by tyler | Jun 29, 2023 | CNN, economy
Russian assets frozen in European accounts could generate billions of dollars a year for rebuilding Ukraine. But can that money be used without breaching international law or damaging the euro’s international standing?
European Union leaders are grappling with that question at a meeting in Brussels Thursday.
The World Bank estimates Ukraine will need at least $411 billion to repair the damage caused by the war. And the EU and its allies are determined to make Russia foot part of the bill.
One idea put forward in the EU is to draw off the interest on income generated by Russian assets while leaving the assets themselves untouched.
This approach would probably deliver about €3 billion ($3.3 billion) a year, according to Anders Ahnlid, the director general of the Swedish National Board of Trade and head of the EU working group looking into frozen Russian assets.
“It’s the best way of using these assets in accordance with EU and international law,” Ahnlid told CNN, noting that was also the view of lawyers at the European Commission, which has promised to propose a way to tap frozen Russian assets within weeks.
But some EU member states, and the European Central Bank (ECB), have concerns that it could shake confidence in the euro as the world’s second biggest reserve currency. The EU has been at pains to contrast the illegality of Russia’s invasion with its own strict adherence to the rule of law.
“We have to respect the principles of international law,” said a senior EU diplomat, who requested anonymity because he is not authorized to discuss closed-door meetings. “It’s a matter of reputation, of financial stability and trust.”
The ECB declined to comment.
After the full-scale invasion of Ukraine in February last year, EU and Group of Seven countries imposed unprecedented sanctions on Russia, freezing nearly half of its foreign reserves — some €300 billion ($327 billion) — among other measures.
Around two-thirds of that, or €200 billion ($218 billion), sits in the EU, mostly in accounts at Belgium-based Euroclear, one of the world’s largest financial clearing houses.
Euroclear plays a crucial role in global markets, settling cross-border trades and safekeeping more than $40 trillion in assets.
The group said in April that cash on its balance sheet had more than doubled over the year to March to stand at €140 billion ($153 billion), boosted by payments associated with frozen Russian assets, including bonds.
Ordinarily, these payments would have been made to Russian bank accounts, but they have been blocked as a result of sanctions and are now themselves generating vast amounts of interest.
Euroclear routinely invests such long-term cash balances and, in the first quarter, it recorded €734 million ($802 million) in interest earned on cash balances from sanctioned Russian assets.
The plan proposed by the EU working group would involve using a special levy to collect the windfall interest income made by Euroclear from frozen Russian assets, which would then be paid into the EU budget for the reconstruction of Ukraine.
Speaking on the sidelines of Thursday’s EU meeting, Latvia’s Prime Minister Arturs Krišjānis Kariņš said frozen Russian assets were “low-hanging fruit.”
“We need to find a legal basis to utilize, mobilize these assets to help… pay for the damage Russia is causing in Ukraine,” he said.
But one senior EU official warned of unintended consequences, such as causing other countries or investors to worry about the safety of their assets in Europe.
“Those who have money might think ….’what if one day, I’m on the list,’” the official, who also requested anonymity because the discussions are private, said Wednesday.
One way to reduce risks to the EU would be to coordinate action with the G7. “I think discussion at the G7 is quite key,” the official added.
Ahnlid echoed this, noting that many EU member states had stressed the importance of the bloc taking steps “in tandem with G7 partners.”
— James Frater contributed reporting.
by tyler | Jun 28, 2023 | CNN, economy
Federal Reserve Chair Jerome Powell doubled down Wednesday on the hawkish view that the central bank isn’t done tamping down inflation, and could even implement consecutive rate hikes at its upcoming monetary policy meetings.
“If you look at the data over the last quarter, what you see is stronger than expected growth, a tighter than expected labor market and higher than expected inflation,” Powell said during a central banker panel hosted by the European Central Bank in Sintra, Portugal. “That tells us that although policy is restrictive, it may not be restrictive enough and it has not been restrictive for long enough.”
Powell said officials haven’t decided how and when they will raise rates, including if they will hikes rates at every other meeting or do back-to-back rate hikes.
“I wouldn’t take moving at consecutive meetings off the table at all,” he said.
In congressional hearings last week, Powell said the Fed still has more work to do to bring down inflation that has been running well above the central bank’s 2% target. Central bank officials voted earlier this month to pause the Fed’s most aggressive rate-hiking campaign in decades.
