45% Of Americans Carry At Least $25,000 In Debt
If you owe creditors less than $5,000 (not including a mortgage) you’re in a rather small group of Americans with minimal debt. According to a new survey, nearly half the country owes at least $25,000 — and spends as much as half of their monthly income paying down their debt.
These stats come from a new Harris survey [PDF] commissioned by Northwest Mutual, which found that nearly three-quarters of Americans are struggling with debt. More precisely, 47% of consumers are carrying at least $25,000 in debt. The average amount of debt — excluding mortgages — for all borrowers is $37,000. On the high end of debts, nearly one in 10 borrowers said they have outstanding balances of $100,000.
According to the report, consumers’ debts are comprised by a variety of sources with 29% of debt coming from mortgages, 19% from credit cards, and 7% from education loans. However, it should be noted that for millennials, 23% of borrowers said they have outstanding student loans.
When asked about how debt impacted their lives, most consumers reported that it was a significant source of stress and pressure. For instance, four in 10 consumers said debt had a “substantial” or “moderate” impact on their financial well-being, while the same number considered debt to be a “high” or “moderate” source of anxiety.
Warren Buffett Hates Gold... Here's Why You Need To Own It
In a 1998 speech at Harvard, legendary investor Warren Buffett shared his thoughts on gold: “[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. It has no utility.”
Buffett is correct—gold doesn’t produce earnings or pay dividends. There are, however, some good reasons gold should be an essential part of every investor’s portfolio.
Even with the Fed raising nominal interest rates, real rates—that is, the nominal interest rate minus inflation—are still in negative territory. And real rates are what really matters to your portfolio. In the first quarter of 2017, inflation averaged 2.57%. Today, a one-year bank CD pays about 1.4%. Therefore, to keep all of your money in a bank account means to watch your purchasing power erode.
Of course, there are other options. You can put your money in U.S. Treasuries or dividend-paying stocks. However, with the 10-year Treasury yield hovering around 2.25% and the average dividend yield for a company on the S&P 500 at 2.33%, you would still be in negative territory. Gold is known as the yellow metal with no yield, but simple math tells us no yield is better than a negative one. In fact, real interest rates are a major determinate of which direction the price of gold moves in.
Buffalo Wild Wings Cuts Jobs Amid Rising Labor, Wing Prices
It’s tough times at B-Dubs. Buffalo Wild Wings Inc. is laying off workers amid higher labor and chicken-wing costs. At the same time, the company is trying to fend off activist investor Marcato Capital Management LP, which earlier this month called for Chief Executive Officer Sally Smith to step down.
“We have eliminated the director of operations position and redeployed some of those team members in other positions,” Heather Leiferman, a spokeswoman for the Minneapolis-based company, said in an email. “We haven’t disclosed the total number of employees let go as it’s immaterial.”
The chain on Wednesday cut its annual sales forecast and laid out a plan to rein in costs, which includes the layoffs, as well as promoting food deals that aren’t wings. Last year, amid weaker results, Marcato took a stake in Buffalo Wild Wings and began pushing for changes. Marcato owned about 6 percent of Buffalo Wild Wings as of February.
Meanwhile, a tighter supply of chicken wings is pressuring the chain’s margin. Prices may be up 10 percent this year, Chief Financial Officer Alexander Ware said on a conference call. The company is “faced with the challenge of rising labor costs and we have the unique headwind of chicken wing price inflation,” Smith said. As a result, Buffalo Wild Wings is planning $40 million to $50 million in cost cuts over the next two years, she said.
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Apple in talks to launch money-transfer service
Apple Inc (AAPL.O) has held talks with payments industry partners about launching a money-transfer service, technology news website Recode reported on Thursday. The service will allow iPhone owners to transfer money digitally to other iPhone users, Recode reported, citing sources familiar with the talks.
