Headline News Archives

Monday 01.09.2017

The Limited Closes All 250 Stores 4,000 jobs lost

In a terse, 40-word message posted on the company’s website Saturday, The Limited announced that it is closing all 250 of its retail stores. The announcement noted that the company’s website would remain open for business, 24 hours a day. A reported 4,000 jobs will be lost.

The Limited was founded in 1963 as a women’s specialty apparel shop that opened relatively small stores in shopping malls around the company. The Limited’s business was split off from what is now L Brands Inc. (NYSE: LB) in 2007 and fully taken over in 2010 by private equity firm Sun Capital Partners, which had purchased a majority stake in The Limited in 2007.

The message posted at the company’s website reads: This isn’t goodbye… We’re sad to say that all The Limited stores nationwide have officially closed their doors. But this isn’t goodbye. The styles you love are still available online – We’re just a quick click away 24 hours a day.

Brick-and-mortar retailers had a tough holiday shopping season and the poor results at Macy’s led to the closing of 68 stores and the loss of up to 10,000 jobs.

The US is 'almost out' of qualified workers, and more immigration is the answer, JPMorgan strategist says

While job growth in December disappointed and the unemployment rate got worse, the chief global strategist at JPMorgan Funds warned Friday that the U.S. labor force is running out of "well-qualified" American workers.

"We actually need more immigration," David Kelly told CNBC's "Squawk on the Street," calling into question any policies that restrict skilled immigrants from entering the U.S. to take jobs that can't be filled by the existing labor pool. "We need these workers," he stressed. "We're almost out of well-qualified native-born workers."

Kelly said he's concerned by "signs of further restrictions on immigration in this country," referring to a bill that was reintroduced in Congress this week to restrict H-1B visas, which allow nonimmigrant foreign workers in specialty fields. Republicans and Donald Trump are pushing to have businesses hire more American-born workers.

Politics aside, Kelly said, "One of the remarkable things about the labor market over the next 10 years is [that] around 85 percent of the new growth in the working-age population is going to have to come from immigrants, not from the native-born population."

Online retailers to take part in SNAP pilot

FreshDirect, Amazon, Safeway, ShopRite, Hy-Vee, Hart’s Local Grocer and Dash’s Market will take part in a two-year pilot that will allow SNAP beneficiaries in certain states to use their benefits when purchasing groceries online. The test will begin this summer.

“For individuals who receive SNAP benefits, this is a game changer that will allow their transaction to be treated like a normal credit card transaction,” FreshDirect’s VP of public affairs Larry Scott Blackmon told SN.

FreshDirect, Long Island City, N.Y., currently takes part in a separate modified EBT (electronic benefit transfer) pilot whereby SNAP beneficiaries residing within two Bronx, N.Y. ZIP codes can order groceries from FreshDirect, but must be present at the time of delivery to swipe their EBT card rather than entering it online. FreshDirect waves the delivery fee for these customers, but the experience isn’t always convenient.

“If they’re not home at the time of the delivery we can’t leave [their groceries] so the hope and the goal is that over time as the USDA program evolves individuals with these benefits will be able to go online and make payments and be able to receive deliveries” made when they are not at home.

This is what Bernie Madoff's life is like in prison

Venezuela's Maduro hikes minimum wage for fifth time in a year

Venezuela's socialist President Nicolas Maduro announced on Sunday a 50 percent hike in the minimum wage and pensions, the fifth increase over the last year, to help shield workers from the world's highest inflation rate. The measure puts the minimum monthly salary at 40,683 bolivars - about $60 at the weakest exchange level under the state's currency controls, or $12 at the black market rate.

"To start the year, I have decided to raise salaries and pensions," he said on his weekly TV and radio program. "In times of economic war and mafia attacks ... we must protect employment and workers' income," added Maduro, who has now increased the minimum wage by a cumulative 322 percent since February 2016.

The 54-year-old successor to Hugo Chavez attributes Venezuela's three-year recession, soaring prices and product shortages to a plunge in global oil prices since mid-2014 and an "economic war" by political foes and hostile businessmen.

