Biden’s rebuke of a bold, reform-minded crime law makes all Americans less safe

President Joe Biden’s support for a Republican-led effort to nullify the Washington D.C. City Council’s revision of its criminal code, signed into law on Monday, plays into the fear narrative that is being increasingly advanced across the U.S.

Biden could have used his platform and clout to clarify the actual substance of the carefully crafted District of Columbia proposal — and adhere to his campaign commitment to reduce the number of incarcerated Americans.

Instead, the president ignored the glaring problems in D.C.’s existing criminal code, which the 275-page long package of revisions was designed to address. This included reforming the draconian and inflexible sentencing requirements that have swelled the District’s incarceration rate and wasted countless resources imprisoning individuals who pose no danger to public safety. By rejecting this decade-plus effort, the president decided that D.C. residents have no right to determine for themselves how to fix these problems.

There are communities across the U.S. that see virtually no violent crime, and it isn’t because they’re the most policed.

Biden’s decision is the latest backlash to U.S. justice reform coming from both sides of the political aisle.

Instead of doubling down on failed tough-on-crime tactics, Americans need to come together to articulate and invest in a new vision of public safety. We already know what that looks like because there are communities across the country which see virtually no violent crime, and it isn’t because they’re the most policed.

Safe communities are places where people (even those facing economic distress) are housed, where schools have the resources to teach all children, where the water and air are clean, where families have access to good-paying jobs and comprehensive healthcare, and where those who are struggling are given a hand, not a handcuff.

This is the kind of community every American deserves to live in, but that future is only possible if we shift resources from carceral responses to communities and shift our mindset from punishment to prevention. 

Too often it’s easier to advocate for locking people up than it is to innovate and advance a new vision for public safety. 

In the wake of particularly traumatic years, as well as growing divisiveness that has politicized criminal justice reform, it is not surprising that many people believe their communities are less safe. While public perceptions of crime have long been disconnected from actual crime rates and can be heavily influenced by media coverage, the data tells a mixed story. Homicide rates did increase in both urban and rural areas in the wake of the COVID-19 pandemic and record levels of gun sales.

While early available data suggests these numbers are trending down, it’s too soon to tell, especially given the nation’s poor crime data infrastructure. What is clear is that there is no evidence that criminal justice reform is to blame for rising crime, despite well-funded attempts by those resistant to change and who are intent on driving a political agenda to make such a claim stick. 

Yet fear often obscures facts; people are scared for their safety and want reassurance. Too often it’s easier to advocate for locking people up than it is to innovate and advance a new vision for public safety. 

We need leaders who can govern with both empathy and integrity – who can provide genuine compassion to those who feel scared while also following the data about how to create safer communities. And all the data points to the need for reform. 

Mass incarceration costs U.S. taxpayers an estimated $1 trillion annually.

Mass incarceration costs U.S. taxpayers an estimated $1 trillion annually, when you factor in not only the cost of confinement but also the crushing toll placed on incarcerated people and their families, children, and communities. Despite this staggering figure, there’s no real evidence that incarceration works, and in fact some evidence to suggest it actually makes people more likely to commit future crimes. Yet we keep pouring more and more taxpayer dollars into this short-sighted solution that, instead of preventing harm, only delays and compounds it. 

We have to stop pretending that reform is the real threat to public safety and recognize how our over-reliance on incarceration actually makes us less safe. 

Reform and public safety go hand in hand. Commonsense changes including reforming cash bail, revisiting extreme sentences and diverting people from the criminal legal system have all been shown to have positive effects on individuals and communities.

At a time of record-low clearance rates nationwide and staffing challenges in police departments and prosecutor’s offices, arresting and prosecuting people for low-level offenses that do not impact public safety can actually make us less safe by directing resources away from solving serious crimes and creating collateral consequences for people that make it harder to escape cycles of poverty and crime. 

Yet, tough-on-crime proponents repeatedly misrepresent justice reform by claiming that reformers are simply letting people who commit crimes off the hook. Nothing could be further from the truth. Reform does not mean a lack of accountability, but rather a more effective version of accountability for everyone involved. 

Our traditional criminal legal system has failed victims time and again. In a 2022 survey of crime survivors, just 8% said that the justice system was very helpful in navigating the legal process and being connected to services. Many said they didn’t even report the crime because of distrust of the system. 

