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Thursday 11.24.2016

Ronald Reagan talks to America on Thanksgiving Day 1985

Big banks' relationship with Dodd-Frank: it's complicated

Having spent billions of dollars on post-crisis U.S. financial industry reforms they once scorned, bankers are concerned the Trump administration, joined by a like-minded Congress, will scrap or significantly change the rules.

To comply with a rule known as Dodd-Frank, which was enacted in 2010 following the financial crisis, big U.S banks hired tens of thousands of staffers, built new technology systems, hived off businesses, simplified corporate structures and doubled the amount of capital they hold.

JPMorgan Chase & Co has said that in its mortgage business alone, employees spent 800,000 hours in compliance training in a single year. The industry went into these changes kicking and screaming. Banks lobbied hard against Dodd-Frank as it was being drafted, then cajoled regulators to go easy in defining and implementing precise rules. But now that the heavy lifting has been done and Dodd-Frank is largely in effect, the industry see a total elimination as more of a threat than a blessing.

Dodd-Frank has largely made banks safer and the once-opaque derivatives market more transparent, banking executives said. President-elect Donald Trump, who takes office on Jan. 20, and some important lawmakers in the incoming Republican Congress have pledged to dismantle the law and put a new one in place. It is not yet clear what the replacement would look like, but Texas Republican Jeb Hensarling, who chairs the House Financial Services Committee, has drafted a blueprint called The CHOICE Act.

Controversial overtime labor law stopped short of the starting line

Barely more than a week before taking effect, a federal judge blocked the new overtime labor law that would have significantly changed overtime pay.

Back in May, the Wage and Hour Division of the Department of Labor announced the Fair Labor Standards Act, which “guarantees a minimum wage for all hours worked during the workweek and overtime premium pay of not less than one and one-half times the employee's regular rate of pay for hours worked over 40 in a work week.”

The final rule, which can be found in the Federal Register here, is very intensive. And similar to many other housing regulations, the industry has had to implement, there are a lot of exemptions, details and clauses to be mindful of.

Here are some of the major changes from the rule: The White Collar Exemption salary threshold increased from $455/workweek (or $23,660 for a full-year worker) to $913/workweek (or $47,476 for a full-year worker). The Highly Compensated Employee salary threshold increased from $100,000/annually to $134,004/annually. Automatic updates to the salary threshold every three years (first update due Jan. 1, 2020).

Has Anyone Seen India's Central Bank Governor?

As India undergoes the world’s biggest currency overhaul in decades, one official is noticeably absent: central bank Governor Urjit Patel.

The head of the monetary authority has spoken just once since the government invalidated 86 percent of currency in circulation in a surprise move on Nov. 8. Mounting cash shortages pushed the Supreme Court to warn of riots, and a powerful bank union called for Patel’s resignation after a senior bureaucrat was tasked with firefighting.

"Generally, measures of this sort are carefully planned well in advance, and the public is given plenty of time in advance to adjust," Robert Hockett, who teaches monetary law at Cornell University and advises the New York Federal Reserve, said by e-mail. "It is generally to be expected, and is typically the case, that the actual issuer of the currency, the central bank, plays the leading, if not the sole, role in these matters."

While Patel’s low profile was initially seen as a foil for Prime Minister Narendra Modi’s high-visibility administration, it risks backfiring as public anger increases. Credibility and autonomy of the Reserve Bank of India is linked to the value investors assign the rupee, which is sliding toward a record low.

Consumer Sentiment Surges Higher After Trump Victory

It turns out that it isn’t just the attitude of business owners and managers that is improving in November. The post-election rally has been impossible to ignore, and that appears to have bled over to the consumer side as well. This surge in sentiment was directly focused in the post-election period.

The University of Michigan has released its final Consumer Sentiment results for November 2016 up at 93.8. The preliminary report released earlier this month for a reading pre-election was at 91.6. Bloomberg’s consensus was 91.6 versus a consensus estimate of 91.8 from Dow Jones (Wall Street Journal).

What matters the most about this revised data for consumer sentiment is that it includes post-election data. Many economic reports are still including only October data, before the election results were known.

Current conditions were 107.3 in November, up 4.0% from the prior month and up 2.9% from the reading a year ago. Consumer expectations rose much more on the monthly reading — up to 85.2 in November, climbing 10.9% from the prior month and up 2.8% from a year ago.

