Headline News Archives

Friday 10.07.2016

Below-Average 156,000 September Job Numbers ‘Reflects a Healthy Economy’

U.S. employers added 156,000 jobs in September, a decent gain that reflects a healthy economy but also a sign that hiring has slowed from its robust pace last year.

The unemployment rate ticked up to 5 percent from 4.9 percent, but mostly for a positive reason: More Americans came off the sidelines and looked for work, though not all of them found jobs.

Job growth has averaged 178,000 a month so far this year, down from last year’s pace of 229,000. Still, hiring at that level is enough to lower the unemployment rate over time. Economists have expected the pace to slow as the supply of unemployed workers declines.

The hiring figures could keep the Federal Reserve on track to raise the short-term interest rate it controls by December. After seven years of pinning that rate at a record low near zero to try to spur more borrowing and spending, the Fed raised its rate in December. It has not acted since. But the Fed signaled after its policy meeting last month that it would likely act in the coming months. The Fed will meet in November, just before the election, but analysts expect it to hold off until the campaign ends.

Americans like their jobs, but worry about keeping them

Americans generally enjoy what they do for a living, but they are concerned about diminishing job security. So finds a new report from the Pew Research Center, in association with the Markle Foundation. The study looked at how the shifting economic landscape is reshaping work and society. The findings are based on interviews with 5,006 adults conducted in May and June and also Census data.

The 2016 presidential election has shone a spotlight on jobs and whether Americans today need a college degree to get ahead, or even just to tread water, as well as the impact of globalization and trade on American workers.

Pew's study found the vast majority of Americans are happy with their jobs. Some 49% say they are very satisfied and another 30% say they are somewhat satisfied with their current employment, the study found. Only about 15% said they were either very dissatisfied or somewhat dissatisfied with their positions.

Workers are also holding onto their jobs longer than in the past. The share of folks who've been with their current employer for at least five years rose to 51% in 2014, up from 46% in 1996, according to Census figures Pew analyzed for the study. This is especially true among older workers. Some 76% were working at the same company for at least five years in 2014, up from 67% in 1996.

Deutsche Bank cuts another 1,000 jobs in Germany as part of global cuts

Embattled German lender Deutsche Bank has announced plans to cut 1,000 jobs in Germany, as part of a restructuring plan. This brings the total of jobs being cut in the country to around 4,000.

The jobs are part of the 9,000 role reductions worldwide, which were previously announced as part of the bank strategy to make the group “more competitive”.

"We consistently implement our strategy to make the bank more efficient," said Karl von Rohr, member of Deutsche Bank's management board, in a press release on Thursday.

"We are fully aware that today's decision is a difficult change with significant personal impact for many employees. We will ensure that any staff reductions are carried out in a socially responsible manner," he added. The most recent round of job cuts will mostly affect employees in the bank’s chief operating office, with the rest spread over several departments such as human resources, communications and corporate finance.

Theranos will shut labs and cut 40% staff

Controversial US blood-testing company Theranos is shutting clinical and medical facilities and slashing jobs, three months after its founder was banned from owning a laboratory. Theranos pioneered new cheap and quick tests, but regulators investigated the firm after ex-employees told a newspaper the tests were unreliable.

Founder Elizabeth Holmes once ranked as America's richest self-made woman. This summer, Forbes magazine estimated her worth as next to nothing. In a letter on the company's website, Ms Holmes said the facilities' closures would affect 340 staff, 40% of the workforce.

She said the company's work would continue: "After many months spent assessing our strengths and addressing our weaknesses, we have moved to structure our company around the model best aligned with our core values and mission.

"We will return our undivided attention to our miniLab [portable blood-testing product] platform. Our ultimate goal is to commercialise miniaturised, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, paediatrics and intensive care."

Can Trump help bring back blue-collar jobs?

Drop in Gold Prices to Push Demand

Normally, if the price of something special falls, demand rises. The World Gold Council (WGC) believes that demand for gold will be spurred by other economic factors as well. The price of gold is going north, at least according to the WGC’s analysis.