But critics say his incompetence, and 17 years of failed socialist policies, are behind Venezuela's economic mess. They say the constant minimum wage hikes symbolize Maduro's policy failures and fail to keep pace with real on-the-street price rises.

Fed's Powell: 'Business-Friendly Regulation' Would Ease Central Bank Burden

A push by Washington for more business-friendly regulation and fiscal support for the economy could improve America's mix of policies which in recent years have relied too much on the Federal Reserve, Fed Governor Jerome Powell said.

Powell, speaking on Saturday at a conference, did not mention the incoming Trump administration by name but his comments suggest some Trump policies will be welcomed by U.S. central bankers who have been urging other institutions to do more to help the economy.

"We may be moving more to a more balanced policy with what sounds like more business-friendly regulation and possibly more fiscal support," Powell told an economics conference in Chicago.

President-elect Donald Trump, who takes office on Jan. 20, has promised to double America's pace of economic growth, "rebuild" its infrastructure and slash regulatory burdens.

Fiat Chrysler ups the ante as automakers respond to Trump

Fiat Chrysler Automobiles on Sunday said it will invest $1 billion to modernize two plants in the U.S. Midwest and create 2,000 jobs, upping the ante as automakers respond to threats from President-elect Donald Trump to slap new taxes on imported vehicles.

FCA's announcement that it would retool factories in Ohio and Michigan to build new Jeep sport utility vehicles, including a pickup truck, and potentially move production of a Ram heavy-duty pickup truck to Michigan from Mexico, also highlighted the auto industry's keen interest in getting relief from tough fuel economy rules enacted by the outgoing Obama administration.

Many automakers plan to use the annual North American International Auto show in Detroit, which started on Saturday, to tout investments in the United States and a commitment to U.S. employment against the backdrop of Trump's criticism of automakers for shipping vehicles into the U.S. from Mexico. Automakers are girding for rounds of questions about Mexican investments and U.S. jobs in the wake of Trump's harsh criticism of automakers.

Most of the major automakers in the U.S. have substantial vehicle making operations in Mexico, as well as complex networks of parts makers that supply their factories in the U.S. and support jobs and investment in states such as Ohio and Michigan.

State Bank of India to launch digital bank

State Bank of India (SBI) is working on its own digital bank – SBI Digi Bank – which it plans to launch in the next three to six months, according to ET Tech. “We are working on a digital-only bank where no individual will be visible to the customer and all transactions will be done with the help of apps, internet banking and mobile banking,“ ET Tech quotes a source from SBI.

The new bank will be open for both new and existing customers of SBI, it is understood. It will offer current and savings/deposits accounts, loans, insurance, mutual funds investment, and personal financial management (PFM).

SBI Digi Bank will use the Aadhaar infrastructure, created by the Unique Identification Authority of India (UIDAI), to onboard customers and provide them with online services. UIDAI collects the biometric and demographic data of residents, stores them in a centralised database, and issues a 12-digit unique identity number – Aadhaar – to each resident.

The source tells ET Tech there will be no physical paperwork, as everything will be done digitally.

Wells Fargo preparing new pay plan in wake of fake account scandal

Last year, in the wake of a massive scandal over fake accounts, Wells Fargo said that it planned to change its employee compensation plan, de-emphasizing the sales goals that led to 5,000 of the bank’s former employees opened as many as 2 million credit card and bank accounts without authorization in order to get sales bonuses.

When Wells Fargo made that announcement in September, the details on the changes were scarce, but a new report from the Wall Street Journal states that the bank is ready to roll out on its new comp plan, one without sales goals.

Here’s the Wall Street Journal with details: San Francisco-based Wells Fargo is in the process of completing the final parts of the new plan, which will focus on customer service, customer usage and growth in primary balances, some of these people said. Before the scandal, which became public in September, retail bank employees had to meet lofty sales goals, which included selling eight banking products per household.

As the WSJ article notes, Wells Fargo’s business has suffered in the wake of the scandal, which led to the bank being fined $185 million and other significant changes, including regulatory and Congressional onslaughts.

