America's biggest banks are closing hundreds of branches
America's biggest banks are closing hundreds of branches. Bank of America, Citigroup and JPMorgan shut 389 branches since the third quarter of last year.
Bank of America, which had over 6,000 branches before the financial crisis has now shrank to 4,629, according to third quarter accounts. The bank has cut 112 financial centers from last year.
Paul Donofrio, CFO of Bank of America, said the closing of branches was part of a "shift to self-served digital channels, mobile, online, and ATM" in a 3Q earnings call transcript. According to the 3Q earnings report, the bank has 21 million mobile banking active users and 18% of deposit transactions are completed through mobile devices. "That’s better for customers, it’s also better for our shareholders," said Donofrio. "It’s one-tenth the cost of walking into a branch."
"So it’s a quality versus quantity and making sure we understand," said CEO Brian Monihyan on the earnings call. "I’d say we went from seven million visits probably four to five years ago to six to five. But those five are of a higher quality, and we think that’s important."
AT&T Confirms $85 Billion Acquisition Of Time Warner Inc.
After two days of “people close to situation” leaking information about a possible merger between AT&T and Time Warner Inc., the two companies have confirmed the deal which is valued at around $85 billion.
The merger combines the vast Time Warner media empire — which includes cable networks (HBO, TBS, TNT, CNN, HLN, among others), movies and home video (Warner Bros., New Line), comic books (DC, Vertigo), and other ventures — with the nation’s largest satellite provider, its second-largest wireless provider, and the operator of a sprawling landline telecom network.
As we’ve mentioned before — because it can get confusing — Time Warner Inc. is not Time Warner Cable. Time Warner spun TWC off into its own company in 2009 and was recently acquired by Charter. Additionally, Time Warner Inc. is not Time Inc., the publishing mega-house (People, Sports Illustrated, Fortune, among others); that division of the company was spun off in 2014.
The confirmation of the merger jives with earlier reports that said Time Warner shareholders would get around $110/share in the deal. The final number, as announced by AT&T, is $107.50/share. AT&T says the boards of both companies gave unanimous approval to the deal.
Why All The Yawning Over The Yuan?
When it comes to China all the main stream media will ever cover is something in regards to a “hot topic of the day” brought about by either a political discourse, or some celebratory exhibition being observed within its boundaries. When it comes to trade, or business topics, they’ve pretty much abandoned them in total, leaving that realm for the “business/financial” outlets.
So it’s no wonder that when it comes to trade, or monetary issues most haven’t a clue. However, one would think when it came to the #1 financial headline generator that had the ability to send markets plunging reminiscent of a “Black Monday” causing global financial panic worldwide, and triggering (the first time in history) a tripping of all three circuit breakers on the U.S.’s major futures markets, while simultaneously causing the Federal Reserve for the first time in its history to openly state “international developments” as a root cause and catalyst to postpone a monetary decision that is supposedly U.S. centric only. The business/financial media would be all over it. Yet?
What is that #1 generator you might ask? Hint: The Yuan. Except for places like Zero Hedge™ and a few others. When it comes to anything about China’s latest currency devaluation (whether by design or not) one would think there was a media blackout on the subject. I find that strange only for this reason: If you remember the day you woke up in August of last year thinking “Here we go again!” Where some markets had plunged over 1000 points bringing back all the fears of 2007/08. The root cause of that was: the Yuan, and its sudden devaluation.
Only after what seemed (and jawboned) like stabilization (and a note to Jim Cramer from Tim Cook on China implying “nothing to see here, move along” added in for extra measure) did the markets bounce back off the lows to then resume their monetary policy captured antics.
Catherine Austin Fitts-Clintons Addicted to Privilege
Wall St. banks on fiscal stimulus taking center stage under next president
Move over Fed. Wall Street says it’s Uncle Sam's turn to get the U.S. economy humming again.
With the days of low-interest rates likely nearing an end and Federal Reserve monetary policy losing its power to stimulate growth, Wall Street pros say fiscal policy -- government moves to boost economic growth through infrastructure spending, pro-growth tax policies and other means -- is what’s needed to boost the economy and stocks.
Wall Street says now's the time for the passing of the baton from stimulus generated by low interest rates to government-driven moves that put more money in Americans' pockets and spur spending by lowering taxes and creating more full-time and higher-paying jobs. Indeed, even though the September unemployment rate was 5% and near full employment, an estimated 5.9 million workers were working part-time because their hours were cut or they couldn't land a full-time job, according to the U.S. Bureau of Labor Statistics. And it doesn't matter who wins the White House. Investors are going to be calling for government to push a growth agenda whether it's President Clinton or President Trump.