The organization’s reasoning: The gold price fell below US $1,300/oz, the first time it has been at these levels since June 2016. We believe this price drop will likely result in physical buying.

The need of central banks to continue to fix faltering major economies and worry about uncertainty about the future of the developed world will be factors: We believe that a shift in monetary policy need not signal lower gold prices. The price dip will likely result in physical demand from consumers, long term investors and central banks. The broader market environment of ongoing low and negative interest rates, coupled with continuing political, economic and policy uncertainty remains unchanged, and are generally positive for gold.

In other words, gold is a sort of investor’s safe haven. Even with a pullback in price, the WGC points out that gold has been an excellent investment this year, only exceeded by the price of oil. Gold’s return has been 20%, against, for example, U.S. stocks, which have been closer to 7%.

University of Illinois has cut more than 500 jobs in last 18 months

The employee count at the University of Illinois has dropped by more than 500 in the last 18 months, a response to the state's fiscal problems, officials said Wednesday. President Tim Killeen released what he called an "interim report" on budget-cutting efforts, showing that 484 non-instructional staff positions have been cut since February 2015, a 3 percent drop.

Most of the reductions have come through attrition, and 202 positions, or 41 percent, were in university administration at the system level. That represents a 17 percent cut, from 1,211 university administration employees in February 2015 to 1,009 last month, Killeen said.

The three campuses in Urbana, Chicago and Springfield lost more than 282 full-time-equivalent staff positions over the same time period — including 192 at the Urbana campus. Non-instructional staff includes academic-professional and civil-service employees at the three campuses and university administration. UI hospital workers are excluded.

A breakdown of the cuts by job category was not available. In fact, the numbers aren't a count of specific positions cut but rather a net reduction comparing employment counts at two points in time — February 2015 and September 2016.

Dutch Central Bank To Move Its Gold From Amsterdam To A Former Military Air Base

Nearly two years after the Netherlands made waves in the gold market when it announced that it had secretly repatriated 122 tons of physical gold from the New York Fed, this morning there was another surprising announcement out of the Dutch central bank which said is was planning to move the country’s gold reserves from the centre of Amsterdam to land owned by the defence ministry near Zeist. According to a statement by the bank, the security measures necessary to guard the gold are a problem for both staff and visitors, and as a result it would transfer the assets to a safer location.

The aim is to move the gold to the new location, Camp New Amsterdam, at the beginning of 2022. The new complex, dubbed the Cash Centre, will also be used to sort and distribute bank notes and to hunt for fake cash. According to official data, some 189 tons of gold are stored in Amsterdam but the bank has total reserves of 612 tons. In order to spread the risk, Dutch gold is also held in central banks in New York, Ottawa and London.

Camp New Amsterdam, also known as Soesterberg Air Base, was a Royal Netherlands Air Force military air base located in Soesterberg, 14 kilometres (8.7 mi) east-northeast of Utrecht. It was first established as an airfield in 1911, and in 1913, the Dutch Army bought the field and established the Army Aviation Division.

For almost 40 years, United States Air Force facilities at Soesterberg, named Camp New Amsterdam was a major front line USAFE air base during the Cold War. The base was closed on 31 December 2008, due to budget cuts in the Dutch Army. The air base ceased flying operations on 12 November 2008, when the command was transferred from the Dutch Air Force to Dutch Defense who will take care of the base until it will be given back to nature. The last fighter ever to depart, delayed due bad weather at Aviano AB, was a Greek F-4E Phantom II. The former USAFE part stays in military hands, and will now officially be called Camp New Amsterdam.

Fed Running Out of Excuses to Avoid Rate Hike

Federal Reserve policy makers may find it harder to avoid raising interest rates, after lifting them only once in the past 10 years, said Brian Nick, a strategist at $889 billion asset manager TIAA.

“It looks like, if anything, the economy is picking up steam,” Nick said Thursday in a Bloomberg Television interview. “That should give the Fed a little bit more faith -- we’ll have to see where the jobs number comes in tomorrow -- that it can go ahead and begin raising rates.”

