Number Of Big Retail Bankruptcies In 2017 Already Equal To All Of Last Year
We’re only three months into the year and already the retail battlefield is littered with the corpses of nine brands that have filed for bankruptcy — the same number that filed in all of 2016.
Gordmans, hhgregg, RadioShack, Gander Mountain, BCBG Max Azria, MC Sports, Eastern Outfitters, Wet Seal, and The Limited have all filed for bankruptcy in just the first few months of 2017. At this rate, the industry is on pace to far surpass the high-water mark of 18 major retail bankruptcies set in 2009, notes CNBC.
Two more retailers may be joining their friends on the garbage heap soon as well: Recent reports have indicated that Payless and Bebe are both struggling and could head in the bankruptcy direction in the near future.
So why is 2017 shaping up to be so bad for retailers? Part of the problem — as we’ve said before and we’re bound to say again — is the lure of convenient online shopping. However, CNBC brings up another factor that might play in to the recent onslaught of bankruptcies: Many of this year’s filings are from retailers that were purchased in the past by private equity firms, according to consulting firm AlixPartners.
Caterpillar shuts plant in Aurora, Illinois, that employs 800
Caterpillar Inc (CAT.N) said on Friday it will shut its Aurora, Illinois, plant, costing about 800 employees their jobs as the world's largest construction and mining equipment maker shifts production to other U.S. facilities.
Caterpillar was among companies that met with President Donald Trump in February to talk about job creation, at a time when about 2,300 U.S. workers at five major manufacturing companies stand to lose their jobs within the next two years as a result of offshoring.
The company said it will transition its large wheel loaders and compactors to its plant in Decatur, Illinois, and medium wheel loaders to North Little Rock, Arkansas.
"Out of about 800 production positions, about 500 positions would likely be added to Decatur and about 150 positions would be added in North Little Rock," Caterpillar spokeswoman Lisa Miller told Reuters. The company has already slashed its workforce by more than 16,000 to cope with a slumping economy and had said it would take another $500 million in restructuring costs in 2017.
Chicago Mayor Creates New ID so that Illegal Immigrants can get get welfare benefits
Chicago Mayor Rahm Emanuel defied President Donald Trump and US Immigration and Customs Enforcement (ICE) back in November stating that illegal aliens had a home in Chicago. Now, he is taking things a step further. In the wake of Attorney General Jeff Sessions’ warning that sanctuary cities, like Chicago, could lose taxpayer money that is funneled through bureaucracy via the central government for harboring illegal immigrants, the mayor has decided to push for a new plan to create an identification card that would specifically be used to make sure illegal aliens in the city could get welfare benefits with minimal risk to repatriation.
Emanuel pushed City Clerk Anna Valencia to move up the municipal ID’s time frame of one year to take care of those who are in the city illegally with taxpayer money. They will do this by not asking about immigration status and only minimal information about the person desiring the ID.
According to Ms. Valencia’s website, the ID will be “an optional, valid, government-issued ID that they can then use to access a range of services from both the private and public sectors.” The Chicago Sun-Times reports:
“It’s going to capture just the name and the date of birth. It’s not going to capture an address,” said a source familiar with the program who asked to remain anonymous to avoid upstaging the mayor and the clerk. “Applicants will also be able to self-designate their gender, which will be huge to the transgender and LGBTQ community. And it’s not just for undocumented individuals. It’s for people with disabilities and people who are homeless or victims of domestic violence” who will be able to designate an alternative address.
James Rickards-Trump Didn’t Get a Honeymoon-He Got a Burning Bed
Goldman Sachs: Trend Towards Digital Cash Is Unstoppable
Untraceable cash is headed for history’s trash bin, says research from Goldman Sachs. With Digital cash and cryptocurrencies such as Bitcoin growing, Goldman notes cash is involved in crime, tax evasion and tracking the population has its benefits, the research piece opines. Consumers can receive loans more easily, for instance. In a March 23 strategy note to clients, the investment bank with perhaps most influence with how cash is managed considered how cashing in on the death of cash can be profitable and pointed to what is painted as an inevitable movement.
