Headline News Archives

Friday 01.13.2017

Lowe's preps for layoffs as it shifts to new store staffing model

Home improvement giant Lowe's is changing its store staffing model and will be laying off "less than 1 percent" of its employees in the near future, a person familiar with the matter said Thursday. The source did not share the exact number of layoffs. Lowe's workforce totals more than 285,000.

As part of the reshuffling, Lowe's is shifting the roles and responsibilities for some of its staff and eliminating some jobs, this person said. Some of the affected workers will be moved to new roles at the company, and others will be promoted. However, a portion will be laid off as Lowe's consolidates some positions, the person explained.

The new staffing model will be implemented nationwide and is aimed at freeing up resources to boost face time with customers as the retailer adapts to evolving customer needs. In a statement, Lowe's said, "While we have no announcements to share, we continually evaluate our staffing model to ensure we have the resources in place to serve customers' evolving expectations and their home improvement needs."

The layoffs are just the latest to hit the retail landscape. Earlier this week, Wal-Mart said it would be slashing hundreds of jobs with many of the cuts impacting its human resources department. In September, Wal-mart said it would cut 7,000 back-office jobs. Meanwhile last week, The Limited announced it would be closing all of its stores. In recent calls with investors, Lowe's has stressed its attempts to boost productivity — a goal the new model is aimed at meeting.

Be Prepared for a Violent Fed Reversal

The outlook for rates has taken what I call a U-turn. There’s very little doubt that the Fed is on track to raise rates. This outlook is not in response to any particular piece of economic data or the overall economic picture. In fact there are plenty of arguments why the Fed should not raise rates based on economic fundamentals.

However, they have a separate agenda which is that the Fed has committed, what I think will be viewed in hindsight, as a historical blunder by missing the opportunity to raise rates in 2010, 2011, 2012. That was when the economy was growing, not strongly but those were the early stages of the expansion.

The economy was growing well enough then to justify rate increases. If the Fed had normalized rates in 2011-2012, between 2 – 2.5%, they would be in a good position today to cut rates if necessary to fight a recession. Unfortunately they did not do that. They missed an entire cycle while experimenting with Ben Bernanke’s quantitative easing, which in hindsight will turn out to be a real mistake by the Fed.

Now they’re in the position to move rates after the eighth year into the recovery. While this has been a weak recovery, and people are still struggling with part-time employment, or can’t launch careers on top of other difficulties, this recovery technically started in June of 2009. This makes for a very long recession by historic standards. More than twice as long as the average expansion since World War II, and comparable to the very long expansions we’ve had since 1980.

Steve Forbes: Trump Should 'Pink Slip' Janet Yellen From Fed

President-elect Donald Trump should ask for the resignation of Federal Reserve Chair Janet Yellen even though she still has a year left in her term, Forbes Media CEO Steve Forbes tells Newsmax TV.

"She should be pink-slipped, but even if you let her stay on, make it clear she's a lame duck," Forbes told "Newsmax Prime" host J.D. Hayworth on Wednesday.

"Trump has two appointments and another one coming along on the Federal Reserve Board. Two governors. Two out of big seven. You put the right people in there, that's going to be critical in setting a new stage," said Forbes, author of "Reviving America." Forbes went on to criticize how the Fed has operated under Barack Obama, becoming essentially an enemy to the business community.

The central bank combined easy money policies and suffocating regulation, "buying up all the government bonds and the net result is big companies have found it easy to borrow but small and new businesses very hard to get credit or reliable lines of credit," Forbes said.

The danger of media companies becoming too large

Wells Fargo was silent about fake account probe for at least 6 months

Federal law requires public companies like Wells Fargo to warn shareholders about non-routine legal proceedings. Yet it has now emerged that Wells Fargo stayed silent for at least six months about the fact that authorities were investigating the bank's creation of fake accounts.

Wells Fargo (WFC) confirmed on Thursday that it was in talks with the Consumer Financial Protection Bureau about unauthorized accounts as early as March 2016. This comes after the Charlotte Observer obtained emails under the Freedom of Information Act that revealed the discussions between the bank and the regulator.

The revelations will intensify questions over why Wells Fargo never alerted investors in public statements or public filings about the risk posed by what turned out to be a damaging investigation.

Wells Fargo's September settlement with the CFPB and other regulators tarnished the storied bank's reputation, hurt its stock price, led to the sudden retirement of CEO John Stumpf and included $185 million in fines. Yet just weeks before the settlement, Wells Fargo filed an SEC document that did not mention the looming settlement or "sales practices" at all. That filing, known as a "10-Q," requires public companies to disclose to shareholders relevant information about their businesses.

Sears is ‘one sick puppy,’ and there may be no remedy

Sears Holdings Corp. is using everything in its arsenal to stay afloat, but that still won’t be enough if the company can’t make its brand more relevant and generate sales, experts say.

