Signs of an unusual ‘richcession’

Here are three of the week’s top pieces of financial insight, gathered from around the web:

Oversharing on Venmo

Venmo is still sharing way too much of your personal life, said Brian X. Chen in The New York Times. Despite numerous complaints, the money-transfer app “is still set by default to publicly share when you receive or make a payment.” This means you can potentially “see transactions among people who are not your friends if you visit their profile.” Recently, The Guardian did just that, discovering through “a Venmo feed that an aide for Justice Clarence Thomas was taking payments from lawyers who have had business with the Supreme Court, a potential conflict of interest.” I realized only recently that Venmo also makes your contact list — pulled from your phone’s address book — viewable to anyone. I quickly switched that setting to “private.”

Signs of an unusual ‘richcession’

Unemployment is rising fastest among households making $125,000 or more, said Irina Ivanova in Fortune. A recent note from analysts at Bank of America said that the number of high-income households receiving unemployment benefits was up about 70% in a year, “more than double the rise in the lowest-income bracket.” Tech, finance and other white-collar workers have been hit by layoffs this year, “even as restaurants and construction companies keep hiring.” Wages for the top income bracket have stayed flat in 2023 “while rising 3% for the lowest paid third.” A typical downturn “crushes the poor but merely inconveniences the wealthy.” The current climate suggests we may instead be approaching something more like a “richcession.”

Robinhood meme-stock suit fails

Robinhood prevailed over a lawsuit brought by investors who claimed the brokerage cost them money during the meme-stock craze, said Jonathan Stempel in Reuters. The proposed class action centered around the brokerage’s controversial decision “to restrict purchases of 13 ‘meme stocks,'” including GameStop, during the January 2021 frenzy. Critics say the decision harmed mostly small traders, who used the app while big Wall Street institutions kept trading. But an appeals court recently dismissed the claims of harm because the company’s “standard customer agreement specifically authorized the restrictions” by not suggesting Robinhood would accept all trade orders. Circuit judge Britt Grant said that Robinhood hadn’t done anything illegal but had taken “a sizable — and perhaps justifiable — hit in the court of public opinion.”

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