Apple will announce the new service later this year, one source told Recode, while another told the website an announcement and launch date may not yet be set. The service, if launched, would compete with digital money transfer services such as PayPal's (PYPL.O) Venmo offering, Square Inc's (SQ.N) Square Cash, as well as services from big banks.
Apple was also in talks with payments network operator Visa Inc (V.N) to create its own pre-paid cards to run on the Visa debit network, and tied to the new peer-to-peer service, the Recode report said.
Apple is looking for ways to boost usage of Apple Pay, its mobile payments service, and the debit card could be one way to do that, Recode reported.
Data Breaches Top 500 to Date in 2017
The latest count from the Identity Theft Resource Center (ITRC) reports that there have been 516 data breaches recorded this year through April 25 and that nearly 9.3 million records have been exposed since the beginning of the year. The total represents a 35% increase in the number of breaches to date compared with 2016.
In 2016, the ITRC reported a record total of 1,093 breaches and at the current pace that total could rise to around 1,500 in 2017. The state attorney general of Maryland last week posted 327 reported data breaches to date in 2017. Most involved relatively small numbers of exposed records, but two of the breaches accounted for about 9,000 exposed records each.
The business sector leads all sectors in the number of records compromised so far in 2017, with nearly 7.5 million exposed records in 285 incidents. That represents 55.2% of the incidents and nearly 81% of the exposed records so far this year.
The medical/health care sector has posted 22.9% (118) of all data breaches. The number of records exposed in these breaches totaled tops 1.5 million, or about 17% of the 2017 total. The government/military sector has suffered 27 data breaches to date in 2017, representing about 2% of the total number of records exposed and 5.2% of the incidents. More than 188,000 records have been compromised in this sector.
Report: consumers' out-of-pocket medical expenses rising
Health insurance is supposed to cover medical expenses. That, after all, is what it's for. But at a time when premiums are rising, consumers are finding they are also paying more out-of-pocket for their health services.
Kalorama Information, a healthcare market research publisher, has crunched the numbers and found that consumers' out-of-pocket spending on medical services rose to $486 billion last year.
Consumers are required to pay up for a couple of reasons. Sometimes their insurance doesn't cover all or any of the services they receive. For example, if they receive services from a provider not in their network, the insurance might not pay as much.
Another big reason for the increased out-of-pocket spending is that policy deductibles continue to rise. In some cases a consumer must pay the first few thousand dollars in medical expenses each year before coverage kicks in. According to Kolorama Information's data, the average out-of-pocket spending for an individual consumer last year was $1,400 – up from $250 in 1980. Even adjusted for inflation, that's a 45% increase.
Ford first quarter profits fall 35% to $1.6B
Ford's profits sank 35% during the first quarter to $1.6 billion as higher costs for warranties, recalls and materials eroded profits. The Dearborn automaker also faced a tough comparison to the first three months of last year and is facing a falling industry sales in U.S. auto market.
Last year, the automaker earned a profit of $2.4 billion, the company's highest quarterly profit on record for the automaker. Ford beat Wall Street's expectations by 3 cents per share. The automaker earned 39 cents per share for the quarter compared with the 36 cents per share that Wall Street analysts, on average, expected the automaker to earn.
"We delivered a solid quarter and we continue to expect a good year this year," Ford CEO Mark Fields told Wall Street analysts. "We remain fully focused on our strategic priorities that will drive value as we drive our transformation to an automotive and a mobility company."
Despite the rough first quarter Ford said it still expects to earn a pre-tax profit of about $9 billion for the year. That would be $1.4 billion less than the automaker's results in 2016.
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Uber’s Growth and Dominance ‘Entirely Artificial,’ Says Expert
Uber is losing money faster than any other Silicon Valley startup. The ride-hailing company does not own cars or other fixed assets, but it is valued higher than both General Motors and Ford. So what makes this cash-burning machine the most valuable private company in the world?
According to transportation industry expert Hubert Horan, Uber’s whopping valuation reflects the anticipation that it would one day drive all incumbent taxi and limo companies out of business. “It is well on the way to achieving that objective in many markets,” Horan said, in a report.
