Headline News Archives

Tuesday 01.17.2017

IMF: Trump stimulus set to boost U.S. growth

The International Monetary Fund on Monday (Jan 16) boosted its estimates for US growth on expected stimulus spending by the incoming Trump administration, but kept the forecast for global growth unchanged.

The IMF's quarterly World Economic Outlook (WEO) however said the forecasts for 2017 and 2018 are beset by uncertainty and risk, including signs of rising protectionism.

It sees world growth of 3.4 per cent this year and 3.6 per cent in 2018, unchanged from the October report, as concerns about slowing in major developing economies were offset by the recovery in advanced economies and China. The US growth estimate was raised a tenth of a point this year to 2.3 per cent, and for next year by four-tenths to 2.5 per cent.

The IMF said it used the most likely of many possible scenarios for the United States under President-elect Donald Trump, one that includes higher spending and other steps to boost the economy. This is in contrast to the World Bank report released last week, which did not change the US forecasts because it said Trump's policy plans were too uncertain. Both organisations agree the forecasts are clouded by unknowns.

American Apparel starts layoffs: sources

American Apparel LLC started to lay off staff on Monday after Canada's Gildan Activewear Inc withdrew its initial plan to buy some of the bankrupt U.S. fashion retailer's manufacturing operations, people familiar with the matter said.

Gildan won the rights to American Apparel's brand with an $88 million bid in a bankruptcy auction last week. It had previously indicated it would assume some of its manufacturing operations, which had made the brand synonymous to "Made in the U.S.A."

Many of the 2,166 employees at the company's headquarters in Los Angeles and 959 employees at the nearby South Gate manufacturing facility now stand to lose their jobs, the sources said, asking not to be identified disclosing these details to the media.

"The company issued a WARN Act notice several months ago, letting employees know that depending on the buyer of the business, a sale could result in eventual shrinkage of some business areas," American Apparel said in a statement. Last week, American Apparel reached a preliminary deal to sell its Garden Grove manufacturing site to textile manufacturer Broncs Inc, re-launching it as a knitting and dying facility.

Deutsche Bank bans texting and messaging apps on work phones

No more texting or using messaging apps such as WhatsApp on company issued phones, Deutsche Bank tells its employees. According to a memo issued by COO Kim Hammonds and chief regulatory officer Sylvie Matherat, the functionality will be switched off this quarter, Bloomberg reports.

“We fully understand that the deactivation will change your day-to-day work and we regret any inconvenience this may cause,” Bloomberg quotes the memo.

“However, this step is necessary to ensure Deutsche Bank continues to comply with regulatory and legal requirements.” WhatsApp, Google Talk and iMessage are among the apps listed in the memo.

The policy also applies to private phones used by Deutsche Bank staff for work purposes. The policy is aimed at improving compliance at the bank besieged by fines and legal settlements for an array of faults, including anti-money laundering (AML) failures, sale of toxic debt, and interest rate manipulation. The bank has been slapped with $13.9 billion in fines since 2008, according to Bloomberg’s data.

Peter Schiff vs. Clueless Liberals on MSNBC w/ Chris Hayes

Welcome To One of The Most Pivotal Weeks In Modern American History

Many are anticipating that a wonderful new era of peace and prosperity is just a few days away, but others are using terms such as “civil unrest” and “civil war” for what they believe is about to happen in America. Without a doubt, Donald Trump is one of the most electrifying politicians in modern American history, but he is also one of the most polarizing. So will the next four years bring us together as a nation, or will anger, frustration, strife and discord tear us much farther apart? It is being projected that extremely large crowds of supporters will attend Donald Trump’s inauguration on January 20th, but the mainstream media is also reporting that “hundreds of thousands of protesters” are on their way to Washington. Many on the far left are hoping to turn Trump’s inauguration into one of the biggest riots in U.S. history, but thousands of law enforcement personnel are going to do their very best to prevent that from happening.

