Sears to close 50 auto centers, 92 Kmart pharmacies
Retail giant Sears said it will close 50 auto centers and 92 underperforming pharmacies inside Kmart stores in a bid to further cut costs in the face of rising red ink.
The cuts come just four months after the Hoffman Estates, Illl-based retailer announced it would close 150 Sears and Kmart department stores across the country. At the time, CEO Edward Lampert said the company needed to reduce operating costs by $1 billion. In announcing the new round of closures Friday, Lampert said the cost cuts would now total $1.25 billion.
In addition to the auto centers and pharmacies, the company said it would reduce its corporate management ranks, though it offered no estimate of how many jobs would be cut at the corporate level. And in yet another move to boost the bottom line, Sears recently sold its Craftsman brand of tools to competitor Stanley Black and Decker, in a deal worth $900 million. The company brought in an additional $177 million by selling properties.
Sears is just one of scores of brick-and-mortar retailers struggling to keep up with online competitors like Amazon that offer seemingly endless retail options at the tap of a screen or click of a mouse. The company said some employees were notified they would be laid off Friday, while others will be told in the coming weeks.
Boeing issues new layoff notices to 429 workers in Washington state
As Boeing continues to downsize, management on Friday issued 429 new layoff notices to union members in Washington state.
A total of 494 such notices went out, though some went to employees who had already received earlier layoff notices in March, so that the latest notice simply adjusted their layoff date.
Altogether 217 members of the International Association of Machinists (IAM) got layoff notices Friday and 277 were issued to members of the white-collar Society of Professional Engineering Employees in Aerospace (SPEEA), the two unions confirmed.
The IAM layoff notices are the second batch for that union’s members this year — 111 people received notices in March. Adjusting for those who had already received notices last month, the number of new layoff notices issued to the IAM was 152, which makes a total of 263 so far this year.
Le Pen, to Face Centrist Macron in the French Presidential Run-off, Says the ‘Survival of France’ is at Stake
Populist right-wing National Front leader Marine le Pen and independent centrist Emmanuel Macron look set to go through to a run-off in France’s presidential election, after Sunday’s first round ended the presidential aspirations of the country’s two major political trends.
Le Pen told voters than in the two weeks until the run-off, no less than “the survival of France” was at stake.
With 86 percent of votes counted, Macron leads with 23.40 percent of votes, narrowly ahead of Le Pen at 22.31 points, according to interior ministry figures. No candidate having received a majority, the run-off between them will take place on May 7.
Républicains candidate Francois Fillon and Jean-Luc Mélenchon, head of the leftist movement Rebellious France, were not far behind at 19.75 and 19.31 percent respectively. Much further back was the flagbearer for President Francois Hollande’s Socialists, Benoit Hamon, lagging at 6.15 percent.
Bill Holter-US Government Will Default
The Fed Is Not 'Terrified' For The Simple Reason: It's Only April
Last week it was reported that Paul Tudor Jones was overheard openly implying (paraphrasing), "The Fed should be terrified of the stock market value relative to the underlying economy." This in turn prompted a response when the Fed's vice chair Mr. Fischer was queried for a response and replied, "We're not terrified."
Fair enough, then again, it's only April. The real issue at hand is not the response given by the Fed's V.C. (after all what is he going to say). No, the real near comical aspect of all this is just how matter-of-fact and "all-seeing" they believe their arguments to be. One would think with what is of public record from their "assessments" to their "reasoning" as to why they chose a death grip to the zero bound, to then suddenly once after the election results not only found the courage to raise, but decided to raise twice within 90 days while basically shouting from the top of the Eccles building that not only were more raises on the table, but also the balance sheet.
The problem for the Fed of late has been - no one has been listening, and basically, no one's cared. This (in my opinion) is what truly terrifies the Fed. And if you watched both their tone and tenor, along with their arguments, as to why now, not before, not any later, but right now was the time to go full-bore on raising rates and cutting the balance sheet, you could see the real reason behind it: They were (are?) terrified of loosing all this new-found power and adulation.
For nearly a decade (yes, it's been that long), the Federal Reserve along with central bankers everywhere have been the ones in near complete control of the global economy via their differing iterations of QE programs. And what do we have to show for all this economic "wisdom"? Let's use the Federal Reserve of Atlanta's Quarterly GDP report for a reference of efficacy shall we?
Germany's Merkel encouraged U.S. will consider EU free trade deal
German Chancellor Angela Merkel fueled expectations of a future EU-U.S trade deal on Sunday, saying she was "very encouraged" talks were being looked at after her recent trip to Washington.
Merkel, speaking at the opening of the 70th annual Hannover Messe trade fair, said Germany was opposed to protectionism and trade barriers, and would continue to work for trade agreements like the one signed between the European Union and Canada.
"I also feel very encouraged by my visit to the United States that negotiations between the EU and the United States on a free trade agreement ... are also being looked at," she said. Merkel's comments came after the London Times reported on Saturday that U.S. President Donald Trump had warmed to a deal with the bloc after meeting Merkel in March.
