Headline News Archives

Tuesday 03.07.2017

Ron Paul to Hold Rally in Arizona in Support of Sound Money Bill

On Wednesday, March 8, Dr. Ron Paul will testify before the Arizona State Senate Finance Committee in support of a state bill that would restore the status of sound money within the sovereign borders of the Grand Canyon State.

The measure — HB2014 — would "exempt from gross income the exchange of one kind of legal tender for another" and redefines legal tender to include "specie," that is to say, "coins having precious metal content."

In plain English, this proposal would provide a way for Arizonans to buy and sell gold and silver without having to treat it as a capital gain, thus reducing the reach of the Federal Reserve inside the state of Arizona. In a statement published by the Ron Paul Institute for Peace, Dr. Paul lauds the bill for "ensuring that people are not punished by the taxman for rejecting Federal Reserve notes in favor of gold or silver. Since inflation increases the value of precious metals, these taxes give the government one more way to profit from the Federal Reserve’s currency debasement."

"HB 2014 is a very important and timely piece of legislation. The Federal Reserve’s failure to reignite the economy with record-low interest rates since the last crash is a sign that we may soon see the dollar’s collapse. It is therefore imperative that the law protect people’s right to use alternatives to what may soon be virtually worthless Federal Reserve notes," the former presidential candidate and constitutionalist icon added.

House unveils Obamacare replacement

House Republicans on Monday announced their long-awaited legislation to repeal and replace Obamacare, but they can't say how many people would get or lose coverage compared to the Affordable Care Act.

The bill puts income restrictions on insurance tax credits and drops a proposed cap on the tax break for employer-sponsored health coverage. The Congressional Budget Office has not released its estimate on how much the bill would cost. The legislation is expected to be marked up later this week.

The Republican-backed measure, called the American Healthcare Act, repeals most of the Affordable Care Act's taxes, but at a later date than originally envisioned. It would keep the law's "Cadillac tax" on high-cost health plans on the books, but would delay its implementation until 2025.

The tax credits proposed by Republicans would be age-based, not income-based as they are under Obamacare. But in the bill released Monday, they would be reduced for individuals earning more than $75,000 and for households earning more than $150,000. Individuals earning more than $215,000 couldn't receive any of the tax credits.

Business Economists Disagree With Trump on Trade, Budget

A majority of business economists disagree with the Trump administration on several key issues, notably immigration, trade and the budget, according to a survey by the National Association for Business Economics. This is the first survey done by the trade organization since President Trump took office.

The biggest sources of disagreement are trade and immigration, according to the NABE. Roughly two-thirds of economists want the Trump administration to allow more immigration from high-skill workers for high-paying jobs, under programs like the H1-B visa. Only 14 percent of economists say the Trump administration should spend more money on deportations and border enforcement -- programs that the White House has emphasized since taking office a month and a half ago. Further, business economists do not consider illegal immigration to be a serious issue.

Regarding trade, survey respondents gave a highly favorable rating of the North American Free Trade Agreement, better known as NAFTA. Nearly 70 percent of respondents said the administration should only use policies like tariffs to restrict trade when U.S. industries are being threatened by unfair trading practices.

A large majority of surveyed economists, 78 percent, believe the budget proposed by the Trump administration will also likely increase the deficit and national debt. NABE economists favor cutting defense spending and federal entitlement programs such as Social Security and Medicare, all of which are programs the White House has opted to keep the same size or increase, as in the case of defense.

There Is No Gender Wage Gap

GM to lay off 1,100 at Lansing plant, cut shift

General Motors Co. will lay off 1,100 people at its Lansing Delta Township Assembly plant when it cuts the third shift in May. The plant will experience a shift reduction as it phases out production of the first generation GMC Acadia in May, said Erin Davis, GM's Lansing spokeswoman, in a statement. The new generation is currently made in Spring Hill, Tennessee.

Workers were given a 60-day notice of the layoffs this morning. The plant employs roughly 3,200 hourly workers and 250 salaried workers. The plant makes the Chevrolet Traverse and Buick Enclave. GM chose the plant to make the new generation Traverse this year.

The statement also confirmed that the new generation Buick Enclave will be made at the plant as well. No further information was released on the new Enclave. "The new Buick Enclave and Chevrolet Traverse enter the market at a time when crossovers have become the most vibrant, dynamic and fast-growing models of the industry," Davis said in the statement.