But Uber lacks the competitive advantage and economies of scale that are required to achieve profitability, hence its business model is entirely different from other giant tech companies, like Amazon.
Horan said Uber’s rapid growth and industry dominance have been “entirely artificial, powered by its predatory investor subsidies.” The ride-hailing company, which operates in nearly 75 markets, more than doubled its gross bookings and recorded $6.5 billion in revenue last year, according to a Bloomberg report.
H1B Visa Restrictions Stoke Fear over Skill Shortage: Survey
Large majorities of U.S. IT companies with more than 50 software developers are concerned about the proposed changes to H1B visa program, saying the reforms will worsen the skill shortage and make hiring IT talent far more expensive.
More than anything else, many of them are considering offshoring to remain competitive in the global marketplace, according to a survey by Harvey Nash. The study was conducted days after the Donald Trump administration issued an executive order to reform the visa program.
More than 60% of IT leaders are of the belief that there was no need to reform the program in the first place because it had successfully helped them access highly skilled IT talent,
Despite the executive order, a majority of respondents made it clear that they would not delay plans for product development and would not stop investing in innovation, because they said remaining globally competitive is an important aspect of their industry.
Venezuelans entering Colombia must get migrant card
Venezuelans who regularly cross into Colombia to work, study or shop must apply for a special migratory card to ease their passage, the Colombian government said on Thursday.
The cards will take the place of passports and allow entry to the Colombian provinces of La Guajira, Norte de Santander, Arauca, Vichada and Guania for residents of Venezuelan border areas, but not into the rest of Colombia, immigration authority head Christian Kruger said.
Thousands of Venezuelans cross the border each day to attend school, work and buy food and medicines that are scarce in the socialist country. Some 40,000 Venezuelans reside legally in Colombia.
The rule, which will take affect from Monday, comes amid tension between the neighbors, which have often been at loggerheads. Colombian President Juan Manuel Santos said recently that the socialist revolution in Venezuela had failed, prompting his counterpart Nicolas Maduro to threaten to reveal what he said were secrets from Colombia's peace negotiations with Marxist rebels and plans to assassinate guerrilla leaders.
United's $10,000 Pledge to Bumped Passengers
United Airlines pledged Thursday to reduce overbooking and pay travelers who volunteer to take a later flight up to $10,000 in response to an incident earlier this month in which a passenger was dragged off a flight.
“Two weeks ago, we failed to meet that standard and we profoundly apologize … Today, we are taking concrete, meaningful action to make things right and ensure nothing like this ever happens again,” Oscar Munoz, United’s CEO, said in a statement. The 10 policy changes follow weeks of global backlash against the airline after video surfaced of a 69-year-old passenger being forcibly removed from his seat on what was thought to be an overbooked flight.
In the aftermath, Munoz pledged United would no longer use law enforcement to remove passengers who are “booked, paid, seated.” In addition to increasing passenger compensation to those voluntarily opting to skip their flight (up from the original $1,000), the airline also pledged to limit its use of law enforcement “to safety and security issues only,” create an automated system to solicit volunteers to change their travel plans before their flight, and to reduce the amount of overbooking overall.
Though the airline said its policy changes, many of which have already gone into effect, mark a “turning point,” much of the backlash against it has already been felt. Shares in the airline’s parent company, United Continental Holdings (UAL) Inc, dropped by nearly 4 percent in the immediate aftermath of the scandal, wiping nearly $1 billion of its value. And though no one at the airline was fired over the incident, Munoz was taken out of consideration to become the UAL chairman next year as previously planned.
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Fewer people signed contracts to buy US homes in March
Fewer consumers signed contracts to buy U.S. homes last month as the spring buying season revs up with stiff competition for homes amid lagging inventory. The National Association of Realtors said Thursday that its pending home sales index slipped 0.8 percent to 111.4 in March, from 112.3 in February.
