• A universal basic income has wide support in South Africa.
• And South Africa's government just pledged to make universal basic income a reality.
• South Africa is ranked one of the worst countries for income inequality.

South Africa suffers from severe income inequality — one of the worst anywhere in the world. Its unemployment rate, meanwhile, is over 30%.

But its government thinks it has a solution: a universal basic income.

The idea has broad political support and the country's largest political party, the African National Congress, said recently it is committed to implementing a universal basic income within two years.

Once the figment of ideological dreamers, a universal basic income — regular direct cash payments to a population with no strings attached — has grown in legitimacy, especially after the success of COVID-era stimulus checks. Tech visionaries racing to develop ever-more advanced artificial intelligence have also suggested implementing a universal basic income. They say it would help mitigate the job losses from AI.

Several other countries have experimented with versions of a universal basic income. Kenya, for instance, offers unconditional payments to about 20,000 people in 200 different towns.

In the United States, numerous cities and some states are experimenting on a small scale with guaranteed basic incomes, which offer no-strings-attached payments but only to select groups of people in need. While studies have shown these American programs to be successful, they have also run up against significant political opposition.

But in South Africa, most political parties are all for it. They just need to work out the details.

"The ANC is committed to finalizing a comprehensive policy on the basic income support grant within two years of the new ANC administration, ensuring broad consultation and expedited action," South Africa's ruling party said in a statement.

That statement came a week before hotly contested general elections on May 29, which saw the ANC lose its majority in parliament. The ANC is now working to form a unity government and a commitment to implementing a universal basic income will almost certainly come up in negotiations.

According to the party, a study at the University of Johannesburg showed that a majority of South African citizens "fully support the introduction of a basic income support grant."

While South Africa provides payments to certain groups living below the poverty line through its Social Relief Distress grant program, the ANC plan would open eligibility to all South African adults, the Guardian reported.

The ANC said it is "exploring" options, like new tax measures and a new social-security tax, to fund the program. The party also says its goal for the program is not to replace existing social-security programs, but to complement them.

If it follows through, the ANC plan would make South Africa the first country to provide a universal basic income.

• New York Attorney General Leticia James has filed a lawsuit against crypto platform NovaTechFx.
• The lawsuit claims the company defrauded thousands, targeting immigrant and religious communities.
• Founder and "Reverend CEO" Cynthia Petion called her investors a "cult," the lawsuit says.

It was once one of the fastest-growing financial platforms on the market. Now, the New York attorney general says NovaTechFx is just a front for a $1 billion pyramid scheme.

New York Attorney General Leticia James filed a lawsuit against the company and its founders, Cynthia and Eddy Petion, in New York Supreme Court this week.

The lawsuit accuses the Petions of defrauding thousands of investors all over the world, bringing in "over a billion dollars by promoting two consecutive fraudulent investment schemes." The lawsuit also names as a defendant AWS Mining Pty, a crypto mining platform previously run by the Petions.

In 2022, NovaTechFx was one of the fastest-growing online financial services in terms of internet traffic. The company's website attracted 12.4 million visitors that year — a 518% increase from the previous year.

NovaTechFx falsely advertised itself as a "registered hedge fund broker" and claimed incorrectly that it had licenses to trade cryptocurrency worldwide, according to the complaint.

The lawsuit accuses the couple of targeting Haitian immigrants in New York City to recruit them into the pyramid scheme using local prayer circles.

After founding NovaTechFx in 2019, Cynthia Petion rebranded herself as the "Reverend CEO," claiming that her company was "God's vision," the lawsuit says.

However, in private messages, she described herself as a "zookeeper" and her investors as a "cult," according to the complaint.

"People join and follow mindlessly… they don't think," Petition says in messages, according to the lawsuit. "They just agree with everything you say."

According to the complaint, NovaTechFx workers created flyers advertising prayer groups hosted by the company with slogans like, "A team that prays together stays together & grows together."

The Petions also operated the NovaTechFx website, which the lawsuit says is where investors would go to invest in cryptocurrency through the company, according to court documents.

After receiving the payments — which the investors intended to use for trading — NovaTechFx would transfer the funds "to a payment processor that did not trade cryptocurrency for NovaTech but merely stored it in NovaTech's wallets," court documents say.

The AG's office says that of the over $1 billion deposited through the website from 2019 to 2023, NovaTechFx only actually traded about $26 million.

"Thousands of New Yorkers were falsely promised better lives if they simply trusted NovaTech and AWS Mining with their money, but it was all a lie," James said in a statement. "These cryptocurrency companies targeted immigrant and religious communities with promises of financial freedom but instead stole their money and drained their life savings.

Renold Julien, executive director of Konbit Neg Lakay, a local Haitian nonprofit, said in the statement that most Haitian immigrants come to the United States to flee violence and don't deserve to be taken advantage of.

"I thank Attorney General James for taking this action to protect all New Yorkers. Konbit Neg Lakay is looking for full restitution," he said.

Since the lawsuit's filing, the NovaTechFx website has displayed a message from Cynthia Petion saying the company experienced a "data breach" and temporarily took down its site.

"We are delighted to inform you about successfully recovered 86% of all official data from the trading platform," the message says. "In order to enable withdrawals, all accounts have been integrated into a new domain. To regain full access, please log in using your exact details on the website."

NovaTechFx did not immediately return a request for comment from Business Insider.

• A prosecutor in Donald Trump's criminal case said Melania was pregnant during his affair with Karen McDougal.
• The affair actually began after Melania gave birth to Barron, two sources told Business Insider.
• The timeline discrepancy was left a lingering mystery after the trial ended last month.

Donald Trump's criminal hush-money trial has given the public more details than anyone wanted about the former president's sex life. But, after weeks of testimony, one mystery lingered.

