Headline News Archives

Tuesday 07.19.2016

Bank of America cuts more than 2,600 jobs

Bank of America continues trimming its workforce, with recent cuts focusing on highly paid managerial positions, the Charlotte-based company disclosed Monday.

The bank eliminated 2,667 positions in the second quarter, the latest reductions as CEO Brian Moynihan remains focused on slashing expenses. Following the cuts, the bank has 210,516 employees, down by more than 6,100 from a year ago, the company announced in its second-quarter earnings report.

Chief Financial Officer Paul Donofrio, speaking on a conference call with analysts, said “the employee base continues to drive lower.” Cuts made more recently have centered on high-paying management roles, he said.

The reductions add to the tens of thousands of positions Moynihan has eliminated through layoffs, attrition and business sales since becoming CEO in 2010. Some of the reductions have been in Charlotte, where the bank says it employs about 15,000. Many of the cuts have come in a unit Bank of America launched in 2011 to deal with large numbers of soured mortgages, many of which it inherited from its 2008 purchase of home loan giant Countrywide. The bank has reduced employment in the unit, as it has lowered the number of troubled mortgages on its books since the recession. Moynihan said Monday that about 900 of the second-quarter job cuts were in the unit, where the bank plans to further reduce costs.

The sun is coming out for the US economy

After an 18-month stretch in which regular data releases were more likely to surprise to the downside than the upside, it appears that these data points are finally turning positive, according to Binky Chadha, chief global strategist at Deutsche Bank.

Chadha wrote in a note to clients on Friday: "US data surprises jumped sharply in the last 2 weeks, moving into positive territory for the first time in a record 18 months. "With strong rebounds in manufacturing and services PMIs as well as in payrolls, recent data conforms to our thesis that the US is emerging out of a severe dollar and oil shock."

The Citigroup economic-surprise index, which measures how disappointing or positive data points are in relation to their projections, had remained below zero since early 2015. Recently, however, positive economic surprises like the dynamite jobs report and stronger manufacturing data have contributed to a little positive bump in the economic picture.

Whether this is because of lower expectations or stronger data, it is encouraging going forward as well. Since expectations are somewhat reserved for upcoming data, according to Chadha, it appears that the positive surprises are going to keep coming.

Brits Are Investing in Gold at Unprecedented Levels

When Britain voted to leave the European Union, the thoughts of Yorkshire teacher Grace Hall immediately turned to her family’s bottom line.

Three days later, as UK stocks and sterling plummeted, she put those thoughts into action and deposited part of her life savings — 25,000 pounds — into gold. “My husband and I are both worried about bank failures and our cash getting swallowed up,” she said. “I’m also worried about our kids’ jobs and their future.”

Hall was not alone. Dealers are seeing an unprecedented amount of interest in gold, much of it from first-time buyers, to take advantage of its role as a safe haven in times of stress or unexpected “black swan” events like Brexit.

“The speed at which people are purchasing gold is unprecedented,” said Joshua Saul, CEO of The Pure Gold Company, where Hall bought and keeps her Britannia coins.

Venezuela’s Inflation Is Set to Top 1,600% Next Year

While most advanced economies struggle to lift inflation, none would want Venezuela‘s situation: Consumer-price inflation is forecast to hit 480% this year and top 1,640% in 2017, according to the International Monetary Fund.

A shortage of medical supplies means infants and other sick patients are dying of treatable illnesses. Soldiers guard empty grocery store shelves. Inflation is so bad, the government has had to order bolivars by the planeload.

As Caracas extends its declared state of economic emergency, it’s no wonder many economists say the nation will soon have to ask the IMF for a bailout. It’s gotten so bad, the government this month handed over control of food stocks to the military, ceding even more power to the armed forces.

But Venezuela, whose government severed ties with the IMF nearly a decade ago under its former socialist autocratic leader, Hugo Chávez, hasn’t tried to restore relations with the world’s emergency lender. “There has been no change in Venezuela’s relationship with the fund,” IMF spokesman Gerry Rice said Thursday. While the IMF has urged Caracas to reestablish a relationship, “the Venezuelan authorities have not contacted us,” he said.