It was less than one year ago that the US Treasury Department said banning cash would be a negative. In 2014, Philadelphia Federal Reserve President Charles Plosser said Bitcoin would not be replacing cash. Bitcoin has been increasingly used in financial transactions since.
Although they didn’t list control of a population by an authoritarian government as a digital cash concern, the issue of repressive manipulation during populist times is a topic that has been nonetheless systematically identified.
This was not a topic addressed in the Goldman Sachs research piece titled “Cashing in on the future of money.” In fact, the only negative the research piece noted was essentially a loss of “privacy,” but there was no attempt to explain the significance. “One of the underrated advantages of cash is that it ensures anonymity; but it is difficult to say how much loss of privacy has hindered the growth in digital payments,” Sumana Manohar, Navreen Sandu from Europe, Hugo Scott-Gall from the US and Siri Kurada said writing from India, the beachhead of the digital cash movement. “The emergence of cryptocurrencies may be evidence that there is demand for a digital medium that ensures privacy, but their adoption remains very limited.”
Obama was terrible for economic growth
On Thursday we closed the book on the Obama economic “miracle” — and it’s a miracle we are not in a recession. Last week the Commerce Department released its third revision for fourth-quarter 2016 gross domestic product. The number came in at a paltry 2.1 percent, meaning that growth during President Obama’s final year in office — the end of an “Error of Hope” — landed with a big thud at just 1.6 percent.
That low-water mark puts the Obama presidency in last place among all the post-World War II presidents when it comes to economic growth. There have been 13 post-WWII presidents, beginning with Harry Truman, who had the disadvantage of beginning in the aftermath of war in 1946, during which the economy contracted 11.6 percent — four times the contraction any other negative year since — and even he bested Obama’s economic record!
Truman, a moderate Democrat, also posted the two best years of growth on record: 1950 at 8.7 percent and 1951 at 8 percent, and there was no zero percent interest rate to gin up the economy back then.
Thirteenth of 13 presidents is no mild distinction. Obama had eight full years to enact a growth policy, while many of his predecessors never had two complete terms. George H.W. Bush and Jimmy Carter had just four years each, Gerald Ford had less than three years and Richard Nixon had five.
Are 401K Holders About To Feel A Savers Pain?
There’s an old truism people forget all too often. It has many variations and is attributed to even more, its core meaning goes something like this: “If the government can give it to you, than it can also take it away.”
Some of you might be wondering if I’m talking about the current “tax” advantages that have made these vehicles so popular over the years. To that I’ll say no, not at this current time. But I feel that will be the least of worries coming down the pike in the not so distant future.
No, what I’m directly addressing is what is now emanating from the one and only non-government, privately held institution, directed by a consortium of non-elected, Ivory Towered, policy wonks: The Federal Reserve. And those emanations are anything but 401K holder friendly. Let me explain…
I know many are wondering how a government inspired quote, a private institution, their retirement account, or savings account fits under one banner, or are some how all connected. Well, that’s easy: The Federal Reserve has been the sole entity that dictates what any of them are currently worth. And if you don’t like their choices or decisions? Tough. There’s nothing you can do about it. Period.
Is $1 Million Still Enough to Retire Comfortably?
When people say, “A million dollars isn’t what it once was,” they have a point. To get what $1 million would have bought you in 1986, you would now need nearly $2.2 million, when accounting for inflation.
It’s a nice round number, and it’s ambitious goal for many savers but as retirement investors review their nest eggs, they can’t assume that a million-dollar portfolio is going to be enough to sustain them.
Many financial advisers believe that to be secure in retirement - that is, to account for a variety of market conditions and at the same time ensure that you don’t blow through your nest egg - you should start out withdrawing only 3% to 3.5% of your money in the first year of retirement, and then increase that amount only slightly as time goes on.