There are sites on the Internet that are literally counting down the hours until Barack Obama leaves office. Knowing that his time is short, Obama seems determined to squeeze as much “change” out of his final hours as he possibly can. Just check out what the Washington Post says that he was able to accomplish on just one day last week…

On Thursday alone, the administration designated three new national monuments and expanded another two in sites including a forest in the Pacific Northwest and a school for freed slaves in South Carolina; took away one of the special immigration privileges Cubans arriving in the United States without visas have enjoyed for 50 years; announced sanctions designations against 18 senior Syrian officials for their role in the use of chlorine as a chemical weapon in 2014 and 2015; awarded the Presidential Medal of Freedom to Vice President Biden; and accused Fiat Chrysler of cheating on national emission standards for some of its diesel trucks.

And in the last few days of his presidency, there is a great deal of concern about how much more damage he may be able to do on his way out the door. Late last week he enraged the Russians by moving U.S. troops into Poland, and Russian Foreign Ministry spokeswoman Maria Zakharova is warning that Obama still has a few more days left to “destroy the world”…

Raising a child in the U.S. more expensive than ever

It's more expensive than ever to raise a child in the United States, where families will shell out an average of $233,610 from birth through age 17 -- or about $13,000 a year -- according to new figures from the government.

The ballooning price tag, a 3 percent increase from a year earlier, comes at a time when day-care costs can exceed university tuitions and homes prices have skyrocketed to record highs. Families in urban areas in the Northeast, such as New York and Boston, were likely to pay even more -- an average of $253,770, or roughly $14,000 a year -- because of higher housing and child-care costs, according to a report by the Department of Agriculture.

The amount a family will spend per child varies greatly based on the family's income, as well as where it lives. Lower-income families are likely to spend $212,300 per child through age 17, while higher-income families will spend more than double that, or about $454,770, according to the report. Families in rural areas, meanwhile, are likely to spend 24 percent less than their counterparts in urban areas in the Northeast.

"People tend to buy what they can afford -- and with higher incomes, people are likely to spend more on their children," said Stephen Fuller, an economist and professor of public policy at George Mason University. Children also become more expensive as they get older, the data show. Parents spent an average of $12,680 a year on infants, while 15- to 17-year-olds cost $13,900 a year.

As robots take jobs, Europeans mull free money for all

I am, therefore I'm paid.

The radical notion that governments should hand out free money to everyone — rich and poor, those who work and those who don't — is slowly but surely gaining ground in Europe. Yes, you read that right: a guaranteed monthly living allowance, no strings attached.

In France, two of the seven candidates vying to represent the ruling Socialist Party in this year's presidential election are promising modest but regular stipends to all French adults. A limited test is already underway in Finland, with other experiments planned elsewhere, including in the United States.

Called "universal income" by some, "universal basic income" or just "basic income" by others, the idea has been floated in various guises since at least the mid-19th century. After decades on the fringes of intellectual debate, it became more mainstream in 2016, with Switzerland holding a referendum — and overwhelmingly rejecting — a proposed basic income of around $2,500 per month. "An incredible year," says Philippe Van Parijs, a founder of the Basic Income Earth Network that lobbies for such payments. "There has been more written and said on basic income than in the whole history of mankind."

Physical Gold Will ‘Trump’ Paper Gold

John Hathaway of Tocqueville Funds says the physical gold market will defeat the paper gold market leading to a much higher price for the monetary metal in the coming months and years in his Tocqueville Gold Strategy Investor Letter (Fourth Quarter 2016 Investor Letter):

Gold rose 8.5% for the year while gold-mining stocks (XAU – Philadelphia Gold and Silver Index stocks) rose 75%. On an annual basis, results were highly satisfactory. However, there was considerable drama beneath the surface that left precious metals investors in a state of anxiety by year-end. Precious metals and mining shares rose sharply through August, and then spent the rest of the year giving back much of the first-half gains. The second half downtrend accelerated into early December, following the unexpected victory by Trump and a hawkish statement after the December Federal Open Market Committee (FOMC) meeting.