The Fed’s position could mean as many as two more quarter-point hikes sometime this year, according to the latest Summary of Economic Projections. But it’s not clear at what meeting officials will vote to raise interest rates, especially given that they won’t learn much about the economy before their upcoming meeting in July.
Some Fed officials have made it clear in recent speeches that inflationary pressures persist, pointing to core inflation, which excludes volatile food and gas prices, not decelerating as fast as overall inflation. At the ECB conference in Sintra, Powell echoed that sentiment pointing to services inflation — which includes labor-intensive businesses such as restaurants and health care facilities — remaining stubbornly high.
“Labor costs are really the biggest factor in most parts of that sector,” Powell said. “We need to see a better alignment of supply and demand in the labor market and see some more softening in labor market conditions so that inflationary pressures in that sector can also begin to subside.”
An often-cited paper by former Fed chair Ben Bernanke argued that the labor market has had a minor, but persistent, impact on inflation that can only be remedied by the economy slowing further. That makes a case for more rate hikes.
The labor market has held remarkably steady in recent months, routinely bucking expectations. Employers added a robust 339,000 jobs in May, while the unemployment rate ticked up to a still-low 3.7% that month.
Powell said part of the reason why Fed officials voted to hold rates steady had to do with the bank stresses that emerged in the spring.
“Part of the decision, in my thinking anyway, was the bank stress that we experienced earlier this year,” he said. “There’s a fair amount of research showing that when something like that happens, bank-credit availability and credit can can move down a little bit, with a bit of a lag, so we’re watching carefully to see whether that does appear.”
The Fed’s latest survey of senior loan officers showed that banks were toughening their lending standards even before the bank failures. Powell argued that it’s still unclear whether that intensified after the turbulence in March.
Economists and some Fed officials have said that bank stresses can have the same effect on financial conditions as a rate hike.
One thing Powell won’t do is substantively weigh in on fiscal policy or government spending. But the Fed chair did offer a tiny piece of commentary Wednesday, saying that at the moment, government spending is not a source of inflation.
It’s true that spending packages approved by Congress can boost demand, and Bernanke’s paper argued that was a major reason why goods inflation rose in 2021, but Powell said government spending has normalized.
“I will add, though, without crossing any lines, that the spending during the pandemic was very high and it’s come down — and so we look at the fiscal impulse from the level of spending and it’s really not material. It may even be slightly contraction, but let’s just say it’s flat,” Powell said. “If you look at where the inflation is in the economy, I wouldn’t say that that’s an important driver of inflation or something that we think about or consider.”
by tyler | Jun 27, 2023 | CNN, economy
Americans are feeling fairly bullish about the US economy: A key measurement of consumer confidence just jumped to its highest level since January 2022.
The Conference Board’s Consumer Confidence Index was 109.7 in June, rising from 102.5 the month before, according to a report released Tuesday.
The latest survey from the business research and membership organization continued to show that consumers retained a far sunnier outlook about the present than what could come in the months ahead. Both the present situations index and the expectations index rose from May; however, the latter remains at a level that flashes a recession warning signal, the Conference Board noted.
“If packed-full restaurants and airports were not enough to convince you that consumers are feeling good at the moment, look at the present situation index, which notched its best monthly gain since December 2022,” Wells Fargo economists wrote in a note issued Tuesday. “In level terms, only two months have been higher for the present situation index in the past three years: those being June and July 2021.”
The labor market, which has softened somewhat but remains historically tight and strong, continues to give a boost to confidence. The share of consumers who viewed jobs as “plentiful” increased to 46.8% from 43.3%.
“Greater confidence was most evident among consumers under age 35, and consumers earning incomes over $35,000,” Dana Peterson, chief economic at the Conference Board, said in a statement. “Nonetheless, the expectations gauge continued to signal consumers anticipating a recession at some point over the next 6 to 12 months.”
Some of those recession fears are fading, it seems: Tuesday’s report also showed a decline in the number of consumers who are expecting a recession. In June, 69.3% of consumers said a recession is “somewhat” or “very likely.” That’s down from 73.2% in May.
Consumers indicated their plans to purchase homes and cars have slowed, and they’re pulling back more on vacation plans, including travel domestically.
