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Business

UBS reports its best third quarter for a decade, with a 99% hike in net profit

  • The Swiss bank said net income came in at $2.1 billion for the third quarter on Tuesday, beating analyst expectations.
  • Pre-tax profit for the period rose 92% to $2.6 billion, in what UBS described as its best third-quarter result in a decade.
  • It comes after an 11% drop in profit for the second quarter, as the global banking industry felt the full effect of the coronavirus pandemic.

LONDON — The world's largest wealth manager, UBS, reported a jump in net income to $2.1 billion for the third quarter on Tuesday, easily beating analyst expectations. It marks a 99% jump from the same period a year earlier.

"It is very difficult not to be happy with this set of numbers because they are coming from a great contribution from all business units," CEO Sergio Ermotti told CNBC's Geoff Cutmore Tuesday.

Analysts had expected the Swiss bank and asset manager to report $1.5 billion of net income for the third quarter, according to data from Refinitiv Eikon. It comes after an 11% drop in profit for the second quarter, as the global banking industry felt the full effect of the coronavirus pandemic.

"We speak a lot about stimulus and Covid-related matters, but the geopolitical uncertainties in Europe, and also in the Sino-U.S. relationship, (are) still there and they're there to stay so we shouldn't underestimate that," Ermotti added.

UBS said pre-tax profit for the third quarter rose 92% to $2.6 billion, in what it described as its best third-quarter result in a decade.

Here are other highlights of the quarter:

  • Operating profit hit $8.9 billion, versus $7.08 billion a year ago
  • CET 1 capital ratio reached 13.9%, versus 13.1% a year ago

Pre-tax profit in UBS' investment bank rose 268%, on the back of market volatility in the wake of the coronavirus crisis. While its wealth management division posted an 18% rise in profit before tax, and total invested assets hit an all-time high of $2.75 billion.

The bank attributed its results to ongoing strong client activity and the "benefits of a well-diversified business model with broad regional mix."

Speaking to CNBC, Ermotti said: "The amount of visibility is very limited, but this has not really changed in the last few years and months. I think what we are doing is staying very agile and staying very focused on our plan."

From a geographical standpoint, Ermotti also said that the U.S. and Asia "offer bigger and greater growth opportunities" than Europe, adding that the latter needed to implement more structural reforms and regain competitiveness.

Tuesday's results are UBS' last under the leadership of Ermotti, who is due to leave the bank this month. Ralph Hamers will become the new head on Nov. 1.

"UBS has all the options open to write another successful chapter of its history under Ralph's leadership," Ermotti said in a statement accompanying the results.

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Business

UK Unemployment Rises, Redundancies Highest Since 2009

The UK unemployment rate increased and redundancies reached its highest level since the global financial crisis in the three months to August even ahead of the scaling back of government’s furlough scheme and the mounting fear of more restrictions.

The ILO jobless rate rose by 0.4 percentage points from the preceding quarter to 4.5 percent in the three months to August, the Office for National Statistics reported Tuesday. The rate was above economists’ forecast of 4.3 percent.

Unemployment increased by 138,000 from the prior quarter to 1.52 million.

At the same time, the employment rate fell by 0.3 percentage points to 75.6 percent in three months to August. Employment totaled 32.59 million, which was 153,000 fewer than the previous quarter.

The ONS said there were also around 192,000 people away from work because of the pandemic and receiving no pay in June to August.

Redundancies increased by a record 114,000 sequentially to 227,000, which was the highest since mid 2009.

With the national furlough scheme closing at the end of this month and the new Covid-19 restrictions set to stall the economic recovery, a second bigger wave of unemployment is probably on its way, Paul Dales, an economist at Capital Economics, said.

That may lead to 1 million more people losing their jobs and the unemployment rate rising to almost 8 percent, the economist added.

James Smith, an ING economist said the unemployment rate is likely to rise towards 9-10 percent over the winter. This will put additional pressure on the Bank of England to add stimulus, and another round of QE is expected at the November meeting, he said.

Further, ONS data showed that average total pay including bonuses remained unchanged from the same period last year, while economists had forecast a 0.6 percent drop.