The question of the hour is whether the 2016 gains were merely a countertrend rally following a four-and-a-half-year decline from all-time highs in 2011, or the beginning of a new leg in the secular bull market that began in 1999, during which gold rose from less than $300/oz. to $1900 in August 2011. We judge the weight of current sentiment, mainstream media opinion, and technical analysis to be extremely bearish, comparable to year-end 2015 just prior to the dramatic gains that followed.

We believe that, based on prevailing negativity, the next big change in the gold price will be substantially higher. If so, the 2016 second-half correction will have established a durable higher low from the advance that began at year-end 2015, and would be the precursor to the continuation of the secular advance that began in 2000.

Big Trends Global Leaders Will Be Talking About in Davos This Year

The World Economic Forum might soon be receiving an early morning tweetstorm from Donald Trump.

Often the theme of the annual gathering of CEOs, top academics, and world leaders—many of whom have traveled by private jet and then helicopter to Davos—which takes place this week, is overtaken by world events. The idea is that the peaks of the mountains that surround this remote Swiss ski town can keep such noise out, allowing leaders to come and discuss long-term solutions to the world's problems. But it never seems to work that way.

Last year, for instance, participants of the annual confab were officially gathered to explore how technological change—namely automation—will alter the global economy, eliminate jobs, and increase inequality. But financial markets, which were going through a mini-crisis in late 2015 and early 2016, as well as a massive oil price drop, dominated much of the conversation.

This year, though, WEF organizers – perhaps because for the first time in years the conference overlaps the U.S. inauguration – seemingly decided to take on world events more directly. The official theme of the forum, which draws world leaders and top Fortune 500 executives, is "responsive and responsible leadership." From a crowd and a conference that seems to lean heavily toward supporting globalism and free trade, one could see this year's theme as taking direct aim at not only Donald Trump, but also Nigel Farage and other British leaders who backed Brexit.

Online shopping changes consumers’ in-store expectations

Shoppers aren’t happy with the in-store shopping experience, and retailers are struggling to adapt, a Capgemini report finds. Nearly a third of all U.S.-based shoppers (31%) view shopping in stores as a chore, while 17% say they’d rather wash dishes or clothes than venture into a store, according to consulting firm Capgemini, which surveyed 500 retail executives and 6,000 shoppers around the world in November for its report titled “Making the Digital Connection: Why Physical Retail Stores Need a Reboot.”

Part of that dissatisfaction with in-store shopping stems from how online shopping and the choices offered via e-commerce have raised consumers’ expectations. “Consumers are bringing their online expectations—personalized and hassle-free shopping—into the store,” Capgemini writes. “However, our research shows that stores are struggling to meet these heightened expectations.”

The inability to easily compare products is a major pain point shoppers face in stores, with 71% saying they find it difficult to do so when in a store.

So what do retailers with physical stores have to do in order to win shoppers accustomed to having a seemingly endless array of options available at their fingertips via desktop or mobile devices? Retailers could improve their store inventory visibility online?, given that 75% of shoppers say they want to be able to see what a store has in stock before heading to the location, Capgemini’s data shows.

Free Gold Coin or Free Candy Bar? - (Social Experiment)

Food Stamp Recipients Spend 20 Percent Of Their Allowance On Junk Foods, $608 Million Spent On Soda Alone ...

The USDA released somewhat startling data regarding the purchases made by Supplemental Nutrition Assistance Program, commonly referred to as food stamps, recipients. The study found that 20 percent of SNAP benefits were being used to purchase “junk foods” which include “sweetened beverages, desserts, salty snacks, candy and sugar.” The most popular junk item purchased with food stamps benefits was soda pop accounting for 5 percent of all food stamps transactions. Now many health organizations and states are asking for soda pop and junk foods to be restricted for recipients while soda manufacturers have banded together to oppose such restrictions.

