Headline News Archives

Friday 01.20.2017

Hail to the chief! Donald Trump arrives at the Capitol for his swearing in as the 45th President of the United States

Quoting Abraham Lincoln, Missouri Senator Roy Blunt, who headed the inaugural committee in the Congress, told the nation: 'What we do here is both commonplace and miraculous.'

Blunt called it 'not a celebration of victory,' but 'a celebration of democracy.' Other senators visible on the balcony overlooking reporters included West Virginia Senator Joe Manchin, who met with Trump at Trump Tower, and Senator Richard Burr of North Carolina.

Burr will oversee a Senate Intelligence Committee investigation into Russian election-year hacking.

Across the balcony to the south, House Appropriations chair Harold Rogers of Kentucky, who will oversee funding of Trump's proposed wall on the U.S.-Mexico border, picked a prominent standing position. Standing next to Rogers was Rep. Dana Rohrabacher of California, who had been a candidate for secretary of state.

Obama commutes a final 330 sentences, most in a single day by any US president

In his last full day as president, Barack Obama commuted the sentences of 330 inmates, further cementing his legacy as having granted more commutations than any other president in US history.

On Thursday Obama cut short the prison terms of 330 people, the majority of whom were convicted of federal drug crimes. During the president’s second term, he exercised his presidential power to grant clemency liberally, particularly for those convicted of nonviolent drug crimes. In addition to raising Obama’s total tally of sentences shortened, Thursday’s flood of commutations is the most Obama or any US president has issued in a single day. Obama has commuted more people’s sentences than the last 13 presidents combined, according to the White House. In total, Obama commuted the sentences of 1,715 people, include more than 560 who were serving life sentences.

“He wanted to do it. He wanted the opportunity to look at as many as he could to provide relief,” Neil Eggleston, Obama’s White House counsel, told the Associated Press. “He saw the injustice of the sentences that were imposed in many situations, and he has a strong view that people deserve as second chance.”

Obama’s flood of last-minute commutations marks the second day this week that he has reduced sentences for federal inmates. On Tuesday, he commuted the sentence of soldier Chelsea Manning, who had been sentenced to 35 years in a military prison for leaking US diplomatic secrets. Manning will walk free on 17 May. Manning was one of 273 people to have their sentence commuted by Obama earlier this week. Two of Tuesday’s commutations including a reprieve for two inmates who had been sentenced to death. They will serve life sentences instead.

Is China About to Drop a Bombshell?

Is Trump’s anti-China rhetoric going to trigger another currency war with China? If so, China may jump out ahead and devalue the Chinese yuan. In that case, the Dow Jones Industrial Average could plunge to 17,824, and the S&P 500 could plunge to 2,024 in a matter of weeks, wiping out trillions of dollars of investor wealth.

This is not guesswork. Plunges of over 10% in U.S. stock indices happened twice in the past year-and-a-half. The first time was in August 2015. The second wasJanuary-February 2016. Both times it was because of a combination of a stronger dollar and weaker yuan. It could happen again. And you need to understand the dynamics both to avoid losses and reap big gains by positioning ahead of the meltdown.

Here’s a quick synopsis: China is struggling under the weight of too much debt, poor demographics, and competition from lower priced suppliers in Vietnam, Indonesia, and the Philippines. China needs economic relief. Fiscal stimulus just means more non-sustainable debt. China has too much of that already. The easiest way to give the Chinese economy a boost is to cheapen its currency, the yuan (CNY), to make its exports more competitive.

When China cheapens CNY, they encourage capital flight. We’re seeing that now. Over $700 billion fled China last year alone. The wealthy and well connected try to get their money out of China as quickly as possible before the next devaluation. This causes the dumping of Chinese stocks, which could then infects U.S. stock markets and causes a global liquidity crisis. The last two times China devalued, U.S. stocks fell over 10%.