Socialism Makes People Selfish

Exposed Government, Medical Records Total More Than 10 Million in 2016

The latest count from the Identity Theft Resource Center (ITRC) reports that there have been 522 data breaches recorded this year through July 12, 2016, and that nearly 13 million records have been exposed since the beginning of the year. The total number of reported breaches increased by 15 since ITRC’s last report

An interim report issued last week by the Republican members of a U.S. House committee charged that data breaches and hacking attacks against the Federal Deposit Insurance Corp. (FDIC) indicate mismanagement and security flaws at the federal agency that insures consumer bank deposits. The report also cited a “culture of concealment” and pointed a finger directly at FDIC’s CIO, who was blamed for the “toxic work environment” at the agency and who also was accused of misleading Congress and retaliating against whistleblowers.

The number of breaches in 2015 totaled 781, just two shy of the record 783 breaches that ITRC tracked in 2014. The 522 data breaches reported so far for 2016 are 15% more than the number reported (453) for the same period last year. A total of more than 169 million records were exposed in 2015.

The government/military sector retained the lead in the number of records exposed in 2016. The sector has suffered 31 data breaches so far this year, representing about 43% of the total number of records exposed and 5.9% of the incidents. More than 5.6 million records have been compromised in the government/military sector to date in 2016.

Baton Rouge, Nice, Dallas, Orlando – A Dark And Distressing Time Has Descended Upon The Civilized World

Does it not seem as though events are starting to accelerate significantly? Since I warned that something “had shifted” and that things had “suddenly become more serious“, we have seen the worst mass shooting in U.S. history in Orlando, we have seen the massacre of five police officers in Dallas, we have seen the horrifying terror rampage in Nice, and now we have seen the brutal murder of three police officers in Baton Rouge. On Sunday morning, the peace and quiet in Baton Rouge were shattered when “dozens of shots” erupted less than one mile from police headquarters. By the end of it, 29-year-old Gavin Eugene Long had killed three officers and seriously wounded three others. It was a crime fueled by pure hatred, and Long specifically waited for his 29th birthday to launch the attack…

The shooter who killed three law enforcement officers and wounded three others in Baton Rouge, Louisiana, on Sunday was a Missouri man who launched a deadly rampage on his 29th birthday, police sources said.

Gavin Long, who was born on July 17, 1987, was the man who gunned down officers before he was killed in a gunbattle with other officers responding to the shootings.

Two Baton Rouge police officers — ages 41 and 49 — died, said Police Chief Carl Dabadie. The gunman also killed a 45-year-old sheriff’s deputy and critically wounded a 41-year-old deputy who is “fighting for his life,” said East Baton Rouge Parish Sheriff Sid Gautreaux.

US Cutting Tool Demand Falls Again, Reflecting Manufacturing Weakness

U.S. manufacturers consumed $165.68 million worth of cutting tools during May, a decline of 4.6% from the April total and a 4.1% drop from the May 2015 result. Cutting tool consumption is an index to overall manufacturing activity.

Cutting tool consumption is tracked by the U.S. Cutting Tool Institute (USCTI) and AMT – the Association for Manufacturing Technology in the monthly Cutting Tool Market Report (CTMR.) The report includes data from a majority of the cutting-tool manufacturers and distributors in domestic manufacturing.

As cutting tools are a primary consumable product involved in the production process for multiple industrial sectors, the report provides an up-to-date index to U.S. manufacturers’ overall activity.

May represents the thirteenth consecutive month of declining orders for cutting tools, USCTI and AMT reported in their data release. With the release of the May data, the 2016 year-to-date total for cutting tool consumption stands at $855.45 million. Thus, through five months of activity 2016 is down 9.1% compared with 2015 results.