According to one of the prosecutors in the case, Trump had an affair with Karen McDougal, a former Playboy model, while his wife, Melania Trump, was pregnant.

The claim that McDougal and Trump had an affair was not new. The idea that the affair took place while Melania Trump was expecting a child, however, had never been previously reported. The prosecutor, Assistant District Attorney Joshua Steinglass, disclosed it at a hearing just before jury selection began, on the morning of April 15.

And it was that detail that would bolster the prosecution's argument that Trump silenced women to benefit his 2016 presidential campaign, he said.

"The fact that this relationship occurred during the defendant's wife's pregnancy, and after the birth of their child, speaks directly to the extent to which the defendant believed the story would be damaging to his campaign," Steinglass told the judge.

According to two sources with knowledge of McDougal's relationship with Trump, the prosecutor got the detail wrong.

"We were just as surprised as you when Josh Steinglass stated that Melania was pregnant at the time," Carol Heller, a representative for McDougal, told Business Insider.

A second source with knowledge of the trysts between Trump and McDougal, and who testified in the trial, confirmed the relationship began "soon after the birth."

Steinglass dropped the apparent bombshell on the very first day journalists flooded the chilly Manhattan courtroom for the trial, before a single juror had been selected.

He asked the judge, New York Supreme Court Justice Juan Merchan, to allow McDougal to testify about it.

"Karen McDougal is a former Playboy model who claimed to have had a romantic and sexual relationship with Mr. Trump that lasted nearly a year, including while Mr. Trump's wife, Melania, was pregnant with their child," Assistant District Attorney Steinglass told the judge.

But something didn't add up.

In previous media interviews, McDougal said the affair spanned 10 months, beginning around Trump's birthday in June 2006 and lasting until April 2007.

Barron Trump, the sole child of Donald and Melania Trump, was born in March 2006 — before McDougal says the affair took place.

According to Heller, Merchan relied on Steinglass's error when he ruled prosecutors should not question McDougal about the subject on the witness stand.

Steinglass had told the judge he would not elicit "the salacious details of the affair, to describe the sexual acts or locales of their liaisons" from McDougal — unless Trump's lawyers would "open the door" to it. But the judge, in his ruling, said it would be "prejudicial" to bring up "the defendant's wife was pregnant with a child at the time, and that this went on while she was pregnant and even after she gave birth."

"Steinglass misspoke about Melania being pregnant during the affair, and Merchan relied on the incorrect impression he gave when he talked about Melania being pregnant," Heller told BI.

"As everyone has previously reported, including Karen herself: Karen met Mr. Trump at the Playboy Mansion when they were filming an episode of The Apprentice," Heller said. "This was June of 2006. Barron was already three months old."

Prosecutors ultimately never called McDougal to testify, so the timeline discrepancy wasn't raised again and didn't become the subject of further scrutiny in the trial. Jurors never heard any evidence about it either way.

The detail ultimately proved inconsequential to winning the case.

The Manhattan District Attorney's Office charged Trump with 34 counts of falsifying business records to cover up a hush-money payment to Stormy Daniels — a different woman who says she had an affair with him — to unlawfully keep the information secret ahead of the 2016 presidential election.

Steinglass marshaled an almost-dizzying matrix of dates and other details in a marathon five-hour closing argument.

The jury convicted Trump of all 34 counts.

McDougal's story helped explain 'catch and kill'

In the past, Trump has boasted about his infidelity in general terms, but has seldom publicly talked about McDougal in particular.

In the April court hearing, Trump's lead defense attorney, Todd Blanche, called McDougal's story "unproven" but did not discuss the details of her claims.

Neither Blanche nor representatives for Melania Trump responded to requests for comment for this story.

"Until Mr. Trump himself confirms their affair, or until any witness in whom he has previously confided comes forward to verify his admission, I suppose Mr. Blanche can legally describe their affair as 'unproven,'" Heller told BI. "Karen will always hold it as the truth, because it is."

Daniels received $130,000 in hush money in October 2016. The alleged affair with McDougal was the subject of an earlier hush-money arrangement, in June of that year.

McDougal's $150,000 in hush money wasn't the subject of any criminal charges, but it helped prosecutors explain the "catch and kill" arrangements between Trump, the publisher of the National Enquirer tabloid, and people who claimed to have unsavory information about him.

In media interviews, McDougal has said she met Trump when NBC filmed an episode of "The Apprentice" at the Playboy Mansion in June 2006. (They also both participated in a softcore Playboy movie released in 2000.) The two had dinner a week later in Los Angeles, around Trump's 60th birthday, McDougal has said.

Before the two had sex after the dinner, McDougal asked Trump about naming his then-3-month-old son Barron, according to "The Fixers," a book by journalists Joe Palazzolo and Michael Rothfeld, who broke the stories about the "catch and kill" arrangements involving Trump, McDougal, and Daniels.

The idea that Trump had an affair while Melania Trump was pregnant may have originated from a text message from Gina Rodriquez, a talent agent who previously represented Daniels.

In an October 2016 text message to Dylan Howard, who then served as the editor-in-chief of the National Enquirer, Rodriguez said Daniels would "take a lie detector and go on the record" about the affair taking place while Melania was pregnant.

"Donald Trump had sex with Stormy Daniels while his current wife was pregnant," Rodriguez wrote in the text message. "He flew Stormy to his Pageant and told her he would get her on Celebrity Apprentice which he never did."

But that doesn't appear to be true, either.

According to trial testimony from Stormy Daniels, she met Trump at a Lake Tahoe celebrity golf tournament in July of 2006 — months after Barron Trump was born.

Rodriguez didn't respond to a request for comment.

Trump also met and slept with McDougal again during the event, according to "The Fixers." And the timeline for both affairs overlapped. According to Daniels' testimony, McDougal even also showed up at subsequent events Trump invited her to.