Excluding bonuses, average earnings grew 0.8 percent versus the expected growth of 0.6 percent.

In September, the claimant count rate rose to a seasonally adjusted 7.6 percent from 7.5 percent in August. The number of people claiming unemployment benefits increased by 28,100 from the previous month.

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Business

Why India’s automobile business is like Bollywood

What worked for Hyundai in India when so many other auto manufacturers have had to eat humble pie?

Pavan Lall finds out.

In recent weeks, cult motorcycle company Harley-Davidson made waves as it announced its exit from the subcontinent just seven months after buzz that US President Donald Trump would actually push for favourable trade terms on his visit here.

The goal being that Harley could up the ante in terms of its Indian footprint. Instead, the company that the 1969 Peter Fonda-starrer Easy Rider made famous, slammed the brakes hard on sales and manufacturing operations, taking a $75 million hit because it missed volumes and revenue targets.

Such failure isn’t uncommon.

Between 2014 and 2015, General Motors CEO Mary Barra came to India not once but three times. Eventually, its company Chevrolet, which started here over two decades ago, threw in the towel and announced in 2017 that it would pull out of the country altogether.

The other American automotive icon, Ford Motor Co, which started in India, fared marginally better. It first came here in 1995 with a joint venture with Mahindra & Mahindra (M&M), which didn’t last long and then got some traction with its first car, the Ikon, in 1999 that was truly made for India.

Its Fiesta hatchback and EcoSport threw up successful numbers but slowed down as the company ran out of new cars to launch.

In 2019, Ford announced that it once again would partner with M&M, which had a chequered history around partnerships: M&M-Renault (2007), Mahindra-Navistar (2005) and M&M-Ford (1995), all struggled to hit pay dirt and ended unsuccessfully.

India is a vibrant auto market and despite the downturn, became the fifth-largest in 2019 with sales reaching 3.81 million units.

It was the seventh-largest manufacturer of commercial vehicles in 2019. Which is why foreign players come here. But it wasn’t just the Americans who had a rough ride.

The Volkswagen Group had a good thing going with Skoda but then lost its way with the positioning of its VW badge and pricing strategy, something it’s striving to correct; Japanese auto majors Toyota and Honda, despite their engineering pedigree, couldn’t drum up market share and volumes.

The only company to have made strides are Korean player Hyundai and its sister brand Kia, which has shown strong performance with 100,000 unit sales of Seltos in barely a year.

Hyundai, meanwhile, has clocked a 17 per cent market share, the second-largest slice of the pie after Maruti Suzuki.

Ganesh Mani, director of production, Hyundai Motor India, said the car business is a lot like Bollywood: “There are many heroes and heroines in many films but on a new release on Friday, what works is decided by customers.”

The key, he added, is to take inputs from them and plow those ideas back into the cars. Come what may, he said, Hyundai has to deliver at least four new products annually.

In the past 18 months, Hyundai has launched the Nios, the Kona, the Venue, the Elantra, the new Verna, the new Creta, the new Tucson, and the Aura.

When a company does that over a period of time, it does generate best-sellers. The numbers speak for themselves. All cars, barring the Kona Electric, come in both petrol and diesel BS6 engines with multiple options for manual and automatic transmissions.

Hyundai Creta, launched in 2015, has sold over 500,000 units; Venue (2019) has sold over 100,000; and Aura (2020) sold over 19,000 units, a Hyundai spokesperson said.

So why have other seasoned multi-billion-dollar global auto majors been unable to break into the Indian auto market?

Kaushik Madhavan, vice president, mobility practice, Frost & Sullivan, explained that Hyundai has launched cars with a frequency not seen in any player — Indian or otherwise.

“The key reasons for Korean OEMs in India gaining market share at the expense of Indian and Japanese OEMs over 2018-2020 are sustained product refreshes and new launches,” he said.

“Similar to what VW Group and PSA Group have done in Europe, Hyundai and Kia in India have periodically introduced new models and targeted high growth areas such as connected cars.”