The USDA report outlines exactly what is most likely in the carts of families who utilize the Supplemental Nutrition Assistance Program. Prior to this report, it was really unknown what individuals were purchasing with the program that has few guidelines outside of items needing to carry a nutritional label instead of a supplement label. However, the study has offered a rare look into the shopping carts of millions and showcased what many believe to be an underlying problem with obesity in America.

The report found that while the most money was spent on meat, poultry, and fish, the second biggest ticket item was soda pop. Soda accounted for 5 percent of total expenditures costing $608 million in SNAP charges. The New York Times reports that many feel that such a large chunk of money going to one industry is tantamount to a government subsidy and should be restricted.

Marion Nestle, a professor of nutrition, food studies, and public health at New York University, called the findings “shocking” claiming that we should consider the implications of the study as a whole. The report found that while the most money was spent on meat, poultry, and sh, the second biggest ticket item was soda pop. Soda accounted for 5 percent of total expenditures costing $608 million in SNAP charges. The New York Times reports that many feel that such a large chunk of money going to one industry is and should be restricted.

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.

Panasonic's hospitality robot will wait on you

Gold price: Hedge funds bullish bets jump 57%

Gold advanced to an eight-week high on Monday in relatively brisk holiday trading in the US after government data showed hedge funds increasing bullish bets for the first time in nine weeks.

Gold for delivery in February, the most active contract on the Comex market in New York, hit a high of $1,208.70 in early dealings, up 1% from Friday's close before giving up some of those gains. If the metal manages to close above the psychologically important $1,200 an ounce level it would be the first time since November 22.

Gold is up $80 an ounce since hitting post-US election lows mid-December, but remains down just under $130 from an initial but brief surge on election night as results showed a likely victory for Trump in the presidential race.

After relentless cutting back of bullish bets hedge funds or so-called managed money investors in gold futures and options grew their long positions – bets that gold will trade higher in future – by 57% last week. Derivatives traders added to longs and cut back shorts – bets that gold can be bought back cheaper in future – lifting the net position to 5.4 million ounces from one year-lows hit at the beginning of 2017 trading.

Yes, Americans Could Live Without Government-Defined Health Insurance

Even though Chief Justice John Roberts engineered a decision to save Obamacare, the Constitution did cast up a barrier to it. For in 2010 the Constitution delivered, for the 56th time, through war and peace, a midterm election. That election brought the news of how sharply the American people recoiled from Obamacare.

That election could not end the so-called Affordable Care Act, but it brought a Republican House determined to start nursing systematic critiques of Obamacare. Now, with a Republican Congress ready to act, and a president willing to sign its measures into law, there are several plausible schemes for replacing Obamacare.

They all draw in one way or another on mechanisms of the “market,” with plans fitted to the needs and wants of the patients themselves, rather than plans overloaded with provisions for Viagra and transgender surgery. All of these Republican plans are aimed at the salutary end of dismantling a political control of medicine, directed from the center, at the national level.

Except, of course, only the most careful steps managed and led from the national level can dismantle this scheme of federal control. We are warned now that every such step will be politically charged. Suddenly we hear of a political minefield for Republicans if too many people lose coverage, even though the new beneficiaries see this insurance as steadily diminishing in quality and escalating in costs. Why, then, is the air filled with all of these warnings of an imminent crisis, designed to scare the Republicans into the kind of pause that becomes debilitating?

European Central Bank prints money at record pace amid bank bonds bonanza

The European Central Bank bought a record-breaking €24.7 billion worth of debt last week, taking advantage of a bumper supply of bank bonds to boost its economic stimulus programme.

Last week’s figure is the highest since the ECB started flooding the euro zone with cash in 2014, in a bid to revive inflation and growth by lowering the cost of borrowing. The jump in purchases, which partly compensates for thin ECB buying in December, was partly driven by covered bonds, a form of bank debt backed by mortgages or public-sector loans.

