Headline News Archives

Wednesday 11.09.2016

Donald Trump sweeps to victory in historic upset

Donald Trump scored a stunning and historic upset victory in the presidential election Wednesday morning, once again defying predictions and winning key battleground states to capture the White House.

Giddy supporters at the New York Hilton — who were sullen just hours earlier — erupted in cheers as the GOP nominee closed in on victory, chanting, “President Trump,” “Drain the Swamp,” and “Lock her up!” about Hillary Clinton.

The celebration grew wilder still when TV monitors showed people crying at Clinton’s party at the Jacob Javits Center.

Ed Rollins, who ran Trump’s Great America Super PAC, basked in the victory. “We won the presidency, the Senate and House. When’s the last time that happened?” Rollins told The Post. “The polls were bad! Trump is going to be president. He’s won this thing. He caught the wave of public discontent and rode it. Washington has to be stunned.”

Government Workers Now Outnumber Manufacturing Workers by 9,977,000

The United States lost 9,000 manufacturing jobs in October while gaining 19,000 jobs in government, according to data released by the Bureau of Labor Statistics.

Government employment grew from 22,216,000 in September to 22,235,000 in October, according to BLS, while manufacturing jobs dropped from 12,267,000 to 12,258,000.

The 22,235,000 employed by government in the United States now outnumber the 12,258,000 employed in manufacturing by 9,977,000.

Over the past year—from October 2015 to October 2016—manufacturing employment fell by 53,000, declining from 12,311,000 to 12,258,000. During the same period, government employment climbed 208,000, rising from 22,027,000 to 22,235,000.

Ominous Sign for China Debt as Cash Crunch Bites

China’s $3.2 trillion corporate bond market is already starting to reel from rising interbank borrowing costs, and the traditional year-end funding crunch hasn’t even started yet.

The yield premium for five-year AA rated notes over the sovereign climbed 10 basis points in October as interbank borrowing costs surged to an 18-month high. Worse may be yet to come as lenders tend to hoard cash for year-end regulatory checks, prompting the overnight repo fixing to rise in December in four of the past five years, including a 33 basis point jump in the last month of 2015.

China’s bond market has had 11 consecutive quarters of gains as investors bet the central bank would keep interest rates low to support an economy growing at the slowest pace in a quarter century. The advance has faltered as the People’s Bank of China focuses on cutting debt, pushing up short-term borrowing costs to discourage speculative trading.

“The real challenge will come later this month, when asset allocation demand wanes as we enter the year-end,” said Shi Lei, head of fixed income research at Ping An Securities Co. in Beijing. “Huge demand for assets that can generate safe returns were behind the bond rally, as investors bet continuous inflows into the market will drive up prices. When the liquidity disappears, it’ll be a problem.”

American Apparel to ax employees as it looks to sell

American Apparel employees will probably lose their jobs soon because the manufacturer is looking to be sold, the company said in a letter to workers.

The struggling Los Angeles company said “it’s likely that the potential purchaser(s) of the company will not wish to continue manufacturing operations or to maintain corporate operations that support the company’s manufacturing, wholesale or retail divisions.”

Last week, The Post reported that the company is considering several options, including a second bankruptcy filing within a year.

The company filed a WARN notice with the state Department of Labor. Employees at American Apparel’s downtown headquarters at 747 Warehouse St., where most of the company’s manufacturing takes place, were informed that they’d be terminated within 60 days of the notice.

Seasonal retail jobs taking a hit this holiday season

Good luck finding help at some of the country’s largest retailers during the holidays. As shopping season kicks into high gear, most retailers are cutting back on sales help in their stores, a survey of hiring announcements reveals.

Walmart, which last year proudly announced that it was hiring 60,000 extra workers for the holiday shopping season, this year is staying uncharacteristically silent on its plans.

“We don’t yet have a number to share, mainly because we are looking at seasonal hiring on a much more local, store-by-store basis this year,” a Walmart spokesperson told The Post. Retailers typically advertise for seasonal help in September and hire in October.

The giant discounter’s plan includes giving current workers “access to extra hours,” the spokesperson said. Walmart said earlier this year that it would use existing employees as “Santa’s helpers,” giving them a yellow vest and a Santa hat.

Building the blockchain--The promise and perils

Job Openings Increase by Small Fraction in September

U.S. employers posted slightly more job openings in September, a likely sign that the steady job gains of recent months could continue. The Labor Department said that job openings edged up to 5.49 million in September, a modest increase from 5.45 million openings in August. Openings had plunged to an eight-month low in August.

The data affirms recent evidence that hiring has been more tempered after setting a robust pace of the prior two years. Still, the economy is generating enough jobs to reduce unemployment and boost incomes. And most economists have expected monthly job growth to slow as the number of unemployed has decreased.

Openings increased in September in construction, manufacturing and financial activities, among other sectors. But openings slipped at restaurants and in the logistics sector.

Hires dipped to 5.08 million in September, a 3.5 percent increase. But workers seem hopeful enough about finding work that more of them are quitting. The number of people who quit their jobs increased between August and September to nearly 3.1 million. But over the past year, the number of people quitting their job has climbed 11.7 percent.