“This is an important indicator of desires to spend on services ahead, which may be a signal that post-pandemic ‘revenge spending’ on travel may have peaked and is likely to slow over the rest of this year,” Peterson said.
by tyler | Jun 27, 2023 | CNN, economy
China’s Premier Li Qiang struck an upbeat tone about the world’s second largest economy on Tuesday, telling a gathering of global financial elites that growth in the current quarter will be higher than it was in the first three months of the year.
“We are on track to achieve the annual growth target of ‘around 5%’ that we set earlier this year,” he told delegates at a World Economic Forum (WEF) summit in the northern Chinese city of Tianjin.
“We are fully confident and have the ability to promote the high quality development track of China’s economy over a long period of time,” he added, promising to roll out more measures to support growth.
Following his comments, Chinese stocks and the yuan made gains. Hong Kong’s Hang Seng index
(HSI), which briefly slid into a bear market last month, closed up 1.9%. The Shanghai Composite rose 1.2%. And after hitting its lowest level against the US dollar in seven months on Monday, the yuan gained about 0.3%.
Li’s speech comes as Beijing grapples with mounting economic headwinds, resulting in efforts to boost growth even as it censors critical voices.
After China achieved a solid 4.5% expansion in the first quarter, its recovery has lost momentum in recent months in many areas, including manufacturing, property, retail and exports. The unemployment rate for 16- to 24-year-olds hit 20.8% last month, shattering the previous record set in April.
On Monday, S&P Global cut its 2023 growth forecast for the country to 5.2% from 5.5% previously. It was the first time a global credit ratings agency had cut China’s growth projections this year. Its analysts cited weak confidence among consumers and in the housing market as the key risks.
Earlier this month, a string of Wall Street banks also slashed their forecasts. Goldman Sachs said the recovery sparked by the country’s post-Covid reopening in the first quarter appeared to have “fizzled out” in the April-to-June period as it downgraded its annual forecast to 5.4% from 6%.
But not everyone is similarly downbeat. In June, the World Bank raised China’s 2023 growth forecast to 5.6%, up from a previous estimate of 4.3% made in January, citing a possible rebound in consumer demand and “resilient” capital spending in infrastructure and manufacturing.
To bolster growth, the People’s Bank of China cut its main benchmark lending rates last week for the first time in 10 months. Many analysts said the move wasn’t enough and called for a much bolder stimulus package, including direct measures to boost consumption and the housing market.
On Tuesday, Li pledged to do more to support the recovery.
“We will introduce … more pragmatic and more effective measures,” he said, without giving much detail, adding the measures aim to boost domestic demand and market vitality.
Li spoke at a forum that was held in person for the first time in four years. Known as the “Summer Davos,” it has over 1,500 participants, including the prime ministers of New Zealand, Vietnam and Barbados, as well as ministers from Saudi Arabia.
The premier, who is number two in the Communist Party’s hierarchy after Chinese President Xi Jinping, also dismissed talk about “de-risking” from China.
“Some people in the West are hyping up so-called concepts of reducing dependency [on China] and de-risking. I would say these concepts are false propositions,” he said.
US President Joe Biden and his European allies have stressed desire to “de-risk” from the Chinese economy. That has led to coordinated efforts to remove China from technology supply chains that can be used to advance its military strength.
Some Western companies have also been moving manufacturing away from China amid growing geopolitical tensions.
Li called for “de-risking” decisions to be made by companies rather than governments
Economic globalization remains unchanged, and there should be more cooperation and communication, he added.
“We are willing to work with entrepreneurs from all over the world to firmly support globalization, firmly maintain the market economy, firmly support free trade and lead the world economy towards a more inclusive, resilient and sustainable future.”
Li made similar comments during his trip to Europe last week, when he tried to woo the region’s biggest companies.
But as China’s recovery loses steam, the authorities have ramped up censorship of comments critical of the state of the economy.
Wu Xiaobo, an influential writer on financial issues with 4.7 million followers on China’s Twitter-like Weibo, has been banned from posting on the platform for “hyping up the unemployment rate issue and disseminating negative, harmful information to smear the development of the stock market,” according to a statement issued by Weibo Monday.
The statement also accused Wu of “attacking and undermining China’s current policies and management systems,” without offering details on the posts that got the writer into trouble.
Two other influential commentators on Weibo were also banned from posting for the same reasons, according to the statement.