So to be safe, that $1 million would start out generating just $30,000 to $35,000 per year, and go up just a bit each year to account for inflation. The challenge: While $30,000 to $35,000, plus Social Security, is perfectly adequate for some people’s retirement needs, it would simply not be enough for many people.
The End Of OPEC Is Near
OPEC, which has far exceeded the average life of cartels, is on the brink of failure. Though cracks have been developing in the cartel since the start of the current oil crisis, the group has managed to stay together so far. Nevertheless, the success of the current OPEC deal for production cuts will decide its future as a cartel.
A cartel is a group of like-minded producers, who act in concert—or collusion—to achieve a shared goal of increasing their profits by means of restricting supply, fixing prices, or destroying their competition by illegal means. The average life of the 20th Century cartels has been 3.7 to 7.5 years, according to various studies by Margaret Levenstein and Valerie Suslow. In the past two centuries, cartels have been able to influence prices by an average of 25 percent.
Since its inception, OPEC has been fairly successful in boosting prices by various means. A few of the price increases, however, were due to reasons other than direct OPEC action, nevertheless benefitting their members.
Though the 1973 oil embargo was brought on by political reasons, OPEC used the production cuts of the embargo to boost oil prices from $3 a barrel in 1973 to $12 a barrel in 1974. The 1979 energy crisis was not a brainchild of OPEC. The production dropped due to the Iran-Iraq war, and the price of oil doubled in about 12 months, again benefitting OPEC members. OPEC was able to boost prices using production quotas and production cuts following the Asian Financial Crisis in 1997.
Auto Loan Market Fears Mounting
After several years of growth since the 2008 financial crisis, the auto loan market—traditionally a staple of the U.S. economy—could face severe challenges in the near future.
Investors are worried about a bubble in the auto loan industry, especially among subprime borrowers with lower credit scores. J.P. Morgan Chase CEO Jamie Dimon signaled an advanced warning last year, calling the auto-lending market “stretched” at an industry conference in May 2016. Industry data trends have since further deteriorated. A confluence of factors are contributing to growing concerns over the auto loan industry, including a record number of new loans, growing delinquency rates, and declining used-car value.
There is currently a record number of outstanding auto loans. American consumers have been on a car-buying spree since the last economic recession, encouraged by the federal “Cash for Clunkers” rebate program that began in 2009, a recent decline in gasoline prices, and the prevailing low-interest-rate environment. Consumers bought 17.5 million new vehicles in 2016—a new annual record, according to auto industry data website Edmunds.
Auto loans exceeded the $1 trillion mark last year for the first time, ending the year at $1.16 trillion, according to the Federal Reserve Bank of New York. The balance of loans was more than 63 percent higher than that at the end of 2010.
Keiser Report: Pension Crisis
Unraveling QE “Later This Year” Gets Serious
Today it was New York Fed President William Dudley’s job to hammer home the message. He’s one of the most influential members on the policy-setting Federal Open Market Committee. His New York Fed deals with the securities that are on the Fed’s balance sheet as a result of QE. And he said the Fed might start reversing QE this year.
With this call to shrink the Fed’s balance sheet, he is following in the footsteps of other Fed heads, including Cleveland Fed President Loretta Mester, San Francisco Fed President John Williams, and most notably Boston Fed President Eric Rosengren – a former “dove” who has been publicly fretting about bubbles in commercial real estate and housing and the risks they pose to “financial stability.”
So this theme unraveling QE, not in the foggy future but this year, is picking up momentum. There is a lot to unravel: the Fed’s $4.5-trillion balance sheet holds $1.8 trillion in mortgage-backed securities and $2.4 trillion in Treasuries. As they mature, the Fed replaces them by buying more.
Dudley was talking to Bloomberg TV today. Everything was couched in the caveat that it “really depends on the data.” But it included a hue of frustration with the credit markets: “We’ve been trying to communicate to people: if the economy stays on that trend we’re going to gradually remove monetary accommodation.”