Yellen not worried about surge of inflation

Signs of overheating in the broader economy are “scarce” at the moment and risks are small that such conditions could suddenly emerge, said Federal Reserve Chairwoman Janet Yellen on Thursday, signaling she saw no reason to rapidly raise interest rates.

“Even if the labor market is not overheated currently, one might worry that overheating could rapidly emerge as labor market conditions strengthen further, causing inflation to surge. I consider this unlikely for several reasons,” Yellen said in a speech at the Stanford Institute for Economic Policy Research.

The labor market might strengthen further as the economy continues to expand at a moderate pace, but GDP growth is still being held down by “a variety of forces,” including slow labor-force and productivity growth, weak growth abroad and lingering headwinds from the financial crisis, the Fed chairwoman said.

“Although I am cautiously optimistic that some of these forces will abate over time, I anticipate that they will continue to restrain overall growth over the medium term, likely holding down the level of interest rates consistent with stable labor market conditions,” she said.

Inauguration street vendors making $100k thanks to Trump!

U.S. General Accounting Office sounds alarm on America’s insolvency

An alarming report this month from the U.S. government accountability office to Congress says “action is needed to address the federal government’s fiscal failure.”

The 49 page report, entitled “The Nation’s Fiscal Health” says, among other things, that “Congress and the incoming administration face serious economic, security, and social challenges” and “an unsustainable long-term fiscal path caused by a structural imbalance between revenue and spending.”

The more alarmist aspects of the report highlight the continuing divergence between revenue and expenses, as well as the shortfalls in unfunded Social Security obligations. It warns that without policy changes, the U.S. debt-to-GDP ratio will surpass its historical high of 106% within the next 25 years. The report stipulates that the new urgency implied in the document is a result of a more holistic picture of the nation’s finances that has emerged as a result of analyzing both the budget and the financial report of the United States government.

Eighty per cent of the operating costs of the federal government go to four agencies: The Department of Health and Human Services, the Social Security Administration, the Department of Veterans Affairs and the Department of Defence.

Crude Oil Price Staggers After Larger-Than-Expected Increase in Inventories

The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Thursday morning, one day later than usual due to the Martin Luther King Jr. holiday. U.S. commercial crude inventories increased by 2.3 million barrels last week, maintaining a total U.S. commercial crude inventory of 485.5 million barrels. The commercial crude inventory is near the upper limit of the average range for this time of year.

Wednesday evening the American Petroleum Institute (API) reported that crude inventories dropped by 5 million barrels in the week ending January 13. API also reported gasoline supplies increased by a massive 9.75 million barrels and distillate inventories increased by 1.75 million barrels. For the same period, analysts surveyed by The Wall Street Journal had estimated an increase of 100,000 barrels in crude inventories, a rise of 1.7 million barrels in gasoline stockpiles and an increase of 100,000 barrels in distillates.

Total gasoline inventories increased by 6 million barrels last week, according to the EIA and have now topped the upper limit of the five-year average range. Total motor gasoline supplied (the agency’s measure of consumption) averaged about 8.6 million barrels a day for the past four weeks, down by 2.4% compared with the same period a year ago.

A report published on Wednesday by energy industry research firm Rystad Energy indicated that total new offshore discoveries of liquid resources in 2016 amounted to just 2.3 billion barrels. That’s a drop of 90% compared with new liquids discoveries in 2010.

Uber Ordered To Pay $20 Million For Allegedly Exaggerating Drivers’ Potential Earnings

Popular ride-hailing service Uber has agreed to pay $20 million to close the book on federal charges that it used misleading and exaggerated earnings figures to attract new drivers to work with the company.

In a civil complaint, the Federal Trade Commission accused Uber of violating the law by using inflated income figures when marketing to potential drivers.

The FTC points to previous statements by Uber’s CEO that drivers for UberX — the standard level of car service for many Uber users — earned a median income of “more than $90,000/year/driver in New York and more than $74,000/year/driver in San Francisco.” This statement was later revised to say that these figures were “potential” earnings drivers could make in their respective cities.