The censorship has sparked a wave of criticism on the social media platform.
“The state of the economy and the stimulus policy have become such sensitive issues that we can’t even talk about them,” said a Weibo comment.
Last year, China shut down the social media accounts of Hong Hao, a prominent market analyst, following downbeat remarks he made about the country’s dramatic economic slowdown and the effects of government policy on the tech industry. Hong left the state-owned bank he worked for days after his accounts were censored.
— CNN’s Nectar Gan contributed reporting.
by tyler | Jun 22, 2023 | CNN, economy
More prime working age women are employed in the United States now than ever before.
The labor force participation rate for women between 25 and 54 years old set a record high in April and then again in May, rebounding from the pandemic “she-cession” and returning to its pre-pandemic form of making progressively historic labor market gains.
That could all change with AI.
Generative artificial intelligence technologies like ChatGPT have the potential to transform the labor market, exposing the majority of the nation’s jobs to automation, Goldman Sachs economists have projected. The technology can create new content — such as text, images, audio, video, and code — from training data that includes examples of that desired output.
However, recent research shows that although outnumbered by men in the US workforce, women could be disproportionately affected by businesses’ adoption of generative AI: One recent analysis estimates that 79% of working women (nearly 59 million) are in occupations susceptible to disruption and automation. That’s compared to 58% of working men, according to research from the University of North Carolina’s Kenan-Flagler Business School.
Estimates that nearly eight out of 10 women workers could be affected “are just staggering,” said Julia Pollak, chief economist with online job marketplace ZipRecruiter. “That said, and I think intuitively many of us appreciate that, it’ll be easier to automate some of these office jobs than it will be to automate carpenter jobs and electrician jobs and pest removal jobs — many of these manual services and production jobs that are far more male-heavy.”
She added: “I think there are legitimate reasons to be worried that some of the gains that women made could be eroded, at least temporarily.” However, she also noted that “these technologies will also surely create many, many opportunities.”
A higher percentage of working women are employed in white-collar jobs, whereas for men it’s more of a 50-50 split between white- and blue-collar occupations, said Mark McNeilly, professor of the practice of marketing at the Kenan-Flagler school and lead author of the AI research. Some of the most AI-exposed occupations with a majority-female employee base are office and administrative support; healthcare practitioners and technical; education, training and library; health care support; and community and social services, according to the UNC Kenan-Flagler research.
“It’s not always going to relate to ‘I’m losing my job,’” McNeilly told CNN. “I think it’s really a matter of if there’s something that the person can do to add value.”
In the years leading up to the Covid-19 pandemic, women’s labor force participation rates were rising faster than that of their male counterparts, Bureau of Labor Statistics data shows.
A confluence of several factors were behind those gains, Pollak said. Notably: Female-dominated industries, such as health care and caregiving, were among the fastest-growing industries; educational attainment for women rose substantially; and women also made greater inroads into traditionally male-dominated fields such as construction, agriculture, and repair and maintenance.
By February of 2020, the labor force participation rate for prime working-age women was 77% — just shy of the record 77.3% set during the dot-com era, BLS data shows.
But by April 2020, that rate plummeted to 73.5% as the pandemic froze the US economy, forcing more than 20 million people out of their jobs. As the nation recovered in the coming months, however, women didn’t return at the same levels as men.
The pandemic walloped the leisure and hospitality and education and health services sectors, where women make up the majority of the workforce. Additionally, job losses and a lackluster employment recovery in the child care sector hampered workers’ ability to return to the labor market; and since caregiving responsibilities often fall to women, they were held back more as school became home-based.
The tide eventually turned.
Three key drivers for women entering the workforce are access to child care, market wage and flexibility, said Dana Peterson, chief economist at the Conference Board, a business research and membership organization.
And the pandemic recovery kicked those catalysts into hyperdrive.
Jobs, by and large, became less rigid: Telecommuting grew more commonplace, and home-based work allowed for more flexibility in hours. That helped improve access to child care with schedules that allowed for easier drop-offs and pick-ups as well as companies that offered on-site child care. And labor shortages — largely related to the acceleration of ongoing demographic trends of Baby Boomers leaving the workforce, long Covid and health-related concerns — help to lift wages, especially for low-paying jobs.
“Some of these things are becoming more prevalent, and that’s supportive of more women in the labor market,” she said.
