General Mills Is Slashing 1,400 Jobs and Closing Plants
General Mills said Thursday it will cut roughly 1,400 jobs worldwide as part of the consumer foods giant’s plan for full or partial closures of certain facilities in the U.S. and abroad.
Those cuts would represent about a 3.6% decrease in the workforce at Minneapolis-based General Mills, which had roughly 39,000 employees when its 2016 fiscal year ended in May.
In the U.S., General Mills said it will shutter its Vineland, N.J. facility, while transferring production there across other U.S. operations, “to eliminate excess soup capacity” in the company’s North American division. The closing of that location, which had been operated by the company since 2001, would result in roughly 370 job cuts. Meanwhile, the company also said it plans to sell a facility that makes dry baking mix products in Martel, Ohio to Mennel Milling Company. Mennel would act as a supplier to General Mills once that $18 million deal closes, which is expected in the second fiscal quarter of 2017, but the sale would result in cuts of roughly 180 positions.
Overseas, General Mills will close snack-manufacturing facilities in Brazil and China, eliminating a total of about 860 positions across the two countries.
U.S. Jobless Claims Fall to Three-Month Low
The number of Americans filing for unemployment benefits unexpectedly fell last week, hitting a three-month low as the labor market continues to gather momentum.
Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 253,000 for the week ended July 16, the lowest reading since April, the Labor Department said on Thursday. Claims for the prior week were unrevised.
Claims are near the 43-year low of 248,000 touched in mid-April. Economists polled by Reuters had forecast initial claims rising to 265,000 in the latest week.
Claims have now been below 300,000, a threshold associated with a healthy labor market, for 72 straight weeks, the longest stretch since 1973. Claims tend to be volatile around this time of the year when automobile manufacturers normally idle assembly lines for retooling. Some, however, often keep production running, which can throw off the model the government uses to strip out seasonal fluctuations from the data.
Adjusted for inflation, the federal minimum wage is worth less than 50 years ago
Nearly seven years after the federal minimum wage was raised to $7.25 an hour from $6.55, it has remained stagnant despite the increasingly heated debate over better pay and worker protections.
But that hasn't stopped Ken Weinstein from paying his workers more at his two restaurants in Pennsylvania, where the state minimum wage matches the federal floor.
Weinstein owns two Trolley Car Diners in Philadelphia, and decided two years ago to increase the minimum wage for his 75 employees to $8.50.
"It's a competitive thing — you certainly get better employees by paying them more," said Weinstein, who supports a $12 an hour federal minimum wage. "We have a stable workforce, and it's partly due to treating our employees well, and paying them more than our competitors."
Gold, Silver Is Best Way For Average Investor To Own Real Wealth
This plan to fix corporate America is very rich coming from Jamie Dimon
On Thursday, numerous CEOs including Warren Buffett of Berkshire Hathaway, Mary Barra of General Motors, and Larry Fink of BlackRock all got together and signed a letter listing a bunch of ways to improve corporate governance in America.
JPMorgan CEO Jamie Dimon also signed the letter, which is odd, since the very first suggestion is: 1. Boards of directors should be truly independent from the company and meet without the CEO present on a regular basis.
In an interview with CNBC after the letter was published, Buffett said Dimon was the one who rallied him to the cause about a year ago. And that's weird.
Here's why: Dimon is both the CEO and the chairman of JPMorgan, and that's not an accident. Through the years Dimon has fought hard to maintain complete control of his massive international corporation. That is what makes suggestion No. 1 so very interesting.
Big Mac latest casualty of Venezuela shortages
McDonald's said Thursday it has stopped selling Big Macs in Venezuela, making the US chain's iconic hamburger the latest casualty of severe food shortages triggered by an economic crisis.
"At McDonald's Venezuela we are working to resolve this temporary situation. Together with our supplier we are evaluating the best options to allow us to continue offering quality products," the company said in a statement.
It did not give details on the reason for the suspension. Venezuelan media reports said McDonald's was no longer able to source the thin slice of bread that separates the sandwich's two meat patties.
The company's restaurants are still serving their other menu items, although they also suspended sales of french fries for 11 months last year because of shortages.
Is America's middle class too pessimistic?
American middle class optimism has gone missing. The U.S. stock market is at record high, unemployment is very low, there's been a surge in hiring and gas is really cheap. Yet, Americans remain on edge.
Call it the "low-esteem economy." Poll after poll shows that most voters acknowledge they are better off today than during the Great Recession. But they still worry about their jobs, their finances and their future. The question is: Are people too pessimistic?