American service companies expanded in September at the fastest rate in almost a year, according to data this week from the Institute for Supply Management’s non-manufacturing index. Any person who was discouraged by figures from a month earlier “has to be very happy about how the numbers have come in,” Nick said. Payroll growth in the U.S. probably picked up in September as employers added about more than 170,000 workers, signaling steady labor-market improvement, based on economists’ projections ahead of a government report Friday.

The Federal Open Market Committee has opted at all six meetings this year not to raise rates. The FOMC, which meets next on Nov. 1-2, raised its target for the federal funds rate to a range of 0.25 percent to 0.5 percent in December, after keeping the benchmark near zero for seven years. Federal Reserve Bank of Richmond President Jeffrey Lacker, who dissented twice last year in favor of raising interest rates, this week urged the committee to hike rates to head off a likely pickup in inflation. “It’s running out of excuses not to at this point,” Nick said.

Can You Trust The Press?

US Admits Record Number of Muslim Immigrants

A recent study by Pew found that a record near-half of all refugees that entered the United States in FY2016 were Muslim, marking the highest number of Muslim refugees recorded since religious self-reporting data became available 14 years ago.

According to Pew: A total of 38,901 Muslim refugees entered the U.S. in fiscal year 2016, making up almost half (46%) of the nearly 85,000 refugees who entered the country in that period, according to a Pew Research Center analysis of data from the State Department’s Refugee Processing Center. That means the U.S. has admitted the highest number of Muslim refugees of any year since data on self-reported religious affiliations first became publicly available in 2002.

Pew added that “A slightly lower share of 2016’s refugees were Christian (44%) than Muslim, the first time that has happened since fiscal 2006, when a large number of Somali refugees entered the U.S.”

Included in the nearly 85,000 refugees admitted this year were 12,587 Syrians, an admission total that surpassed President Obama’s pledge to admit 10,000 refugees from the war-torn nation in FY2016. Of those Syrian allowed into the United States, 99 percent were Muslim, while less than one percent were Christian. As MRCTV reported last month, predominantly Muslim countries currently make up the largest single contributor of refugees to the United States when broken down by state religion.

Wal-Mart Plans to Slow New Store Openings, Invest in Online

Wal-Mart Stores Inc. is planning to slow new store openings as it looks to pour more money into its online efforts, technology and store remodels. Wal-Mart closed on its more than $3 billion buyout of the fast online retailer last month, showing how heavily it's willing to invest as it tries to boost online sales that totaled $13.7 billion last year — still just a fraction of the company's annual revenue.

The world's biggest retailer also said Thursday that it anticipates fiscal 2018 earnings per share being about flat versus its fiscal 2017 adjusted earnings per share. Wal-Mart foresees fiscal 2019 earnings per share growth of about 5 percent.

Wal-Mart, based in Bentonville, Arkansas, outlined its plans for the next several years ahead of its meeting with investors Thursday. Executives are expected to offer more updates on how it will integrate its business with its online operations and offer more insight into how it will compete against online leader

"We are encouraged by the progress we're seeing across our business and we're moving with speed to position the company to win the future of retail," said CEO Doug McMillon in a statement. "Our customers want us to run great stores, provide a great e-commerce experience and find ways to save them money and time seamlessly - so that's what we're doing."

Taxpayers fueled much more of Mylan's EpiPen revenue as prices rose sharply

As EpiPen prices grew and grew and grew, it was increasingly American taxpayers that were footing the bill. The share of revenue that big drug maker Mylan got for its life-saving EpiPen from taxpayers more than doubled in the past five years — a period when prices of the anti-allergy device climbed more than 350 percent, a US Senator said Thursday.

Sen. Chuck Grassley, R-Iowa, said his office compared newly released information from the government-run health coverage programs Medicare and Medicaid to Mylan's filings with the Securities and Exchange Commission.

"The Grassley analysis finds that the share of Mylan's revenue for EpiPens from the taxpayers went up each year from 2011 to 2015, from 23.3 percent in 2011 to 53.4 percent in 2015," the senator's office said.