When asked what they want, many crime survivors express a fundamental desire to ensure that the person who caused them harm doesn’t hurt them or anyone else ever again. But status quo approaches aren’t providing that. The best available data shows that 7 in 10 people released from prison in 2012 were rearrested within five years. Perhaps that’s why crime victims support alternatives to traditional prosecution and incarceration by large margins. 

For example, in New York City, Common Justice offered the first alternative-to-incarceration program in the country focused on violent felonies in adult courts. When given the option, 90% of eligible victims chose to participate in a restorative justice program through Common Justice over incarcerating the person who harmed them. Just 7% of participants have been terminated from the program for committing a new crime. 

A restorative justice program launched by former San Francisco District Attorney George Gascón for youth facing serious felony charges was shown to reduce participants’ likelihood of rearrest by 44 percent within six months compared to youth who went through the traditional juvenile justice system, and the effects were still notable even four years after the initial offer to participate.

Multnomah County District Attorney Mike Schmidt launched a groundbreaking program last year to allow people convicted of violent offenses to avoid prison time if they commit to behavioral health treatment. As of January, just one of 60 participants had been rearrested for a misdemeanor. 

While too many politicians give lip service to reform, those who really care about justice are doing the work, regardless of electoral consequences. We need more bold, innovative leaders willing to rethink how we achieve safety and accountability, not those who go where the wind blows and spread misinformation for political gain. 

Fear should not cause us to repeat the mistakes of the past. When politicians finally decide to care more about protecting people than protecting their own power, only then will we finally achieve the safety that all communities deserve. 

Miriam Aroni Krinsky is the executive director of Fair and Just Prosecution, a former federal prosecutor, and the author of Change from Within: Reimagining the 21st-Century Prosecutor. Alyssa Kress is the communications director of Fair and Just Prosecution.  

More: Wrongful convictions cost American taxpayers hundreds of millions of dollars a year. Wrongdoing prosecutors must be held accountable.

Plus: Senate votes to block D.C. crime laws, with Biden’s support

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Chips, energy and an Amazon rival: Stock picks from a fund manager with three decades of experience

Markets are again on the backfoot ahead of Thursday’s open. Credit Suisse shares have shot higher on plans to borrow billions, a day after collapsing and upending already fragile markets.

The European Central Bank raised its key interest rate by 50 basis points as some had expected. That’s as stress returns for some U.S> lenders.

Onto our call of the day, which comes from the manager of the Plumb Balanced Fund
PLIBX,
-1.08%
,
Tom Plumb, who has three stock ideas to share. But first, some timely advice from the manager’s three decades of experience.

“The market is really going to be volatile here, but if you look at 1981 to 1982, it was a significant amount of pressure on the stock market, but the fourth quarter of 1982…the S&P 500
SPX,
-0.21%

was up 40%,” Plumb told MarketWatch in a recent interview.

“I think people still have to look at what their comfort with risk is…for the first time in 15 years, they have a reasonable expectation that a balanced portfolio will modify the volatility because they’re earning 4% to 7% on their higher quality fixed income investments,” he said.

“You just have to make sure the companies you own aren’t overleveraged, they’re not dependent on capital and that they’re not standing, as we say, on the railroad tracks for different trends that are really going to be developing,” said Plumb.

That brings us to his first pick, microcontroller maker Microchip Technology
MCHP,
-0.17%
,
which he has owned at different periods over 20 years and sits in a sector he likes — chips.

The first microcontroller was put on a car to regulate the fuel injection system in 1987 and the average car now has about 400 of those, controlling everything from temperature, to safety, he notes. Microchip trades at about 14 times forward earnings, and likes the fact they’re normally conservative on the guidance front.

And: Intel’s stock nabs an upgrade: ‘Things are moving enough in the right direction.’

“They focus on industrial aerospace, defense, auto and auto centers. They have almost no exposure to PCs and cellphone markets,” return free cash to shareholders, with regular dividends over the past 15 years. While not as sexy as AI, Microchip delivers on the basis of a “good, solid company,” he said.