There's a case to be made that America's middle class is suffering from a recession hangover. They lost a lot of money in the 2008 crisis (almost a quarter of their wealth, according to Stanford researchers), and they are extremely fearful it could happen again.
America is overdue for another downturn. The next president will almost certainly face one. But for the middle class (and below), there are legitimate reasons to worry about the future that go beyond the next recession. Jobs may be plentiful in the U.S., but are they good paying jobs? Five of the 10 fastest growing jobs pay less than $25,000 a year, according to the Bureau of Labor Statistics. A single parent, with two kids, who earns that amount would qualify for food stamps.
Why Italy’s banks could ignite a eurozone crisis
It wouldn’t be summer without Europe threatening to upend global financial markets. The looming threat this year comes from Italy and its long-suffering banking sector.
“As we trend into the second half of the year, the situation in Italy, and its spill over for the rest of Europe, will continue to be one of the biggest macro-political risks we are concerned about,” said Federico Santi, a London-based analyst at Eurasia Group, a risk consulting group, in a note.
The focus on Italy comes after the U.K. voted in late June to exit the European Union. In a worst-case scenario, analysts fear Italy’s bank problems could threaten the country’s membership in the eurozone.
In coming weeks, the situation has the potential to create at least near-term global market turmoil as financial and political risks collide. It also threatens to catch many investors, who had assumed the world’s banking woes were largely in check after the financial crisis, by surprise.
Share Of Income Spent On Rent At Generational High, Near 50% In Cities Like LA
The amount of money being spent on rent is at generational highs. High rents make it tougher for potential home buyers to save up for a down payment and this trend has impacted Millennials greatly. What is interesting looking at nationwide data is that while rents are consuming a larger share of income, those with mortgages are spending less. This is interesting because it doesn’t coincide with the big drop in the homeownership rate. But it makes sense. After all, investors are spending a smaller portion of their income covering the mortgage and those that did own, likely refinanced into record low rates. The trend is clear on a nationwide basis but not so much for markets like those in Los Angeles. Let us look at the latest figures.
The math seems somewhat contradictory here: over the last decade we have gained 10 million renter households while netting out at close to zero for actual homeowners. There is massive machinery trying to push people to buy but many simply cannot especially with more than 7 million completed foreclosures over the last decade:
This is an interesting chart going back to 1985. You will notice that Americans that own a home with a mortgage are spending a smaller share of their income on the mortgage payment. But what you will also notice is that renters are spending a lot more of their income on rents.
Price-to-income ratios seem a bit high on a historical basis nationwide.
Is Gold Set To Hit $1,500 Per Ounce?
Following several years of significant price weakness, gold appears to be well-and-truly back! The yellow metal’s 12-year bull run came to a spectacular end in 2013, prompting many market experts to warn of a painful collapse in the years ahead.
Gold had shed a third of its value during the course of 2013, but that was just the beginning — indeed, bullion prices came within a whisker of moving back into triple digits just last December, and represented a far cry from the record highs above $1,900 struck back in 2011.
But metal prices are firmly back on the charge. Just this month, gold galloped to 21-month peaks around $1,370 per ounce as investors rushed to safety on the back of the ‘Brexit’ vote. The commodity has gained almost a quarter in value since the beginning of 2016. And many analysts believe bullion is yet to run out of steam.
The boffins over at UBS , for example, have hiked their average price forecast for 2017, from $1,250 per ounce to $1,400. And they expect prices to keep charging through to the end of the decade, with averages of $1,450, $1,475 and $1,500 per ounce chalked in for 2018, 2019 and 2020 respectively. UBS cites rising macroeconomic risks, low real interest rates, and a decline in the dollar versus emerging market currencies as major price catalysts for gold.
Six Years After Dodd–Frank, a Lot of What Occurs on Wall Street Is Nothing More Than Gambling
Six years ago this week, hundreds of people gathered in Washington, D.C., to watch President Barack Obama sign into law the Dodd–Frank Wall Street Reform and Consumer Protection Act. On that day there was a hope that its passage marked the beginning of a new phase in Washington’s approach to Wall Street regulation.
Dodd–Frank was passed in the aftermath of the “Great Recession” to deal with the urgent problems in the financial system that became apparent during the crisis. It marked a shift away from the “light-touch” approach to Wall Street regulation that had characterized the 30-year period that led to the crisis. A lot has hinged, however, on decisions by regulators about how to implement the law and whether Congress would finish the job of re-writing the rules that govern Wall Street that started with Dodd–Frank.