Bankrupt Aeropostale Preparing To Sell Off Its Assets At Auction Next Month

After taking a few weeks to weigh its options, Aeropostale says it won’t be able to manage a reorganization under bankruptcy, and instead is getting ready to auction off all its assets in the coming weeks. It’s also taking fire at the lender it claims pushed it into bankruptcy in the first place.

Aeropostale said in court papers July 15 cited by Bloomberg that “reorganization on a standalone basis is not feasible.” Instead, it’s hoping a “stalking horse” — an entity that has shown interest — will make the first bid at an auction next month. Any proceeds from that sale will go to creditors.

The retailer added that it’s still poring over 11,000 pages of documents and depositions produced by senior lender Sycamore Partners as part of a bankruptcy probe, and is considering whether or not it’ll pursue claims against the private equity firm.

Upon filing for bankruptcy in May, Aeropostale accused Sycamore of instructing a company it controls — which delivers clothing to Aeropostale stores — to cut off the teen chain’s credit. Instead, Aeropostale claims, the company demanded money for goods up front instead after delivery.

Gold: Never a Great Investment Hedge?

So buying gold doesn’t make a sure-fire hedge against economic or investment turmoil, and never did, writes Adrian Ash at BullionVault. That, at least, is what Harvard professors Robert Barro and Sanjay Misra apparently claim in a paper apparently set for publication in the Royal Economic Society’s Economic Journal. “Gold has not served consistently as a hedge against large declines in real GDP or real stock prices,” says the RES’s summary of Barro and Misra’s research. And they are right.

But this is no secret. No one serious ever said otherwise. Economists and investment analysts have long pointed to gold’s lack of long-term correlation – neither positive nor negative – with economic growth, stockmarket returns, or industrially useful commodities.

File this under Sherlock – unless you want to look under the hood and see what gold’s utter lack of a solid connection to stockmarket prices might mean for defending your savings. Barro and Misra have studied US data running back to 1836. We don’t yet know why. If the RES paper is a re-tread of their 2013 analysis, then the choice of that two-century period won’t be explained, although gold’s changing role is examined. Gold was money for the first 80-odd years, when horses were cars and few homes had flushing toilets, never mind telephones.

Its price then remained fixed under various Gold Standard look-a-likes to August 1971, again skewing any conclusion from what movement there was. Either way, “A true hedge would display significantly negative correlation” economic growth and with stockmarket returns, according to the RES summary. But looking at US GDP and US equities, “this study finds that these variables have a correlation of essentially zero with US real gold returns.” Surprise? Only if you believe spreading your risk should be a zero-sum game, and so you make a strawman out of gold’s correlation with stockmarkets and economic growth. I mean, can you see a pattern here? Do you need to?

US says fuel economy likely won't meet 2025 targets

The U.S. government says fuel economy of the nation's fleet of cars and trucks won't meet its targets in 2025 because low gas prices have changed the types of vehicles people are buying.

Under standards set in 2012, automakers' fleets were expected to get an average of 54.5 miles per gallon by 2025. But in a report issued Monday, the government says that's more likely to be between 50 miles per gallon and 52.6 miles per gallon, depending on the price of gas.

A summary of the report — by the U.S. Environmental Protection Agency, the U.S. Department of Transportation and the California Air Resources Board — was obtained by The Associated Press.

The report is part of a review that will decide whether to relax the standards or keep them in place. A final decision is expected by 2018. When the government issued the latest standards, in 2012, the average price of a gallon of gas was $3.68. This week, it's $2.36. The agencies say they believe automakers can meet the targets set in 2012 using primarily advanced gasoline engines, not hybrids or electrics. They're already making good progress; the government says that 100 car, SUV, and pick-up truck versions on the market today already meet fuel economy standards targeted for 2020 or later.

US Homebuilder Sentiment Slips in July

U.S. homebuilders are feeling slightly less optimistic about their sales prospects this month, though their outlook for the new-home market remains positive overall. The National Association of Home Builders/Wells Fargo builder sentiment index released Monday fell one point to 59.