Read: Chip stocks fall as delivery times shrink, Samsung plans to build world’s largest chip complex

His next pick is down to the Ukraine war’s causation of a rethink of energy independence, capacity and companies that can produce commodities such as liquid natural gas. With that Philips 66
PSX,
-0.22%

is “probably the best company in the mid market,” trading at about 7 times earnings, with a 4% dividend yield meaning investors are paid as they wait, he said.

“Earnings obviously are pretty volatile, but their main thing is capacity utilization rates on the refineries. Refineries are only a quarter of their revenues, but it’s 60% of their profits, and then they transport the LNG,” he said. LNG exports will be significant as countries try to diversify energy inputs, and “carbon-based energy is gonna still have a significant place in the world for a long time,” he adds.

His last pick is an old favorite for the manager — Latin America’s answer to Amazon.com
AMZN,
+1.21%

— MercadoLibre
MELIN,
-0.63%

MELI,
-0.58%
,
whose shares have been on the recovery road after coming off COVID-19 pandemic-era highs. The company is now “getting to scale and you’re seeing a tremendous increase in not only their revenues, but their profit margins are expanding,” he said.

“So it looks like you’re going to have 28% revenue growth maybe for the next four years at least, and get 50% plus growth in their reported earnings,” he said, noting increasing benefits of electronic transactions and digital advertising.

“So you’ve got three legs: you’ve got the financial, you’ve got the Amazon type, online retailer and the third is the advertising. All of these things are putting them in a spot that’s unique in Latin America, Mexico and South America,” said Plumb.

Last word from Plumb? Like many others, he’s worried that the Fed has moved too fast with rate hikes and that those delayed effects are playing out. He worries about risk to insurance companies and long-term lenders of commercial real estate, which he thinks will be “an area of significant potential risk over the next couple of years.”

The markets

Stock futures
ES00,
-0.54%

YM00,
-0.78%

NQ00,
-0.27%

extended losses after the ECB rate hike, while bond yields
TMUBMUSD10Y,
3.440%

TMUBMUSD02Y,
3.961%

have also turned lower, and the dollar
DXY,
-0.14%

lower. Asian stocks
HSI,
-1.72%

NIK,
-0.80%

fell, while European equities
SXXP,
+0.06%

turned mixed after the ECB hiked interest rates. German 2-year bund yields
TMBMKDE-02Y,
2.466%

are also rising after a big plunge. Oil prices
CL.1,
-1.39%

are weaker.

For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.

The buzz

“Inflation is projected to remain too high for too long.” That was the ECB statemetn following a 50 basis point rate hike to 3%, a move that some had been on the fence over, given fresh banking stress. President Christine Lagarde will speak soon.

U.S. data showed weekly jobless claims dropping 29,000 to 1.68 million, while import prices declined 0.1%, housing starts rebounded by a 9.8% jump and building permits surged 13.8%. The Philly Fed manufacturing gauge remained deep in contraction territory in March, hitting a negative 23.2, versus expectations of 15.5

Treasury Sec. Janet Yellen is expected to tell the Senate Finance Committee on Thursday that the U.S. banking system is “sound.”

That’s as First Republic shares
FRC,
-29.97%

have dropped 35% to a fresh record low amid reports the battered lender is considering a sale. The lender was cut to junk by Fitch and S&P on Wednesday. Elsewhere, PacWest Bancorp
PACW,
-18.29%

is down 14%.

Meanwhile, “everything is fine,” with Credit Suisse, said the head of top shareholder Saudi National Bank on Thursday, a day after he effectively blew up markets by saying the Middle Eastern bank wouldn’t boost its stake. Credit Suisse shares
CS,
+3.51%

CSGN,
+15.73%

are surging on a pledge to borrow money from the Swiss National Bank and repay debt.

Adobe shares
ADBE,
+2.99%

are up 5% after topping Wall Street expectations for the quarter and hiking its outlook.

Shares of Snap
SNAP,
+6.77%

are up 6%, following a report that the Biden administration has told its Chinese owners to sell their TikTok stakes or face U.S. ban.

Shares of DSW parent Designer Brands
DBI,
+14.13%

are headed for a 2-year low after a surprise profit, but disappointing revenue.

Goldman Sachs is lifting its odds of a U.S. recession in the next 12 months by 10 percentage points to 35%, over worries about the economic effects of small bank stress.