It’s worthwhile to look back and appreciate the great things that Dodd–Frank accomplished. It created the Consumer Financial Protection Bureau, an agency solely dedicated to protecting consumers from tricks and traps in consumer financial products like home mortgages and credit cards. The CFPB, which is celebrating its fifth anniversary this week, has already returned more than $11 billion to more than 25.5 million consumers who were victims of improper lending practices.
To prevent future bank bailouts and systemic crises, Dodd–Frank limits some of the riskiest behavior that banks were engaged in like owning and managing hedge funds and speculating in the stock market. Dodd–Frank establishes regulatory oversight for some of the riskiest parts of the shadow financial system like derivatives and hedge funds. And it gives regulators the ability to liquidate failing, systemically risky financial institutions (think AIG), without the need for a taxpayer bailout.
Why the Obama Administration doesn't favor mergers
Michael Moore: ‘Trump is Going to Win’
During a special edition of HBO’s Real Time with Bill Maher Wednesday night, liberal documentary filmmaker Michael Moore told the host that he honestly believes Donald Trump will win the White House in November.
“One of the things I’ve been concerned about this week is that we’re all sitting … in our bubble, having a good laugh at this total sh*t show,” Moore said Wednesday of the Republican National Convention.
“But the truth is, I’m sorry to have to be the buzzkill here so early on, but I think Trump is going to win,” Moore said, drawing jeers and boos from the audience.
Maher quickly cut off his apparently vexed audience and thanked Moore for “saying it.” “Boo if you want,” Maher told the crowd, adding that “the enemy is complacency, say it everyday.” “He certainly could win,” Maher fumed.
Central Bank Gold Buying Back On Track
Central Bank gold buying has been put forward as one of the key gold demand elements in the metal's supply/demand fundamentals. In reality, though, for the past couple of years or so there have only been two central bank gold buyers of any real significance - Russia and China - which between them had been announcing month-on-month purchases equivalent to around 400 tonnes a year, ever since China started announcing its monthly gold holding increases from the middle of 2015.
There have been some other buyers, which have reported sporadic rises, or falls, in their reserves, while the only other regular gold buyer has been Kazakhstan, taking in about 2.5-3 tonnes a month which amounts to approximately the monthly production from its own gold mining industry.
So when in May Russian gold buying fell to a paltry 3 tonnes and China announced a zero increase in its reserves, analysts wondered whether this signified an almost total cutback from the world's principal central bank gold buyers, which would throw their supply/demand projections for the year into total disarray.
However, in June things seem to be getting back on track with respect to Chinese and Russian gold buying. First China announced a return to increasing its gold reserves by 15 tonnes that month - see: Chinese Central Bank Gold Buying Is Back - and now the Russian central bank has announced a good increase in its gold reserves too, also for June. Analysts may still have to reduce their overall central bank buying forecasts for the year, though - particularly as Venezuela has been having to sell a significant proportion of its gold to meet its international debt commitments.
Most Americans — and 83 Percent of Trump Supporters — Now Say Too Many People Are ‘Easily Offended’
The amorphous subject of “political correctness” is a campaign issue this year, including at this week’s Republican National Convention.
Speakers have called it “antithetical to the founding principles of this country,” a tool “to make people sit down and shut up,” and — to the extent it prevents America from talking openly about terrorist threats — even a danger to national security.
Many liberals have dismissed these concerns as pleas to be able to speak offensively without criticism, but new Pew Research Center polling finds 59 percent of Americans — including 83 percent of Trump supporters and 39 percent of Clinton backers — said “too many people are easily offended … over the language that others use.”
That’s compared to 39 percent of Americans who said “people need to be more careful about the language they use to avoid offending people with different backgrounds.” That belief is held by 59 percent of Clinton supporters and 16 percent of Trump backers, according to the poll.
Why nobody is helping America’s displaced workers
The little guy has an unusually loud voice in this year’s presidential election. Angry voters who feel they’re falling behind in the global economy have animated the entire campaign of Republican presidential nominee Donald Trump, who wants to tear up trade deals and impose sharp new tariffs on cheap imports. His Democratic rival, Hillary Clinton, has shifted her own views as well, moving toward harsher trade policies and expanded government subsidies for those who are struggling.
The focus on free trade frustrates many economists, who argue that open borders benefit nearly everybody by lowering the cost of products in just about every category. But free-trade supporters increasingly acknowledge that there are also losers from free trade—and that the United States does very little to help them. “Trade isn’t a panacea,” John Murphy of the U.S. Chamber of Commerce, the nation’s largest business lobbying group, tells me in the video above. “It doesn’t mean rainbows and unicorns for everyone in the country when trade costs jobs, as it does occasionally.”