Readings above 50 indicate more builders view sales conditions as good, rather than poor. The index had mostly held at 58 this year before rising to 60 last month. Builders' view of current sales and traffic by prospective buyers slipped one point this month. Their outlook for sales over the next six months slid three points.

The latest survey of builders follows a recent pullback in sales of new U.S. homes. Sales declined 6 percent in May to a seasonally adjusted annual rate of 551,000 homes. Overall, though, sales are running ahead of last year's pace through the first five months of this year, aided by job growth and ultra-low mortgage rates.

The average 30-year fixed-rate mortgage ticked up 3.42 percent last week, staying close to its all-time low of 3.31 percent in November 2012. A year ago, the average rate was 4.09 percent. While new-home sales have rebounded from the depths of the housing bust, the current rate of new home sales lags behind the historical annual average of roughly 650,000 homes. New home sales figures for June are due out next week.

White House Still Won't Light up House in Blue to Honor Fallen Police

There’s one big reason why this housing bubble “can only go so far”

After a wait of 417 calendar days, or 286 trading days, the S&P 500 finally set a new record high on light volume. Bonds have soared, and yields have dropped to ludicrous lows. The 10-year Treasury yield hit an all-time low on Friday of 1.366 percent. Globally, nearly $13 trillion, or 29 percent of total bonds outstanding, are trading with a negative yield. So those asset bubbles remain intact.

Commercial real estate has been soaring since March 2009, and that bubble remains intact, though some markets are already causing fear and trembling due to office-space gluts that are now coinciding with withering demand, such as in Houston and in San Francisco. Home prices too have been soaring for years, though in some major cities, the tide has turned.

Rents have been rising in parallel. It’s in real estate where an asset bubble becomes a real-life issue for people who don’t even own any assets – they’re paying the price for the bubble. Other asset bubbles abound. Central banks have accomplished a lot. Blowing so many bubbles to such an extent for so long has been an astounding feat. In total, central banks created $24.6 trillion, according to BofA Merrill Lynch estimates. When they bought financial assets with that new moolah, they put $24.6 trillion of cash into the hands of investors and speculators concentrated in the major financial centers of the world.

Yet the global economy remains languid. Demand is sluggish. Job growth in the US can barely keep up with population growth. And a good part of American consumers – those on fixed incomes and savers – have seen their incomes transferred to others. So they’ve gutted their consumption.

Deutsche Bank Collapse May Trigger 'Global Financial Catastrophe'

In June, the International Monetary Fund (IMF) labelled Deutsche Bank as the most risky global financial institution. Experts do not believe the bank will suffer the same destiny as Lehman Brothers. But if it does this would be a global financial catastrophe.

In late-June, the IMF stated that Deutsche Bank is the most important net contributor to systemic risks among the global systemically important banks, The Wall Street Journal reported. Moreover, the United States Federal Reserve reported that the US subsidiary of the bank had failed a stress test due to poor risk management and financial planning. A total of 33 banks were tested, and two of them, Deutsche Bank and Santander, failed.

The news pushed Deutsche Bank shares to a 30-year low, to €12.37 per share. Western experts warned that the bank could share the destiny of Lehman Brothers. It was declared bankrupt in 2008, having triggered a global financial crisis.

The German financial sector plays a key role in the global economy. According to the IMF, the German asset management market is the third-largest in Europe. Germany’s sovereign bond market is a safe haven for investors. There are 2 of the 30 global systemically important banks in Germany, Deutsche Bank and Allianz SE, according to a report by the Financial Stability Board.

Obama Has Different Talking Points Depending on the Tragedy

President Obama is a funny guy. No, seriously. His level of hypocrisy has reached such epic heights that it’s laughable.

At the White House on Sunday, Obama said: As of right now, we don’t know the motive of the killer. We don’t know whether the killer set out to target police officers or whether he gunned them down as they responded to a call.