Bill Reed, president of UAW Local 602, which represents the hourly workers at the plant, said the layoffs were expected. "This was a major vehicle change," he said. "It was kind of expected this was going to happen. I believe it's going to be for a short time."

ESPN layoffs to hit on-camera personalities

The cuts will only affect "talent" -- not rank-and-file employees, according to sources familiar with the matter. The details are still being finalized, but layoffs are expected to take place through June.

No announcement has been made about which personalities will be affected, but it seems those with contracts up for renewal may be cut first. ESPN may also buy out some contracts that aren't ending soon, according to sources.

"We have long been about serving fans and innovating to create the best content for them," ESPN said in a statement. "Today's fans consume content in many different ways and we are in a continuous process of adapting to change and improving what we do. Inevitably that has consequences for how we utilize our talent. We are confident that ESPN will continue to have a roster of talent that is unequaled in sports."

The last time ESPN cut talent had layoffs was in 2015. Keith Olbermann and Bill Simmons, both of whom had expensive contracts, were among the big names who were cut loose. Later that year, ESPN also laid off about 300 employees -- roughly 4% of the network's global workforce. During those layoffs, hosts, reporters and commentators generally weren't affected. ESPN also had a round of layoffs in 2013.

It cost 1.5 cents to make a penny last year

Issuing pennies doesn’t seem to make much economic sense. Last year, each penny cost 1.5 cents to make -- about 50 percent more than its face value -- and all the pennies the U.S. Mint issued last year cost it $46 million. It’s the 11th year the cost to make a penny has been higher than its face value.

Nickels, too, cost more than their value to make -- 6.32 cents for each five-cent piece last year. At least the Mint makes a profit on dimes and quarters.

The high prices are mostly caused by metal, manufacturing and transportation costs, a spokesman for the Mint said. (Pennies, despite their copper color, are mostly made of zinc.) And their cost is lower compared to just a few years ago: In 2010, each penny cost 2.5 cents to manufacture.

Despite sporadic efforts from government to lower the costs of penny-minting, that doesn’t seem likely to happen. Congress in 2010 directed the Mint to find a cheaper way to manufacture the penny, but the Mint soon concluded there wasn’t one. “There are no alternative metal compositions that reduce the manufacturing unit cost of the penny below its face value,” it said in a 2014 report, which also said changing a penny’s metal composition would cost coin-reliant industries far more than it would save in manufacturing costs.

Here’s How Most Americans Plan to Spend Their Tax Refunds

Most Americans plan to use their 2016 tax refunds for savings and paying down debt rather than shopping sprees or vacations, according to a new survey.

About half of Americans, 47%, expect to get a tax refund in 2016, according to the study from survey, and 90% say they will use the money they get back from the federal government for something practical. Thirty-four percent say they will save whatever money they get back and 29% will use the money to pay bills or buy food.

Only 6% of those polled plan to use their refunds to splurge on indulgences like a vacation or shopping spree.

According to Bankrate, about a quarter of Americans had already filed their taxes by mid-February and two out of three of those filers have gotten refunds already. Millennials, the survey found, were most likely to be both early filers and savers.

Report: Neiman Marcus Hires Investment Firm To Explore Debt Restructuring

Nearly a year after rumors began swirling that Neiman Marcus was in the market for a buyer in order to get out from a $5 billion debt load, the luxury department store has reportedly hired an investment bank to boost its bottom line.

Reuters, citing sources familiar with the matter, reports that Neiman Marcus — which also owns Bergdorf Goodman — hired Lazard Ltd. to explore debt restructuring options.

While the sources note that Neiman Marcus is not in immediate risk of bankruptcy, the move could provide the company with relief from its reported $4.8 billion debt acquired during a 2013 buyout.

Neiman Marcus tells the Dallas Morning News in a statement that it wouldn’t comment on rumors, but that the retail company will “routinely retain consultants and advisors to evaluate opportunities to create long-term value for our associates, customers and other stakeholders and will continue to do so moving forward.”

JPMorgan Economist Explains Why He Changed His Fed Call

Will Unemployment Press the Fed to Raise Interest Rates in March?

This Friday’s unemployment report is also one of the freshest economic views before Federal Reserve Chair Janet Yellen and the Federal Open Market Committee members decide whether to raise interest rates at the March FOMC meeting. What the markets need to consider is that Yellen’s speech from March 3 was the most pointed pro-rate-hike speech she has ever given.