The War On Cash Ratchets Up In Greece With “Soft Cash” Ban

It wasn’t long ago that it came out that the IMF intentionally wanted to create a “credit event” in Greece - part of a larger plan to destabilize Europe. The country has already fallen victim to the repercussions of the war on cash, but now the grip of capital control is growing tighter.

The Greek Finance Ministry in their infinite wisdom has decided that its nation’s taxpayers will only be granted deductions or tax-allowances if payments are made using a debit or credit card.

This comes after numerous efforts intended to restructure debt. The Greek crisis started in late 2009, as the great recession revealed problems with the Greek economy. These involved difficulties with deficits, especially those that had not been properly accounted for by the Greek government. The government already tried to reduce debt 12 different times since 2009 without lasting success. Instead, it has generated riots. Additionally, the government has ended up with additional loans from the IMF and other European funders.

There’s plenty of reasons to believe the IMF and other lenders are not giving Greece enough money. They don’t really want Greece to deal with its problems. The same sort of thing is happening elsewhere, including the US. There’s far too much federal debt for the citizens ever to pay off in the US. The idea in fact is to trap the US in the same kind of debt trap that afflicts European countries and especially Greece.

California Congressmen's H-1B Outsourcing Bill Will Not End Outsourcing

Reps. Darrell Issa (R-Calif.) and Scott Peters (D-Calif.) have introduced legislation to combat outsourcing within the H-1B visa program. While the bill recognizes how destructive the H-1B program can be, it doesn't do nearly enough to rein in outsourcing companies or protect American jobs.

"Hundreds of Americans lost their jobs to the H-1B program in Rep. Issa and Peters' congressional districts," IEEE-USA President Karen Pedersen said. "Yet their bill will allow thousands more jobs to be lost in the future." "It is simply unacceptable -- at any wage rate -- for companies to fire Americans and replace them with non-Americans who will never be allowed to become citizens."

The "Protect and Grow American Jobs Act," reintroduced Wednesday, raises the minimum salary companies have to pay their H-1B workers to avoid complying with regulations protecting U.S. and H-1B workers. Under the bill, the current threshold of $60,000 would increase to $100,000. The legislation would also eliminate an exemption from the regulations for H-1B workers with master's degrees.

IEEE-USA has the following concerns about the bill: * No wage rate is acceptable for companies to replace American workers with employees who are non-citizens. * Compensation is more than just salary. Employing H-1B workers can save companies money on retirement costs, healthcare costs, training costs and virtually every other benefit. * H-1B workers can be dismissed at will without any legal complications, negating decades of hard-fought worker protections.

Economists say decline in birthrate may lead to big problems

‘There Are No Jobs’: Obama Loyalists Scramble To Find Work

Outgoing White House staff and President Obama-appointees are struggling to find new work after Donald Trump and Republicans generally swept into office last November.

Thousands of Obama loyalists are struggling to find work in a city now dominated by the GOP, according to a report from Politico. “It feels like there are just thousands of us trying to find a job, and there are no jobs,” Mira Patel, a longtime Clinton aide told Politico.

Democratic operatives and Obama staffers no longer have the more than 4,000 presidential appointed jobs to transition to after President-elect Trump takes office. Politico describes how a generation of young operatives from the Hillary Clinton campaign and failed down-ballot races are still managing their “shock and grief” from Clinton’s loss.

“Clients are all pivoting, and they’re all frankly trying to figure it out just like we all are right now,” Julian Ha, a partner at the executive search firm Heidrick and Struggles, told Politico. The report describes an anxious environment, where Clinton campaign staff struggle to talk about their work to potential employers. Some Clinton campaign staff are so rattled, that they have lost their bearings, according to Politico.

Now Is the Time to Face Reality and Invest in Gold

Since reaching multi-year highs in July, gold has plummeted 17%. Having risen 22% in the first seven months of 2016, many believed the yellow metal had moved too far, too fast. They were right.