McDougal's claims first came to the attention of Michael Cohen — who then served as Trump's personal lawyer and fixer — in 2015. When Cohen raised her story of an affair with Trump, he didn't deny it, Cohen testified in the trial.

"She's really beautiful," Trump remarked, according to Cohen's testimony.

In a May 17 statement, McDougal said details of her experience remained "to be disclosed on my own terms, at a time of my own choosing." She was responding to CNN re-running a 2018 interview she gave to Anderson Cooper, where she first publicly laid out the timeline of the affair.

"What has not changed is the truth that I have always told," McDougal said.

In the interview with Cooper, McDougal expressed guilt about her relationship with Trump, since he was married.

"Back in that day, I was a different girl, I had fun," she said. "I was in the Playboy scene. I was just enjoying life as much as I could."

But there was a spark, she said.

"There was a real relationship there. There was real — there were feelings between the two of us," she said. "Not just myself, not just him. There was a real relationship there."

• Jeff Bezos owns three private jets worth $140 million in total, per JetSpy data.
• That includes a Pilatus PC-24, which the Swiss company calls "the world's only super versatile jet."
• It can seat up to 10 people and uniquely has a toilet in the galley to save space.

Just like Elon Musk and Bill Gates, Jeff Bezos' private jet of choice is a Gulfstream G650ER. In fact, he owns two of them.

But the Amazon founder also has a smaller business jet known for its versatility, according to data from JetSpy.

Swiss planemaker Pilatus bills its PC-24 as "the world's only super versatile jet" because it's capable of landing on short and unpaved runways.

Business Insider saw inside a PC-24 on display in Geneva at EBACE, Europe's largest business aviation conference. The model we visited is slightly newer than Bezos', built in 2023, compared to the Amazon founder's 2020 jet.

Jeff Bezos owns three private jets worth around $140 million, according to data from JetSpy.

Jeff Bezos' 3 private jets are worth $140 million and include 2 Gulfstream G650ERs alongside a hangar in Seattle

The majority of that figure is owed to two Gulfstream G650ERs. But the Amazon founder also owns a smaller jet made by a Swiss company: the PC-24 from Pilatus.

I toured a $65 million Gulfstream G650ER private jet like the ones owned by billionaires like Elon Musk and Jeff Bezos and saw how the ultra-rich travel

A PC-24, worth around $10 million, was on display in May at EBACE, a business aviation conference in Geneva.

This jet is the first of the updated model that Pilatus announced last October. On the tail, its livery features the Alps' famous Matterhorn.

It has a maximum cruise speed of 506 miles-per-hour, but Pilatus bills it as "the world's only super versatile jet" because it can land on shorter and non-paved runways.

Compared to one of Gulfstream's large business jet, it looks tiny — but the two are designed for completely different journeys.

In the background of this image is a Gulfstream G700 which is only slightly bigger than the G650ER. It's almost twice as long as the PC-24 and is capable of flying for more than 10 hours straight.

With a range of around 2,200 miles, the PC-24 would need a fuel stop to travel between Bezos' Miami home and Amazon's Seattle HQ.

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Boarding the plane, most people have to duck to fit into the cabin that's 5 feet and 1 inch high.

The first thing you see is the compact galley …

… which has a sink and a cupboard for champagne glasses …

… and space for a coffee machine or another appliance.

The only sign of the most unique feature is this toilet button.

Below the sink, you can pull a handle to reveal the toilet: a unique layout that saves space.

Just a curtain separates it from the cockpit, where only one pilot is needed to operate the jet. At least there's a door to the cabin on the other side for privacy.

Bathrooms are usually at the aft of a jet, but on the PC-24 you'll find a curtain …

… which allows for convenient inflight access to the hold, which has a cargo capacity of 3,100 lbs.

This cabin has seats for eight passengers, but the PC-24 can alternatively be configured for up to 10 people.

The seats can swivel round 180 degrees …

… and also lie flat — an uncommon feature on jets designed for shorter distances.

7 airlines around the world offer lie-flat beds in economy — see what makes this seating arrangement so rare

Along the ceiling are the lights and air vents, with neat little seatbelt signs.

This PC-24 also had a divan that can be made up into a bed.

Bezos' PC-24 was built in 2020 — before Pilatus added the divan as an option.

Its armrests also come with holders for two drinks.

Behind the rear seat there's more storage space.

And underneath the windows are pop-out tables for each seat.

For a man with as much money as Bezos — the world's second richest person — it's interesting that he would own this small jet as well as his large ones.

So it's likely that he was keen on the PC-24's main selling points: the only business jet capable of landing on unpaved runways as short as 3,090 feet while loaded to its maximum capacity, plus its unique space-saving designs.

• India and China's rivalry will likely intensify in the Indian prime minister's third term in office.
• Both countries have self-reliance as a policy priority — which means they will both go big into manufacturing.
• India aims to boost manufacturing, competing with China for economic leadership.

Indian Prime Minister Narendra Modi this week secured a historic third term in office — and it's likely to intensify India's economic rivalry with China.

As David Lubin, a senior research fellow at London-based think tank Chatham House, wrote on Thursday, the rivalry is likely to heat up because Modi and Chinese leader Xi Jinping have the same obsession for their country: self-reliance.

Modi has a vision for Viksit Bharat, or "Developed India," that sets a pathway for the South Asian giant to become a developed economy by 2047.

Meanwhile, Xi's vision for China is global dominance by 2049.

"Competition for economic leadership in Asia is in the air," wrote Lubin.

Both India and China will be focused on manufacturing

To reach its goal, Modi's India will likely be going big on manufacturing.

"The pursuit of national greatness is, essentially, a relative game, and for India, the comparison that matters is with China," wrote Lubin.

Since self-reliance is a policy priority for both India and China, "an obsession with manufacturing is likely to accompany it," Lubin wrote.