A source close to the White House was quoted as saying that there had been a "realization" in the Trump administration that a trade deal with the EU - allowing the tariff-free exchange of goods and services - was more important to U.S. interests than a post-Brexit deal with Britain.
The average millennial worker makes less than the average baby boomer did in 1975
The United States has enjoyed extraordinary economic progress over the past four decades, but average incomes for today's young workers are lower than they were in 1975. Over the past four decades, young American workers saw their average incomes decline by 5.5 percent after adjusting for inflation, according to new figures published Wednesday by the U.S. Census Bureau. In 1975, workers aged 25 to 34 had a median personal income of $37,000 in modern dollar terms. In 2016, that number was down to $35,000.
Earnings have declined despite the fact that today's young people are better educated than 40 years ago. Thirty-seven percent of young people had a bachelor's degree last year, compared to 22.8 percent in 1975.
In part, experts say, the decline in average incomes results from new impediments to financial success that confront millennials, but that older Americans did not have to overcome. A more unequal economy presents fewer opportunities for younger workers. Young people today must compete with a well educated labor force, while young people in the past often had an advantage over older workers who were less qualified.
In another sense, the decline represents progress, because it is partly a result of striking gains among young women. Young women have joined the workforce in high numbers, but because they still earn less than young men, their entrance has driven down the average for young workers in general. In 1975, just under half of women aged 25 to 34 were working, and only 18.4 percent had at least a bachelor's degree. In 2016, about 70 percent of women between those ages were employed, and 40 percent had at least a bachelor's degree.
Most Americans Think Government Should Do More
Sears owner has milked iconic retailer dry, analysts say
Sears, the iconic American retailer, is now just a shell of its former self, and Wall Street retail analysts say responsibility for that can be laid at the feet of owner Eddie Lampert and his hedge fund ESL Investments.
However, Lampert — once ranked the richest person in Connecticut — may be smiling all the way to the bank, critics say. They charge that he has milked the venerable retailer dry since taking control of bankrupt Kmart in 2005 and using the retailer’s shares to help him acquire Sears, Roebuck & Co.
“Eddie Lampert has very clearly taken a functioning asset and stripped it of every single shred of profitable component in order to make a profit for himself, and arguably investors, while employees and the public are left to deal with the rotten carcass,” said Michael Kink, executive director of Strong Economy for All Coalition, a vocal opponent of many hedge funds.
After making his initial $6 billion on Sears through 2009, the hedge fund tycoon has stripped this American icon of most of its famous brands, say analysts. And despite it all, most estimates have Lampert still in the black with about $1 billion in profits despite plunging sales and huge multibillion-dollar losses eroding much of that early gain, according to an analysis for The Post.
BOA: Retail Job Losses Are Snowballing Into A Big Problem
Even though the number of retail job losses is not causing havoc in the labor market today, “the pace of adjustment away from brick and mortar towards online and likely to impact the overall data in time” according to a new research report on the topic of retail job losses from Bank of America.
Brick and mortar retail losses have accelerated in recent months hitting a staggering 61,000 over February and March. Initially, this weakness was blamed on a slowdown in consumer activity on weak demand for seasonal goods. However, a deeper dive into the data suggests there is more to the story “than just the recent weather patterns with evidence of more persistent weakness” according to BOA.
According to proprietary BOA credit and debit card data, there is a considerable weakness in card spending in department stores show through. The analysts speculate that this weakness is an example of “increased competition from online retailers who have gained significant market share.”
Given the accelerating disruption in the retail sector, BOA believes retail is heading for a structural change, likely to disrupt the retail workforce. And if this scenario does pan out, it’s worth considering where displaced retail workers will eventually end up.
Gold tumbles most in more than seven weeks after French election
Gold slumped the most in more than seven weeks as investors returned to riskier assets on speculation pro-growth centrist Emmanuel Macron will become France's next president after the first round of voting.
Bullion for immediate delivery tumbled as much as 1.5 per cent, the biggest decline since March 2, to US$1,265.51 an ounce, and traded at US$1,271.25 at 7:08am in Singapore, according to Bloomberg generic pricing. The commodity dropped as the euro surged, hurting the US dollar.
Gold trimmed this year's gain to 11 per cent after Mr Macron and far-right nationalist Marine Le Pen won the first round of the French presidential election, triggering a runoff on May 7.
The place for Mr Macron in the second round avoids the scenario of a contest between the anti-euro Ms Le Pen and the Communist-backed Jean-Luc Melenchon, curbing risk for the euro zone after a year of polling upsets and political turmoil around the world.
America's Brazilian Future
When I write about poorly designed entitlement programs, I will warn about America’s Greek future. Simply stated, we will suffer the same chaos and disarray now plaguing Greece if we don’t engage in serious reform. Ideally sooner rather than later.
But when I write about state governments, perhaps it would be more appropriate to warn about a Brazilian future. That’s because many American states have made unaffordable and unfunded promises to give lavish benefits to retired bureaucrats, a topic that I’ve addressed on numerous occasions.