"Total government charges for EpiPens increased 463 percent while EpiPen unit sales at large increased only 51 percent from 2011 to 2015," the office said. "This is beyond the over-charging for EpiPens under a Medicaid misclassification, which Grassley is pushing the Centers for Medicare and Medicaid Services (CMS) to explain."

Pound hits 31-year low, US initial jobless claims hit 43-year low

People in California are starting to use their homes as piggy banks

The surge in home values in California is prompting a growing number of homeowners to treat their properties like piggy banks and draw cash out of their homes.

They are using the equity on their homes to access credit products that take advantage of the higher value, according to a September report from the California Credit Union League.

For instance, the league observed a rise in the number of people getting Home Equity Lines of Credit (HELOCs) — an extra credit line that uses the homeowner's property as collateral in case they are unable to pay.

The league also observed a rise in cash-out refinance mortgages. That's essentially a second mortgage that's larger than the existing mortgage on the house, pays it off, and lets the homeowner keep the change. That cash is not free, however, as the borrower would need to pay interest on it.

The Great Debt Unwind: Business Bankruptcies Soar 38%

Something funny happened on the way to the bank: In August, commercial and industrial loans outstanding at all banks in the US fell for the first time month-to-month since October 2010, which had marked the end of the collapse of credit during the Financial Crisis.

In October 2008, the absolute peak of the prior credit bubble, there were $1.59 trillion commercial and industrial loans outstanding. As the Great Recession chewed into the economy, C&I loans plunged. Many of them were cleansed from bank balance sheets via charge-offs. But then the Fed decided what the US needed was more debt to fix the problem of too much debt, thus kicking off what would become the greatest credit bubble in US history. By July 2016, C&I loans had surged to $2.064 trillion, 30% above their prior bubble peak.

But in August, something stopped working: C&I loans actually fell 0.3% to $2.058 trillion, according to the Federal Reserve Board of Governors. That translates into an annualized decline of 3.8%, after an uninterrupted six-year spree of often double-digit annualized increases.

It’s still too early to tell how significant this dip is. It’s just the first one. It could have occurred because companies borrow less because they need less money as there’s less demand, and expansion is no longer on the table. Or it could have occurred because banks are beginning to tighten their lending standards, with one hand on the money spigot. And all this is occurring while banks write off more nonperforming loans (and thus remove them from the C&I balances) that have resulted from mounting defaults and bankruptcies by their customers.

Average U.S. household will spend $1,388 on Christmas

Low-income shoppers are feeling better about their finances and are seen fueling a rise in holiday spending this year, a new study has found. Households with an annual income of less than $50,000 plan to spend $837 on gifts, travel and entertainment this Christmas, up 23 percent from 2015, according to PwC. While households earning more than that amount will shell out substantially more — an average $1,388 — that figure would represent just 4 percent growth.

The wealthiest shoppers plan to rein in their spending, with those households earning $150,000 or more saying they'll spend $1,812. That would be a 3 percent dip compared with last year.

Households earning between $100,000 and $149,999 are seen tightening their grip even more, and are planning to shell out $1,394 — down 10 percent from last year. PwC's forecast includes spending on restaurants and travel, unlike the National Retail Federation's forecast: On Tuesday it said it expects retail sales excluding automobiles, gasoline and restaurants to rise 3.6 percent in November and December, to $655.8 billion. That would mark an acceleration over last year's 3 percent increase, and would easily top the 10-year average of 2.5 percent growth.

The trade organization's forecast, considered the industry benchmark, is based on an economic model that factors in consumer credit, monthly retail sales and personal income. NRF anticipates non-store sales, which skew toward digital, will increase between 7 percent and 10 percent, to as much as $117 billion.

ECB: Ready to do add more stimulus, but not right now

Top officials at the European Central Bank remain open to providing new stimulus to raise inflation in the 19 countries that use the euro as their currency -- but for now they’re emphasizing carrying out measures they have already agreed on.

That’s according to a written account released Thursday of the Sept. 8 meeting of the bank’s 25-member governing council.

