The next recession now appears further away, thanks to Trump, economist says
Recession risk has declined and the economy's current expansion period will last at least a year longer than was forecast before the U.S. election, according to a new Deutsche Bank analysis of a survey by the Federal Reserve Bank of New York .
The results of the primary dealer survey, which polls banks and securities brokers on their economic, monetary policy and financial market expectations in advance of Federal Reserve meetings, showed that primary dealers (a list that includes firms like Bank of America, Citigroup, Barclays, Nomura Securities and RBC Capital Markets) forecast an increase in the number of months before the federal funds rate returned to 0 percent.
Deutsche Bank's chief international economist, Torsten Slok, concluded this showed the election of Donald Trump effectively reduced recession risk in the near term and extended the economy's expansion period.
The Fed's targeted short-term rate returning to 0 percent would imply a recession, as interest rates are reduced by central banks in times of economic weakness to provide a boost to the economy. Seven months before the U.S. election the expectation was that the economy would experience a recession within 11 months; the current expectation from market participants is 27, according to Slok's analysis of the survey.
School shootings rise when economy struggles, study suggests
School shootings rise when the economy tanks, according to a new study of U.S. schools, even as violent crime in general appears to be unaffected.
Researchers analyzed data from 379 shootings in schools between 1990 and 2013 and found a link between changes in national and local unemployment rates and the frequency of shootings.
Most were targeted attacks — often not fatal — and suicides, according to the study in Monday's journal Nature Human Behaviour. Only six percent of the shootings studied were random mass shootings. Using a complex statistical analyses, researchers found "with very, very high confidence" there are specific time periods when school shootings are higher than others, said study co-author and data scientist Luis Amaral, a physicist and co-director of the Northwestern Institute on Complex Systems.
"Above 5.7 percent (unemployment) you start to really detect an in increase," in the frequency of school shootings, Amaral said. Some experts not involved in the research did not find the study convincing, in part because different types of gun violence at school — random and targeted, and fatal and non-fatal — often have completely different motivations and root causes.
Will The Federal Reserve Raise Interest Rates? Janet Yellen Will Hike Central Bank’s Rate Several Times In 2017, Experts Say
At the conclusion of a Federal Reserve meeting Wednesday, Janet Yellen will announce whether the central bank will raise the target for its federal funds rate, a bank-to-bank loan rate with influence on mortgage rates, credit card rates and other forms of interest.
Most analysts predict Yellen will take her foot off the gas pedal as the central bank awaits the economic impact of Donald Trump’s presidency. Using federal funds rate futures prices, which often forecast the market’s belief in the likelihood of rate changes, the CME Group, a financial market company, pegged the probability that the central bank would maintain the current level at 96 percent as of Monday morning.
“I think the Fed is going to take a break in January and really get a sense of where the economy is headed,” Lindsey Piegza, chief economist at financial services company Stifel Fixed Income, told the consumer finance site Bankrate. “We don’t know exactly what is going to come to fruition. Right now we’re at the stage of political posturing.”
The federal bank increased its target rate range in December, to between 0.5 and 0.75 percent from between 0.25 and 0.5 percent, for the second time since the recession, and plans to do so again “a few times a year” until 2019, as Yellen said in a Jan. 18 speech in San Francisco. The Fed lowers the rate in times of slow economic growth to incentivize more borrowing and, by extension, more business activity and consumer spending, and raises it to keep inflation from spiraling out of control in times of economic boom.
Petition calls on UK to ax Trump's state visit
Mexico earmarks $50 million to back migrants in US
Mexico's top diplomat says his country will spend about $50 million to hire lawyers for migrants facing deportation in the United States.
The money will also go to outreach programs "to promote respect for Mexicans' rights."
Foreign Relations Secretary Luis Videgaray says the effort "isn't about obstructing the enforcement of the law in the United States, or much less oppose law enforcement."
Videgaray also says Mexico understands "it will be necessary to make some changes" to the North American Free Trade Agreement with the U.S. and Canada. But he said Monday that Mexico won't accept a return to protectionist import quotas or tariffs.
US consumer spending, housing data bolster economic outlook
U.S. consumer spending accelerated in December as households bought motor vehicles and cold weather boosted demand for utilities amid a rise in wages, pointing to sustained domestic demand that could spur economic growth in early 2017.
There are also signs that inflation firmed last month. The growth outlook was further bolstered by other data on Monday showing a jump in contracts to buy previously owned homes. A strengthening economy, rising price pressures and tightening labor market could allow the Federal Reserve to raise interest rates at least three times this year.