However, the complaint contends that the real earnings figures, when calculated using a 40-hour work week, were significantly lower. According to the FTC, in 2014 — the year that the above statement was first made — a New York City Uber driver earned a median income closer to $60,000, while in San Francisco the actual median was around $53,000. Fewer than 10% of drivers in these two markets earned the potential income that the company had boasted about.

Truck drivers grapple with automation

Drug company raised price of life-saving drug 85,000%

A drug company violated antitrust laws when it bought the rights to a drug that threatened its monopoly for a life-saving drug, allowing it to raise prices by 85,000 percent, the Federal Trade Commission and five states charged.

Mallinckrodt ARD Inc., formerly known as Questcor Pharmaceuticals, Inc., will pay $100 million to settle FTC charges that it violated antitrust laws when it acquired the rights to a drug that threatened its monopoly in the U.S. market for adrenocorticotropic hormone (ACTH) drugs.

“Questcor took advantage of its monopoly to repeatedly raise the price of Acthar, from $40 per vial in 2001 to more than $34,000 per vial today – an 85,000 percent increase,” said FTC Chairwoman Edith Ramirez. “We charge that, to maintain its monopoly pricing, it acquired the rights to its greatest competitive threat, a synthetic version of Acthar, to forestall future competition. This is precisely the kind of conduct the antitrust laws prohibit.”

Acthar is a specialty drug used as a treatment for infantile spasms, a rare seizure disorder afflicting infants, and a drug of last resort to treat several other serious medical conditions – including nephrotic syndrome, flare-ups of multiple sclerosis, and rheumatoid disorders. According to the complaint, Acthar treatment for an infant with infantile spasms can cost more than $100,000.

JPMorgan hikes Jamie Dimon's pay to $28 million

JPMorgan directors paid chief executive Jamie Dimon $28 million in total compensation for 2016, a 3.7% increase from the prior year, the company said on Thursday.

His package includes a base salary of $1.5 million as well as cash and stock-related instruments that are tied to Dimon's performance, the filing with the U.S. Securities and Exchange Commission said.

The bank on Friday January 13 reported Q4 earnings, which beat analysts' expectations and marked a record-breaking quarter.

"2016 demonstrated the strength and depth of our platform with record net income and EPS in an increasingly complex global environment," Dimon said in a statement.

Alan Greenspan thinks it will be “nearly impossible” to repeal Dodd-Frank

Alan Greenspan, the 90 year-old former Federal Reserve chair, doesn’t think Donald Trump would be able to completely dismantle and repeal Dodd-Frank even if he tried.

The comments were made at the Private Equity International CFO & COO’s Forum in New York on Wednesday. “The complexity of unwinding such regulation embedded in the system makes it nearly impossible. The Trump administration might take half of it down, but I don’t think that’s enough,” Greenspan told attendees at the forum, Private Equity Real Estate reported.

Greenspan, who chaired the Federal Reserve from 1987 to 2006, said if incoming President Trump managed to repeal the act, it would be a “remarkable event.”

Though he’s not a fan of the landmark law, Greenspan conceded that there was one positive element: increased capital requirements. A requirement of 20 percent of capital retained rather than invested should remain, according to Greenspan.

Student Debt Payback Far Worse Than Believed

First cash, now India could ditch card payments by 2020

If you thought India's decision to ban 86% of its cash was ambitious, wait until you hear what it may do next.

The head of a government-run policy institute said on Thursday that the country could completely eliminate the need for credit cards, debit cards and ATMs in the next three years by switching to biometric payments.

Amitabh Kant said that even electronic payment methods may be "totally redundant" by 2020. Instead, all Indians will need for transactions is their thumb or eye. "Each one of us in India will be a walking ATM," Kant said at the World Economic Forum in Davos. That would represent "the biggest technological leapfrogging ever in the history of mankind," he added.