The council members stressed their commitment to continue at least through March 2017 with the stimulus program under which the EBC is buying 80 billion euros ($90 billion) in bonds every month with newly created money. The bank is also extending ultra-cheap loans to banks, in hopes that money will find its way into the economy in the form of more credit to companies and consumers.

The stimulus efforts aim to raise inflation from an annual 0.4 percent toward the bank’s goal of just under 2 percent, considered more in line with a healthy economy. The measures, along with record low benchmark interest rates, “had not yet filtered through to final variables such as growth and inflation,” according to the account.

Indian Call Centers Made Up To $225K/Day Pretending To Be From IRS

No one wants to get a call from the Internal Revenue Service, and for many people the tax return process is confusing and fraught with potential for errors. So when someone calls claiming to be from the IRS and in need of more information, or saying you need to pay up or face arrest, you might assume it’s a legitimate call. It’s not. This week, police in India detained hundreds of employees from three different call centers for allegedly making these sorts of scam calls — and raking in big money in the process.

a disgruntled call center employee that these centers were calling American phone numbers, claiming to be from the IRS and telling their victims that they had defaulted on their tax debt and must now pay — anywhere from a few hundred dollars to several thousand dollars, which would be remitted via prepaid cash card.

We know what you’re thinking: I would never fall for that. You’re probably correct, and that’s awesome, but a lot of people fell for this. Thane police say the scammy call centers were raking in anywhere from $150,000 TO $225,000 each day, and that the operators of this scam brought in around $75 million in a little more than a year. Not bad money for being an evil jerk.

There may also be victims outside the U.S., Thane police chief Param Bir Singh told the press: “It could be the tip of the iceberg and the amount could multiply as our probe progresses.”

‘Trumped: A Nation on the Brink of Ruin... And How to Bring It Back’

Survey: Millennials Believe Economy Is Failing Them

A new survey by Ernst & Young and Economic Innovation Group found that “millennials” — those born in the 1980s or later — are a deeply pessimistic generation that is willing to work hard, but is “convinced the economy is failing them,” and is “very uncertain” about the future.

The study shows that most millennials are living in quiet desperation. They face a job market that has left even normally employable new college graduates out of work, or employed at well below their potential as baristas, temps, or in low-level retail jobs.

Millennials understand that this situation will have a substantial impact on their lifetime earnings, due to depressed early years and and due to finding themselves on a lower income track than those few that landed higher-quality roles straight out of college.

According to EIG cofounder and executive director Steve Glickman: The Millennial mindset was dramatically impacted by the harsh economic realities of the Great Recession, which has made them remarkably politically independent, economically pessimistic, and skeptical of traditional institutions. What the establishment doesn’t understand is that in their minds, Millennials did all of the right things – they worked hard, got their education — but they incurred huge amounts of debt and the job market they inherited hasn’t rewarded any of these sacrifices. Now they are deeply concerned about their future.

Chobani to give paid family leave to all employees: a growing trend?

Every new parent deserves six weeks paid leave, says Chobani's founder, following the recent birth of his own first child.

In an impassioned blog post published Wednesday, Chobani founder and chief executive Hamdi Ulukaya announced that starting in 2017, all Chobani employees, both hourly and salaried, will be offered six weeks of paid family leave following the birth, adoption, or placement of a foster child in their home.

“It was important to me that everyone at the company have this time – especially the people in our plants,” Mr. Ulukaya wrote, reflecting the reality that most American hourly factory workers are denied access to paid leave when they or their spouse have a child. “From the top down, we’ll encourage our folks to use this time knowing their careers at this company won’t be affected by it.”

Currently only three US states – California, New Jersey, and Rhode Island – require companies to offer paid parental leave. Meanwhile, of the 193 countries in the United Nations, 185 have national laws mandating paid leave. The United States joins Papua New Guinea, Lesotho, and Suriname, as well as several small Pacific Island states, in offering no paid leave whatsoever.

NEWS to Disturb the Comfortable...

We don't tell you what to think,

but we give you something to think about.