Government currency strike to push many to gold

The jewellery industry on Tuesday welcomed the government's decision to ban old Rs 500 and Rs 1,000 notes, saying gold demand will rise as people will have more faith in the precious metal than the currency notes. 

"It will create havoc for a little while and the economy will also destablise. But overall, it is going to be good for the country. In fact, the jewellery industry will thrive as people will have more trust on jewellery than currency notes," Gitanjali Gems Chairman and Managing Director Mehul Choksi told PTI.

He said there will be crisis for some time. "If you want to buy vegetables tomorrow and you will not have notes in lower denomination, what will you do?" 

Stating that there could be short­term impact, PC Jewellers Managing Director Balram Garg said, "This is a very good decision for long term especially for the organised sector. There could be impact on pure gold demand, which is good for jewellers."  Echoing these views, All India Gems and Jewellery Trade Federation (GJF) Chairman Sreedhar G V said: "This affects all industries, it will also affect the jewellery industry. We are in favour of the decision announced by the Prime Minister." 

This is How Consumers Turn into Debt Slaves

The Fed likes the word “credit.” Sounds less onerous than “debt.” Consumer debt rose by $19.3 billion in September to $3.71 trillion, another record in a five-year series of records, the Federal Reserve’s Board of Governors reported on Monday. Consumer debt is up 6% from a year ago, at a time when wages are barely creeping up and when consumer spending rose only 2.4% over the same period.

This follows the elegant principle of borrowing ever more to produce smaller and smaller gains in spending and economic growth. Which is a highly sustainable economic model with enormous future potential, according to the Fed.

Consumer debt – the Fed uses “consumer credit,” which is the same thing but sounds a lot less onerous – includes student loans, auto loans, and revolving credit, such as credit cards and lines of credit. But it does not include mortgages. And that borrowing binge looks like this:

Diving into the components, so to speak: outstanding balances of new and used vehicle loans and leases jumped by $22.6 billion from Q2 to $1.098 trillion, another record in an uninterrupted four-year series of records.

The new low-wage reality for older Americans

Thanks to economic instability and an eroding pension system, Americans are working longer than ever. But it turns out there’s a twist in how they’re working: New research shows workers older than 55 increasingly hold low-wage jobs.

The findings may add to the anxiety that haunts many workers about how -- or if -- they’ll have the financial resources to retire. In September, slightly more than 27 percent of full-time workers over 55 years old held low-wage jobs, compared with 19 percent of younger workers, according to Teresa Ghilarducci, professor of economics at The New School for Social Research.

Low-wage jobs, defined as those that pay less than two-thirds of the median wage, deliver about $539 per week in income, or annual earnings of about $28,000. The trend may build as baby boomers continue to hit their golden years without the resources to manage a comfortable retirement, Ghilarducci said.

In some cases, older workers are forced out of the middle-income jobs they’ve held. Then, unable to find work in their prior careers, they accept lower-paying work such as in retail, home health care or housecleaning.

Ford Is Pouring Millions Into a New Technology India

Ford Motor is investing 13 billion rupees ($195 million) over the next five years in a technology and business center in the Indian city of Chennai to develop new products, design mobility solutions, and provide business services.

Dearborn, Michigan-based Ford F -0.86% , which has already invested over $2 billion in India to date, will hire 3,000 people and bring in 9,000 from other centers in the southern Indian city to staff the facility which will be operational by early 2019, the company said in a statement on Tuesday.

Ford is focusing on emerging markets like India where small, inexpensive yet powerful cars are popular and which is dominated by brands from Maruti Suzuki India Ltd and Hyundai Motor Co.

The center will be the car maker’s second-largest technology setup outside its global headquarters, and will include laboratories and testing facilities for vehicles and components, to enable Ford to test future products in India. Ford opened a technology and research lab in Palo Alto, Calif., in January 2015 with just 15 employees. The lab now employs more than 130 people. That number will double by the end of next year, Ford CEO Mark Fields told Fortune in August.

One dead in shooting near California polling station

Toyota Also Declares Peak for the U.S. Auto Market

Japan’s two largest carmakers have arrived at the same conclusion: the U.S. auto market that’s functioned as a growth engine has run out of gas.

Toyota Motor Corp. (IW 1000/6) cut its forecast for North American sales this fiscal year by 60,000 vehicles and for the first time said it’s expecting a decline for the year, as American consumers shift away from fuel sippers like the Prius hybrid and toward trucks and sport utility vehicles.

Nissan Motor Co., (IW 1000/25) which posted a drop in profit as it gave heftier incentives that buoyed deliveries, said it’s not seeing room for further expansion.

“The market turned out to be somewhat weaker,” Takahiko Ijichi, a Toyota executive vice president, said on November 7 after the carmaker reported a 43% plunge in quarterly operating profit. The North American market “really requires very careful managing going forward,” he said.

Tesco Bank Pays $3.1 Million to Replace Cash Taken From Accounts

Tesco Bank, the lending arm of the U.K.’s biggest grocer, said it’s spending 2.5 million pounds ($3.1 million) to reimburse customers who lost money during a wave of fraudulent account transactions over the weekend.