There’s also a management angle. Paris-based automotive author Gautam Sen said there is a similarity in the mistakes automakers make when they come in here: “They hire foreign CEOs who almost always don’t understand the business landscape. They come in with a sense that this market is going to be like China or other emerging markets, which it never is, and they push products that have worked elsewhere assuming they will here.”

Hyundai owes much of the early foundation and success of the Santro — a made-for-India car — to its Indian CEO BVR Subbu, who came from Tata Motors, Sen pointed out.

He added that it’s key to see the country not just as a local sales market but also a base for manufacturing for exports with an almost 50-50 share for both.

Many auto majors come to India with presumptions that fail.

Suraj Ghosh, principal analyst-powertrain Forecasts, IHS Automotive, said: “Foreign players see India as a predominantly cost-conscious market, which has a narrow range of product segments”. And then the taxation system favours smaller cars, which doesn’t help foreign players who make larger bodies and powertrains, he added.

Cars less than four-metre long and with engines smaller than 1.2 litre for petrol and 1.5 litre for diesel get subsidised, but nowhere in the world is that seen as a rational definition of a quality automobile, he added. Recently, Toyota rolled back expansion plans in India citing the asymmetric tax structure as a reason.

If culture eats strategy for breakfast, then tuning one’s business to India would include roping in local leadership, creating products to consumer demand and not force-fitting them to a market because of price constraints.

“A lot of car companies make the mistake of thinking that Indians don’t want to spend money on a car and only shop on a budget. The truth is they expect value for their money,” Ghosh said. “It’s as simple as that.”

Feature Presentation: Rajesh Alva/Rediff.com

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World News

Debate commission says it will mute Trump, Biden while opponent talks

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The Commission on Presidential Debates (CPD) will cut off President Trump and former Vice President Joe Biden during the two-minute response times allotted to their opponents for commenting on topics during Thursday's debate in Nashville.

The commission said in a statement that it "had determined that it is appropriate to adopt measures intended to promote adherence to agreed-upon rules and inappropriate to make changes to those rules.”

Also included in the debate will be an open discussion forum that won't include the mute option. Thursday’s debate will consist of six 15-minute segments, totaling 90 minutes in all as in the first debate.

Trump's and Biden's initial debate was widely panned as both candidates faced backlash for their behavior. The two candidates skipped the second presidential debate after Trump was diagnosed with the novel coronavirus and declined to participate in a virtual format. 

Announced on Monday, the new rule drew scrutiny from the Trump campaign, which urged the commission earlier in the day to include more discussion of foreign policy in the next debate.

"President Trump is committed to debating Joe Biden regardless of last minute rule changes from the biased commission in their latest attempt to provide advantage to their favored candidate," read a statement from campaign manager Bill Stepien

In a letter, Stepien had accused the commission of adding to a broader pattern of "pro-Biden antics" with its choice of topics. The upcoming debate topics included fighting COVID-19, American families, national security, leadership, climate change, and race in America.

The commission did not immediately respond to Fox News' request for comment. The Biden campaign responded to Stepien's letter by suggesting that he was lying.

"The campaigns and the Commission agreed months ago that the debate moderator would choose the topics,” National Press Secretary TJ Ducklo said in a statement provided to Fox News.

“The Trump campaign is lying about that now because Donald Trump is afraid to face more questions about his disastrous COVID response. As usual, the president is more concerned with the rules of a debate than he is getting a nation in crisis the help it needs."

But Ali Pardo, Deputy Communications Director for the Trump campaign, told Fox News that "[o]ver the past several months, the CPD [Commission on Presidential Debates] verbally confirmed on multiple occasions that the third debate would have a foreign policy focus."

Senate Minority Leader Chuck Schumer, D-N.Y., previously suggested a "mute button" would be necessary for another debate to take place.

"Maybe we should give the moderator a mute button, given how President Trump just interrupts at will," Schumer said a day after the first debate. "And the bottom line is Donald Trump doesn't follow the rules [and] the commission has got to get a lot tougher."

But his counterpart in the House, Minority Leader Kevin McCarthy, R-Calif., argued a mute button gave the moderator too much power. 

"If you are going to run for the free leader of this world we want to hear what you have to say, but now we're going to allow one person to moderate it to determine what the American people can hear from our candidates?" he previously said on "Fox & Friends."

