% a year over the past three years, buoyed by hedge funds and private-equity firms piling into Georgian townhouses, while rents in Canary Wharf have mostly stayed the same, according to Green Street. Average office-space rent in Canary Wharf is $69 a square foot, compared with $95 in the City and more than $165 in the West End, according to data from Knight Frank, a U.K. real-estate brokerage.

With most of the district held by Canary Wharf Group—a joint venture between Qatar’s wealth fund and private-equity giant Brookfield—or by the Qatari fund directly, the development has space for long-term planning. “The Canary Wharf Group is very good at making its own weather,” said Tony Travers, who directs the London School of Economics’ London centre.

Shobi Khan, Canary Wharf Group’s chief executive, has outlined a plan for a “Canary Wharf 3.0” that would thrive off of residential rents, entertainment offerings and biotech.

The group plans to construct a 750,000-square-foot life-sciences centre, which it says will be the largest commercial lab in Europe. Rents in the sector can bring in a 70% premium compared with office space, according to Savills, a British real-estate-services company.

As for the residential sector, 3,500 people inhabit the group’s 2,200 units there, compared with zero tenants three years ago. Two thousand more units are under construction.

A combination of high-end retailers, restaurants and music and arts festivals have brought in extra revenue. Foot traffic on evenings and weekends is up by 50% compared with pre pandemic levels, according to data from the city’s transport authority.

But a full makeover will be a difficult task to pull off. Higher interest rates and lower revenue mean that Qatar and Brookfield may need to put up more cash to cover the costs of refurbishment and construction.

Another risk: Fewer financiers and lawyers could mean little demand for the stores and amenities. “You could see a downward spiral as people start to leave,” said Breach, the think tank analyst.

The developers will likely need to lure in lots of people like Justin Walker, a tax accountant who works in JPMorgan Chase’s office there.

“I hated how sterile Canary Wharf looked when I first got here,” he said, “But, the place has grown on me, it’s more residential now, and a lot more vibrant.”

Posted on

The NSW country estate to rival Elizabeth Bennet’s family home

Bowled over by Bridgerton? Delighted by Downtown Abbey? Or still pining for Pride and Prejudice?

If you’ve always dreamed of living in a bygone era where formal introductions were de rigueur and ladies danced with gentlemen at country balls, chances are opportunities have been scarce. The number of well-maintained historic country estates still standing in Australia is low and even fewer come onto the property market. Which makes the sale of 4 Ranelagh Road, Burradoo all the more special.

Set on 4.54ha in the NSW Southern Highlands, Knoyle Estate was designed by London architect Maurice Adams and built in the 1880s as a country retreat for Charles B Fairfax and his wife Florence.

Offering one of the largest landholdings and oldest gardens in the area, the property has four residences, all self contained. The main house has 1155sqm internal space with 14 bedrooms, seven bathrooms and five living spaces. The other three residences are of varying sizes, with one offering eight bedrooms, another five bedrooms and the smallest with four bedrooms.The park-like gardens include rare specimens and century-old trees as well as a seven-level private labyrinth.

While it is indeed perfect for stepping back in time, the property has been put to various uses over the years, including as a boarding school. Agent Andrew Blake from Knight Frank notes that it sits on three titles, with the possibility of subdivision and dual occupancy.

 “The property could be used in its current form as a grand home, but there is also the opportunity to repurpose the residence, as well as to develop, subject to council approval and hence for it to instead be a commercial acquisition,” he said. 

“Other possible uses include a bed and breakfast or a country hotel with the demand for premium accommodation in the area, a luxury wellness retreat, a wedding or events venue, a cooking school, an art gallery or even as a retail outlet for antique dealers. 

“There is also the potential for group homes and seniors’ living.”

A stunning property in the Queen Anne style with Arts and Crafts and Gothic Revival influences, it’s the stuff dreams are made of.

 

Address: 4 Ranelagh Road, Burradoo 

Price guide: $12 million

Agents: Nathan Berlyn Nathan.berlyn@au.knightfrank.com 0449 157 773.

Andrew Blake Andrew.blake@au.knightfrank.com 0434 770 307

Inspection: By appointment

 

Posted on

Construction costs ease across Australia as key materials prices stabilise

Construction cost increases have fallen to their lowest point since the start of the pandemic according to the latest data from CoreLogic.

The property data provider’s Cordell Construction Cost Index (CCCI) shows a growth rate of 0.7 percent over the June quarter, which is the lowest figure recorded since September 2020.

The CCCI tracks the cost of building a typical three-bedroom, two-bathroom new home in Australia.

While there was variation and volatility across building product types, CoreLogic Construction Cost Estimation Manager John Bennett said steel and timber prices had begun to stabilise. It’s a trend he said was likely to continue.

“There’s been a significant drop off in dwelling approvals in the year to April, which will flow through to prices,” Mr Bennett said. “As the level of residential construction work reduces, pressure on material costs and labour supply is likely to reduce further.”