Best of the web

Chinese companies are still trying to get their money out of SVB.

A rare Patek Philippe watch owned by the last emperor of China’s Qing dynasty could break auction records.

An issue with your tissue? ‘Forever chemicals’ are in toilet paper, too.

The tickers

These were the top-searched tickers on MarketWatch as of 6 a.m.

Ticker

Security name

TSLA,
+0.89%
Tesla

CS,
+3.51%
Credit Suisse

FRC,
-29.97%
First Republic Bank

BBBY,
+8.25%
Bed Bath & Beyond

CSGN,
+15.73%
Credit Suisse

AMC,
-2.45%
AMC Entertainment

GME,
-1.38%
GameStop

AAPL,
+0.08%
Apple

NIO,
+0.91%
NIO

APE,
-8.10%
AMC Entertainment Holdings preferred shares

Random reads

Cookie Monster NFTs? No thanks, say the furry guy’s fans.

The 8-year old daughter of a Russian President Vladimir Putin ally apparently owns a multimillion-dollar London apartment.

This Spanish ice cream screams childhood days.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton.

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India is becoming a hot market for investors, but it risks falling victim to its own success

India is poised to become the world’s most important country in the medium term. It has the world’s largest population (which is still growing), and with a per capita GDP that is just one-quarter that of China’s, its economy has enormous scope for productivity gains.

Moreover, India’s military and geopolitical importance will only grow. It is a vibrant democracy whose cultural diversity will generate soft power to rival the United States and the United Kingdom.

One must credit Indian Prime Minister Narendra Modi for implementing policies that have modernized India and supported its growth. Specifically, Modi has made massive investments in the single market (including through de-monetization and a major tax reform) and infrastructure (not just roads, electricity, education, and sanitation, but also digital capacity). These investments – together with industrial policies to accelerate manufacturing, a comparative advantage in tech and IT, and a customized digital-based welfare system – have led to robust economic performance following the COVID-19 slump.

These investments — together with industrial policies to accelerate manufacturing, a comparative advantage in tech and IT, and a customized digital-based welfare system — have led to robust economic performance following the COVID-19 slump.

Yet the model that has driven India’s growth now threatens to constrain it. The main risks to India’s development prospects are more micro and structural than macro or cyclical. First, India has moved to an economic model where a few “national champions” — effectively large private oligopolistic conglomerates — control significant parts of the old economy. This resembles Indonesia under Suharto (1967-98), China under Hu Jintao (2002-12), or South Korea in the 1990s under its dominant chaebols.

In some ways, this concentration of economic power has served India well. Owing to superior financial management, the economy has grown fast, despite investment rates (as a share of GDP) that were much lower than China’s. The implication is that India’s investments have been much more efficient; indeed, many of India’s conglomerates boast world-class levels of productivity and competitiveness.

But the dark side of this system is that these conglomerates have been able to capture policymaking to benefit themselves. This has had two broad, harmful effects: it is stifling innovation and effectively killing early-stage startups and domestic entrants in key industries; and it is changing the government’s “Make in India” program into a counterproductive, protectionist scheme.

We may now be seeing these effects reflected in India’s potential growth, which seems to have declined rather than accelerated recently. Just as the Asian Tigers did well in the 1980s and 1990s with a growth model based on gross exports of manufactured goods, India has done the same with exports of tech services. Make in India was intended to strengthen the economy’s tradable side by fostering the production of goods for export, not just for the Indian market.

Instead, India is moving toward more protectionist import-substitution and domestic production subsidization (with nationalistic overtones), both of which insulate domestic industries and conglomerates from global competition. Its tariff policies are preventing it from becoming more competitive in goods exports, and its resistance to joining regional trade agreements is hampering its full integration into global value and supply chains.

India should be focusing on industries where it has a comparative advantage, such as tech and IT, artificial intelligence, business services, and fintech.

Another problem is that Make in India has evolved to support production in labor-intensive industries such as cars, tractors, locomotives, trains, and so forth. While the labor intensity of production is an important factor in any labor-abundant country, India should be focusing on industries where it has a comparative advantage, such as tech and IT, artificial intelligence, business services, and fintech. It needs fewer scooters, and more Internet of Things startups. Like many of the other successful Asian economies, policymakers should nurture these dynamic sectors by establishing special economic zones. Absent such changes, Make in India will continue to produce suboptimal results.