Fox News' Brooke Singman and the Associated Press contributed to this report.

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World News

Split High Court Rejects Pennsylvania GOP, Allows Late Ballots

An evenly divided U.S. Supreme Court allowed a three-day extension for the receipt of mail-in ballots in Pennsylvania, giving Democrats a boost in a state that could determine the presidential election.

The justices, voting 4-4 and giving no explanation, rejected a Republican bid to reinstate the state’s requirement that ballots arrive by 8 p.m. on Election Day, Nov. 3. The Pennsylvania Supreme Court extended the deadline until Nov. 6, even if the ballots lacked a legible postmark showing they were mailed by Election Day.

The breakdown underscores the impact Amy Coney Barrett could have if, as expected, she secures Senate confirmation next week to fill a vacancy on the court. Chief Justice John Roberts joined the court’s three Democratic appointees in voting to allow the extension.

Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Brett Kavanaugh would have granted the Republican request and reinstated the Nov. 3 deadline. The court deliberated for almost two weeks over the case.

Pennsylvania, where polls show Democrat Joe Biden leading President Donald Trump, could become a focus in any post-election legal showdown. By law, election officials can’t start counting mail in-ballots until Election Day, meaning the results might not be known for days. More than 2.7 million Pennsylvania voters have requested mail ballots.

Pennsylvania is allowing no-excuse mail-in voting for the first time in 2020. A measure passed last year by the Republican-controlled state legislature and signed by the Democratic governor said those ballots had to be received by 8:00 p.m. on Election Day.

Mail Delays

After the pandemic hit and then the U.S. Postal Service warned about likely mail delays, Democrats sued to try to extend the ballot-receipt deadline for seven days. Democrats pointed to a state constitutional clause that guarantees a “free and equal” election.

Pennsylvania’s top elections official, Democratic Secretary Kathy Boockvar, then told the state’s Supreme Court that a three-day extension would be sufficient, and the court granted that extension on a 4-3 vote. The Pennsylvania court ruling required elections officials to presume that any ballot received by Nov. 6 was mailed on time, even if it lacked a legible postmark.

Pennsylvania Republicans told the U.S. Supreme Court that the state court ruling violates the federal laws that establish a single nationwide Election Day. The ruling “has created a strong likelihood that ballots cast or mailed after the scheduled election day will count in the upcoming general election,” the Pennsylvania Republican Party argued in court papers.

State Legislatures

Two leading Republican state senators asked the U.S. Supreme Court to go even further and throw out the deadline extension altogether. They said the Pennsylvania Supreme Court violated a U.S. constitutional provision that says state legislatures get to set the rules for the presidential election.

“The Supreme Court of Pennsylvania’s decision makes precisely the kind of policy choices the elections clause assigned to the various state legislatures,” Senate President Pro Tempore Joseph Scarnati and Majority Leader Jake Corman argued.

Democrats said the Pennsylvania Supreme Court ruling didn’t change the state’s requirement that votes be cast by Election Day. And they said the U.S. Constitution doesn’t prevent a state’s highest court from interpreting its own constitution and election laws.

“Rather than usurping the role of the General Assembly, the Pennsylvania Supreme Court applied established state constitutional principles and then endeavored to discern the remedy that the General Assembly would have wanted,” the Pennsylvania Democratic Party argued.

Boockvar said Republicans were seeking to have the Supreme Court “intrude upon Pennsylvania law and sovereignty.”

The cases are Scarnati v. Boockvar, 20A53, and Republican Party of Pennsylvania v. Boockvar, 20A54.

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Average credit scores rose slightly over the summer, despite record unemployment and economic pain

  • In July, the average credit score was 711 compared to a reading of 708 in April, according to a report by The Wall Street Journal.
  • The report concluded that the increase in credit scores nationwide stemmed from both financial assistance by the government and expanded unemployment benefits.
  • Visit Business Insider's homepage for more stories.

The average credit score for Americans rose slightly during the novel coronavirus pandemic, even though times have gotten more stressful and difficult for many. 