India's GDP of $3.9 trillion is far behind China's $18.5 trillion GDP. And China has served as the world's factory floor for the last four decades — but the tides are changing.

Companies are diversifying their operations outside China to avoid over-relying on one country, and India is aiming to be the new China.

Given that India is now the world's most populous nation — with 65% of its population under the age of 35 — there are huge opportunities for the South Asian nation.

However, with Modi's party losing its parliamentary majority, this means it will be much harder for his adminstration to push through much-needed land and labor reforms to supercharge growth.

In addition, as Raghuram Rajan, a former head of the Central Bank of India, told NPR's "Planet Money", India is wading into a crowded space with other emerging nations such as Vietnam, Bangladesh, and Malaysia with their skin in the game.

Rajan said India would do better to focus on the service industry, since the country already has a large English-speaking population.

But Delhi is throwing big money to catch up with China, including over $20 billion worth of incentives and subsidies to encourage output in 14 key sectors including electronics, automobiles, and EV batteries.

It's also provided another $10 billion for the semiconductor chip industry — a hot strategic sector that Taiwan has an outsized presence in.

India has been trying to woo Taiwan's chip plants to invest in the country and has had some success.

India's rocky relationship with China

Given India's ongoing rivalry with China and the Modi government's eagerness to attract Taiwan investments, the Delhi-Beijing relationship is also off to a rocky start as the Indian leader kicks off his new term.

On Tuesday, Modi angered China — which claims Taiwan as its own territory — when he accepted Taiwanese President William Lai's congratulations following India's elections.

"China opposes all forms of official interactions between the Taiwan authorities and countries having diplomatic relations with China," Mao Ning, the spokesperson for China's foreign ministry, said at a scheduled press conference on Thursday.

India's foreign policy toward China is unlikely to change following Modi's re-election, Ivan Lidarev, an Asian security scholar at King's College London, told Channel NewsAsia.

"India has pursued a very active foreign policy of kind of getting closer with the West and counterbalancing China for many years," he told the network. "There is a very strong consensus within India about this."

China, meanwhile, will try to limit India's influence on the global stage, he said.

"I think India has strived to position itself as a leader of the global south, and of course, China wants this position," added Lidarev. "So we think that this competition is going to increase and I think that Beijing will do a lot to limit any Indian attempts to be seen as the natural leader of the world."

We are once again at a crucial point in the world's economic recovery. Everything must go right, or global markets could turn violent.

For the past four years, the world has been unified in its efforts to first ease the economic pain caused by the pandemic and then combat the historic bout of inflation that followed. When the pandemic set in, central banks around the world slashed rates to zero — just as they did during the financial crisis. Then as inflation set in, they started raising rates at a rapid clip unseen in decades. They did all this in nearly perfect time, which ensured that markets remained stable and predictable. But now, the world risks falling out of sync.

The European Central Bank began easing interest rates on Thursday, cutting its benchmark rate by 0.25%. The move is not only a sign of confidence that the eurozone is in the last bouts of its battle with inflation but also an indication of worry that the economy needs a small boost to keep rolling. Investors and economists expect the Federal Reserve to follow suit and cut interest rates in September. And so, the story goes, central banks around the world will begin their coordinated descent into a soft landing — a perfect calibration of that push-pull between fighting inflation and evading a recession.

The thing is, reality has been making a mockery of experts' assumptions all year long. Wall Street started the year expecting inflation to cool off, the economy to slow to a more leisurely pace of growth, and as many as six interest rate cuts from the Fed. Instead, inflation data has consistently come in hot, and the US economy's strength has defied expectations. This combination means there's a good chance that the September cut Wall Street is praying for may never materialize.

"Summer will definitely be interesting," Tamara Basic Vasiljev, a senior economist at Oxford Economics, told me. Her base case is that everything will go according to plan, but there are caveats: "The Fed has proven its ability to fight off any kind of financial stability issues. But what if services inflation keeps surprising to the upside through the summer? Then it becomes apparent they can't even cut in September."

If the Fed doesn't cut come fall, America's high interest-rate regime will be out of step with the rest of the world. And any differential between the US and the rest of the world would send a weird wave of money crashing onto America's shores. That sudden surge of cash could, in turn, add liquidity to our financial system just as the Fed is trying to dry it up and push up prices around the economy. This would make it even harder for the Fed to ease, further diverging US policy from the rest of the world. Think of it as a vicious cycle standing in the way of the world's smooth, soft landing.

Over time, this has the potential to add volatility to already skittish markets. Here in the US, stocks move on mood — one week, Wall Street thinks we're in for stagflation; the next, it believes a soft landing is coming. This divergence in interest policy, over time, has the potential to bring that same frantic energy to currency markets.

The carry nation

Wind is the result of an imbalance: air moving from areas of high pressure to areas of low pressure. The greater the pressure differences, the faster the wind blows. The same principle applies to the global flow of cash — investors chase imbalances, and sometimes things get blown over in the process.

The US already has somewhat higher interest rates than other countries — the Fed's benchmark rate is 5.25%- 5.50%. These differentials have allowed Wall Street to make what is called a "carry trade": Investors borrow money from a country with low interest rates, invest it in bonds from a country where interest rates are high, and pocket the difference. In this case, that means moving money from the rest of the world and buying US assets, particularly government bonds.

What seems like a slam dunk for Wall Street is not such good news for either the US or the global economy.

This trade has been hot since the start of the year — investment banks like JPMorgan and UBS recommended it to clients, and a Bloomberg index based on selling the lowest-yielding G10 currencies and buying the highest ones has already returned 7% this year. The Institute of International Finance reported that in May alone, Emerging Markets ex-China — where rates are also higher — saw bond-market inflows of $10.2 billion, mostly due to investors benefiting from carry trades like selling Japanese yen to buy Mexican pesos. These trades are "everywhere," Peter Schaffrik, a global macro strategist at RBC Capital Markets, told Bloomberg. And the more rates diverge, the more attractive this march of money from weak to strong becomes.