Gold’s fall quickened post-election, caused by an uptick in optimism about America’s future. The economy was seen as ready to “take-off” in 2017 once Trump’s pro-growth policies kicked in. The Fed’s December rate hike just added fuel to the fire.

But I wonder, how solid is the reasoning behind the rose-colored glasses? Let’s start with a look at the Fed’s rate hike.

The quarter-point rise was seen as a vote of confidence in the economy from the Fed. Though the increase itself is tiny, it was the Fed’s projection for three more rate hikes in 2017 that moved markets higher. However, it will be very difficult for the Fed to "go-it alone" on monetary tightening. Although the economic picture in the US is improving, weak global growth looks set to continue. This is likely to weigh down the Fed’s plans for 2017.

Struggling retailers offer warning to restaurants

2017 isn’t starting off all that well in the retail world. Just this week, Macy’s announced plans to close 68 locations. And then Sears, which has been shrinking for years, said it plans to close 150 Kmart and Sears stores and sell off its iconic and popular Craftsman brand. Macy’s CEO Terry Lundgren told TheStreet’s Brian Sozzi that “America is still over-stored.”

It’s a situation to which restaurants should pay close attention. The problem is simple: Internet-based retailers like Amazon and Wayfair are taking business away from traditional brick-and-mortar concepts like Sears and Macy’s. Consumers can easily shop for prices online, and can often find better deals. Traditional shops have higher capital and overhead costs.

Over the years, retailers aggressively built new locations as developers opened up shopping malls and strip centers. As demand for those locations waned, they’ve been slow to close them. Walk into a Sears at any particular moment and you wonder how that store remains open.

The Internet isn’t having the impact on restaurants that it is having on retailers — it’s too fragmented a business with too many potential occasions for that to happen. In fact, the Internet arguably holds the potential to help restaurants’ business, as innovative concepts like Domino’s Pizza Inc. and Starbucks have already proven. But restaurants are definitely “over-stored.” Last year proved that. And the problems in retail are actually contributing to the supply.

Bill Holter-It’s Going to Look Like Caveman Days

CEO Tim Cook gets his pay cut as Apple's revenue declines for first time since 2001

Apple penalized Chief Executive Tim Cook for the iPhone maker's first sales slump in 15 years with a 15% pay cut.

Cook still did extremely well, with a compensation package valued at $8.7 million for Apple's fiscal year that ended Sept. 24, according to a regulatory filing made Friday. But the amount was down from nearly $10.3 million in the prior year.

The Cupertino, Calif., company cited a downturn in Apple's revenue and operating profit as the main reason it cut the pay of Cook and its other top executives. Apple's revenue dropped 8% to $216 billion, while its operating profit declined 16% to $60 billion. That was mainly because it sold fewer iPhones for the first time since the device came out in 2007.

It also marked the first time that Apple's annual revenue decreased since 2001, which was just before the company's late co-founder and CEO Steve Jobs unveiled the iPod. That digital music player set the stage for the iPhone and iPad.

Fear of ‘Big Government’ Near Record High Despite Trump Win

Gallup has an interesting poll out today concerning top fears of US citizens. Despite the election of Donald Trump, Americans Still See Big Government as Top Threat.

As businessman Donald Trump prepares to become the nation’s 45th president, Americans continue to express more concern about the threat big government poses to the US than big business or big labor. Two in three Americans (67%) identify big government as the country’s biggest threat. That is below the record high of 72% in 2013 but still on the higher end of the range since the mid-1960s.

Americans have consistently been more concerned about big government than big business and big labor since Gallup first asked this question in 1965. This concern peaked in 2013, the year healthcare exchanges opened under the Affordable Care Act and former NSA contractor Edward Snowden revealed information about government spying tactics. However, concern about big government has declined slightly since.

Worry about big business spiked to a record high of 38% in 2002 after corporate scandals at Enron, WorldCom and Tyco made headlines. It rose again to 31% in 2008 and 32% in 2009 after government bailouts of banks and automotive companies during the financial crisis, as well as the revelation of Bernie Madoff’s massive Ponzi scheme.

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