Additionally, women-centric sectors, such as health care and leisure and hospitality, are continuing to see some of the most robust job gains during the past two years.
“That’s where a lot of the hiring is happening, and that’s also where a lot of the wage increases are happening,” Peterson said. “So, if you have more job openings and higher wages and these are areas that women tend to predominate, then it makes sense that women are going to gravitate toward those sectors and be more willing to work.”
Last month, the labor force participation rate for 25- to 54-year-old women set a fresh high of 77.6%, ticking up from the previous record of 77.5% set the month before, according to BLS data.
Revelio Labs, which specializes in the collection and analysis of publicly available workforce data, recently identified the most AI-exposed occupations and the gender and ethnicity distributions among them. Revelio’s analysis showed that the AI-exposed positions with the highest percentage of women included bill and account collectors (82.9%), payroll and timekeeping clerks (79.7%), executive secretaries (74.3%), word processors and typists (65.4%) and bookkeeping, accounting and auditing clerks (65%).
In the most AI-exposed occupations, women make up 71% of employees, said Ben Zweig, Revelio’s chief executive officer.
“Sometimes in the AI conversation, we take a perspective, which I think is a false perspective, that the task composition of a job is static — that a job is a job and it has fixed responsibilities,” said Ben Zweig, chief executive “But that’s not really the case. Jobs transform all the time.”
AI represents an opportunity and a threat all at once, and it really depends on the industry, Peterson said.
Generative AI might not have the capacity now to turn a patient over or insert an IV, but it could prove helpful in poring through billions of pieces of imaging data to diagnose a condition.
On the other hand, AI could prove harmful and threatening for any role that is highly “automatable,” Peterson said.
“The thing about AI is that it’s not perfect; it’s generating new content from existing content,” she said. “It still needs a human to create some existing content for it to pull from. And whatever it’s generating, it doesn’t mean it’s right — you still need someone to look at it and see if it makes sense.”
For businesses, there are legitimate risks, including ensuring that the applications are used responsibly and potential concerns around bias and ethics are fully understood and addressed, she noted.
“Over time, it will replace some jobs, but as with every other type of technological advancement that we’ve had, people have always figured out something else to do,” she said. “Yes, it may destroy jobs in the short run, but it also creates new jobs and different opportunities. It helps people to become more productive in their existing jobs.”
At Montana State University, Dr. Sara Mannheimer, who received her Ph.D. in library and information science, is working under a grant from the Institute of Museum and Library Services and leading a team of researchers to explore how AI could be used ethically in libraries and archives.
“Librarians think a lot about evaluating information and thinking about sources and trustworthy sources,” she said, noting that the data often feeding into AI is from the internet. “ChatGPT uses Reddit data and Wikipedia data and who knows what else, and [those are] known to be predominantly used by, edited by and participated in by men, and mostly white men. So the information that is coming out of [these technologies] is biased, and it’s not always accurate.”
While the AI project doesn’t specifically address labor market implications, especially for library workers, Mannheimer is cognizant of what this technology could mean for her and others in her field.
“The library cannot be replaced by a machine, there will always be work that a human needs to do,” she said, adding that if AI could handle rote tasks, “I think there’s plenty of work for librarians and library staff to do that requires critical thinking.”
Meredith Nudo, a freelance writer and voice actress based in Houston, is staying sharply aware of the potential disruption from AI to her jobs, specifically the voiceover work.
Voice actors such as Nudo are pushing back on attempts to have AI-created voices replace them. Organizations like the National Association of Voice Actors has developed guidelines and a campaign to educate the industry and supporters around the topic.
Nudo has a clause in her standard voice work contract stating that her work cannot be used to train AI and is starting to include a similar clause for her writing, especially after being recruited with job opportunities to teach AI to write or edit more effectively.
“It was a really strange, surreal experience to be asked to train what was basically my replacement, and it was like saying you’re not good enough to hire [for] the job that you have experience in and trained for,” she said.
Nudo said she sees the opportunities in working with AI for certain duties, such as note-taking and transcription, which could free up time and space for other tasks that require more legwork, creativity and critical thinking.
“If we didn’t have to worry about meeting our own basic needs, I think we would probably see a lot more people be amenable to the technology,” she said.
by tyler | Jun 22, 2023 | CNN, economy
The Bank of England raised interest rates by half a percentage point Thursday, after data this week revealed surprisingly stubborn inflation. The move will pile pain on people with mortgages and put more downward pressure on house prices.