What seems like a slam dunk for Wall Street is not such good news for either the US or the global economy. At a time when economies in Europe and elsewhere are losing momentum, sucking more money away from these economies will tighten financial conditions while they're trying to avoid a slowdown — especially in crucial regional data like German industrial production, which has come in soft of late. It will also weaken the euro, which will make it harder for the continent to import the energy it needs to fuel its economy and make it more expensive to buy American goods. And in Asian economies, where interest rates are already significantly lower than in the US, things could get even messier.

"We expect that Japan and South Korea will face challenges balancing monetary policy to maintain stability as the dollar appreciates," Nigel Green, the CEO of deVere Group, a global wealth-management firm, told me. "I wouldn't be surprised if policymakers feel the need to intervene in the currency markets or adjust interest rates to manage these effects."

For the US, more money sloshing onto America's shores has the opposite impact of what the Fed wants to achieve: It pushes up asset prices and loosens financial conditions. In other words, it makes it harder for the Fed to fight the inflation that is aggravating consumers.

"There are legitimate concerns that this influx of capital into the US will increase liquidity, driving up asset prices and inflationary pressure, making it more challenging for the Fed to lower rates," Green said. "Increased liquidity can lead to inflationary pressures, which the Fed might need to counteract by maintaining or even raising rates."

As Green mentioned, there's a way for the Fed to fight back: hiking interest rates some more. But jacking up interest rates even further could finally break the back of the until now strong US consumer and send us into a recession. It's the same calculation the ECB is making, though the EU's slowdown is more marked. Given these downsides, the Fed is unlikely to hike, which will create the perfect market for the carry trade to thrive. And as long as US data remains choppy — pointing to sticky inflation one day and disinflation the next — this carry-trade cash will end up sloshing around in the economy. This is a dynamic that central banks from countries already on their rate-cutting path will be watching. They're already seeing growth slow and, on top of that, will have money sucked away to the US, where data has been relatively strong through the first half of the year. Carry-trade cash exploits the dislocations between global economies that are keeping our policies from coordinating. We're in the early innings, but the longer this goes on, the more of an impact it will make. For Wall Street, that means a summer of vigilance. For economists, it means the picture of our economy that they're trying to cobble together with contradictory data is even blurrier. It's a time of increased uncertainty.

Sticky-ing the landing

There is, of course, hope that this divergence will be only a temporary state of affairs. If the US suddenly starts printing weak economic data, that will hasten the Fed's move to cut rates. And there are signs that EU inflation is stickier than policymakers would like, which could slow the pace of cuts enough for America to catch up.

There are already signs of a slight tempering of America's red-hot economy: The household savings rate is at a 16-month low, disposable incomes have made only modest gains, and the amount that people have to pay on credit balances is elevated. The white-hot job market has cooled, and job openings have returned to prepandemic levels. But not every indicator is telling the story of a soft landing. On Friday, May's jobs report showed that the country created 272,000 jobs — way more than the 182,000 expected. The data seesaw stateside continues.

There are limits to how far we can diverge from the United States.

On the other side of the Atlantic, there are signs that UK and EU inflation could be stickier than policymakers had foreseen. EU inflation ticked up slightly to 2.6% in May, surprising the ECB but not shocking it enough to stop a June rate cut. In the UK, stubborn services inflation, which came in at 5.9% for the month of April, may give the Bank of England reason to pause. Oxford Economics' Basic Vasiljev told me that this indicated that the EU and US were moving more in tandem than this policy lag suggests and the current policy divergence would remain short. Even the Bank of Canada, which cut its benchmark rate to 4.75% from 5% last week, is cautiously optimistic the dislocation will be momentary. "There are limits to how far we can diverge from the United States, but we're not close to those limits," Gov. Tiff Macklem said at the Bank of Canada's latest meeting. Not close… yet.

This rosy outlook is not a guarantee: Wall Street still expects three cuts this year from the ECB and the Bank of England. Even in little clips of 0.25%, three cuts would create a divergence traders would exploit. And if September comes and the US is still hot, that exploitation could continue all year long, exacerbating the conditions that are keeping monetary policy out of sync. That sucking sound you'll hear all summer is the sound of Wall Street slurping money from Europe, Canada, the UK, and East Asia into US markets. Policymakers will have to recalibrate. This doesn't mean we won't stick a soft landing — especially if this disordered moment is brief — it just increases the odds of a bumpy ride until we get there.

Linette Lopez is a senior correspondent at Business Insider.

• John and Susan Pazera moved to Colombia six years ago.
• They knew they wanted to retire early, and they saw leaving the US as the only way to do so.
• Their expenses in Colombia are low, and the affordable healthcare makes a big difference.

John and Susan Pazera knew their retirement years would look a lot different if they chose to stay in California.

As sailors, John and Susan — 68 and 64, respectively — were no strangers to travel. In 2001, the couple took a three-year sabbatical and sailed down the West Coast to Central America, where they stopped in Panama. It was a moment of inspiration.

"It started getting us to think that maybe we could retire at a younger age if we moved outside the country," John told Business Insider.

They're not the only retirees to make the leap. BI has previously spoken to a range of Americans who chose to move abroad to seek better and more affordable conditions in retirement. For many older Americans, it can solidify their financial security later in life, especially because just over half of people over 65 said they made $30,000 or less in 2022 while in the US, per the Census Bureau's Current Population Survey.

Moving to a new country can certainly present challenges, including the political atmosphere and potential language barriers. John and Susan recommended that anyone seeking to move abroad visit the place they might want to live a few times, especially when it's not tourist season and the weather is not as nice. They also suggested waiting a couple of years before purchasing any property.