Central bank sources said the ECB was taking advantage of ample supply of these bonds, which lenders tend to issue at the start of the year, before they release results and when buyers are flush with cash.

“There is a very simple reason: there are finally enough bonds in the market for the ECB to buy ... the scheme relies on activity in the primary market,” said Guenther Scheppler, a senior covered bond strategist at DZ Bank. About €13 billion worth of corporate bonds were issued last week, compared to just €500 million in the last week of December, according to data by IFR, a Thomson Reuters market information service.

The cost of illegal immigration

An African American Lady Liberty Will Grace a New Commemorate Gold Coin

For the first time, Lady Liberty will appear as a black woman on a US coin, to be released by the United States Mint in April to celebrate the department’s 225th anniversary. A commemorative coin with a $100 face value, the 24-karat gold piece will be the first issued in a series of similar ones that depict the famed figure as non-white, as she is traditionally shown: others, to go on sale every two years, will portray her as Asian American, Hispanic, and Native American “to reflect the cultural and ethnic diversity of the United States,” as stated in a press release. The allegorical woman has appeared on American coinage since the late 1790s.

This forthcoming coin illustrates a woman with dreadlocks tied in a bun, turned to her side with a determined, steadfast expression; decorating its inverse is an eagle in flight. The artist behind the woman’s face is Justin Kunz, a Utah-based painter who also designed a 2014 commemorative silver dollar honoring the 1964 Civil Rights Act and a 2009 one paying tribute to Abraham Lincoln. While the shift in her identity is historic, she still carries some classical trademarks, from her wreath made of patriotic stars and her garment, which appears as a stola.

“The coin demonstrates our roots in the past through such traditional elements as the inscriptions ‘United States of America,’ ‘Liberty,’ ‘E Pluribus Unum’ and ‘In God We Trust,'” the Treasury Department said in a statement. “We boldly look to the future by casting Liberty in a new light, as an African-American woman wearing a crown of stars, looking forward to ever brighter chapters in our Nation’s history book.”

To be precise, the forthcoming release likely marks the first time Liberty is deliberately portrayed and immediately acknowledged as a black woman. As etymologist Barry Popik notes, African-American artist’s model Hettie Anderson supposedly sat for Augustus Saint-Gaudens’ Indian Head eagle — minted between 1907 and 1916 – and his famed double eagle coin — produced between 1907 and 1933. She also likely posed for Adolph A. Weinman’s silver, Walking Liberty half dollar — but received no recognition during her lifetime due to the color of her skin.

Oil up on Saudi commitment to cut; U.S. output seen rising

Oil prices settled up on Monday, as Saudi Arabia’s commitments to reducing production offset a report forecasting U.S. output would again rise this year. The Organization of the Petroleum Exporting Countries (OPEC) has agreed to cut production by 1.2 million barrels per day (bpd) to 32.5 million bpd from Jan. 1 in an attempt to clear a global oversupply that has depressed prices for more than two years.

Russia and other key exporters outside OPEC have said they will also cut output. Saudi Energy Minister Khalid al-Falih said on Monday the country will adhere strictly to its output reduction commitment, expressing confidence that OPEC’s plan to prop up prices would work.

Benchmark Brent crude oil was up 41 cents a barrel, or 0.7 percent, at $55.86 and U.S. West Texas Intermediate crude rose 27 cents, or 0.5 percent, to $52.64 a barrel. But expectations of rising oil output in the United States as well as the U.S. federal holiday on Monday capped price gains.

Goldman Sachs said it expects year-on-year U.S. oil production to rise by 235,000 bpd in 2017, taking into account wells that have been drilled and are likely to start producing in the first half of the year. U.S. oil output is now at 8.95 million bpd, up from less than 8.5 million bpd in June last year and generally at levels in 2014, when overproduction sent the market into a tailspin.

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