"Consumers keep on spending to help the economy grow and inflation is stirring," said Chris Rupkey, chief economist at MUFG Union Bank in New York. "The economy is at full employment. Time for the Fed to hoist sail on interest rates."
The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.5 percent after gaining 0.2 percent in November. The rise was the biggest in three months and in line with economists' expectations.
China’s Central Bank Completes Digital Currency Trial on a Blockchain
The People’s Bank of China (PBOC) has completed a trial run of digital currency based on blockchain technology. According to a recent report from Chinese publishing giant Caixin, the central bank completed a trial that saw transactions settled with its own digital currency. Developed by the PBOC, the digital currency was tested on a blockchain and the trial was completed in mid-December 2016.
The trial took place on shared distributed ledger that saw several major commercial banks as participants. The world’s largest bank by assets, the Industrial and Commercial Bank of China along with the Bank of China – both government-owned banks – participated in the trial. So too, did privately owned WeBank, hinting toward a sweeping effort toward the possible digitization of the Chinese Renminbi, the country’s fiat currency.
The report also revealed how the government plans on setting up the digital payment infrastructure, when functional and ready for deployment. An excerpt from the report reads:
"When the system is ready, the central bank’s pilot digital bank acceptance exchange platform will be connected with the existing Shanghai Commercial Paper Exchange to form a national platform for bank bill transactions.” Further, the publication also cites sources that point to an exclusive ‘digital currency research institute’ to be setup by the PBOC. The central bank issued a public recruiting call in November 2016 seeking experts in developing blockchain technology, big data, cryptography and systems’ design. As a mandatory requirement, applicants must hold a master’s or a doctoral degree in cryptography, computer science of information security.
Reality Check: Trump, Refugees, and the Crazy Liberal Freakout
The United States Is On The Precipice Of Widespread Civil Unrest
It doesn’t take much of a trigger to push extremely large crowds of very angry protesters into committing acts of rioting and violence. And rioting and violence can ultimately lead to widespread civil unrest and calls for “revolution”. The election of Donald Trump was perhaps the single most galvanizing moment for the radical left in modern American history, and we have already seen that a single move by Trump can literally cause protests to erupt from coast to coast within 48 hours. On Friday, Trump signed an executive order that banned refugees from Syria indefinitely and that placed a 90 day ban on travel to the United States for citizens of Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. Within hours, protesters began to storm major airports, and by Sunday very large crowds were taking to the streets all over the country…
From Seattle to Newark, Houston to Boston, hundreds jammed airport terminals — lawyers, immigration advocates, ordinary citizens compelled to the front lines, many refusing to leave until those who had been detained by U.S. Customs had been freed or had obtained legal counsel.
On Sunday, the movement caught fire and demonstrations and rallies erupted in communities across the U.S. from city halls to airports to parks. In the nation’s capital, the site of the march that drew a crushing 500,000 people Jan. 21, Pennsylvania Avenue was shut down Sunday as thousands trekked from the White House to the U.S. Capitol. An energized crowd stopped outside Trump’s showcase hotel along the avenue to shake fists and chant “shame.”
As I was going through articles about these protests today, I remember one woman holding up a sign that said “Remove Trump By Any Means Necessary”. It doesn’t take much imagination to figure out what she was suggesting. Visions of violence are dancing in the heads of these very frustrated people, and they are being egged on by top members of Congress such as Chuck Schumer…
Majority of Americans are data breach victims, survey finds
Americans don't agree on much these days, but on one topic, we're united -- most of us have been data breach victims, according to a new study.
Democratic Party leaders were famously hacked, possibly by the Russian government. Hackers made off with private information from at least 1 billion Yahoo email accounts. Records of the World Anti-Doping Agency were stolen and released.
The list goes on, and, according to a study from the Pew Research Center, at least 64% of Americans have personally experienced a major data breach, while 49% feel that their personal information is less secure than it was five years ago. Pew also found that 41% of Americans have dealt with fraudulent charges on their credit card, and 15% have received notice that their Social Security number had been compromised. A substantial majority (70%) of Americans anticipate major cyberattacks in the next five years on our nation's public infrastructure.
Perhaps more ominously, many Americans lack faith in government and business to keep their information safe. They express concern about telecommunications firms and credit card companies but have even less faith in the federal government and social media platforms.
Will Housing Become Better under Trump? Half of Americans Think So
Americans are “cautiously optimistic” about the housing market, with 69 percent recently surveyed by ValueInsured believing 2017 will be a better year for real estate than 2016, and 52 percent believing housing will become more favorable under the Trump Administration.