The recent saga surrounding the Adani Group is symptomatic of a trend that will eventually hurt India’s growth.

Finally, the recent saga surrounding the Adani Group
512599,
-4.98%

is symptomatic of a trend that will eventually hurt India’s growth. It is possible that Adani’s rapid growth was enabled by a system in which the government tends to favor certain large conglomerates and the latter benefit from such closeness while supporting policy goals.

Again, Modi’s policies have deservedly made him one of the most popular political leaders at home and in the world today. He and his advisers are not personally corrupt, and their Bharatiya Janata Party will justifiably win re-election in 2024 regardless of this scandal. But the optics of the Adani story are concerning.

There is a perception that the Adani Group may be, in part, helping to support the state political machinery and finance state and local projects that would otherwise go unfunded, given local fiscal and technocratic constraints. In this sense, the system may be akin to “pork barrel” politics in the US, where certain local projects get earmarked in a legal (if not entirely transparent) congressional vote-buying process.

Supposing that this interpretation is even partly correct, Indian authorities might reply that the system is “necessary” to accelerate infrastructure spending and economic development. Even so, this practice would be toxic, and it would represent a wholly different flavor of realpolitik compared to, say, India’s vast purchases of Russian oil since the start of the Ukraine War.

While those shipments still account for less than one-third of India’s total energy purchases, they have come at a significant discount. Given per capita GDP of around $2,500, it is understandable that India would avail itself of lower-cost energy. Complaints by Western countries that are 20 times richer are simply not credible.

The scandal surrounding the Adani empire does not seem to extend beyond the conglomerate itself, but the case does have macro implications for India’s institutional robustness and global investors’ perceptions of India. The Asian financial crisis of the 1990s demonstrated that, over time, the partial capture of economic policy by crony capitalist conglomerates will hurt productivity growth by hampering competition, inhibiting Schumpeterian “creative destruction,” and increasing inequality.

It is thus in Modi’s long-term interest to ensure that India does not go down this path. India’s long-term success ultimately depends on whether it can foster and sustain a growth model that is competitive, dynamic, sustainable, inclusive, and fair.

Nouriel Roubini, professor emeritus of economics at New York University’s Stern School of Business, is chief economist at Atlas Capital Team and the author of “Megathreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them” (Little, Brown and Company, 2022).

This commentary was published with permission of Project Syndicate —
India at a Crossroads

More: This perfect storm of megathreats is even more dangerous than the 1970s or the 1930s.

Also read: Freeing the U.S. economy from China will create an American industrial renaissance and millions of good-paying jobs

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U.S. vs. Iran at the World Cup: What time it starts, where to watch


This is the match that will either advance Team USA to the round of 16 in the 2022 World Cup or see America knocked out of the international soccer tournament. 

The United States faces Iran on Tuesday at 2 p.m. Eastern in Doha, Qatar, coming on the heels of the U.S. recording a 1-1 tie against Wales and a scoreless draw against England last week. 

But a tie won’t keep Team USA alive this time; in order to finish in either the first or second spot in Group B and win a place in the knockout bracket, the U.S. must beat Iran

Iran, meanwhile, is coming off of a stunning 2-0 victory over Wales on Friday (after falling to England, 6-2, in its World Cup opener earlier in the week.) The Iranian team could stay in the tournament through a few scenarios: beating Team USA; or tying with Team USA if Wales draws or loses against England. (As for England and Wales, they will be playing at the same time that the U.S. and Iran play). 

But Iran will also be eliminated from the tournament if they lose on Tuesday. So the stakes are high for both teams to score a victory.  

What’s more, tensions flared up between the two teams this week after U.S. Soccer’s official social-media accounts temporarily posted a version of Iran’s national flag without the emblem of the Islamic Republic, which was done in a show of solidarity with protesters in Iran — namely those supporting women’s rights. “We wanted to show our support for the women in Iran with our graphic for 24 hours,” the U.S. Soccer Federation said in a statement. In response, Iran’s government accused America of removing the name of God from its flag, and reportedly called for America to be disqualified from the World Cup over the incident.