"You have to adapt to that country's culture and lifestyle. You can't bring your US mentality to another country and expect everything to be the same," John said. "You have to wipe clean everything that you expect from the US that you think you're going to get from another country."

How they made the move and what life costs in Colombia

When John and Susan started planning, they first focused on boosting their savings. Then, in 2015, they sold their house and cars packed everything away in seven duffel bags and moved to Panama with their two dogs.

They ultimately decided that Panama wasn't the right fit. Having already visited some cities in Colombia, they were familiar with the lifestyle there and felt confident making it their new home.

They said that had they not moved abroad, early retirement would not have been a possibility. Instead, they both retired at 59 — Susan worked remotely for a few years. That's compared to the average retirement age of 63 for women and 65 for men in the US. Plus, they believe their quality of life after retirement is better.

"Everything was just so expensive," John said. "And we were able to afford it, but it's like, do we want to have this lifestyle until we retire? We got to figure out an exit strategy to get out quicker."

They recently purchased property outside of Medellín, Colombia, so they no longer have rent payments, but they estimate they'll owe around $137 a month in apartment insurance and property taxes. When it comes to their basic monthly expenses, they spend about $45 a month on utilities, $40 a month on cell phones, and $36 a month on internet. Healthcare costs vary each month, but they said it's typically around $300.

The couple said that moving also gave them the peace of mind of knowing that as they age, they'll have a healthcare system they can rely on for any physical ailments they might face.

"If we stay in the US, one of us gets really, really sick with some strange disease, and the insurance company says, 'Well, we don't cover that.' And then it's all out of your pocket," John said. "So all the money you saved your whole life, you have to dip into your savings for something that's not covered by the health insurance companies. But here, we know we can get sick with anything in the world, and we're going to be taken care of."

It's not free healthcare, Susan emphasized, but "it's really eye-opening" to see the quality of care she can get in Colombia for a significantly lower price than she could in the US.

Lower healthcare costs are often a key reason people might choose to leave the US. Another expat, Debra Crockett, previously told BI that she moved to Turkey after battling high health expenses in the US and found the situation to be much more affordable abroad.

John and Susan are grateful that finances are not a concern for them as they continue to live abroad in retirement. But it's more than that — they said their neighborhood is very walkable, they're able to do a range of outdoor activities like hiking and biking, and their neighborhood frequently has cultural events and activities they can participate in.

They achieved their goal of early retirement, and now they can enjoy the benefits.

"It's not easy all the time, but it's forced us to get out into the community and learn because it's complete immersion," Susan said. "And it really feels like the place we are meant to be at this point in time. "

How are you planning for retirement? Share your story with this reporter at asheffey@businessinsider.com.

• The gig economy is expanding beyond delivery and rideshare.
• One example is Shiftsmart, an app that lets workers pick up one-off shifts at a host of employers.
• One Shiftsmart user said it helped him get a full-time job — but he wouldn't go back to it. 

This as-told-to essay is based on a conversation with a worker in South Carolina who worked for Shiftsmart, an app that allows workers to pick up shifts for various employers, including Google, Subway, and USPS.

The worker worked for Circle K and Parker's Kitchen, a South Carolina-based chain of convenience stores and gas stations, by claiming shifts through Shiftsmart.

The worker asked not to be named for fear of retaliation at work. Business Insider has verified the worker's identity and employment. The story has been edited for length and clarity.

I am homeless, and gig work is pretty much the only thing that kept me above water.

I started with Shiftsmart last year. I needed a way to make extra money, and a friend turned me on to it. I signed up.

I would go to Circle K and work as a cleaner and merchandiser. To start a four-hour shift, I would show up, contact the manager, and let them know that I'm here to assist with whatever they need.

They would put you on certain tasks: Mopping up the floor, cleaning the bathrooms, restocking, just different odd jobs they need to take care of.

There were a whole bunch of other jobs that I could've gotten on Shiftsmart, like a mystery shopper, but most of them were 50 miles away — an hour's drive. You could take them, but then you're out the time and gas money.

If shifts sit unclaimed for too long, they'll entice you by raising the pay. The other day, I went in and worked a little over four hours. The estimated pre-tax earnings would've been $57.17 with a $50 bonus because nobody wanted to pick up that shift.

The bonus will start at $10, for example, then they'll raise it up to $20, then they'll raise it up to $30, and so on until somebody takes that shift. You get paid between 24 and 48 hours after the shift, in my experience.

What's funny is that one of the managers for this Circle K location I worked at through Shiftsmart noticed that I was working hard and said, "Hey, are you doing this just for side money, or are you looking for a full-time job? I would love to hire you." So, I decided to take her up on it and start working there full-time.

Shiftsmart itself has technical issues. Once, I was missing just over $1 of my pay. I had to go in through the app and submit a request. They sometimes correct it, but sometimes you won't hear anything from them. I'm not going to keep going after somebody for $1.17, but that adds up over the scale of thousands of people who could be experiencing the same thing that I am.

It also uses a ranking system. They have a "reliability" score, which is how often you actually show up to shifts and how often you cancel shifts with at least 24 hours' notice. They also have an "on-time" score. That goes down if you are late to work, of course, but if you show up 30 minutes or more early and clock in, then your time will also go down.

I realized that, at the pay rate Shiftsmart and Circle K were offering, it was putting me further into a hole financially. I don't know the exact numbers, but Shiftsmart has to be getting paid by Circle K whenever someone takes a shift. As an employee, I can make more money, and I don't have to deal with the same rankings and compete for shifts.

I'm just cutting out the middleman, in other words.

If you're going to get into gig work, by all means, do your hustle and try to survive, but don't get stuck in it. Understand that these types of gig jobs are not for all people. If somebody gets hurt on the job, they're not covered by workers compensation. I'm not sure I'd do it again.

Shiftsmart did not respond to a request for comment from BI.