So why don’t we do more to help the workers harmed when work leaves the United States for cheaper foreign markets? Murphy outlines a few reasons. First, most government aid money is targeted at disabled workers, unemployment insurance and nutrition assistance. The U.S. government has never spent much on worker retraining, and the amount spent now is actually lower than it was 25 years ago, before the controversial North American Free Trade Agreement went into effect in 1994. Germany spends five to seven times as much as the United States, relative to GDP, helping workers adjust to disruption.
Some jobs are eliminated not by foreign competition but by new technology—and there are few government programs designed to deal with that. Many times it’s a combination of factors that cause a plant to close or a company to cut jobs. Businesses sometimes retrain their own workers or train new ones coming onboard. But no group, in either the public or private sector, is in charge of identifying the broad skills employers need at any given time, forming training programs, determining where the good jobs are and helping the people who need the jobs get there.
Keiser Report: Revolving Doors
Pension Funds Are Underwater – And Taking Us With Them
The California Public Employees’ Retirement System (CalPERS) has announced its worst performance in seven years. Its meager rate of return for the fiscal year ending June 30 just managed to squeak by .6%, not even beating our current meager rate of inflation.
After two successive years of tepid returns, long-term fund averages have sunk far below the critical 7.5% benchmark. It’s bad news for California taxpayers, because if returns don’t soon show a long-term average of 7.5%, they’ll be the ones who will have to make up the difference. Ted Eliopoulos, the fund’s chief investment officer, admits the massive pension fund’s long-term returns are well below anticipated levels, telling the Los Angeles Times, “We’re moving into a much more challenging, low-return environment.”
Yeah. Average returns are now barely over seven percent for a twenty-year period, and returns over ten and fifteen years now average less than six percent. These changes are not just a blip on the investment horizon, as we assume bond yields and stock dividends will improve. According to the Milliman pension consulting firm, many public pension funds have had to adjust their expectations to accommodate lower returns overall. CalPERS needs to adjust its own expectations accordingly, even though doing so would drive up costs for state and local government agencies covered by the big pension firm.
“We quite clearly have a lower return expectation than we had just two years ago,” Eliopoulos said. “That will be reflected in our next cycle. We are cognizant that this is a challenging environment for institutional investors.”
What Happens When There Are Limits on Bankers’ Bonuses?
Do bankers make too much? That question has been widely discussed ever since the 2008 financial crash, which many experts blamed (in part) on a system of compensation that excessively rewarded risky behavior.
As one element of the bailout, President Obama limited the compensation of executives at banks the government rescued, but the cap wasn’t absolute—compensation above $500,000 could be paid in stock—and the measure lifted once a bank paid the government back. The idea was that if bankers can’t make crazy sums of money by taking crazy risks, there will cease to be a reason to take those risks.
So does that strategy work? In a new working paper, Anya Kleymenova and Irem Tuna, who are professors of accounting at the University of Chicago Booth School of Business and London Business School respectively, look at one place that tried it—England, where an earnings-capping law went into effect in 2010. The law, called the Remuneration Code, specifically targets the bonuses of those making more than £500,000 a year, mandating that 60 percent of each bonus be paid out a minimum of three years after the fact.
The paper found that, indeed, it worked. Under the code, bankers became “less risky and [exhibited] higher pay-performance sensitivity, in line with the intended purpose of the regulation.”
Top Clinton Lobbyist Bundlers Tied to Foreign Banks, Governments
A number of Hillary Clinton’s top lobbyist bundlers, who have raised millions for her presidential campaign, either directly represent foreign entities or work at firms that represent foreign entities, according to documents from the Justice Department’s Foreign Agents Registration Unit.
Hillary for America, Clinton’s campaign committee, has hauled in more than $7 million in bundled lobbyist contributions since its inception. The committee finished 2015 with $4.1 million in bundled lobbyist contributions. It has since added more than $2.9 million to its coffers from lobbyists, with $1.2 million of that amount pouring in during the second quarter of 2016, from April 1 to June 30.
Tony Podesta, owner of the Podesta Group and brother of John Podesta, the chairman of Clinton’s campaign, is a top bundler for Hillary for America. Podesta has bundled $267,835 in contributions to date. Podesta was hired to work on behalf of Saudi interests.
Saudi Arabia has built an extensive lobbying and public relations presence in the United States, the Washington Post reported in April. It has also supplied the Clinton Foundation with millions. The Kingdom of Saudi Arabia has given between $10 and $25 million to the foundation while Friends of Saudi Arabia has contributed between $1 and $5 million.