Read more: Tehran said to have pushed for U.S. team’s ouster from Qatar World Cup over Iranian flag flap

And: Why is the Qatar World Cup so controversial? Here’s a list of issues overshadowing FIFA’s quadrennial showpiece.

Here’s what else to know about the match: 


MarketWatch illustration of how Team USA and Iran match up heading into their World Cup match.

The U.S. vs. Iran match begins at 2 p.m. Eastern, and can be watched or streamed on Fox in English (via your local Fox channel, fuboTV, FoxSports.com, the Fox Sports app) and Telemundo in Spanish (via fuboTV, Telemundo Deportes En Vivo and Peacock.) 

World Cup 2022: How to watch, who’s favored to win and everything else you need to know 

America has never beat Iran in a men’s soccer match, losing to Iran in 1998 and tying in 2000 — the only two previous times that the teams have squared off. 

More World Cup at MarketWatch:

Qatar World Cup backlash is an important moment for soccer, says ESPN’s Shaka Hislop

‘It’s gonna be big’: Budweiser to host ‘victory celebration’ in World Cup winning nation with surplus Qatar beer

World Cup singer Maluma walks out of live interview over Qatar human rights question



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Panic is not an investment strategy. How financial advisers can help you think through the unthinkable.


Financial planners spend much of their time preparing clients for an uncertain future. They cite worst-case scenarios and pepper clients with anxiety-inducing hypothetical questions. (For instance: What if you die tomorrow? What if your portfolio sinks 50%? What if someone in your family has a serious health crisis?)

So how do advisers help clients prepare for the worst and be optimistic? It’s helpful to transform anxiety into action, which gives clients a sense of control over what’s to come. Devising an action plan makes people feel as if they’re ready for anything, even calamities.

“I want to take away the fear,” says Scott Bishop, a Houston-based certified financial planner. “If people are worried, they don’t listen. It’s like when a doctor says, ‘You have cancer.’ You don’t hear anything else.”

Bishop has found an effective way to reduce client anxiety: He creates what he calls “survival guides” to help people brace for threats to their financial security. Through podcasts and articles, Bishop educates clients on how to be proactive in the face of recession or layoffs and other challenges. He urges them to research their options, ask smart questions and take practical steps to anticipate and address potential financial risks. “Don’t just worry about it,” he said. “Do something.”

Bishop calls his kits survival guides because he wants clients to confront their fears head-on and withstand whatever comes. “It is scary, so let’s put a plan in place to survive,” Bishop says. “Otherwise, people can be really complacent in their expectations,” get overly comfortable and cling to a status quo that can vanish in a flash.

To prepare for a layoff, for instance, he suggests developing a plan for managing cash if paychecks stop coming. At least six months of emergency funds is ideal.

People also need to imagine what their financial life would look like after a layoff. What ongoing expenses would they incur? What expenses could they cut (and perhaps cut them now to save money)? What are their loan options, such as a home equity line of credit?

“The last thing you’d want to do after getting laid off is buy a new car or have another big expense,” Bishop said. “So you’ll want to plan now to control your spending to make sure you can maintain your current lifestyle” if you’re temporarily jobless.

Bishop’s layoff survival guide also explores health insurance options and the cost of a monthly COBRA premium if they want to keep their employer-sponsored health coverage. He also suggests contacting the company’s human-resources representative about other post-layoff benefits. Questions might include:

  • Can I cash out my unused or unpaid vacation time?

  • What kind of severance package might I expect?

  • Can I borrow from my 401(k)?

  • Can I cash out my stock options?

Knowing these answers in advance may take some of the sting out of a layoff. This also allows for a clear understanding of what’s next, rather than panic.

“You can’t make good decisions in an emotional state,” Bishop said. “I don’t want you to worry about the next shoe dropping. It’s like fight-or-flight [response]: Can you make it better by running away from problems? Or is it better to confront them and prepare to solve them before they happen?”

More: I pay my adviser 1%, but feel like we have ‘poor communication’ and some ‘issues.’ Is this too much to pay and what’s the move here?

Plus: Investors are running towards the safety of cash — but here are 3 ways they could screw that all up, pros say



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