Headline News Archives

Friday 04.07.2017

President Trump statement on U.S. Missile Strikes in Syria

Gold Rallies on Haven Demand as U.S. Missiles Hit Syrian Targets

Gold rallied with haven assets as the U.S. launched a punitive missile strike against Bashar al-Assad’s regime for its use of poison gas to kill civilians, with Secretary of State Rex Tillerson telling reporters that steps are under way to mobilize a coalition to remove the Syrian leader.

Bullion for immediate delivery climbed as much as 1.4 percent to $1,269.46 an ounce, the highest since November, and traded at $1,266.29 at 10:21 a.m. in Singapore, according to Bloomberg generic pricing. The metal is heading for a fourth consecutive weekly rise and has surged 10 percent this year. Miners’ shares jumped as Newcrest Mining Ltd. gained 3.2 percent in Sydney.

The decision marks a reversal for U.S. President Donald Trump, who during his campaign faulted past leaders for getting embroiled in conflicts in the Middle East. The attack early Friday morning in Syria targeted hangars, planes and fuel tanks at a military airfield. Secretary Tillerson told reporters that “steps are under way” to mobilize a coalition to remove Assad , although that effort would probably come after Islamic State militants in the country are defeated and some stability returns to the country.

“We’re seeing a rush to safe-haven buying, in which of course gold will be a major beneficiary,” Jeffrey Halley, senior market analyst at Oanda Corp. in Singapore, said by phone. As long as the situation is quite fluid in Syria, it would remain supportive of gold, according to Halley.

Fed's Kashkari says JPMorgan's Jamie Dimon is dead wrong about banks

Minneapolis Fed President Neel Kashkari is taking on the financial world's perhaps most well-known and powerful name — JPMorgan Chase CEO Jamie Dimon, whom the central bank official said recently made "demonstrably false" statements about the industry.

In his annual letter to investors, Dimon said "too big to fail" fears have been eradicated. The expression stems from the financial crisis, when taxpayers were on the hook for billions in bailouts to the financial industry. Dimon contended that banks are well-capitalized and well-regulated enough to sustain shocks similar to what happened during the crisis.

Kashkari disputed both points. He said bank equity won't be near enough to help the industry in the case of another crisis, and believes regulators are still being too easy on banks.

"Although capital standards are higher than before the last crisis, they are not nearly high enough," Kashkari said in a blog post on "The odds of a bailout in the next century are still nearly 70 percent." A Fed analysis concluded that banks should be able to able to handle a 20 percent loss on assets during a crisis. To get to that level, bank capital standards should be doubled from current levels, Kashkari said.

Rue21 May Be Next Retailer To File For Bankruptcy

The retail wheel of misfortune has been particularly unkind to teen-targeted shops that occupy many of the nation’s malls and shopping centers. WetSeal, Aeropostale, Pacific Sun, and Quicksilver have all recently filed for bankruptcy, and a new report says Rue21 may be the next to fall.

Bloomberg, citing sources familiar to the matter, reports that Rue21 could file for bankruptcy as soon as this month.

The sources say that the retailer, which specializes in apparel and accessories for young men and women, is currently in the process of negotiating with lenders.

“Rue21 has been working to improve its operations and enhance its liquidity position and has been actively engaged with its lenders and bondholders to explore the best path forward,” the retailer said in a statement to Bloomberg. The Pennsylvania-based chain, which operates about 1,100 stores in malls, outlets, and strip centers across the U.S, was purchased by Apax Partners in 2013.

Dallas Major Rejects Taxpayer Bailout of Public Employee Pension Fund

Since the middle of 2016, the city of Dallas has been dealing with a Texas-sized problem for one of its public employee pension funds. Specifically, the Dallas Police and Fire Pension System was so at risk of becoming insolvent that the city’s retired firefighters and police officers were effectively conducting a run on the bank, so to speak, by using a policy that permitted them to cash out their pensions in lump sum withdrawals.

Back in December 2016, Dallas’ city government acted to stop the retired public employees’ run on the pension fund by eliminating the policy that allowed them to withdraw the balance of their pensions accounts to protect their wealth. Unfortunately, the problems for the city of Dallas didn’t end there, because the risk of insolvency for the city’s troubled Police and Fire Pension System wrecked the city’s credit rating, making it more costly for it to borrow money to fund improvements in its public infrastructure and other public programs.