So, Obama wants to reserve judgment as to the motive of the Baton Rouge cop killer, wanted to reserve judgment as to the motive of the Dallas killer, but had no problem condemning the police officers in the shootings of Alton Sterling in Louisiana and Philando Castile in Minnesota.

Micah "X" Johnson and Gavin Long shot and targeted police officers, but Obama isn't quite sure whether the killers were targeting cops. When Obama commented about the two civilian shootings on Facebook on July 7, he said: But regardless of the outcome of such investigations, what's clear is that these fatal shootings are not isolated incidents. They are symptomatic of the broader challenges within our criminal justice system, the racial disparities that appear across the system year after year, and the resulting lack of trust that exists between law enforcement and too many of the communities they serve.

Japan Is a Bankruptcy Waiting to Happen

Last week, Shinzo Abe won a big victory in Japan’s Upper House elections, which gives him, together with the smaller Komeito party, enough of a majority to rewrite Japan’s constitution.

He has decided, instead, to first attempt to revive the Japanese economy with another “stimulus” program of 10 billion yen ($98 million) in new public spending – a solution that will only worsen Japan’s already-serious debt problem, and ultimately do nothing to revive Japan’s economy.

This “solution” will merely push the country closer to bankruptcy. It’s no longer a question of if, but when. The Japanese economy was, for decades, the envy of the world. After a variety of missteps and mishandlings, it’s now in sorry shape.

The producer price index fell 4.2% in the year to June, driven down by the relentless rise in the yen, which is up some 15% against the dollar in the past year. Thus, even with interest rates on 10-year bonds below zero, the economy is suffering high real rates of interest.

Hillary Clinton: 'We White Americans…Need To Recognize Our Privilege'

Raising the minimum wage won't matter

Raising the minimum wage doesn’t matter. I can hear the screams now. “What do you mean it doesn’t matter? Fifteen dollars an hour is way better than seven.” Sure it is, but the conversation needs to be about a living wage and frankly, $15 an hour is not a living wage.

Sure, having more money in your pocket is nice, but at 15 bucks an hour can you now replace your broken car with a new reliable one or get out of that cramped apartment? No. This is assuming you’re one of the people who actually makes $15 an hour.

I know people like to think that corporations are sitting on a ton of money and they can just pay an increase in wages without having to take any other action, but that’s not the way it works. Instead, the business is either going to raise prices, cut costs, or both.

We’ve actually seen this situation before. In the late ’70s and early ’80s, the minimum wage increased every year from 1977, when it was $2.30, until 1981, when it was $3.35. People were happy to see their wages go up, but what else happened? Prices also went up. I was working in fast food at the time and I remember when January rolled around and the annual minimum wage increase went into effect. Another thing that went into effect was our annual price increase. I remember customers would come in and notice the price increases, but when we reminded them that the minimum wage had just gone up, they seemed OK with it. They didn’t bother to do the math to see that the percentage of our price increase was actually higher than the wage increase percentage.

Taco Bell Employee Was Fired for Refusing to Serve Law Enforcement

“We don’t serve law enforcement, and you need to leave.” An employee at an Alabama Taco Bell was fired after refusing to serve two Sheriff’s deputies.

The law enforcement officers came into the Phenix City Taco Bell on Saturday night. Opelika-Auburn News reports that when the cashier denied them service, they at first thought that she was just joking. When they asked if she was, she apparently responded by saying, “No, I’m not. We don’t serve law enforcement, and you need to leave.” So they left.

“I’m very disappointed in the fact that simply because two individuals were wearing the uniform of a law enforcement officer that they were refused service at this establishment,” Lee County Sheriff Jay Jones told OAN. “I would hope, and am more inclined to think, that this was the action of one person as opposed to a corporate policy or general cultural attitude of the business itself.”

Jones added that Taco Bell immediately got in touch with the Sheriff’s office to apologize, as well as express their support for officers of the law.

NEWS to Disturb the Comfortable...

We don't tell you what to think,

but we give you something to think about.