In July, the average credit score was 711 compared to an average score of 708 in April, the Wall Street Journal reported on Sunday. July's average also compares to an average credit score of 706 just one year ago. 

The report concluded that the increase in credit scores nationwide stemmed from both financial assistance by the government as well as expanded unemployment benefits that made it easier for some Americans pay their bills on time and pay off any debt they might have. 

FICO scores range from 300 to 850. They're calculated based on numerous factors such as payment history, loan applications and credit reports from consumers. The Journal received its data from Fair Isaac Corp., the California-based data analytics company that creates the score. 

"First the macro stress occurs, and then it takes a few months for the strain to show up in people's credit reports," Ethan Dornhelm, vice president of scores and predictive analytics at FICO, said to The Journal. Dornhelm added that both federal stimulus and deferment programs "are having a further effect of pushing out that stress for many people."

The unemployment rate declined to 7.9% in September, down from a historic high 14.7% in April, with the US economy adding 661,000 more jobs. Despite the drop in unemployment, other pieces of economic data portray that millions of Americans are still struggling to get by on a daily basis.

"The first few months after reopening was always going to see the easy economic gains," Seema Shah, chief strategist at Principal Global Investors, said following the release of September's jobs report by the Bureau of Labor Statistics. "Now is when additional positive economic surprises become harder to come by."

Long-term unemployment continues to increase after coming off the biggest spike on record, and on Thursday the Labor Department announced that US jobless claims jumped to an unadjusted 898,000 for the week that ended Saturday, October 10. 

Negotiations between Congress and the White House for a second stimulus package have stalled ever since the Coronavirus Aid, Relief, and Economic Security Act, or the $2.2 trillion CARES Act, passed in March. On Sunday, House Speaker Nancy Pelosi said that a stimulus deal needs to be reached by Tuesday in order for some type of legislation to be passed by election day on November 3.

Consequently, if both parties can't reach a deal, then American consumers might see the quality of their credit slowly decline, according to The Journal's report.

"We're afraid that in a couple months there could be real damage to credit reports," Francis Creighton, chief executive of the Consumer Data Industry Association, told The Journal.

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Business

7.5 Magnitude Quake Off Alaska Prompts Tsunami Warning

Juneau, Alaska (AP) — A reported 7.5 magnitude earthquake off the Alaska Peninsula on Monday prompted tsunami warnings for a vast swath of communities, leading some schools to evacuate and send students to higher ground.

Raynelle Gardner, a secretary at Sand Point School in the Aleutians East Borough School District, said things are hectic because “this is an evacuation point.”

Some schools in the Kenai Peninsula Borough School District were evacuating to higher ground, the district said on Twitter.

Public safety officials in King Cove sent out an alert urging residents in the coastal area to move inland to higher ground.

The tsunami warning was issued by the National Tsunami Warning Center, following an earthquake off Sand Point, Alaska.

The size of the quake was originally reported to have been a magnitude of 7.4, but has been revised to a 7.5, said Paul Caruso, a geophysicist with the U.S. Geological Survey. He said an earthquake of this size, in this area, is not a surprise.

“This is an area where the Pacific Plate is subducting underneath the North American Plate. And because of that, the Pacific Plate actually goes underneath the North American Plate, where it melts,” Caruso said, noting that’s why there are volcanoes in the region. “And so we commonly have large, magnitude 7 earthquakes in that area.”

The National Tsunami Warning Center in Palmer, Alaska, said the tsunami warning was in effect for roughly 950 miles (1,529 kilometers), from 40 miles (64 kilometers) southeast of Homer to Unimak Pass, about 80 miles (129 km) northeast of Unalaska.

Unalaska officials sent out a message saying the city is just outside the warning zone and they aren’t ordering evacuations right now. Unalaska public safety officials earlier Monday had sent out a release saying they would be conducting tests of the community’s tsunami warning sirens.

The Alaska Earthquake Center said the quake was widely felt in communities along the southern coast, including Sand Point, Chignik, Unalaska and the Kenai Peninsula. The Alaska Earthquake Center said a magnitude 5.2 aftershock was reported 11 minutes later, centered roughly in the same area.