To fix both problems, the city’s leaders were looking to potentially hike the municipal property tax rates that it imposes on Dallas residents by as much as 130% of their 2016 levels.

That plan, however, fell apart earlier this week when Dallas’ mayor, Mike Rawlings, withdrew his support for a bill before the Texas state legislature that would use a massive infusion of taxpayer funds to bail out the failing pension fund. But it wasn’t just the big increase in property taxes that would be imposed on Dallas’ residents that prompted his objections. It was a clause in the bill that would require the city to fund the pensions of “phantom” police officers and firefighters.

Tsipras takes aim at IMF, EU clears way for merger

Amazon says it will hire 30,000 part-time workers over the next year

Amazon announced Thursday it plans to add 30,000 part-time positions in the U.S. over the next year, part of a massive hiring binge by the online retailing giant.

The part-time hiring includes 5,000 jobs in Virtual Customer Service, which would allow employees to work as a customer service agent from home. The remaining 25,000 would be at Amazon warehouses. Any part-time employees who work 20 hours or more a week are also eligible for benefits.

"There are lots of people who want or need a flexible job — whether they’re a military spouse, a college student, or a parent — and we’re happy to empower these talented people no matter where they happen to live,” said Tom Weiland, Amazon's vice president for worldwide customer service, in a statement.

The part-time plan is part of a larger hiring spree by Amazon. In January, the company said it would add 100,000 full-time jobs in the U.S. with full benefits over the next 18 months. Most positions will be filled at fulfillment centers and in new fields including cloud technology and machine learning.

Goldman Sachs is ready to crash the world economy through space mining

The global investment bank Goldman Sachs has claimed mining asteroids for precious metals is a “realistic” goal.

It has released a report exploring the possibility of using an “asteroid-grabbing spacecraft” to extract platinum from space rocks.

“While the psychological barrier to mining asteroids is high, the actual financial and technological barriers are far lower,” the report said, according to Business Insider. “Prospecting probes can likely be built for tens of millions of dollars each and Caltech has suggested an asteroid-grabbing spacecraft could cost $2.6 billion.”

The bank added: “Space mining could be more realistic than perceived.” It is believed an asteroid the size of a football field could be worth up to $50 billion. However, bringing that much platinum back to Earth is likely to crash the precious metal market – and probably the rest of the economy with it.

22 Retailers Closing the Most Stores

In April, Payless ShoeSource filed for Chapter 11 bankruptcy protection, and announced plans to close around 400 locations. This news comes about two months after RadioShack filed for Chapter 11 bankruptcy protection for the second time in just over two years. The company has already made plans to close more than 500 locations nationwide, and has yet to announce what it will do with its remaining 1,000 locations. During the 2015 bankruptcy, about 2,000 RadioShack stores closed.

Radioshack and Payless’ bankruptcy announcements are the latest in what has been a disastrous year for retailers and retail employees. Many of the nation’s largest retailers have closed or are in the process of shutting down operations. These retailers are closing a varying number of locations. The major retailers alone that are going bankrupt or restructuring are closing well over 2,000 stores nationwide, often at some of the biggest malls in the country.

American Apparel, The Limited, and others have declared bankruptcy and will disappear this year. Big names such as Kmart, Macy’s, J.C. Penney, and others will each close dozens of stores as they attempt to respond to the changing shopping habits of Americans, who more and more consumers choose to shop online. These are the 22 retailers closing the most stores in 2017.

Many of the companies on this list have long fought an uphill battle — and many would say a losing one — against surging e-commerce companies such as Amazon. Amazon’s revenue reached $136 billion in fiscal 2016, about nine times its revenue a decade ago. It is now, according to the National Retail Federation, the eighth-largest U.S. retailer based on annual sales.

Walmart Cuts 300 Jobs In Local Tech Division, Sam’s Club Also Cutting Staff

Arkansas-based retail giant Wal-Mart in its re-organization of the Walmart U.S. technology division is eliminating around 300 jobs in the Information Systems Division (ISD).

Insiders said the retailer is laying off about 10% of its ISD workforce over the next few days. The layoffs at ISD in Bentonville began this week and are expected to continue through the month.