The current estimates are subject to change after the monthly ADP payrolls and after the weekly jobless claims from the Bureau of Labor Statistics (BLS) hit the tape.

Bloomberg is projecting that the unemployment rate will drop to 4.7% in February from 4.8% in January, and its Econoday range of estimates was 4.6% to 4.8%. Dow Jones (Wall Street Journal) is calling for a consensus 4.7% on the official unemployment rate.

Bloomberg’s consensus estimate on nonfarm payrolls is 195,000 for February, down from 227,000 in January’s preliminary reading. The range of estimates was shown to be 162,000 to 220,000. Dow Jones has the nonfarm payrolls consensus estimate at 192,000.

The U.S. government changed H-1B visa rules. Here's what it means for tech

U.S. immigration authorities suspended a program last Friday that expedited visas for skilled workers — a darling class of workers in the tech community.

Despite stoking tension in tech companies, it's a relatively routine decision that's happened under administrations past. But it is missing one key piece of information — a timeline— and that could impact businesses.

"Premium processing" of H-1B visas, which allowed skilled workers to pay extra to request faster approval to work in the U.S., will no longer be available starting April 3, immigration authorities announced. That basically means all applicants will have to wait the standard period to see if they have won the "lottery," without the option to pay an extra $1,225 filing fee for guaranteed answer after 15 days.

Essentially, the government is shifting around which administrative tasks they'll tackle first, said said immigration attorney Rajiv Khanna. "This is not new for anybody. Last year they did the same thing," Khanna said. "It simply means a diversion of resources toward other programs that lack resources." Indeed, last year immigration authorities said they were delaying premium processing until May 16. But this year's announcement gives a six-month window, not a specific date, for the premium processing delay.

Not enough candidates for Border Patrol jobs

Trump Cheers Exxon's Plan to Create 45,000 Jobs

Exxon Mobil (XOM) will spend $20 billion by 2022 to expand its footprint along the U.S. Gulf Coast, creating more than 45,000 jobs. The world’s largest publicly traded oil company said Monday it will invest in refining and chemical-manufacturing projects at 11 proposed and existing sites, located in Texas and Louisiana. Speaking at the CERAWeek conference in Houston, Exxon's new CEO Darren Woods noted that 35,000 temporary construction jobs will be needed. The investments will also create 12,000 permanent jobs.

Many of the new positions will be for high-skilled, high-paying jobs with an average salary of about $100,000 a year, Woods said in Exxon’s announcement. “The United States is a leading producer of oil and natural gas, which is incentivizing U.S. manufacturing to invest and grow,” Woods said.

President Donald Trump applauded the news, calling Exxon’s plans “ambitious.” “This is exactly the kind of investment, economic development and job creation that will help put Americans back to work,” Trump said in a statement released by the White House. “Many of the products that will be manufactured here in the United States by American workers will be exported to other countries, improving our balance of trade.”

Exxon said its investments will spur $20 billion in new economic activity and increase the company’s manufacturing and export capacity. Related investments on the Gulf Coast began in 2013.

GM to sell Opel, Vauxhall to French Peugeot maker

General Motors has made a deal with the French carmaker behind Peugeot, agreeing to sell its faltering European car brands in a 2.2 billion euro deal that has some fearing job cuts as an uncertain market moves forward.

The deal includes the GM-owned brands Opel, which is made in Germany, and Vauxhall, from Britain. With the $2.33 billion acquisition, the French Groupe PSA, which makes Citroën cars in addition to Peugeot, is slated to become the continent’s second largest automaker following Volkswagen.

GM has sold the brands in Europe since the 1920s, but failed to turn a profit between the two for the past 18 years. The automaker began to see a turnaround last year but fell behind again after Britain’s vote to leave the European Union caused the pound to steeply drop in value.

"Without Brexit, we would have reached the breakeven goal" to the European leg of the business, GM chairman and chief executive Mary Barra told reporters Monday. PSA executives say the company has no plans to cut existing jobs, but it plans to invest in research and development. That, they hope, will allow the company to avoid plant closures while redeveloping technology and the design of vehicles.