“Regardless of who wins the U.S. presidential race, we see an inevitable shift away from monetary policy toward fiscal policy in the next several years,” Don Rissmiller, economist at Strategas Research Partners, said. “The nature of any coming fiscal stimulus will likely determine whether the global economy can break its (long-term) stagnation.”
Don Coxe: Raise Cash, Hold Gold
Instead of a single nation or region holding sway, perception has shifted to a more global perspective, with central banking at the center of power.
“Though the European situation is unattractive, it is not at the epicenter of ultra-fear,” he said. “The new power center that emerged in 2008 is central banks.” The members of this new international elite group come from the same educational background, and their perspectives and decisions are having a profound impact on policy in various countries. As a result, what we’ve seen is a shift towards negative interest rates.
“Einstein said that the most powerful force in the universe is the law of compound interest,” Coxe said. “That works both ways. As we go into a negative interest rate environment, that … is self-reinforcing.”
At a zero-bound interest rate, Coxe argued, various forces begin to build up in the economy. For example, we’re sitting at an 18 multiple on the S&P and debt is rocketing upwards because it’s possible to borrow for virtually nothing. This money, in turn, hasn’t been allocated toward capital investment; rather, it’s been used to buy back stocks. “If you look at what is happening with asset classes, what you have to understand is that we have reached the limits as to what central banks can do,” Coxe said. “Yet, we’re going to have a recession at some point.”
Italy's front line in fight to save banks: a storage room
Storage rooms crammed with loan documents have emerged as a hidden front line in Italy's battle to save its banks from the threat of financial crisis. Dozens of analysts have been toiling in back offices of the nation's third-largest lender, Monte dei Paschi di Siena (BMPS.MI), in the first stage of a campaign to sell or recover much of Italy's 360 billion euros ($395 billion) worth of problem loans.
The analysts, engineers from a loan data firm, have worked for almost a year with the bank's officials to comb through aging files, copies of which are kept in binders tied together with string and stacked in cupboards, in order to help prepare a 28 billion euro bad loan sale.
"Ours is a painstaking job," said Luca Mazzoni, chief executive of Protos, which has been hired by Monte dei Paschi. "Documents associated with a single loan can take up an entire cupboard. In one case I remember half a room filled with papers related to just one loan."
Monte dei Paschi, Italy's weakest major lender, is under pressure from the European Central Bank to resolve its bad debt problem by the end of the year, but foreign investors have so far shown little enthusiasm in supporting its rescue plan. The arduous work of Protos' engineers shows how the patchy state of loan records at Italian banks is likely to hamper sales of bad debts for some time, despite a regulatory push.
Keiser Report: Double Government
Fannie Mae: Economic growth to slow down remainder of 2016
Fannie Mae expects economic growth to average 2.4% in the second half of 2016. While this is up from the 1.1% for the first half of the year, it is a slower pace than what Fannie Mae previously forecasted, according to the company’s October 2016 Economic and Housing Outlook.
“Recent economic data have been a mixed bag, the good, the bad, and the steady,” said Fannie Mae Chief Economist Doug Duncan. “On the upside, the third print of second quarter GDP showed that the economy grew three-tenths higher than in the second estimate, with an encouraging upward revision in nonresidential fixed investment.”
“The steady news comes from the labor market, with relatively decent conditions overall,” Duncan said. “The biggest doses of bad news come from consumer spending, the linchpin of economic growth, and residential investment, which appears to have posted a second consecutive sizable drop in the third quarter.”
The economy is project to grow in the third quarter due to improvements in inventory investment and trade. However, it will be dampened by a decrease in domestic demand, the report stated. Consumer spending decreased in August for the first time since January and the personal saving rate ticked up, suggesting consumers are feeling increasingly cautious, according to the report.
Are The Polls Rigged Against Trump? All Of These Wildly Divergent Surveys Cannot Possibly Be Correct
Some of these polls are going to turn out to be dead wrong. With just over two weeks to go until election day, some surveys are showing a very tight race, while others say that Hillary Clinton has a massive lead. For example, the tracking polls put out by Rasmussen, the L.A. Times and IBD/TIPP have all consistently shown that the race is either tied or Donald Trump is winning by a small margin. But Fox News has Hillary Clinton ahead by six points, Bloomberg has Clinton ahead by nine points, and the latest ABC News/Washington Post poll has Clinton ahead by twelve points. So what in the world is going on here? If the latest ABC News/Washington Post poll is correct, we are likely to see a landslide of historic proportions for Clinton, and this is what many of the experts are now projecting. But if Rasmussen and the L.A. Times are correct, the race could easily go either way. So who are we supposed to believe? Could it be possible that some of the polls are rigged against Trump?