About 9,000 of the firm’s 136,000 checking-account clients fell victim and were fully reimbursed by Tuesday, the company said in a statement. The bank said it ended a temporary suspension of online transactions and that no personal data were compromised.

“Our first priority throughout this incident has been protecting and looking after our customers and we’d again like to apologize for the worry and inconvenience this issue has caused,” Tesco Bank Chief Executive Officer Benny Higgins said in the statement.

The subsidiary joined some of the world’s biggest financial institutions -- including JPMorgan Chase & Co., HSBC Holdings Plc and the Federal Reserve Bank of New York -- in being targeted by cybercriminals in recent years. Still, the latest incident may be unprecedented and “requires further urgent analysis,” the U.K. Financial Conduct Authority’s CEO, Andrew Bailey, told a parliamentary committee Tuesday.

GOP Keeps Control of the House of Representatives

Drug Price Hikes Are “Unsustainable,” Medicare Chief Says

While Mylan’s EpiPen scandal may have made national headlines, the highly priced product didn’t earn a place on the Centers for Medicare and Medicaid Services’ (CMS) list of worst offenders, according to remarks by Andy Slavitt, the CMS’ acting administrator. In a presentation before the Biopharma Congress in Washington, DC, Slavitt warned that recent price hikes for certain medications have become “unsustainable.”

“Drug costs have become the health policy issue Americans are most anxious to see us act on, and we have a responsibility to them to explore all the options available to us to make their medications more affordable,” Slavitt said.

He noted that Part B Medicare spending doubled from 2007 to 2015, whereas Part D costs increased 8.4% in the years between 2013 and 2015. The CMS predicts average annual price increases of 6.7% to 2025.

The cost of specialty drugs is a key factor. Based on 2014 data, specialty drugs accounted for 32% of drug costs but only 1% of prescriptions, Slavitt said. He also pointed out that of the 20 drugs with the highest per-unit cost increases in Medicaid, seven were generics, with price hikes ranging from 140% to nearly 500% between 2014 and 2015.

Gold Still In A Bull Market. Why Fundamentals Outweigh Short-Term Market Gains

Gold Still In A Bull Market. Why Fundamentals Outweigh Short-Term Market Gains. 2016 is gold’s big bull run. The precious metal rose close to 20% this year, pushed by a summer rally that peaked on July 10th. But then, gold experienced a bumpy ride during the remainder of the summer, as investors were concerned about the Federal Reserve’s decision on the rate hike. This volatility was underlined by the immense uncertainty that prevailed in the gold market.

Investors are not entirely to blame, not when the officials were releasing misleading information. For example: Fed chair Janet Yellen stated at the Jackson Hole meeting of central bankers that the case for rate rises has “strengthened”, yet she gave markets little guidance on timing, saying the hikes would be “gradual” and happen “over time”. In effect, this discouraged investors from buying into gold, because they still trust the establishment and its credibility. A rate hike offers investors an alternative to owning gold, because gold doesn’t pay any interest. Moreover, higher interest rates tend to damp down inflation – this is also bad for gold.

But surprise, surprise! The Fed decided the time was not right to increase the rates after all. So, will this revive demand for the bullion? Initial market reactions seem to concur: after the Fed’s decision NOT to raise rates, combined with a weaker dollar, as well as economic stimulus in Europe and Japan, demand for gold has picked up once again. Gold’s bull run is still marching on and it has the steam to continue doing so for a while.

However, these are all short-term market considerations where bullion is seen as part of “buy-low and sell-high” strategies. This is indeed valid and effective, but gold is far more than that. We encourage investors to see the bigger picture, to look to gold for the long-term, instead of making short-term gains in reaction to the Fed’s interest rate decisions.

Americans' Views of Economy Remain Slightly Negative

Americans' assessments of the economy remain steady and more negative than positive. Gallup's U.S. Economic Confidence Index registered -11 last week, in-line with past readings since late July.

While Americans' confidence in the economy has remained relatively flat for three months, economic data published recently suggest economic growth may have picked up over this time period. GDP grew at a rate of 2.9% in the third quarter, the strongest pace in two years. Furthermore, last week's Bureau of Labor Statistics jobs report showed wages growing faster than expected in October and, at 2.8% for the year, the fastest growth since the Great Recession. But for the same month, the economy reportedly added 161,000 jobs, slightly below the 2016 average monthly job growth.

If GDP is now growing at a faster clip than the lackluster speed that has characterized 2016, Americans may not be sensing it yet. Gallup's Economic Confidence Index has generally lingered around the same level throughout the year -- with slightly more Americans pessimistic about the economy than optimistic. Attitudes briefly worsened in the spring and early summer, but bounced back in late July.

Heading into an election where economic concerns are more at the top of Republicans' minds than Democrats', U.S. adults who lean or identify Republican continue to express far lower levels of confidence in the economy than Democrats. For the week ending Nov. 6, Republicans' confidence in the economy stood at -44, while Democrats' confidence was +27. It is not unusual for partisans siding with the opposite political party of the president in office to view the economy more negatively -- Democrats did so during the George W. Bush presidency.

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