So you've heard about blockchain, but what is it?
The latest fintech buzz has been about blockchain. You've probably heard of it, but what is it exactly? Simply defined, a blockchain is a distributed and continually growing public ledger of transaction records arranged in cryptographically secured blocks (hence the name) that link themselves together. Each block references and recognizes the previous block by a hashing function, forming an unbroken chain that can’t be altered.
This means that once a transaction is recorded in the ledger, it can’t be updated or changed and it’s permanently linked to the previous block. Anyone with access to the ledger can see the same transaction history as other users.
The latest blockchain offering in the mortgage industry is from blockchain-as-a-service company Factom, based in Austin, Texas. Factom’s product Harmony is a practical blockchain solution. Harmony works with existing document management solutions to create an unalterable record for loan documents.
Factom CEO and co-founder Peter Kirby explained that the system of checking and then checking those who check has caused an increase in the cost of making a mortgage. The benefit of a ledger system using blockchain is that it keeps everything finalized and follows a chain, allowing for lower mortgage production costs and cleaner record keeping, an important facet for the industry following the financial crisis.
Credit Suisse takes out UK newspaper ads after office raids in tax case
Credit Suisse (CSGN.S) has taken out adverts in British Sunday newspapers stressing a zero-tolerance policy on tax evasion, as the Swiss bank tries to limit any damage to its reputation from raids on three of its offices.
Zurich-based Credit Suisse was pulled into an international tax evasion and money laundering investigation on Thursday when coordinated searches were carried out on its London, Paris and Amsterdam offices.
The ads, which appeared in the Sunday Times, Sunday Telegraph and Observer, stated they were a "response to recent reports about tax probes in various European countries". Among seven bullet points, Credit Suisse said it "wishes to conduct business with clients that have paid their taxes" and the bank would "continue to work closely with the local authorities in all matters and particularly in this new case".
The raids reopened the thorny issue of tax evasion which has dogged Swiss banks for years as wealthy individuals around the world have used the country's strict bank secrecy laws to hide cash from the tax man.
What Is America Going To Look Like When Stocks, Home Prices And Even Used Cars All Crash By At Least 50 Percent?
Have you ever thought about what comes after the bubble? In 2008 we got a short preview of what life will be like, but most Americans seem to have come to the conclusion that the last financial crisis was just a minor bump in the road toward endless economic prosperity. But of course the truth is that the ridiculously high debt-fueled standard of living that we are enjoying now is not sustainable, and after this bubble bursts it will be an extremely painful adjustment for our society.
Since the last financial crisis, the U.S. national debt has nearly doubled, corporate debt has doubled, stock valuations have reached exceedingly ridiculous extremes, the student loan debt bubble has surpassed a trillion dollars, we are facing the largest unfunded pension crisis in U.S. history, and in many parts of the country (particularly the west coast) we are facing a housing bubble that is even worse than the one that burst in 2007 and 2008.
And even with all of these bubbles, U.S. GDP growth has been absolutely anemic. Even if you believe the grossly manipulated numbers that the federal government puts out, the U.S. economy grew at a “miserably low” rate of just 1.6 percent in 2016…
In terms of GDP, the fourth quarter was revised up slightly, but there were adjustments for prior quarters, and overall GDP growth for the year 2016 remained at a miserably low 1.6%. We’ve come to call this the “stall speed.” It’s difficult for the US economy to stay aloft at this slow speed. As Q4 gutted any hopes for a strong finish, GDP growth in 2016 matched the worst year since the Great Recession. And corporate profits, despite a stock market that has been surging for years, are even worse. A lot worse. They’ve declined for years. In fact, they declined for years during the prior two stock market bubbles, the dotcom bubble and the pre-Financial-Crisis bubble. Both ended in crashes.