“It was a pretty good shaker here,” said David Adams, co-manager of Marine View Bed and Breakfast in Sand Point. “We’re doing OK.” He said all guests were accounted for and “the structure itself is sound.”

“You could see the water kind of shaking and shimmering during the quake,” he said. “Our truck was swaying big time.” He didn’t take any photos or video: “It just kind of happened of all of a sudden.”

Rita Tungul, front desk assistant at the Grand Aleutian Hotel in Unalaska, said she felt some shaking but it wasn’t strong. Her coworker didn’t feel the quake at all, she said.

Connie Newton, owner of the Bearfoot Inn, a grocery store, liquor store and small hotel in Cold Bay, said the temblor it felt like someone drove into her building with a truck. Still, nothing fell to the ground and she suffered no damage because she earthquake-proofed her stores by installing 2-inch (5-cm) risers around the outside of her selves.

___

Associated Press journalists Jennifer Sinco Kelleher, Audrey McAvoy and Caleb Jones in Honolulu and Mark Thiessen in Anchorage contributed to this report.

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Trump is 'sitting' on $9 billion earmarked for COVID-19 testing because of a controversial advisor, new report reveals

  • The Trump administration has not spent $9 billion in funding for COVID-19 testing due to opposition from Scott Atlas, an advisor on the White House coronavirus task force, per a Washington Post report.
  • Atlas is not an infectious disease expert and has emerged as perhaps the most controversial advisor on the task force by promoting ideas in line with Trump's anti-science approach to the pandemic.
  • "We're demanding that the feds release … those dollars," Senate Minority Leader Schumer said on Sunday, urging the Trump administration to commit to a "robust testing and tracing program."
  • Visit Business Insider's homepage for more stories.

The Trump administration has yet to spend $9 billion allocated by Congress for COVID-19 testing due to a controversial advisor who has garnered significant influence over the White House's pandemic response, according to a Washington Post report based on interviews with 41 administration officials, advisors to the president, public health leaders, and others.

Dr. Scott Atlas, a radiologist who is not an expert on infectious disease, has taken a fervent stance against expanded testing, per the Post report, in contrast to the advice of top experts on the White House coronavirus task force such as Dr. Anthony Fauci and Dr. Deborah Birx.

Senate Minority Leader Chuck Schumer on Sunday decried the Trump administration, and more specifically the Department of Health and Human Services, for "sitting" on the $9 billion in funding for testing and tracing. 

"We're demanding that the feds release … those dollars," Schumer said, calling on the Trump administration to commit to a "robust testing and tracing program."

The White House did not immediately respond to a request for comment from Insider. 

Atlas, a healthcare-policy expert who works at the Hoover Institute, a conservative think tank at Stanford University, has quickly consolidated influence on the task force in recent months by advocating strategies that are more in line with the president's rejection of harsh restrictions to mitigate the spread of the virus. 

He's reportedly pushed hard for a herd immunity approach to the pandemic, which occurs when enough of a population develops resistance to a disease, whether through exposure or through a vaccine, to interrupt the virus' spread.  Top experts have warned that allowing COVID-19 to spread through the country unchecked could lead to half a million US deaths from the virus, which has killed nearly 220,000 Americans as of Monday afternoon. 

Atlas, who was tapped by Trump to join the task force in August after repeated appearances on Fox News, in a statement to the Washington Post rejected the notion he's advocated a herd immunity strategy, but multiple reports suggest otherwise.

Over the weekend, Twitter removed a tweet from Atlas that misleadingly told the public that face masks don't help to prevent the spread of COVID-19. Trump has also pushed against wearing masks or face-coverings, contradicting his advisers and a mountain of evidence that masks are a vital tool in preventing the spread of COVID-19. 

Atlas' presence on the coronavirus task force has created tension within the unit and seen top advisors like Fauci and Birx increasingly sidelined, according to the Post. This is seemingly linked to the fact they provide advice to Trump that runs counter to his political goals. Atlas has also challenged the analysis of Birx and other top officials with "junk science," three senior administration officials told the Post. 

The president on Monday attacked Fauci during a campaign call and referred to him as a "disaster," CNN reported.

