"World Economic Forum warns of growing array of global risks" by Pan Pylas Associated Press January 15, 2016
LONDON — The global economy faces an array of risks, from natural disasters related to climate change to the rise of the Islamic State and increasingly sophisticated cyberattacks, according to experts polled by the World Economic Forum, which organizes the annual gathering of political and business leaders in the Swiss resort of Davos.
In a bleak assessment published Thursday ahead of next week’s meeting in Davos, the WEF said its survey found that a failure to deal with and prepare for climate change is potentially the most costly risk over the next ten years, ahead of weapons of mass destruction, water crises, large-scale migration flows, and severe energy price shocks.
PFFFFFFT!
Really need that carbon tax loot to prop up the whole $y$tem they do.
That’s the first time that an environmental concern has topped the WEF’s Global Risks Report list and comes after what meteorologists say was the hottest year on record.
With all due respect, I've stopped believing those claims coming from an agenda-pu$hing pos.
‘‘Climate change is exacerbating more risks than ever before in terms of water crises, food shortages, constrained economic growth, weaker social cohesion, and increased security risks,’’ said Cecilia Reyes, chief risk officer at Zurich Insurance, which helped develop the annual Global Risks Report.
The survey of almost 750 experts and decision-makers from a variety of fields, locations, and ages was conducted in the autumn of 2015 before the global warming targets agreed on in Paris in December.
John Drzik, president of global risk at insurance broker Marsh, which also helped develop the 2016 report, conceded the ‘‘broadest array’’ of risks facing the global economy in the survey’s history. However, he noted that the 2008 financial crisis, which saw the collapse of numerous banks and caused the deepest global recession since World War II, may have prompted more immediate damage from a purely economic point of view.
And stocks are melting down again.
‘‘Events such as Europe’s refugee crisis and terrorist attacks have raised global political instability to its highest level since the Cold War,’’ Drzik said.
So what do these globe-kicking bastards have planned for us all this year?
A major concern identified by all involved in the report is the interconnectedness of all the risks.
‘‘We know climate change is exacerbating other risks such as migration and security, but these are by no means the only interconnections that are rapidly evolving to impact societies, often in unpredictable ways,’’ said Margareta Drzeniek-Hanouz, the WEF’s head of global competitiveness and risks.
In its survey, the WEF found that large-scale involuntary migration — not just in Europe but within regions, including the Middle East — was the most likely risk to emerge, as opposed to the biggest in terms of potential impact.
With nearly 60 million involuntary migrants last year — almost 50 percent more than in 1940 — participants at the report’s launch in London warned about the potential for social unrest.
We are in WWIII, and these numbers are primarily the responsibility of the United States.
One potential effect of the refugee crisis is the call by many in Europe to restrict the freedom of movement of labor within the 28-country European Union, one of the symbols of the post-war unity push. The restrictions would harm growth and employment and potentially dent cooperation efforts in other fields.
Purely economic factors remained high on the list of concerns, too.
They mean China and oil prices.
Marsh’s Drzik said the confluence of worrying economic signals, which has seen global stock markets suffer sharp losses so far in 2016, is ‘‘creating a very difficult environment to navigate for business.’’
Despite the worrying backdrop, all involved in the report sought to sound a note of optimism and stressed the opportunities that come with challenges. Dealing with climate change can stimulate technological innovation, for example.
That kind of talk is scary coming from these Shock Doctrine sickos.
‘‘Let’s not forget the risks and the rewards,’’ said Zurich’s Reyes. ‘‘They’re two sides of the same coin.’’
OMG!
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They won't be worried about the fart mi$t for long, not when you consider what is happening to their wallets:
"Economic anxiety dominates Davos forum" by Pan Pylas and Carlo Piovano Associated Press January 21, 2016
DAVOS, Switzerland — In the couple of hours before Morgan Stanley chief James Gorman sat down Wednesday to speak on a panel in Davos, Switzerland, he had lost some $600,000 on the value of his shares in the bank.
As the world’s richest business leaders and public figures kicked off the World Economic Forum’s annual meeting in the Swiss ski resort, a renewed plunge in stock markets and global oil prices clouded the air with anxiety. Gorman is not alone — already this year trillions of dollars have been wiped off the value of shares around the world.
Some participants voiced a high degree of concern over the global economy, saying the recent turbulence in financial markets — which saw the Dow plunge more than 500 points at one point Wednesday — was akin to a ‘‘meltdown.’’ Others sought to describe it as a natural adjustment. Not many were upbeat.