Lawrence Yun, chief economist for the Realtors, said that even with the dearth of inventory, activity was still strong enough to be the third best in the past year. He said the low supply of homes could mean higher prices in the months ahead.
"Sellers are in the driver's seat this spring as the intense competition for the few homes for sale is forcing many buyers to be aggressive in their offers," Yun said. The Realtors reported last week that Americans had purchased homes in March at the fastest pace in over a decade, as more people seek to close deals with home prices on the rise.
Although they had ticked down the past few weeks, average interest rates on a typical 30-year mortgage are back over 4 percent again. Rates are expected to continue to rise from last year's record lows, another reason people are eager to buy. The bad news for buyers is that the number of houses for sale has dropped to its lowest level in nearly 20 years.
iHeartMedia facing bankruptcy
iHeartMedia has warned investors that it may be forced into administration before the end of the year, with a $350 million debt repayment due in the coming months.
The biggest radio broadcaster in the US, and owner of the iHeartRadio streaming service and Clear Channel billboard advertising business, the iHeart company took on $20 billion of debt during a $24 billion private equity buyout in 2008. If it manages to make this year’s hefty repayment, it still has a far more significant $8.3 billion due in 2019.
In a new filing with the US Securities And Exchange Commission, the company says: “Management anticipates that our financial statements to be issued for the three months ended 31 Mar 2017, will include disclosure indicating there will be substantial doubt as to our ability to continue as a going concern for a period of twelve months following the date the first quarter 2017 financial statements are issued”.
The company is attempting to defer up to $14 billion of its debts, though without much success so far. There was a recent arrangement in relation to $476 million due in 2018, but bankruptcy now seems increasingly likely.
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Feds Spent $13.5 Million on Vehicles It Doesn’t Know It Needs
The federal government spent $13.5 million on cars and SUVs it has no idea whether it needs, according to a new audit from the Government Accountability Office.
The report found that government workers also billed taxpayers $2.5 million for vehicle upgrades such as heated seats and video entertainment systems.
The watchdog group found that the government spent $1.6 billion to purchase over 64,000 new vehicles between 2011 and 2015, at an average cost of $25,600. The majority of purchases were made by five agencies, the Departments of Defense, Homeland Security, Agriculture, Justice, and Interior.
The GAO found that some agencies are failing to keep track of whether vehicles are used. For instance, the Customs and Border Protection agency could not determine if 81 percent of its vehicles were used in 2015. Over 1,800 CBP vehicles were driven less than 12,000 miles that year, the minimum mileage required by Homeland Security to justify purchasing a vehicle. By contrast, the Navy was able to account for all of its 3,652 vehicles reviewed in the GAO report.
Warren 'troubled' by Obama's big Wall Street speech payday
Sen. Elizabeth Warren is "troubled" to hear that President Barack Obama will receive $400,000 to speak at a Wall Street health conference in September. "I was troubled by that," the Massachusetts Democrat said Thursday on SiriusXM's "Alter Family Politics." "One of the things I talk about in the book ("This Fight Is Our Fight: The Battle to Save America's Middle Class") is the influence of money. I describe it as a snake that slithers through Washington and that it shows up in so many different ways here in Washington."
Warren, an icon of the left and influential Democratic leader in the Trump era, is the most prominent progressive to publicly question Obama's decision, particularly after Hillary Clinton alienated many liberals during the 2016 election over her coziness with Wall Street.
Despite the influence of the wealthy in politics, however, Warren said she is confident that the numbers are in favor of the American people. "There's more of us than there is of them," Warren added. "And we've got to use our voices and our votes and fight back."
In the opening weeks of Obama's administration, the former president called bank CEOs "fat cats" amid widespread criticism about the golden parachutes given to execs whose companies contributed to the Great Recession. But an Obama spokesperson dismissed the idea that the large speaking fee compromises the former president's convictions.