"If I listened to him, we'd have 500,000 deaths," Trump reportedly said, adding: "People are saying whatever. Just leave us alone. They're tired of it. People are tired of hearing Fauci and all these idiots."

A few hours later, Trump also mocked the infectious disease expert's baseball skills on Twitter.

"Tony should stop wearing the Washington Nationals' Mask for two reasons. Number one, it is not up to the high standards that he should be exposing," the president tweeted. "Number two, it keeps reminding me that Tony threw out perhaps the worst first pitch in the history of Baseball!"

Trump, who was diagnosed with COVID-19 in early October and subsequently hospitalized, has taken an anti-science approach to the pandemic. Top public health experts have pointed to this haphazard and lackluster response as a key factor in the US outbreak spiraling out of control. There have been over 8.1 million confirmed cases of COVID-19 in the US, more than any other country in the world, per Johns Hopkins University.

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3 times my emergency fund saved my life, and 2 I wished I had one but didn't

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

  • In my early 20s, I took low-paying jobs outside my field without even negotiating; my lack of savings made me feel like I had to take what I could get.
  • When I totaled my car just days after quitting my job, I vowed to save money in my next job.
  • Saving up a year's worth of living expenses has allowed me to fly out to family in times of crisis, weather a breakup, move to a new city, and handle pandemic-related income loss all without money stress being an added burden.
  • See Business Insider's picks for the best high-yield savings accounts »

If someone had told me I should save money for emergencies as a young adult, I probably would've laughed in their face. I would have rather spent my money than let it sit around collecting dust, and I probably would have said that's what credit cards are for.

After several years of going through adult life and a couple moments in which I really could've used some savings to back me up, I finally realized the life-changing magic that is an emergency fund. To prove its power, here are two times I wish I'd had one, and three times I was so glad I did.

2 times I wish I'd had an emergency fund

1. When I felt stuck in a job I hated

Throughout my early 20s, whenever I needed a job, I always took the first offer I got. I didn't even negotiate my pay the first time — which was just $12 an hour. With no money in my savings, I felt like I needed to take what I could get. This led me into a series of low- or mediocre-paying jobs in fields that didn't interest me.

One of those jobs had me working 60 to 70 hour weeks on a modest salary and did nothing to get me closer to the kind of work I actually wanted to do. However, I stayed in that job for three long years because I felt stuck. Opportunities where I lived were slim, and I barely had the money to get me through a move, let alone a job search. 

If I'd had an emergency fund, I would've left that job much sooner — or perhaps not even taken it in the first place — and I'd probably be further along in my field now. I suspect I would've been far better at negotiating my pay as well, because the best negotiations tend to happen when you can afford to walk away.

2. When I got into a car accident

Despite not having much money saved up, I started to make a plan to quit my first job out of college so I could move across the country and look for a new one. I figured I could crash on a friend's couch until I found work.

The day after I put in my notice at work, I got into a car accident. The other car T-boned mine, completely crushing the driver's side door. Luckily I came out of it unscathed, but the car I'd planned to fill with my belongings and drive cross-country was totaled. 

I could barely afford the repairs, but I definitely couldn't afford a car payment without a job. So, I drained my savings to replace the door, a repair that ended up costing more than my 22 year old car was even worth. I went through with my plan to move across the country and ended up having to live off my credit card for the first month. This meant that I once again took the first job offer I could get, barely negotiated, and went into the job with a few thousand dollars in debt. 

If I'd had an emergency fund, I could've covered the repairs and still made the move without getting into debt. I might've even put the money toward a new car instead of repairing my old one that would only last a couple more years.

3 times I was glad I had emergency savings

After moving to a new city strapped with credit card debt and having to yet again take the first job offer I got, I vowed to always keep money in savings. I started saving a portion of each paycheck through automatic deposits into a high-yield savings account. This helped me build up an emergency fund that could last me six months with no income. 

After that, I built it up to one year's living expenses. In addition to covering emergencies and necessities, the fund was now big enough to cover the occasional non-essential but important purchase in the event of unexpected life changes.

There are three instances when I was especially glad to have that cash.