Well, when you take a closer look at the latest ABC News/Washington Post poll, it does appear that it is not as accurate as it could be. It turns out that those that conducted the survey purposely included 9 percent more Democrats than Republicans…
"Methodology - This ABC News poll was conducted by landline and cellular telephone Oct. 20-22, 2016, in English and Spanish, among a random national sample of 874 likely voters. Results have a margin of sampling error of 3.5 points, including the design effect. Partisan divisions are 36-27-31 percent, Democrats – Republicans – Independents.”
But as Zero Hedge has pointed out, registered Democrats have never outnumbered registered Republicans by 9 percent at any point over the last several decades. So how in the world can ABC News and the Washington Post possibly justify their methodology?
Environmental Protection Agency (EPA) is spending $10.8 million training teachers on “environmental education.”.
The Environmental Protection Agency (EPA) is spending $10.8 million training teachers on the fundamentals of “environmental education.”
EPA will fund the training of 4,400 educators annually and “deliver high-quality environmental education in formal and non-formal education settings.” EPA officials declined to tell CNS News what the program would actually teach or how it would explain topics, like global warming.
It would collaborate with other academic institutions including Stanford University, the University of Oregon, Antioch University and several federal agencies. Research by Oregon State University shows that the best way to get adults to act like environmentalists is by indoctrinating their children. The research found that having teachers indoctrinate kids about global warming caused their parents to use less energy and act more like environmentalists. The investigation was run on 30 Girl Scout troops in northern California and had a “lasting impact on family energy consumption” for at least eight months after the end of the program.
The study was financially supported by government grants from the U.S. Department of Energy’s Advanced Research Projects Agency — Energy Program, the California Energy Commission, the Child Health Research Institute and the Precourt Energy Efficiency Center.
Science confirms rich people don’t really notice you—or your problems
No one can pay attention to everything they encounter. We simply do not have enough time or mental capacity for it. Most of us, though, do make an effort to acknowledge our fellow humans. Wealth, it seems, might change that.
There’s a growing body of research showing how having money changes the way people see—or are oblivious to—others and their problems. The latest is a paper published in the journal Psychological Science in which psychologists at New York University show that wealthy people unconsciously pay less attention to passersby on the street.
In the paper, the researchers describe experiments they conducted to measure the effects of social class on what’s called the “motivational relevance” of other human beings. According to some schools of psychological thought, we’re motivated to pay attention to something when we assign more value to it, whether because it threatens us or offers the potential for some kind of reward.
The NYU team had a group of 61 study participants walk down a city block in Manhattan wearing Google Glass. The pedestrians, who were told they were testing the technology, later filled out surveys asking them to self-identify their social class. Analyzing the Google Glass recordings, the researchers found that those who had self-identified as wealthy didn’t rest their eyes on their fellow humans for as long as those who said they were from lower social classes.
Student Loan Forgiveness Won’t Solve the $1.3 Trillion Problem
With outstanding student loan debt now exceeding $1.3 trillion, it is no wonder that the sticker price of college tuition has gotten a lot of attention in 2016. Yet few proposals have gotten to the root of the college cost problem.
Despite overwhelming evidence that more federal subsidies for higher education increase tuition prices, policies such as “tuition-free” or “debt-free” public college are attracting attention. But such plans do nothing to address price increases and shift more of the financial burden onto taxpayers.
Unfortunately, discussions of higher education policy have increasingly fixated on proposals that would fail to address college costs, and would instead exacerbate prices by creating the wrong incentives for both universities and students. Income-based repayment, which caps loan repayments at a percentage of a student’s discretionary income, became more generous under the Obama administration.
When the program was instituted in 2007, repayments were capped at 15 percent of discretionary income. That amount fell to just 10 percent of discretionary income under President Barack Obama, and, as George Leef, of the John William Pope Center for Higher Education Policy, notes, included “zero measures intended to prevent students from binging on foolhardy borrowing.” The Pope Center is a nonprofit that advocates improving higher education. In addition to more generous income-based repayment terms, loans are now forgiven after 20 years of payments—or just 10 years if a graduate takes a public sector job. The George W. Bush administration had previously set loan forgiveness at 25 years. Some have suggested even shortening those terms further.
Harvard has a $35 billion endowment. Its dining hall workers are on strike for a $35,000 minimum salary.
Bullhorn in hand, union organizer Kelly McGuire flips between Spanish and English as he rallies a group of striking dining hall workers outside of the Harvard Business School on this damp and gray weekday morning.