Impacted employees said they received an email to report to a training room on Tuesday where they were told their jobs were being eliminated in the company’s efforts to restructure. The layoffs appear to be across-the-board and include officers. Wal-Mart corporate spokesman Randy Hargrove told Talk Business & Politics-Northwest Arkansas Business Journal they were not targeted at older or longer-term employees – as was often suggested on social media – but based on the company’s ongoing efforts to streamline operations.

“As we said in January, to fuel our growth and our investments we have to manage our costs and our capital decisions with discipline. This means we will continue to find ways to operate more efficiently and effectively, true to our cost-conscious heritage. In order to achieve this, from time to time you’ll see the company eliminate positions in an effort to stay lean and fast. In some areas, we’ll invest in new positions but in other cases, we’ll operate more efficiently and work to change our processes and become more digital to change the work itself,” Hargrove said on Wednesday.

BP Cuts CEO's Maximum Pay by $3.7 Million to Appease Investors

BP Chief Executive Officer Bob Dudley’s maximum pay by as much as $3.7 million over the next three years as the oil producer tries to avoid a repeat of last year’s shareholder revolt.

Dudley will earn a maximum of five times his basic salary as part of the long-term incentive plan compared with seven times under the previous remuneration policy, London-based BP said Thursday. This would cut his maximum pay, excluding pensions, to $15.3 million from $19 million. His total pay in 2016 dropped 40% compared with the previous year, according to BP’s annual report.

A majority of BP shareholders last year voted against Dudley’s 20% pay increase after the company reported a record net loss in 2015 and announced thousands of job cuts following the slump in oil prices. The revolt sparked investor discontent about compensation at other European companies. BP, which had pledged to change the way it pays executives, will ask investors to approve the new policy next month.

“Last year’s AGM remuneration vote was a clear message about how we manage executive pay,” Ann Dowling, chairman of BP’s remuneration committee, said in the annual report. “It is clear that shareholders and other stakeholders would like our remuneration policy to be simpler, more transparent, and to lead to reduced levels of reward.”

Fed's Williams: We Can Start Unwinding Stimulus This Year

It would make sense if the U.S. economy continues to grow for the Federal Reserve to begin trimming its $4.5 trillion balance sheet towards the end of this year, unwinding extraordinary stimulus deployed during the crisis, a Fed policymaker said on Thursday.

John Williams, president of the San Francisco Federal Reserve Bank, said this process would take several years and run in parallel, albeit for longer, to increases in the Fed's interest rates.

"It would make sense to take the next step in terms of starting the normalisation process of our balance sheet," Williams told reporters on the sidelines of a conference in Frankfurt.

"My own view would be towards the end of this year would be a good time to take that next step, assuming the economy progresses." The Fed bought Treasury and mortgage-backed bonds on an unprecedented scale in the wake of the financial crisis to help keep interest rates low to spur hiring and growth.

Some Harvard students claim Trump is more dangerous than ISIS

College Grads Stuck With Low Wages as U.S. Hiring Heats Up

Connor Reyer gave up after more than a year of looking for a job in his preferred field of forest resources following graduation from the University of Georgia in Athens, finally opting in February for a hotel front-desk job paying $10 an hour.

The relegation of college graduates to non-degree positions was once seen as a temporary blow for young people unlucky enough to graduate around the time of the deep 2007-2009 recession. Instead, millions of Americans like Reyer continue to face the same struggle.

About 44 percent of recent college grads were employed in jobs not requiring degrees in the final quarter of 2016, not far from the 2013 peak of 46 percent, while the share of that group in low-wage positions has held steady, data from the Federal Reserve Bank of New York showed Wednesday.

That’s a sign that the nation’s labor market isn’t at full health, despite an unemployment rate forecast to remain at 4.7 percent in March, close to the lowest in almost a decade. In fact, the elevated level of college grads in non-college jobs could mean there’s still slack and that the Fed can go slow in raising interest rates, betting that more high-wage jobs will materialize. It could also mark a more permanent shift in employment that the Fed can’t fix and be a tough challenge for President Donald Trump and Congress.

ICE Arrests 82 Illegals From 26 Countries in DC, Virginia Sweep

Immigration and Customs Enforcement officials have announced its officers arrested 82 illegal immigrants – a majority with criminal convictions – from 26 countries during a five-day sweep late last month in Washington, D.C. and Virginia.