Irish Government To Issue Free Gold Coin To Protect Citizens From Brexit's Impact
In an unprecedented move the Irish government is issuing and dispatching a free gold coin to all Irish citizens and foreign persons of Irish heritage. In a controversial move, the Ministry of Finance plans for Irish people to own at least 1 ounce of gold bullion. The Irish Finance Minister said the “little people” were exposed due to the many risks that Brexit poses to Irish companies and the Irish economy and indeed the risks posed to the EU and the euro itself.
Irish politicians on the left have criticised the move as being “too generous.” They said that wealthy Irish Americans should not benefit from the move given that there is a homeless crisis in Ireland and given that the state was still close to bankruptcy. Speaking on condition of anonymity the Irish Finance Minster Mr D. O’Gill stated in his Constituency office of Donaghue’s Bar on Baggot Street:
“Sure if the Brits leave us alone to fight the mad Germans and French Looney’ in Europe, sure we will be awful trouble and it won’t belong before the whole Euro project goes up in flames, a bit of gold in the hand will do wonders to calm nerves and keep the party going”.
All Irish people and those who claim Irish descent should register at the local Irish consulate. The Irish Embassy in Washington is expecting significant interest and Irish Americans began queuing the Embassy last night. Seamus McSeamus, the preeminent personal finance journalist of his times said that the move was “financial lunacy” and that “sure don’t the dogs in the street know that gold is just a silly pet rock and a yellow metal of no value whatsoever. Gold is a volatile, high risk, barbaric relic that has no intrinsic value and should be consigned to the dustbin of history … you cannot even eat gold … or euros or dollars … Gold is the root of all evil” he wrote in a recent op-ed.
Big Government Kills Small Businesses
Lloyds Bank to shrink hundreds of branches in size
The new "micro branches" will be staffed by just two people, who will help customers to use machines, including pay-in devices.
Some of those being converted will be Halifax and Bank of Scotland branches. Lloyds said the reason was "a profound change in customer behaviour", which has seen more transactions move online.
It has already announced plans to close 400 of its branches around the UK, with 9,000 job losses. The micro format, modelled on an existing branch in Paternoster Square in the City of London, will use as little as 1,000 square feet of space.
"We have a lot of branches that used to have a lot of footfall, and therefore feel quite empty and intimidating for customers," said Jakob Pfaudler, Lloyds' chief operating officer for retail.
Yes, Obamacare Is Here to Stay -- and Yes, It's Probably Going to Fail
Last week was expected to be a long-awaited victory for the Republicans with the passage of the American Health Care Act (AHCA) in the House. The AHCA, which had also been dubbed as "Trumpcare," was designed to repeal and replace the ACA, which is more commonly known as Obamacare. It would have eliminated all of the ACA's mandates, penalties, and subsidies, and replaced them with age-based tax credits, as well as eliminated Medicaid expansion and modified Medicaid payments made to states to a per-capita basis.
The passage of this bill seemed almost certain before it was even crafted. President Trump won the November election for the presidency, and Republicans kept control of both houses of Congress. With a clear majority, Obamacare's days looked numbered. Plus, House Republicans had attempted to repeal Obamacare more than 60 times while former President Barack Obama was in office. The table was clearly set for Obamacare to fade off into the sunset.
However, that's not how things worked out. Trump was met with resistance from certain Republicans who felt the bill went too far in removing health insurance pathways for low-income individuals and families, while another group of Republicans felt the AHCA didn't go far enough. In other words, they wanted to see every last Title 1 component of Obamacare (Title 1 covers the mandates and penalties that covered people, businesses, and insurers) rolled back. With little compromise achieved, Republicans pulled the AHCA from the docket before any votes were cast.
The failure of the AHCA to gain the desired support means two things. For starters, it means President Trump is going to ask Congress to focus on bigger fish namely, comprehensive individual and corporate tax reform. Not having Obamacare repealed certainly eliminates a reduction in spending that Republicans were probably counting on to bolster other categories (perhaps infrastructure or defense spending), but it won't stop Trump from moving to the next item on his list.