“We know what we’re doing is working. We gotta keep pushing,” says the red-bearded McGuire, a representative of Unite Here Local 26. Negotiations between the union and Harvard University started back in May. Then, two weeks ago, more than 700 cafeteria and food service workers walked off the job.
The workers want better pay and benefits. They’re demanding a $35,000 minimum salary for full-time workers, and they oppose increases in employee contributions to health care costs, which average between $3,000 and $4,000, per family, every year. Dining hall workers at Harvard currently make $21.89 an hour, on average, according to the university.
“Harvard has among the highest hourly wages, but because so many workers do not collect unemployment and have low hours, they fall behind in overall annual income,” says Tiffany Ten Eyck, also of Unite Here Local 26. Ten Eyck calls that “shameful for a university of its resources.” Harvard University has an estimated endowment of more than $35 billion.
Economists never imagined negative interest rates — now they're rewriting textbooks
If you’re a bank, the idea sounds crazy. Why pay someone to hold your cash? In 1983, when Frederic Mishkin started writing "The Economics of Money, Banking and Financial Markets," his seminal textbook on macroeconomics, he never thought he'd devote much space to the idea of negative interest rates.
"A million years no," Mishkin told Business Insider. Negative rates were seen as a bizarre thought exercise by academic economists, not something any of us would see in the real world.
It was "absolutely unthinkable when I started writing this book," Mishkin, a former Federal Reserve governor and professor at Columbia Business School, said. In fact, it took just about 30 years. And as Mishkin finishes the 12th edition of his textbook, he's devoting a whole lot of space to negative interest rates.
"There's something very shocking about this," Mishkin said. "I have to talk about how negative rates are something that can be very prevalent." At a basic level, a negative interest rate occurs when a lender pays someone to borrow its money. The policy has evolved from radical idea to mainstream policy of postrecession governments in Europe and Asia. And in the US, Federal Reserve Board Chair Janet Yellen has said the US will not rule out using them if it needs to.
Goldman Sachs CEO Expresses His Admiration for Hillary Clinton
Dunkin' Donuts Says The Election Is Killing Its Sales
If you’ve felt less inclined to go to Dunkin’ Donuts since the presidential election started, you’re not alone: The coffee-chain said last week that the election is hurting its sales.
During an earnings call last Thursday, Dunkin’ Donuts announced that its revenue was low, despite U.S. same-store sales being higher than expected. The reason? The contentious election, the company’s management said, according to Business Insider.
Dunkin’ Brands CEO Nigel Travis said that the changes in gas prices and changes in food stamp regulations were also factors in the declining sales. But as for the “dampening effect of the presidential election,” Travis said he thinks “we’ll all be pleased when that’s passed,” Business Insider reports.
It’s not clear why the election would cause fewer people to buy coffee or donuts from the retailer, Business Insider reports. But “it is likely that the uncertainty surrounding the presidential election had a negative impact, especially among lower income consumers, and without that added uncertainty, the confidence measures may not have weakened,” said Richard Curtin, the leading economist of the University of Michigan’s preliminary consumer confidence survey.
Why Economic Growth Is So Lackluster?
U.S. economic growth is anemic, and the country needs to do something about it, quickly. This was one of the central themes of the third presidential debate. “China is growing at 7 percent. And that for them is a catastrophically low number. We are growing—our last report came out, and it is right around the 1 percent level,” Trump said Wednesday night. “Look, our country is stagnant.”
Trump is right that U.S. growth has not been very impressive of late, especially when compared to rates of the past. Though the United States gross domestic product (GDP) grew at a rate of more than 3 percent for much of the 1980s and 1990s, the rate has slowed significantly since the recession, according to the Bureau of Economic Analysis. In the second quarter of this year, for instance, GDP increased at a rate of just 1.4 percent. After a recession, an economy should come roaring back, but this time around, it hasn’t, and that’s left many concerned about the state of the economy. GDP growth, economists say, helps raise wages and living standards, and increases the size of the entire economic pie—making it possible for more people to have a bigger share.
But economists aren’t quite sure why the pie—the country’s gross domestic product—has stopped growing as quickly as it used to. GDP is the total value of goods and services produced in a country during a year. The more workers there are in the labor force and the more each individual produces, the more a country’s economy grows. But even as the U.S. economy keeps adding jobs, growth has remained sluggish. And productivity is barely budging, too. Output per hour has expanded at a rate of just 1.3 percent per year, the worst run of productivity growth since the recessions of the 1970s.
So what’s the problem and how can it be fixed?