According to the agency, 68 of those scooped up in the raids had previous convictions for crimes like armed robbery, larceny and drug distribution.

Of the remaining 14, two had ties to the MS-13 street gang – which, according to an NBC affiliate – has been linked to several murders in the D.C. area; two had outstanding final orders of removal; three had overstayed their visas; one was wanted by a foreign law enforcement entity; one was a verified human rights violator and two had pending local charges, ICE said in its news releae.

One of those arrested included a second lieutenant in command of the Somalian National Security Service, an organization known for human rights abuses, rape, torture and extrajudicial killings, ICE reported. He also has a felony drug conviction.

Bankrupt Oil Companies Pay Huge Bonuses To CEOs

The oil price rout that sent several hundred U.S. oil and gas companies under seems to be largely over, and in a somewhat surprising turn of events, some chief executives of companies that filed for bankruptcy protection in the last two years are doing better than they did when oil traded at over $100 a barrel.

A Wall Street Journal analysis cites the CEO of Ultra Petroleum, for example, who received a portion of 7.5 percent of new shares, to be issued after the company emerges from bankruptcy protection. In absolute terms, this translates into about $35 million – a tenfold jump on Michael Watford’s annual salary in the pre-crisis years.

Another chief executive, Seventy Seven Energy’s Jerry Winchester, got a stock package of 440,000 shares that were worth $6.6 million when the company emerged from bankruptcy last August, which have now swelled to $16 million, thanks to the $1.76-billion acquisition of Seventy Seven by Patterson-UTI Energy.

According to analysts, the post-bankruptcy treatment of CEOs in the U.S. energy industry is not unusual. What’s unusual is the size of some of their compensations, clearly demonstrating the revitalizing effect that higher oil and gas prices have had on some industry players. Both those that filed for bankruptcy protection when the time was right, and those that missed the bankruptcy protection train, trying to hang on for as long as possible.

Tsipras takes aim at IMF, EU clears way for merger

Feds: IRS seized millions from innocent people and businesses

Using a law targeting money launderers and drug dealers, the Internal Revenue Service has wrongfully seized millions in small business and individual bank account money on the mistaken belief that they were hiding ill-gotten gains.

A report by the Treasury Department Inspector General found that the IRS launched hundreds of cases between 2012 and 2015 against innocent people who the agency accused of evading the Bank Secrecy Act, which is aimed at thwarting illicit deposits. In a random sample of 278 IRS forfeiture cases involving this law, the IG found that 91 percent of the people and businesses had gotten the suspect money legitimately.

Under the 1970 law, banks must report currency transactions over $10,000. But it also bars “structuring” deposits in amounts under $10,000 intended to evade the reporting requirement. That’s only a crime, however, if someone intentionally tries to skirt the law. The Washington Post first reported the IG’s findings.

The IRS, which is overseen by the Treasury Department, said it had ceased the structuring-related practices in 2014. The IG, though, found eight cases of such seizures after the new rules went into effect.

Americans Are Pretty Skeptical That Hard Work Will Pay Off

Hard work is often touted as the key American virtue that leads to success and opportunity. And there’s lots evidence to suggest that worker buy into the belief: For example, a recent study found that Americans work 25 percent more hours than Europeans, and that U.S. workers tend to take fewer vacation days and retire later in life. But for many, simply working hard doesn’t actually lead to a better life.

In the past, economists have acknowledged that citing hard work as the path to prosperity is overly simplistic and optimistic. Ultimately, whether hard work alone can lift people into better economic conditions is a more complex question. The formula only works if an individual’s efforts are met with opportunities for a better life. According to research, it’s getting harder and harder for Americans to move up the income ladder.

A new poll from the Strong, Prosperous and Resilient Communities Challenge (SPARCC), an initiative to bolster local economies, found that Americans are quite skeptical of the narrative connecting wealth with personal agency. SPARCC found that 74 percent of those surveyed believed that most poor people work hard, but aren’t able to work their way out of poverty due to the lack of economic opportunities.

In the U.S., 19 percent of income inequality is attributed to predetermined circumstances such as a person’s race, gender, and parental income. The SPARCC report also points to past research showing that economic mobility and health outcomes are greatly affected by geography as evidence that individual hard work won’t ensure success because opportunities aren’t evenly distributed.

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