Last week, Sears SHLD, announced it had sold its Craftsman tool brand for $900 million to Stanley Black & Decker Inc. SWK, the latest move in an effort to keep the business going. The sale came after Sears announced a new credit facility with funds run by Chief Executive Eddie Lampert of up to $500 million, secured by mortgages on 46 real estate properties. That facility came a week after it said it had secured a standby letter of credit for up to $200 million, also with funds owned by Lampert’s ESL Investments. That facility can also be increased to $500 million, if the lenders agree.

“You’ve got a group of symptoms that would lead one to believe a bankruptcy would be imminent,” said Chuck Tatelbaum, director and chair of the bankruptcy and creditors’ rights department at the Tripp Scott law firm, and a 50-year bankruptcy law veteran. “It’s a sick puppy.”

Even among those who don’t believe bankruptcy is imminent, like Dave Marcotte, senior vice president of the Americas for Kantar Retail, the question is whether Sears still has the juice for a turnaround. Reducing inventory and cutting employees is the company just “eating itself,” he said. “All you’re doing is reducing capabilities.” Without resources, Sears’ options are limited.

Saudis Cut Even More: Oil Production Falls To 2 Year Low

Saudi Arabia has cut oil output to its lowest level in two years, reaching below 10 million barrels per day, Saudi Energy Minister Khalid al-Falih said on Thursday, jump-starting markets that have been jittery over whether OPEC countries will cheat on their output cut commitments.

Saudi Arabia’s 10-million-barrel per day output is a more ambitious cut than it had promised as a part of this deal, and represents a 22-month low. Al-Falih also said they planned to make deeper cuts next month. Such levels haven’t been seen since February 2015.

According to OPEC’s 30 November output cut agreement, Saudi Arabia agreed to cut 486,000 barrels a day to 10.058 million barrels. “Oil production now is below 10 million so far,” Khalid told reporters on Thursday. “So, we’re going the extra mile to lead our colleagues within and outside of OPEC to make sure that the market sees that there’s serious action in place”.

OPEC has a notoriously poor track record at sticking to output cut promises, so the market has been volatile. Goldman Sachs, however, said earlier this month said it anticipated compliance to be at 84 percent. Likewise, Energy Aspects oil analyst Virendra Chauhan told CNBC that he expected compliance at 80 percent, and that Russia would stand by its promised cut.

Senate passes budget to repeal ObamaCare

Cuts to High-Skilled Visa Program Would Threaten American Jobs

On the campaign trail, President-elect Donald Trump took positions both for and against a program allowing highly-skilled foreign workers a visa for employment inside the United States. Trump’s nomination of Sen. Jeff Sessions for attorney general has also raised concerns about scrutiny placed on the visas, but serious doubts remain over whether Trump or Congress will be interested in rolling back the program. Supporters of the program argue reducing or eliminating these H-1B visas would cause economic damage in the U.S. and boost foreign tech hubs, running counter to many of Trump’s campaign promises.

The H-1B visa program provides employers with high-skilled foreign workers when they cannot find qualified domestic workers. Critics have contested it’s being abused by employers looking for cheap labor. The program, however, has become a needed resource for companies who can’t find required skills domestically.

“Limiting the number or eliminating the program entirely would honestly be a shock to the U.S. system that could cause a contraction and ship a lot of this production entirely overseas,” Information Technology and Innovation Foundation analyst Adams Nager told InsideSources. “Statistics show a guest worker, especially a technology guest worker, moving to a location creates jobs in their own industry.”

Nager adds that it’s not even an issue of companies choosing foreign workers over qualified Americans. The issue is there simply aren’t enough qualified domestic workers to meet their demands. The computer and technology sector has become increasingly in need of skills that are in short supply domestically.

Yellen had 'super risky' proposal for Fed's 2011 low-rate vow: transcripts

Faced with sharply deteriorating economic conditions in 2011 after ending their second bond-buying program, Federal Reserve policymakers made an unprecedented bid to shore up the recovery by promising to keep rates low until at least mid-2013.

But according to transcripts of the 2011 Fed meetings released for the first time on Thursday, then-Fed vice Chair Janet Yellen wanted an even stronger statement - a vow to keep rates low not just until mid-2013, but until the unemployment rate, then at about 9 percent, fell to 7.5 percent.

Yellen, chair of the U.S. central bank since 2014, has resisted calls from Republicans in Congress to tie Fed decision-making on rates to a monetary policy rule that uses data on GDP and inflation to determine what interest rate the Fed should target. But at the Fed's August 9, 2011 meeting, she advocated for something along those lines herself -- tying the Fed's rate-setting to a threshold for the unemployment rate.