In Time For Black Friday, Judge Issues Restraining Order Against Striking Pilots At Amazon-Backed Cargo Line

About 40 hours after pilots at Amazon-backed cargo airline ABX went on strike, threatening to throw a wrench in the holiday shipping plans of the country’s largest online retailer (and others), a federal judge has granted a temporary restraining order against the striking pilots.

ABX may not have the household name recognition that FedEx or UPS does, but its air cargo operations are vital to Amazon. In addition to the 35 dedicated Amazon flights ABX flies every day, the retailer recently purchased a minority ownership stake in ABX’s parent company ATSG.

The ABX pilots — represented by Teamsters Local 1224 — had approved a potential strike back in May, claiming that the airline has been understaffed for nearly two years and that ABX had refused to hire back previously furloughed pilots because they would have had to be paid at the top of the wage scale. Instead, said the union, ABX hired a small number of less-expensive, less-experienced pilots.

Following the strike, ABX sued the union in federal court and sought an immediate injunction in the hopes of getting the planes back up in the air. Stopping a nonviolent strike by a labor union isn’t simple. The Norris-La Guardia Act generally prohibits federal courts from granting injunctions in cases “involving or growing out of a labor dispute,” but the law does spell out certain conditions that might allow a judge to grant an injunction request.

U.S. gas prices at lowest level in 8 years

Motorists hitting the road for the Thanksgiving holiday weekend have at least one thing to give thanks for: cheap gas.

According to the U.S. Energy Information Agency (EIA), the average national price for a gallon of gasoline is $2.16. That’s the lowest level since 2008, when gas prices averaged $1.85 and when the economy was experiencing its worst slowdown since the Great Depression.

The agency expects prices to sink below $2 in January before leveling out to an average of $2.27 in 2017. By comparison, between 2011 and 2015 drivers paid more than $3 a gallon.

Fuel prices tend to follow the ups and downs in the global oil market, where prices rose today amid speculation that OPEC members will soon agree to curb their production and reduce the worldwide glut in crude.

Reversal Rates Are the Next Big Challenge for Central Banks

Negative and ultra-low interest rates have become the norm for the developed world. The phrases “lower for longer” and “new normal” are now accepted as facts rather than predictions. But, how low is too low?

For many developed world economies, rates remain low in order to combat stagnation as growth slows. Negative rates are a side effect of these deep, fundamental economic issues. That brings up some big questions: How low? And for how long?

New research by Markus K. Brunnermeier and Yann Koby addresses this issue. They’ve tried to determine the point at which lower policy rates lose their stimulative effect. Their research shows that lowering interest rates too far can be contractionary instead of stimulative. And the consequences are profound.

Before the Great Recession, the Fed Funds rate was the Fed’s main way of transmitting monetary policy. The fear then was that holding its policy rate too low for too long would cause inflation pressures to rise dramatically. But times have changed. Now, the problem is precisely the opposite. The need to provide more stimulus has led to quantitative easing… and eventually to negative interest rates.

Why fewer stores will be open on Thanksgiving

What Food Stamp Recipients Are Legally Buying With Your Money

Ok. Here’s a thought experiment: You’re down on your luck. You apply for – and receive food stamps. It’s effectively free money to go and buy groceries for you and your family, courtesy the American taxpayer.

There are some things you can’t buy – cigarettes and alcohol, soaps and paper products, “fast food,” pet food and vitamins. But otherwise, if you can “eat it,” you can get it with food Stamps. What do you purchase?

Well, a federal agency commissioned a study of the Supplemental Nutrition Assistance Program (or SNAP, which is what they call food stamps now) to find out exactly what people are purchasing, and the results are shocking and terribly disappointing.

The top item purchased on the list is soft drinks. Soda. Carbonated beverages that have zero nutritional value, rot the teeth and are full of sugar. In the study of one major food retailer, food stamp recipients spent $358 million on soft drinks. Second on the list – at $254 million was milk.

Foreign Governments Cutting off Funding for Hillary

Hillary supporters claimed that the Clinton Foundation was an innocent, “charitable” organization. On his proposed first day to “Drain the Swamp,” Trump will impose lifetime ban on lobbying for foreign governments.

Numerous foreign governments handed money to the Clintons purely for “influence.” The corruption with Norway’s link to the Clinton Foundation extended to Obama. This was the reason Obama was given the Noble Peace Prize, and Jens Stoltenberg, who approved the half-billion donation from Norway to the Clintons, was made the head of NATO in Europe.