Are you a gig worker and have a story idea to share? Reach out to this reporter at abitter@businessinsider.com

• A recent Bankrate survey shows that Americans are less likely to tip workers across a variety of services.
• Still, a high share of US adults who go to sit-down restaurants always tip servers.
• The new survey found 35% of US adults said "tipping culture has gotten out of control."

Many Americans are not willing to leave a tip all the time, and they're becoming less likely to do so.

Bankrate recently published survey results about tipping for different types of services. Across all the categories in the survey, a smaller share of respondents said they tipped all the time than in a 2022 survey from Bankrate's sister site CreditCards.com.

The 2024 survey of US adults conducted from April 29 to May 1 found that 67% percent of those who go to sit-down restaurants always give tips to servers. A way smaller share of adults who go to coffee shops are tipping baristas all the time or when they have to pick up their takeout food. Thirty-seven percent of adults said they "feel like businesses should pay their employees better rather than relying so much on tips," per a Bankrate post about the results.

Thirty-five percent of adults said "tipping culture has gotten out of control," per the Bankrate post.

The share of US adults who always tip servers among those who go to sit-down restaurants slipped from the 2022 survey — 73% said this in the 2022 survey. This wasn't the only kind of tipping for which the share of adults using these services who said they always tip slipped, as seen in the table below.

Why people end up giving a tip

Ted Rossman, a senior industry analyst at Bankrate, noted to Business Insider some of the reasons people end up tipping. There's when it's typically expected, or people may tip to try to get better service. Another could be to avoid feeling guilt.

"Sometimes we tip more out of guilt, like they flip the tablet around and you feel bad saying no," he said.

Rossman told BI that Gen Xers and baby boomers were "much more likely to say there's too much tip creep and tipping culture's gotten out of control." Still, the survey found 78% of Gen Xers and 86% of baby boomers who go to sit-down restaurants always give a tip.

And younger Americans are less likely to tip at sit-down restaurants. "The fact that only 35% of Gen Zers who go to sit-down restaurants are always tipping, only 56% of millennials who go to sit-down restaurants always tip there — that's a setting where I feel like you should be tipping every time, ideally 20%," Rossman said.

"We're seeing this backlash, though," Rossman added. "Some of it is high prices, some of it is tip creep, some of it is maybe just people feeling like they don't have a lot of money to go around."

A Pew Research Center survey of US adults conducted in August also highlights when people tip. That survey found 77% said service quality is a major factor in deciding whether they tip, and 18% called this a minor factor. Almost a third of adults said how much the worker or workers earn before tips is a major factor, 23% said social pressure is a major factor, and 23% said how much the tip will end up costing them is a major factor.

"Service quality is by far the most cited factor across all age groups, but younger Americans are more likely than older people to consider certain other factors," Pew Research Center said. "For example, adults under 30 are more likely than those 65 and older to point to workers' pre-tip wages, social pressure and cost as major factors when deciding whether to leave a tip."

When to leave a tip

So should you tip every time you place an order, stop in for a haircut, and get an appliance delivery? Rossman said his advice is for people to make a priority list of who to tip.

"Maybe this is especially useful around the holidays, too," Rossman said. "There's pressure to give a teacher gift and to tip the trash guys and the mailman and your kid's daycare provider and everybody. If you can't tip everybody, maybe at least prioritize who really went above and beyond."

Still, Rossman thinks there are several places or services where people should give a tip: at a hair salon or barbershop, food delivery, taxis and rideshares, and sit-down restaurants.

"If you're a rideshare driver, you're paying out of your pocket for gas and insurance, and if people aren't tipping, that's really taking a chunk out of your wages," Rossman said. Similarly, Rossman said many food delivery workers "are footing the bill for things like gas and car insurance."

Rossman said tipping for coffee shops, food trucks, or takeout restaurants are more optional.

"To me, there's a big distinction between where tipping is more expected and where it could be optional," Rossman said. "But I do think the lines are blurring, and I think that businesses are looking to customers to make up some of the difference — that maybe they're reluctant to raise prices any higher; they're looking to supplement their employees' wages."

Are you sick of tipping culture? Are you a server, driver, hairstylist, or other worker who has seen fewer tips lately? Reach out to this reporter to share at mhoff@businessinsider.com.

• The longest traffic-restricted "open street" in New York City is in Jackson Heights, Queens. 
• The working-class, predominantly immigrant neighborhood was an epicenter of COVID-19 in 2020.
• With open streets closing and shrinking across the city, 34th Avenue offers a model of community engagement.

On a recent sunny Friday afternoon in Jackson Heights, Queens, dozens of migrants filled out applications for asylum at folding tables set up in the street outside a local elementary school. Former Manhattan prosecutor Nuala O'Doherty-Naranjo, who operates the free legal clinic three days a week, sat nearby answering questions.

In good weather, she and her team — all volunteers — hold the clinic in the street, which was recently transformed into a car-free public plaza. Steps away, kids played soccer, a little girl tested out the training wheels on her bicycle, and a neighbor led a free crocheting class.

Just a few years ago, that same road — 34th Avenue — was a traffic-clogged artery. But a years-long, grass-roots effort has turned a 1.3-mile-long, 26-block stretch of the avenue — which the city council renamed Paseo Park — into the crown jewel of New York City's embattled Open Streets Initiative.

As New York Gov. Kathy Hochul reverses the city's attempt to reduce congestion in Manhattan, Jackson Heights has managed to cement its open street into a feature the community isn't willing to give up.

Turning a dangerous street into a center of community

O'Doherty-Naranjo remembers that the principal of a public middle school on 34th Avenue — one of nine schools with thousands of students within about 35 blocks — had to direct traffic as kids filtered across the street at dismissal, fighting for space with drivers.

"Drivers would literally just scream and honk at the principal as a thousand kids are crossing the district," said O'Doherty-Naranjo, who was the president of the school's parent-teacher association.