The idea was ultimately abandoned in that meeting, panned by several of her colleagues, including St. Louis Fed President James Bullard who called the idea "super risky." But at least two other times in 2011 Yellen embraced controversial steps to ease monetary policy that, like her unemployment rate threshold idea, were initially rejected but later embraced by the policy-setting panel as a whole.

Deportations Drop 73% Under Obama, Hit 43-Year Annual Low

Deportations of illegal aliens living inside the United States have tanked 73 percent since 2009, when President Obama first took office, according to a new report from the Center for Immigration Studies.

CIS analyzed the most recent annual report released by the Department of Homeland Security, which states that U.S. Immigration and Customs Enforcement removed only 65,332 illegal aliens from the interior of the U.S. in FY2016 (roughly .5 percent of the estimated 12 million currently known to be living here unlawfully).

The immigration analysis group noted that those 65,000 or so deportations reflect a 73 percent drop in interior removals since 2009, when roughly 240,000 illegal aliens were deported from inside the U.S.

CIS added that the number of criminal aliens ICE deports annually has decreased by about 60 percent over the last eight years. Last year, ICE reported they had removed 60,318 criminal aliens who’d been living inside the United States (which made up roughly 98 percent of the total number of interior deportations). CIS notes the number of criminal aliens removed dropped by about 4 percent between 2015 and 2016, and 60 percent from its peak in 2010, when about 150,000 criminal aliens were sent home.

Government Collects $740 Billion in Taxes in First Quarter of 2017

The federal government collected approximately $740 billion in taxes in the first quarter of fiscal year 2017, but the federal government still ran a $208 billion deficit during that time, according to the latest monthly Treasury Department statement.

Treasury receipts include tax revenue from individual income taxes, corporate income taxes, social insurance and retirement taxes, unemployment insurance taxes, excise taxes, estate and gift taxes, customs duties, and other miscellaneous items.

In the first quarter of 2017, which included the months of October, November and December, the amount of taxes collected by the federal government totaled $740,771,000,000. The 2017 fiscal year begins on Oct. 1, 2016, and runs through Sept. 30, 2017.

This was slightly lower than the $765,645,000,000 that the federal government collected in the first quarter of 2016. Most of the $740 billion that the government collected from this year came from individual income taxes, which comprised almost half of that total, totaling $352 billion.

How Trump’s business experience can help the U.S.

Pandora is laying off 7% of its US workforce

Pandora said it would lay off around 7 percent of its U.S. workforce, excluding Ticketfly, by the end of the first quarter this year in an announcement that it would beat the guidance it set for the fourth quarter in 2016.

Pandora now has more than 4.3 million paid subscribers, which at the end of the year is a flash of good news for a company desperately in need of some. Pandora has had to contend with an increasingly commoditized music streaming business and had to find ways to differentiate itself from Apple Music and Spotify. The net result has been a rocky year for the company, which saw one of its biggest jumps happening as a result of potential acquisition talks.

By the end of December last year, Pandora Plus added more than 375,000 new subscribers, the company said. Pandora also said that it showed “strong advertising performance,” though didn’t clarify exactly what that meant.

After the announcement — which typically would show that a company was and is trying to get its act together — shares of Pandora were up around 9 percent. On the year, Pandora’s shares were up around 20 percent, jumping from major dives from its earning reports to spikes as a result of acquisition reports.

Study: Economy Was Top Issue Among Millennial Voters - See more at:

A new study conducted after the election shows that the economy mattered most to millennial voters. The study by the Millennial Impact Report surveyed 350 young voters they had surveyed in different waves throughout the election.

The organization found that millennials had considered education to be the most important topic during the election through each of three waves of surveying.

However, this changed when respondents were surveyed between Nov. 9 and Nov. 14. The survey showed employment and wages were the primary concern for millennial voters. The study also showed roughly 80 percent of all millennials surveyed said they voted in the election.

In addition, the survey showed that the number of millennial voters who said they voted for Republican candidate Donald Trump nearly doubled postelection compared to those who said they were voting for him before the election.

Ford Will Pay Suppliers After Canceling Mexico Plant

Ford Motor Co. is working on a plan to compensate parts makers that were preparing to supply the plant the company canceled last week, and will return the land to the government of Mexico, according to an executive.

The foundation was poured and some steel beams were going up at the site of the small-car factory that President-elect Donald Trump criticized on the campaign trail, Joe Hinrichs, Ford’s president of the Americas, told reporters Wednesday. The company will eventually disclose the construction cost of the aborted project, he said.

“It’s not an easy decision to cancel a plant that you’ve already started,” Hinrichs said after a speech at Automotive News World Congress in Detroit. “We don’t take it lightly. It was a big decision to build the plant in the first place and it was a big decision to cancel it.”

Ford told Mexico’s government of its intent to scrap the $1.6 billion small-car factory on the morning of Jan. 3, just before making the decision public. The Dearborn, Michigan-based company now plans to build Focus compacts at its existing plant in Hermosillo, Mexico. Executives made the decision when they saw the latest sales projections for the car were lower than anticipated, Hinrichs said. “We stayed true to our commitment to the Focus program to make it in Mexico.”