The outlook is primarily felt among millennials who are not homeowners. According to the survey, 62 percent of millennials believe the housing market will turn in their favor this year, while the level of confidence held by millennial non-homeowners has gone up the most in the past quarter, to a score of 61.3 in the ValueInsured Housing Confidence Index. (The Index is based on a 100-point scale.) The Index overall, however, has trended downward to 68.0 since September 2016—the first decline since March 2016, driven largely by homeowners.
The sentiment comes in contrast to the drop in share of first-time homebuyers who plan to purchase a home during the spring real estate season this year. A recent report by realtor.com® reveals the percentage of first-time homebuyers who plan to enter the housing market this spring has gone down 10 percent since October 2016—before the presidential election—due to concerns over higher mortgage rates. Mortgage rates rose for the first time in 2017 last week, after falling since the start of the year.
Forty-four percent of millennial non-homeowners in the survey are also confident they can afford a down payment, and 41 percent are expecting it to be easier to buy a home. Research out of Freddie Mac bears out a related trend, showing 40 percent of millennial non-homeowners are making saving for a down payment a priority. (Affording the ideal 20 percent—which ensures better mortgage loan terms—remains elusive.)
Wells Fargo asset-based lending head resigns
Wells Fargo & Co’s
Fuchs resigned because he preferred working with colleagues and customers on transactions as opposed to having a role that required a large amount of administrative responsibilities, Schultz said on Monday.
Fuchs’s resignation came as Wells Fargo reorganized a unit he oversaw, giving him fewer supervisory responsibilities. However, Ed Blakey, his boss, said in an interview that the reorganization had nothing to do with Fuchs’ decision to leave. He did not provide further details.
Fuchs’ resignation was first reported by The Wall Street Journal. Blakey, who oversees Wells Fargo Commercial Capital – a unit with $250 billion in assets- may take some time to decide on a replacement for Fuchs, Schultz said.
The Fed Might End Gold’s Bear Market; Here’s Why
Deutsche Bank fined by regulators over money laundering claims
Deutsche Bank has been fined $630m (£504m) by US and UK regulators in connection with a Russian money laundering plan. Under the scheme, clients illegally moved $10bn out of Russia via shares bought and sold through the bank's Moscow, London and New York offices.
Authorities said Deutsche had missed "numerous opportunities" to detect, investigate and stop the scheme. Deutsche Bank said it was co-operating with regulators.
It also said it had put aside money to cover the cost of the settlement. During the investigation, New York authorities and Britain's Financial Conduct Authority (FCA) found that so called "mirror" trades had been carried out through the bank between 2011 and 2015.
Clients would purchase stocks in rubles in Moscow before their counterparts sold the same stock at the same price through the bank's London branch. "By converting rubles into dollars through security trades that had no discernible economic purpose, the scheme was a means for bad actors within a financial institution to achieve improper ends while evading compliance with applicable laws," according to the legal document detailing the settlement with DFS.
Halliburton Warns Workers From Restricted Countries Not to Travel to U.S.
Halliburton Co. is warning workers not to travel to the U.S. if they are from any of the seven countries named in President Trump’s immigration ban.
"Due to these travel restrictions, the company is notifying employees of these nationalities that travel to the U.S. is inadvisable during the travel restriction period," Lawrence Pope, executive vice president of administration and chief human resources officer, wrote Monday in an e-mail to all Halliburton workers.
Trump’s executive order set new barriers to entry for people from Syria, Iraq, Iran, Sudan, Somalia, Yemen and Libya. Refugees, visa holders and permanent U.S. residents were all among those affected, at least initially, although a trio of court orders over the weekend blocked parts of the plan.
Emily Mir, a spokeswoman for the world’s second-largest oil services provider, confirmed the e-mail, but declined further comment.
It’s Naive To Think Illegal Aliens Aren’t Voting – By The Millions
Leftists and their media outlets have been all too eager to dismiss President Donald Trump’s charge that as many as 5 million illegal aliens voted in the 2016 presidential election, enough to easily swing the popular vote to Hillary Clinton.
Many of these pundits, backed by an army of so-called “fact-checkers,” would have you believe that the number of illegals who are registering to vote and voting is insignificant. Oh, there may be the occasional, misguided “undocumented worker” who inadvertently wanders into the election booth, they seem to suggest. But, surely, not enough to make any difference. Anyone who thinks that needs to think again.