And why does that mean a Brazilian future? Because as Greece is already suffering the inevitable consequences of a bloated welfare state, Brazil is already suffering the inevitable consequences of a pension system that treats bureaucrats as a protected and cossetted class. Here are some excerpts from a sobering report in the Wall Street Journal.
"Twenty years before Michel Temer became president of Brazil, he did something millions of his compatriots do, at great cost to the country’s coffers: He retired at age 55 and started collecting a generous pension. Delaying that moment until age 65 is at the center of Mr. Temer’s proposed economic overhaul. …making that happen is seen as a make-or-break test of whether the government can get its arms around mounting economic problems like rising debt, low investment and a stubborn recession now entering its third year. New pension rules are considered central to fixing an insolvent system."
Can Wage Growth Get Any Worse?
Real average weekly earnings fell in March from the prior year -- for the third month in a row. With inflation, as measured by the consumer price index, starting its downward leg, the wage decline was by the smallest amount -- essentially flat but fractionally less than zero.
It was the first time real wages have fallen three months in a row since early 2012. The six-month average is just about zero, too, unsurprisingly also the lowest since mid-2012.
Despite the unemployment rate falling well-below 5 percent, there isn’t the first sign of wage acceleration in nominal terms. That has left real wages to the whims of oil prices, first as their biggest boost in years as oil prices, like early 2009, collapsed and now on the wrong end of them as they partially rebound.
The overall negative effects aren’t so much the decline in real terms as the unstable and highly volatile nature of it all that never really gets better. In early 2014, right at the start of her tenure, Janet Yellen claimed that nominal wage growth of 3 percent to 4 percent “would be normal.” The official and academic literature of the time also concluded that a 5 percent unemployment rate reflected full employment.
IMF says Greece needs to dig even deeper
The International Monetary Fund had a sobering message for Greece this weekend: Even if the country secures debt relief from its European creditors -- a question that is by no means assured with bailout talks still deadlocked -- the nation still needs even more painful economic overhauls than currently planned.
Seven years into an economic crisis and another near-term financial emergency looming, that is a message no Greek wants to hear and a key reason why the IMF is also urging Germany and Athens' other European creditors to give the country hope in the form of real debt relief.
The country's "fiscal and structural reforms...pension reforms, tax reforms, are only a down payment," said Poul Thomsen, IMF's European department chief and Greece's original bailout architect, on the sidelines of the fund's semiannual meeting of finance ministers and central bankers.
To bring the country's unemployment and income levels back to precrisis rates will take "deep structural reforms, many of which are not yet on the books," he said. The jobless rate is currently at 22% and half of all the youth labor force are without work.
End of Easy Money?
Poll: 96% of Trump Supporters Would Vote for Him Again, Win Popular Vote
An ABC News/Washington Post poll released on Sunday found that President Donald Trump only had 42% approval from Americans, the lowest since 1945 — but that 96% of Trump supporters say that they would vote for him again. Moreover, the poll indicates that Trump could win the popular vote if the 2016 electorate were to vote a second time.
The poll comes as Trump looks to finish his first 100 days later this week on a high note, with new legislative initiatives on tax reform and health care. Unlike his predecessors, Trump had no “honeymoon,” with the media and the Demcoratic opposition — a.k.a. “Resistance” — determined to maintain a bitter antagonism from the very first day.
But the “resistance” has its own major problems. Two-thirds (67%) of Americans say that Democrats are out of touch with their concerns, while 62% say the same about Republicans and 58% say that about President Trump himself.
Americans also support Trump’s approach to foreign policy, with a plurality saying that he is dealing with North Korea correctly and a majority approving of the recent missile strikes in Syria.
Plastc Smart Cards Raise $9M In Pre-Orders, Won’t Ever Ship
A few years ago, universal payment cards were a mini-fad online. The idea was that you carried one “smart” card which stored the numbers of all of your other credit cards. The most popular was Coin, which was ultimately acquired by Fitbit and shut down. Another card was Plastc, which has brought in $9 million through pre-orders since 2014, but has yet to ship — and is now out of business.
This is not another cautionary tale about crowdfunding, exactly, because Plastc didn’t use a platform like Kickstarter or Indiegogo to gather publicity and pre-orders. Like another still-unshipped gadget from 2014, the Mellow sous vide device, the company spread the word through social media, posts on technology blogs, and probably some online advertising.
The company uses the language of crowdfunding to talk about itself, its project, and its customers, though, calling the people who placed pre-orders “backers.” In its shutdown announcement, which was also emailed to pre-order customers, the company explained that it was ending its operations on April 20, considering Chapter 7 bankruptcy, and that the pre-orders would not ship.
“It’s been a long road with a lot of obstacles,” they wrote. “The support of our amazing backers has been incredible, which makes this announcement even harder. We were so incredibly ready for production in order to hit our deadlines but without capital it is impossible for us to move forward and we will not be able to fulfill any pre-orders.”