Then, one afternoon in March 2019, a 12-year-old boy was hit and seriously injured by a driver in a Jeep outside another of 34th Avenue's middle schools. That tragedy spurred meetings between the schools, the police department, DOT, and safe street advocates to speed the process of restricting vehicle traffic during certain hours.

Not long after, the pandemic hit. Suddenly, schools were closed and traffic slowed to a trickle. Central Queens' working-class immigrant neighborhoods had become the "epicenter of the epicenter" of the virus. Nearby, Elmhurst Hospital Center became one of the hardest-hit medical centers in the country.

The lockdown also shed a harsh spotlight on the area's lack of green space. Jackson Heights has among the least amount of park space of any New York City neighborhood.

With people cooped up in small apartments, O'Doherty-Naranjo and a group of other neighbors decided to start pushing to restrict traffic along most of 34th Avenue. They got the go-ahead, but they needed manpower to enforce it. About 100 volunteers were soon recruited to help set up and take down metal barricades at each intersection every morning and night to block the street from through traffic.

These days, 34th Avenue is the neighborhood's public backyard. All pass-through vehicle traffic is prohibited between 7 am and 8 pm every day of the year, although cars can still park on all of the blocks that aren't plazas.

The blocks immediately outside each school are permanently vehicle-free, an increasingly popular safety measure around the world. Residents have cleaner air and quieter and safer streets, as well as a community space they desperately need. Traffic accidents on 34th Avenue involving pedestrians are down 61%, according to the City Department of Transportation, and crashes with injuries are down 34%.

On a Friday afternoon in late May, 19-year-old City College student Braulio Tellez hung out eating pizza with his mom and sister while perched on the tree-lined median that runs along the center of the open street. Tellez grew up in the neighborhood and sometimes carries his telescope out at night to observe the moon and planets from the quiet of the road.

"It helps remove all stress," Tellez said of the traffic-restricted street. "I love it."

A 'superhighway' of pedestrians and bikes

Jim Burke, a longtime pedestrian and transit advocate, had lived in his apartment building right on 34th Avenue for a dozen years when the pandemic hit. But he knew virtually none of his neighbors. In the early days of the pandemic, bored in their apartment, Burke and his partner started regularly playing a coin-tossing game in the street. Soon, neighbors and kids began joining in.

Burke grew up in the Bronx and the Rockaways and remembers that as kids, he and his friends "owned the streets," where they played every day. He figured adults and kids alike should have that same experience on 34th Avenue.

"One thing led to another and then we started raising money," Burke said. "People looked out their windows and said, 'Oh that looks like fun, I don't want to stay in my house for another minute.'"

O'Doherty-Naranjo and Burke co-founded the 34th Avenue Open Streets Coalition and used the funds they raised to put on programming — hiring yoga and Zumba instructors to teach free classes, volunteers to lead English lessons, and even enlisting doctors to dispense free medical advice. The effort was entirely volunteer-powered for the first 18 months before the city stepped in to help.

"In the summer, I see a lot of people doing activities, or going out, walking, kids playing with chalk — just cool things that I didn't have when growing up," said Yorladiz, a Jackson Heights native who regularly walks her four-year-old daughter up and down 34th Avenue. "It's yoga night, it's salsa night — they're always doing something."

These days, Burke can't spend more than a few minutes on 34th Avenue without running into a neighbor he knows.

"It's become this superhighway of kids and families and neighbors," O'Doherty-Naranjo said.

These days, controversy on 34th Avenue mostly concerns a surge in mopeds, which tend to use the street as a cut-through.

Shekar Krishnan, the councilman who represents the neighborhood, held a "Moped Crisis" town hall recently and says the City needs to come up with a plan to redesign the street to keep mopeds off of it and create safer ways for them to travel on other streets. If the Department of Transportation is going "to oversee the expansion of public space, in addition to their other work," Krishnan said, "they need to get far more serious, and ambitious, and creative in how they do so — and, frankly, listen to the communities."

Burke and O'Doherty-Naranjo don't want to ban mopeds from 34th Avenue. They recognize that other streets often aren't safe for moped drivers, many of whom are delivery workers.

Funding for open streets can be hard to come by, however. Across the city, 83 miles of open streets dwindled to about 20 miles between 2020 and 2022. DOT only allots $20,000 a year for 34th Avenue, Burke said, which is just a fraction of the funds needed to operate the open street all year round. The city has also been slow to reimburse neighborhood groups supporting open streets across the city.

Burke estimates 34th Avenue needs at least $50,000 a year to operate with a decent amount of programming — and the City still owes it $10,000 from last year. The more money the street has, the more instructors, artists, and musicians it can pay to lead workshops, beautify the street, and put on performances.

Unlike many other open streets across the city, 34th Avenue isn't a commercial street — it's entirely residential in between its many schools and one small park. "A lot of the places that New York City has done these kind of more groundbreaking projects, they've been in wealthy neighborhoods," Dawn Siff, the director of the Alliance for Paseo Park, a nonprofit supporting the open street.

Siff and others hope 34th Avenue will become a public park that prioritizes people on foot. She pointed to models in cities like Mexico City and Paris. Just across the East River, there's a great model in Manhattan's High Line.

O'Doherty-Naranjo and Burke want to see the open street extended all the way down to the end of 34th Avenue near Citi Field. They all envision a greener street, with flood mitigation like rain gardens — and more public art. Burke said he hopes the city will eventually be filled with connected open streets.

"Someday, my dream would be to interconnect them, where you could visit every neighborhood," he said, "and you could do so by traveling on an open street with your family, whether you're walking, or using a wheelchair, or biking."

Do you live on or near an open street in New York City or a traffic-restricted street elsewhere? Reach out to this reporter at erelman@businessinsider.com.