Arundhati Bhattacharya, head of the State Bank of India, agreed that such a dramatic shift was possible. "This is something that's eminently doable," she said, pointing out that nearly 1.1 billion of India's 1.3 billion people have already registered their biometric data under the government's unique identification program.

"Gigs" are becoming lifelines for seniors

Marilyn Kolleth, 74, was happily retired for six years when her condominium’s homeowner’s association imposed a 60 percent boost in monthly fees. While able to afford that hike, the former medical technician began to worry about whether her modest retirement savings would hold up to future cost-of-living increases.

Responding to her concerns, Kolleth’s daughter introduced her to the so-called “gig” economy. Now Kolleth supplements her retirement income with $600 in monthly payments from renting out a spare bedroom through a service called SilverNest.

She’s among a small, but rapidly growing, segment of retirees who have embraced web-based platforms, from AirBnb to Lyft, to secure extra income in retirement.

“This online marketplace is offering a wide variety of opportunities, whether it’s driving a vehicle, doing desk work, filling out surveys or renting out an asset,” said Fiona Greig, director of consumer research for JPMorgan Chase Institute. “As a supplemental source of income, these are material dollars -- especially when the alternative is to spend down your savings.”

Obama Leaves U.S.A $9,335,000,000,000 Deeper in Debt

President Barack Obama will leave the federal government approximately $9,335,000,000,000 deeper in debt than it was when he took office eight years ago, according to data released today by the U.S. Treasury.

The increased debt incurred under Obama equals approximately $75,129 for every person in the United States who had a full-time job in December.

The $9,334,590,089,060.56 that the debt had increased under Obama as of the close of business on Wednesday is far more debt than was accumulated by any previous president. It equals nearly twice as much as the $4,889,100,310,609.44 in additional debt that piled up during the eight years George W. Bush served as president.

When Obama took office on Jan. 20, 2009, the federal debt was $10,626,877,048,913.08. As of the close of business Wednesday, it was $19,961,467,137,973.64.

Henry Kissinger: National debt is a major problem

Lilly USA to lay off about 500 after drug fail

Lilly USA announced Thursday it will eliminate about 485 jobs nationwide in wake of the failure of a drug intended to treat Alzheimer's disease.

The company said 75 employees in Indiana, where the subsidiary of multinational drug maker Eli Lilly and Co. (LLY) has its headquarters, will be affected, according to the Indiana Department of Workforce Development. Eli Lilly's stock price closed down 69 cents Thursday to $76.84, a less than 1% drop.

All of those affected worked in the unit that had been developing solanezumab, a medication designed to slow the development of Alzheimer's, a Lilly official wrote in a letter to the state and Indianapolis Mayor Joe Hogsett. In December, Lilly announced that trials showed the drug did not achieve its goal and layoffs would be forthcoming.

Lilly said it was closing its entire Integrated Health Partners/Cardiovascular Account Specialists department, part of its Bio-Medicine Business Unit. Eli Lilly had almost 42,000 employees worldwide as of June 30, 44% work in the United States and more than a quarter work in Indianapolis, according to the company's website.

Pizza Hut Plans to Hire 11,000 Ahead of the Super Bowl

Pizza Hut is gearing up for the Super Bowl by hiring 11,000 people in the U.S. to cook up its pies, deliver them to hungry customers or manage its restaurants.

The Super Bowl is the busiest day of the year for Pizza Hut, and it expects to sell more than 2 million pizzas during the Feb. 5 football game.

It plans to fill as many of the positions as possible before the Super Bowl, but those that aren't will be filled afterward. A Pizza Hut spokesman says the chain typically adds more workers before the big game and estimates it had about 4,000 to 5,000 openings at this time last year.

Pizza Hut, which is owned by Louisville, Kentucky-based Yum Brands Inc., has about 8,000 U.S. restaurants.

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