There are a total of 43 million noncitizens currently living within US borders. Of these, approximately 12 million are illegal aliens. Not only are there well-documented reasons to believe that many of them may be violating election integrity, the fact is, many on the left are more than happy to see them do so. A Rasmussen Reports poll last year found that 53 percent of the Democratic Party supports allowing illegal aliens to vote.
Part of the problem is that election laws in the United States are a complicated hodgepodge of federal, state, and local rules, regulations, and red tape. Generally speaking, it is illegal for any noncitizens to cast a vote in any election, and those who do are at least theoretically subject to criminal penalties if they are caught.
Not again? Why Greece could be on track for another bailout
After nearly 10 years of crippling austerity, contraction, brinkmanship and bailouts, the Greek economy returned to growth in 2016. However this good news could soon be eclipsed as fears are raised that the Athens government could soon have to ask for another financial rescue.
The Greek government and its creditors -- the International Monetary Fund, the European Central Bank and the rest of the European Union -- are once again at odds, with the Europeans asking Athens to carry on with reforms to pave the way for further disbursements of its 86 billion euro ($91 billion) bailout.
The second review of the bailout program has been postponed and, at the moment, there isn't a date for creditors to return to Athens to make sure that the government is sticking to the terms of the bailout and therefore eligible for further payments. This brings into doubt the medium- and long-term economic sustainability of Greece.
According to Societe Generale, without the second bailout review concluded, Greece will struggle to repay 8 billion euros ($8.51 billion) it owes government and private investors due next July. Furthermore, talks on debt relief measures will be stalled. "Without large debt relief, Greece will be unable to issue new debt any time soon. Another programme would thus be needed," Yvan Mamalet, senior euro area economist at Societe Generale said in a note published late last week.
Global markets, big business down on Trump ban
Citigroup Says Goodbye to Mortgage Servicing
New Residential Investment Corp announced today that it has entered into an agreement to purchase nearly $97 billion in unpaid principal balance (UPB) of mortgage servicing rights from CitiMortgage Inc. The agreement represents an acceleration of Citigroup’s initiative to move out of mortgage servicing.
“Over the past several years, we have made significant progress transforming our business to deliver a sustainable annuity of growth,” stated CitiMortgage President and CEO C.D. Davies. “CitiMortgage remains a critical part of serving our customers, deepening relationships with existing and prospective retail bank clients and driving growth in our core markets. We will continue to originate loans for current and new clients.”
The move represents the company’s “increasing focus on retail banking customers,” Director of Citi Public Affairs Mark Rodgers told DSNews. As the release notes, all loans sold to New Residential in the agreement were third-party loans, and CitiMortgage plans to maintain its focus on all loans which originated within the firm’s retail banking unit.
The New Residential and CitiMortgage agreement was accompanied by a Nationstar Mortgage Holdings subservicing agreement with New Residential for the mortgage loans in question. Of course, regulatory approval will forestall some of the expected proceedings. A release by New Residential states that: “Citi will continue to subservice the portfolio on behalf of NRM, pending receipt of GSE and regulatory approvals to transfer servicing to Nationstar Mortgage LLC.”
At San Francisco's New Cafe X, A Robot Makes Your Coffee Just The Way You Like It
For seven years I worked as a barista at Starbucks. I was freelancing for a few magazines out of my home, and I took the Starbucks job because I felt like I was slowly turning into a hermit. I really enjoyed getting out and talking to people in person from behind the bar for a few hours each day. Of course, the free coffee was a nice perk too, but the human connection aspect was what kept me around for so long.
I wasn’t the only one that used Starbucks as an opportunity to meet people. The retailer has a whole business built around the idea of creating a "third place," somewhere that customers feel is a comfortable extension of their home, a real-life Cheers where everyone—or at least your regular barista—knows your name (if only because they write it on a cup every morning). During my stint at the coffee bar, I made friends with a number of customers who stopped by daily, looking for the same thing I was: a human connection.
But a new coffee shop opening today in San Francisco has the exact opposite in mind: Instead of getting your daily cup of joe from a friendly barista, you’ll get it from a robot.
Called Cafe X, the small shop inside San Francisco’s Metreon shopping center allows customers to place orders via smartphone or an iPad kiosk. The orders are prepared and delivered by a robo-barista. The place is not so much a coffee shop as a fully enclosed kiosk that looks like a hybrid between a café and a vending machine. Inside are two WMF espresso machines that can make one of seven different beverages, each offered with three different coffee options from local roasters, as well as organic milk and add-on features like syrups.