The Reality Is, Half Of Americans Can’t Afford To Write A $500 Check

The CEO of Assurant appeared on Bloomberg TV to explain why demand for his services is likely to increase: the chief executive of the mobile phone insurer said he expects a surge in demand as carriers charge customers more to replace their devices. “If you think back five years ago, you as a consumer didn’t know how much that phone cost, you thought it was free or close to free,” Assurant's Alan Colberg said Monday. “Now you’re paying $600, that’s a lot. So we’ve actually seen the attachment rate, or the number of people buying the product, going up a little bit in the last couple of years.”

He then proceeded to give Bloomberg his traditional sales pitch: Assurant is counting on growth at its business covering phones and appliances to help counter a decline in the segment that insures foreclosed homes for lenders. While improvement in the real estate market has limited the number of vacant homes, Colberg said there are still many cash-strapped consumers.

It is what he said next that caught our attention: “The reality is, half of Americans can’t afford to write a $500 check,” Colberg said. He spun that stunning statistic by saying that when US customers sign up for a cellular plan, they’re willing to buy protection in case “they lose that phone or something happens to it.”

In other words, there are millions of Americans who don't have $500 in the bank but are willing to dish out more than that on a cell phone, and then are stupid enough to make monthly payments that ultimately end up being far higher than $500 to protect their purchase... which they clearly couldn't afford in the first place.

Is the US Trade Deficit a Problem?

Snap tumbles 12% on day three, erases gains

Snapchat parent Snap Inc. debuted on the stock market Thursday and immediately saw substantial gains on its first two days. But the excitement has already worn off, with shares tumbling more than 12 percent on day three.

After finishing Friday at $27.09 per share, Snap closed at $23.77 on Monday, beneath the $24 where it opened on its first day of trading. This is still above the $17 IPO price, but only select institutional investors and high-net worth individuals were able to buy it that low.

“Some of the air is coming out of the stock,” said Kathleen Smith, principal at Renaissance Capital. “The stock had really run up beyond the expectations of most people who look at fundamentals,” she said, referencing Snap’s sub par financials.

Smith, who also manages IPO-focused ETFs, was surprised by the company’s market cap, which is already about $35 billion (fully diluted). “The company has to basically cure cancer or something with its app,” to justify that kind of value, she quipped. Snap is already considered to be worth more than American Airlines, Hershey’s and Hilton Hotels, with its sky-high market cap. With the stock trading down today, it seems that some investors are starting to wonder if Snap’s app warrants it.

Delta Air cuts first-quarter operating margin forecast, citing higher costs

Delta Air Lines Inc (DAL.N) on Monday cut its operating margin forecast for the current quarter, citing higher costs, and said it expected passenger unit revenue, a closely watched revenue metric, to be at the lower end of its forecast.

The No. 2 U.S. airline by passenger traffic Delta said its margins will likely contract this year as the pace of revenue improvement lags cost increases.

"Market fuel prices are tracking up about 55 percent for the quarter, which is expected to be the greatest year-on-year increase in 2017," the company said in an investor presentation. Delta Air now expects operating margins to increase about 10-11 percent, less than 11-13 percent rise it had previously forecast.

The airline now expects passenger unit revenue, which compares sales to flight capacity, to be about flat in the first quarter ending March. It had earlier expected passenger unit revenue to be between flat and up 2 percent.

Rest of the World Paved the Way for the Next Fed Rate Hike

In just a week, markets went from doubting a March rate increase to viewing one as a sure bet. The central bank’s top brass engineered the change by speaking in favor of a hike, culminating in Fed Chair Janet Yellen’s endorsement on Friday.

What changed to push central bank policy makers from the neutral stance that Fed watchers saw in their January meeting minutes to the brink of a rate increase? Not much, if you’re looking at U.S. data. The fact that nothing deteriorated was enough to clear the hurdle for a March rate move, especially because steady domestic data have come alongside a slowly-improving international outlook — a major shift from the situation at this time last year, when global risks helped to stay the Fed’s hand.

“There is almost no economic indicator that has come in badly in the last three months,” Fed Vice Chairman Stanley Fischer said Friday at a forum hosted by the University of Chicago’s Booth School of Business. Likewise, Yellen said employment and inflation are evolving in line with the Federal Open Market Committee’s expectations. While prices haven’t broken out dramatically to the upside, they’re still moving toward the Fed’s goals.

Unemployment has “essentially met” what officials see as full employment, Yellen said Friday. Low joblessness isn’t a major change from last year, though wages are very slowly crawling higher, suggesting that the labor market is getting tighter.

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