1. When family members died

I moved abroad in my mid-20s, which put me an expensive plane ride away from all my family members. I was usually able to earn enough airline miles to fly home once every year for the holidays, but if anything else came up, a last-minute flight could run me anywhere from $700 to over $1,000.

Luckily, I had a generous emergency fund saved up by this point. Over the years, several of my relatives died, and I was able to dip into my emergency fund to buy a flight home for the funeral. I know my presence meant the world to my family, and I don't think I would've been able to make that happen if it weren't for my savings account.

2. When I went through a breakup

I'd been living with my partner for a little over a year when we decided to split up. We still had two months left on our lease, but I couldn't imagine sticking it out after the breakup. Even if one of us moved out, we lived in an incredibly small town, and I felt I really needed some distance to help me heal and move on.

If I hadn't had money saved up, I would've had to stick around in that town and take over the lease for a couple months. Because I did have a healthy emergency fund, I was able to move into the city and get a nice Airbnb for the first month. It even had a pool with city views, which I was certain could help me get over any heartbreak. 

I even dipped into my savings to cover some much-needed self-care expenses, like signing up for a new gym membership, a co-working space, and some creative classes I'd always wanted to take. All in all, the breakup and move ended up costing me several thousand dollars. Being able to easily cover that without feeling stressed about money on top of an already difficult emotional time was priceless.

3. When the pandemic hit

As a freelancer with multiple streams of income, I was lucky they didn't all dry up at once when the coronavirus pandemic hit. However, because a good amount of my work involves travel, I did lose some work and clients. My income went down by about 50% in March, and it didn't start recovering until August.

Thanks to my emergency fund, I was able to get through six months on half of what I normally make fairly comfortably, all while covering a move back to the US. 

Without that fund, I probably would've scrambled to find any work that I could get, accepting low-paying jobs outside of my field once again. Instead, I was able to slowly work my way back up to full employment doing work I actually want to do while staying firm with my rates.

Having an emergency fund is about so much more than paying for random, unexpected expenses. In the end, it shifts your mindset from scarcity to abundance, and that changes everything. I can look a job offer in the face, and if it's not exactly what I want, I can comfortably say, "Something better will come along." I can end an unhealthy relationship and pamper myself a little. I can move to a new city without worrying how I'll cover temporary housing or a rental deposit.

My emergency fund gave me the freedom and flexibility to bounce back from setbacks and make life decisions based more on what's best for me than what's affordable.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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Georgetown University hires Peter Strzok to teach at foreign service school

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Former FBI special agent Peter Strzok, who drew notoriety for anti-Trump text messages he sent during an extramarital affair with FBI attorney Lisa Page while employed by the bureau, is now an adjunct professor at Georgetown University's Walsh School of Foreign Service.

Georgetown University's website lists Peter Strzok II as an adjunct in its undergraduate program, and Strzok has added his position at Georgetown to his Twitter bio.

PETER STRZOK'S LAWYER CLAIMS NOTES MADE PUBLIC BY FLYNN'S DEFENSE WERE 'DOCTORED'

The Walsh School of Foreign Service offers undergraduate and graduate studies and describes itself as a "premier school of international affairs." Prominent alumni include former President Bill Clinton, former Secretary of Homeland Security Kirstjen Nielsen, Bloomberg Media Group CEO Justin B. Smith and conservative commentator Daniel Henninger.

A screenshot of former FBI special agent Peter Strzok’s Twitter bio, which now includes his role at Georgetown University.

Strzok, who was fired from the FBI in 2018, was one of the investigators who questioned former national security adviser Michael Flynn about his discussions with Russian officials in 2017 and believed he lied about them.

Strzok was removed from then-special counsel Robert Mueller's team once those messages were discovered. A report from Justice Department Inspector General Michael Horowitz said Strzok's messages were inappropriate and "cast a cloud over the FBI’s handling" of the investigation into former Secretary of State Hillary Clinton’s private email server.

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Georgetown and Strzok did not immediately respond to Fox News' request for comment.

Fox Business' Brittany De Lea and Andrew O'Reilly contributed to this report.

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