Why Are Wal-Mart And Boeing Laying Off Workers If The U.S. Economy Is In Good Shape?

The stock market has been on quite a roll in recent weeks, but signs of trouble continue to plague the real economy. Earlier this week, I talked about the “retail apocalypse” that is sweeping America. Major retail chains such as Sears and Macy’s are closing stores and laying off workers, but I didn’t think that Wal-Mart would be feeling the pain as well. Unfortunately, that is precisely what is happening. USA Today is reporting that approximately 1,000 jobs will be cut at Wal-Mart’s corporate headquarters in Bentonville, Arkansas by the end of this month…

Walmart’s plan to lay off of hundreds of employees is the latest ripple in a wave of job cuts and store closures that are roiling the retail industry.

The world’s largest retailer is cutting roughly 1,000 jobs at its corporate headquarters in Bentonville, Ark., later this month, according to a person familiar with the matter who was not authorized to speak about it.

The company is saying that these cuts are necessary because Wal-Mart is always “looking for ways to operate more efficiently and effectively“. But something doesn’t smell right here. You don’t get rid of 1,000 employees at your corporate headquarters if everything is just fine. I have driven past Wal-Mart’s headquarters in Bentonville a number of times, and it is in a beautiful part of the country. Bentonville and the surrounding areas had been booming, but it looks like times may be changing.

VW settles with U.S. for $4.3 billion

Morgan Stanley cuts bankers, bonuses as deals

Morgan Stanley (MS.N) laid off a number of senior investment bankers last week and cut bonuses by roughly 15 percent because of a decline in revenue from dealmaking and capital raising across Wall Street, people with knowledge of the matter told Reuters.

Individual bankers were awarded different amounts depending on performance and geographic region, though many received a smaller paycheck for 2016, said the sources on Thursday, who were not authorized to discuss compensation publicly.

Morgan Stanley, which ranked fourth for investment banking fees last year, cut more than 20 managing directors from its investment banking division globally, representing about 5 percent of the total, the sources said. While the bank typically lets go of the bottom 5 percent of its workforce at year-end to get rid of underperformers, the cuts to senior bankers were deeper than in years past, according to the sources.

Morgan Stanley also announced the promotion of managing directors on Thursday. A Morgan Stanley spokeswoman declined to comment. The bank will offer more details about staffing and compensation next Tuesday, when it reports earnings.

How Venezuela’s corrupt socialists are looting the country to death

Venezuela is no longer a country with a government, institutions and a civil society. It’s a geographic area terrorized by a criminal enterprise that pretends to govern, with a civil society made up of two sets of people: accomplices and victims. More than 30 million of the latter.

The Hugo Chavez-led looting spree began in 2000. By “looting,” I mean fraudulent government contracts, a celebration of bribery, phantom payrolls across all government ministries, bogus government-grant programs, the sacking of Venezuela’s gold reserves and a massive currency-exchange scam.

More than $1 trillion has disappeared — some of it wasted on social programs that produced nothing — and a staggering amount has ended up in bank accounts in Andorra, Panama, New York, Hong Kong and Switzerland.

And the pillaging has turned Venezuela into a dystopian landscape. There are shortages of every imaginable foodstuff and basic necessity; diseases once thought eradicated are back with a vengeance; and a crime wave that has given Caracas the highest murder rate in the world.

J.C. Penney anticipating store closures, but emphasizes importance of brick and mortar

Though J.C. Penney says it’s committed to a “robust brick and mortar portfolio,” the company also plans to condense its store footprint. At the Weitzman Annual Forecast event held Wednesday, the retailer’s CEO Marvin Ellison said he believes the company’s 1,014-store footprint is too large, and that J.C. Penney (NYSE: JCP) is analyzing what locations don’t meet the company’s “brand standard.”

“For the record, I think that 1,014 stores for J.C. Penney is too many, because we haven’t made the necessary investments in our store fleet the way we should,” Ellison said. “It’s a simple question: If we have a location that I wouldn’t want my children to work at, or wouldn’t want my wife to shop at, then we’re going to invest capital and ask if it fits the brand standard.”

Ellison did not say when or where the store closures might happen, or how many locations would be shuttered. In a request for comment, J.C. Penney said in an emailed statement to the Dallas Business Journal that it has not made any announcements regarding store closures.

Last year, the Plano company trimmed seven stores, primarily in smaller markets where traffic was light. Two of the stores were owned by J.C. Penney and the others are leased. J.C. Penney also shuttered 41 stores in 2015 and 33 locations in 2014 as it fought to recover from financial losses. And last week, the retailer announced it sold its headquarters in a partial leaseback for $438.7 million.

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