The price of timber has escalated sharply in recent years as local stocks dried up following the 2019 bushfires and demand for materials increased following the Federal Government’s HomeBuilder initiative. It’s a similar story with steel, which has been impacted by the war in Ukraine, the strength of the Australian dollar and supply chain issues.

However, there appears to be some relief on the horizon with the latest national figures well below the 1.2 percent decade average, CoreLogic data shows, representing a further softening from the 0.9 percent growth rate during the first quarter of this year.

CoreLogic head of research, Eliza Owen, said the figures bode well for a further reduction in the rate of inflation.

“The cost of new owner occupier dwelling purchases comprises the largest weighting in the CPI ‘basket’, which means the ongoing reduction in the CCCI is good news, potentially signalling lower inflation numbers,” she said.

Posted on

Bosses Push Back on WFH Die-Hards: ‘They Will Need to Show Up’

Office attendance is slumping again and bosses have a warning: We are a worse company when you stay home.

In buildings across 10 major U.S. cities, office occupancy has fallen back below 50% for the past three weeks, according to Kastle Systems, which tracks security swipes into offices. The drop comes despite new return-to-office mandates that affect more than 600,000 workers and counting.

Hundreds of Wall Street Journal readers—many of them bosses and team leaders—responded to our story on the workers who say “it’s not my responsibility” to save the office economy. These bosses say employees who insist they are more productive while working from home are missing the larger picture: Team productivity is taking a hit.

The purpose of an office is to create a dynamic environment where people feed off one another’s energy, bond on a personal level and explore ideas in unstructured ways, many company leaders said. Remote work can’t provide those kinds of casual interactions that build culture and camaraderie, they say, which means it is worse for the organisation and, in many cases, individual careers, too.

“Team collaboration really is much better and more effective with actual face time. Career growth also,” said William McNamara, a hiring manager who lives in Bellevue, Wash. “Sure, zealots will claim you can do it all remotely, but you can’t do it all as effectively for everyone, remotely.”

Still, work-life balance is a vital piece of company culture—one that workers say is helped by the option to work from home, at least part of the time. That leaves bosses to strike a difficult balance, something they are more keenly aware of than their employees might realise.

“We are stuck. Remote work means remote engagement. In-office means less flexibility,” said John Hayes, founder of Blackney Hayes Architects, a Philadelphia-based firm.

Eavesdropping as education

Bosses say that developing young workers and new hires is a priority, and that it’s tougher and slower to accomplish it when people aren’t gathered together in offices. Structured training sessions can often be conducted via Zoom, but the daily rhythms of mentoring and learning on the job require a less-structured exchange of questions and answers that happen organically.

“Eavesdropping is a huge form of education,” Hayes said. “Hearing what other people are saying, how they’re dealing with problems.”

Blackney Hayes asks employees to do their jobs from the office at least two days a week, but doesn’t mandate the face time because so many workers have said they prize flexibility.

“If leadership and all the energy radiate from the office, then people will understand that if they want to be part of the team they will need to show up,” Hayes said.

Jenny von Podewils, co-chief executive of Leapsome, an HR productivity and engagement platform, has taken a similar approach in the hopes of boosting young workers’ professionalism, such as appropriate conversations with colleagues and how to present in client meetings. Without office time, newer staff members take longer to get up to speed—if they catch up at all.

“Learning doesn’t happen on Zoom calls. It happens during meetings, together, through body language, listening to how people approach certain situations,” she said.

Breakthrough problem-solving

Ad-hoc interactions are important for seasoned employees, too, said Kevin Kowalczuk, a technology product manager based in Franklin, Tenn., who retired in April.

“We could literally make progress on a task while waiting for our coffee cup to fill up or while we heated lunch in the microwave,” he said of his return to the office.

Kowalczuk resolved one of his tougher challenges while chatting with colleagues in the company kitchen last spring. After discussing the housing market, their conversation turned to a new application that was only loading for some users despite being released to hundreds. The group quickly determined the problem stemmed from incorrect group permissions being granted to the users.

“That saved us days of time,” Kowalczuk said.

Team productivity vs. individual output

Individual contributors with task-oriented roles and a clear to-do list can perform satisfactorily in a remote setting in a way that doesn’t work for more strategic roles, said Edward Boggs, an information-technology team lead who lives in Durham, N.C., and goes in five days a week.

“If the tasks they are receiving are of the ‘figure it out’ variety, they often don’t do a very good job, or it takes them much longer than it should,” he said. The critical thinking required for those jobs usually requires a team working through issues in real time, Boggs added.

Working from home introduces other performance-related issues, even for conscientious employees with the best intentions, said Kim McClung, a former vice president of clinic operations for a large medical group, who’s now retired.

Managers who reported to McClung struggled to step back from work. They answered emails and took calls after hours, a habit she said she tried to discourage because it leads to burnout.

“If you’re in the car driving or trying to watch your kid’s recital while you’re answering emails, you’re not giving your best to anyone,” she said. “I don’t want your attention under those circumstances.”

McClung would rather her team work shorter hours together in the office, 100% focused on work, then go home and have true downtime.

When people are “on 24/7, the quality of work is going to suffer,” she said.