The decision in favor of a 13th consecutive hike takes the main borrowing cost for commercial banks in the United Kingdom to 5%, the highest since April 2008.
“The economy is doing better than expected but inflation is still too high and we’ve got to deal with it,” Bank of England Governor Andrew Bailey said in a statement.
“We know this is hard — many people with mortgages or loans will be understandably worried about what this means for them. But if we don’t raise rates now, it could be worse later,” he added. “We are committed to returning inflation to the 2% target and will make the decisions necessary to achieve that.”
Financial markets now expect the Bank of England’s benchmark interest rate to reach 6% around the turn of the year — a level not seen in two decades — in the ever more desperate battle to control rising prices.
That’s bad news for more than 2 million UK mortgage holders, who are bracing for a sharp increase in their monthly mortgage bills when they are forced to refinance this year and next.
“People are very concerned with what is being described as the mortgage bomb about to go off,” lawmaker Jake Berry from the ruling Conservatives said Tuesday in parliament.
Higher mortgage rates are likely to dampen consumer spending and raise the chances of a deeper economic slowdown in the UK, which has so far managed to escape a recession.
The Bank of England had little choice but to hike rates after official data Wednesday showed that inflation stayed stuck at 8.7% in May, defying forecasts for a tick-down.
And bucking the trend seen in the United States and Europe, core inflation — which strips out volatile food and energy costs and is a better gauge of the underlying trend in prices — rose last month, hitting a 31-year high of 7.1%.
The worse-than-expected inflation numbers pile pressure on Prime Minister Rishi Sunak, who has promised to halve inflation this year to around 5% as one of his five pledges to voters.
The average maturity of UK mortgages is much shorter than in the United States, with two-year and five-year fixes the most common. Many mortgage holders due to refinance their loans this year and next bought their homes when interest rates were much lower and mortgage rates were closer to 1% or 2%.
This week, the cost of the average two-year fixed-rate mortgage rose above 6%, the highest since the start of December, according to financial product comparison website Moneyfacts.
If rates remain at that level, households will spend almost £280 ($357) more on their mortgage each month on average, compared with what they were paying in March 2022, according to the Institute for Fiscal Studies. Those aged 30-39 will pay almost £360 ($459) more.
The number of households feeling that squeeze is only going to grow.
Some 800,000 fixed-rate mortgages are due to expire in the second half of the year, according to UK Finance. Another 1.6 million mortgages will need to be refinanced next year, and at significantly higher rates.
“The latest moves in market interest rates suggest that a dire outlook for UK mortgagors just got worse,” Simon Pittaway, senior economist at the Resolution Foundation, a think tank, said in a report.
“If rates move in line with expectations, UK families are set to face a prolonged and historic mortgage crunch.”
The latest spike in mortgage rates will hit demand for house purchases and, ultimately, house prices.
“So far, the housing market hasn’t seen a material change in behavior, although anxiety levels are rising,” said Tom Bill, head of UK residential research at real estate agent Knight Frank.
Knight Frank expects house prices across the country to fall 5% this year and another 5% next year.
The housing market will be supported by pay rises — which have in fact become a major driver of UK inflation and therefore interest rates.
“Wage growth is the single biggest aggravating factor for the housing market, but it will also mitigate any decline,” Bill told CNN.
Savings accumulated by households during the pandemic and the fact that a large share of homeowners own their dwellings outright are other mitigating factors. Banks are also more likely to exercise restraint and work with borrowers who are struggling to meet repayments.
“I don’t think we’re going to see a wave of foreclosures and repossessions, which could start to drive prices down more aggressively,” Bill said. “There’ll be forbearance from the banks.”
Only about 30% of UK households have a mortgage, down from 40% in the 1990s, according to Capital Economics, an economic research firm.
There’s also been a shift toward loans with terms of 35 or 40 years, rather than 25 years, reducing monthly mortgage payments, said Andrew Wishart, a senior property economist at the firm.
Capital Economics is forecasting a 12% decline in house prices between their August 2022 peak and 2024.
If interest rates must stay higher for longer to tame inflation, house prices could fall more sharply. “If mortgage rates were to stay at 6% for several years, a house price fall of 25% would be likely,” Wishart said.