The Norwegian newspaper Hegnar reports that Norway is expected to slash their contributions to the Clinton Foundation now that Hillary has lost the presidency. Norway’s pay-off to the Clinton Foundation was strategic. According to local press, during the period 2007 to 2015, Norway sent 584 million to the Clinton Foundation. For the next three years, they promised the Clintons a further 92 million.

Now that Hillary lost, Norway it is cutting those donations by 87%. Our sources are whispering that all other foreign governments will follow. With Trump’s lifetime ban on lobbying for foreign governments, Hillary’s days of influence are starting to crash and burn. Trump did not say he would indict her. He has cut off Hillary’s funding by foreign governments that she cultivated as Secretary of State.

Denver Sheriff's Dept. Fined for Not Hiring Non-Citizens

I'm not sure how many people are actually aware of this, but did you know that in Colorado you don’t have to be a citizen of the United States to be a deputy sheriff?

That’s right. Colorado is one of 10 states that does not require a person to be a U.S. citizen as long as they have a work permit. And recently, this policy ended up forcing the Denver Sheriff’s Department to pay a $10,000 fine and change its hiring practices.

According to the Washington Times: "The Denver Sheriff Department will pay $10,000 and change its hiring practices after the Justice Department found it broke the law by excluding job candidates who were not U.S. citizens, according to the terms of a settlement agreement announced Monday."

“While we didn’t commit this violation intentionally, we accept responsibility and are taking steps to clarify policy and amend language in hiring documents,” Denver sheriff spokesman Simon Crittle said.

Big Thrust into Precious Metals in Trump’s First Term

Election Not Over? Money Is Being Raised To Challenge The Election Results In Wisconsin, Michigan And Pennsylvania

Just when you thought it was safe to celebrate Trump’s victory, the left is hatching a plan to try to steal the election right from under his nose. A group composed of “prominent computer scientists” and “election lawyers” is urgently asking the Clinton campaign to challenge the election results in Wisconsin, Michigan and Pennsylvania. They claim that there is “persuasive evidence” that the election results in those states were “manipulated or hacked”, and they are pushing Clinton to file formal challenges to those results while there is still time to do so. As I write this article, the final result in Michigan could still go either way, and if Hillary Clinton does end up winning Michigan all she would have to do would be to flip the results in Wisconsin and Pennsylvania to become the next president of the United States.

Many on the left are absolutely incensed that Donald Trump is going to be the next president even though it looks like Hillary Clinton is going to win the popular vote by a very wide margin. In fact, as I write this article Hillary Clinton’s lead in the popular vote has expanded to more than 1.8 million votes.

After all of the votes have been counted, it is entirely possible that Hillary Clinton may finish more than 2 million votes ahead of Donald Trump.

In a desperate bid to try to salvage the election, an attempt is being made to push for recounts in the key swing states that Clinton lost. This is being talked about all over the mainstream media today, but it was first reported by New York Magazine… Hillary Clinton is being urged by a group of prominent computer scientists and election lawyers to call for a recount in three swing states won by Donald Trump, New York has learned. The group, which includes voting-rights attorney John Bonifaz and J. Alex Halderman, the director of the University of Michigan Center for Computer Security and Society, believes they’ve found persuasive evidence that results in Wisconsin, Michigan, and Pennsylvania may have been manipulated or hacked.

India’s Outsourcing Industry Cuts Growth Forecast Due to “Transitional Phase”

India’s outsourcing industry lobby group has cut the fiscal 2016 growth forecast by 2%, saying the global services industry is going through a transitional phase.

Revenue will likely grow between 8% and 10% in constant currency terms in the fiscal year ending March 2017, said the National Association of Software and Services Companies (NASSCOM). In a projection made earlier this year, the lobby group had projected 10% to 12% growth for the fiscal year.

“The industry is going through a transient phase with various domestic and global factors impacting its performance,” said Nasscom President R Chandrashekhar in a statement. “While the effect of various short-term factors may show for a couple more quarters, the worst is behind us.”

Industry analysts attribute the lower growth to a variety of factors, including the changing technologies, Britain’s exit from the European Union, and the rising political heat in the United States. The lobby group has warned its member firms that the world is investing in the future, adding that the next wave of growth will come from new technologies like advanced analytics, social media, cloud, and mobility.

How Much Government Debt Rests Upon Your Shoulders?

Courtesy of: Visual Capitalist

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