‘‘The new normal is a low-growth world,’’ said Martin Sorrell, chairman of United Kingdom-based advertising giant WPP. Sorrel worrie[s] that consumers remain wary — nearly eight years after the global financial crisis saw the collapse of many banking groups and triggered the deepest recession since World War II.
A "new normal," huh?
That wariness is why consumers don’t appear to be spending the windfall they earn from lower oil prices. Money saved at the pump could be spent elsewhere, but that doesn’t appear to be happening now.
How insulting! It's all our fault after this crew stole all the loot.
Tensions in the Middle East are also a concern. Iran’s foreign minister, Mohammad Javad Zarif, denounced new US sanctions over Iran’s ballistic missile program and warned that warmer diplomatic ties with Washington remain ‘‘far away’’ despite a landmark nuclear deal.
Related:
"Iran’s foreign minister, Mohammad Javad Zarif, said Wednesday in Davos, Switzerland, at the World Economic Forum, “This was an act that we were not proud of. It was an act against our security, our sovereignty, and we are prosecuting the people who committed that horrendous act.” Despite Zarif’s conciliatory language, Iran and Saudi Arabia are engaged in a bitter sectarian proxy war in Syria, with Tehran backing President Bashar Assad and Riyadh propping up the rebel forces opposing him. Analysts said the comments from the Iranian supreme leader, Ayatollah Ali Khamenei, could be ties to a meeting of the Organization of Islamic Cooperation in Jiddah, Saudi Arabia, on Tuesday, where the attack is high on the agenda."
That Iranian, speaking out of both sides of his mouth!
We got a guy like that.
"US Secretary of State John Kerry said on the sidelines of the World Economic Forum in Davos, Switzerland, ‘‘We don’t want to waste time. We have to get into the talk of creating this unity transitional government which the Iranians have proposed, the Russians have accepted, and everybody has signed on to in the context of Geneva and Vienna twice, and the UN Security Council resolution.’’ The Geneva talks build upon diplomatic cooperation in Vienna in November and last month’s UN Security Council resolution that set a target for peace talks to start this month. The resolution also aims to produce credible governance and a schedule for drafting a new constitution. Kerry will travel to Saudi Arabia over the weekend for talks with Saudi officials on how to push forward the political process. Kerry said he believed current tensions between Iran and Saudi Arabia, inflamed by the Saudi execution of a prominent Shi’ite cleric that sparked the sacking of the Saudi embassy in Tehran, would not affect the Syria talks. And he noted that Iran’s supreme leader, Ayatollah Ali Khamenei, had on Wednesday apologized for the attack on the embassy. ‘‘The supreme leader went to the extraordinary length of actually apologizing yesterday,’’ Kerry said. ‘‘That is very significant and I hope people will recognize that in today’s context, measured against where we’ve been, that’s a huge step.’’
"Secretary of State John F. Kerry acknowledged Thursday that some of the money Iran receives from sanctions relief may be used to fund terrorist activities, but he said the Obama administration does not believe it will increase the threat to US allies in the Middle East. Speaking to reporters at the World Economic Forum, Kerry said Iran has too many pressing domestic needs to devote much money to the hard-line Revolutionary Guard Corps and its support of groups that the United States and Iran’s regional rivals consider terrorists. ‘‘The calculation is that the demands of Iran and of the Rouhani administration and of the supreme leader for development in their country are such that there’s no way they can succeed in doing what they want to do if they’re very busy funding a lot of terrorism,’’ Kerry said."
WTF?
Sort of explains why the U.S. is in such sorry shape, 'eh?
Getting a little far away from the meeting.
Min Zhu, deputy managing director of the International Monetary Fund, which this week cut its global growth forecast, said political uncertainties are behind much of the recent market volatility, and the reason for companies’ reluctance to invest $7 trillion or so of cash lying in banks.
Say what?
Profitable corporations are letting banks sit on $7 TRILLION?
No wonder economic activity is slowing!
To boost global growth, Zhu said it’s paramount that governments make deep reforms to pension systems and labor markets, given that there’s little room for central banks to stimulate the economy by cutting interest rates and state budgets are stretched.
Once again, it's the Chicago school of pi$$-on-you economics!
Paul Singer, chief executive of hedge fund Elliot Management, blames a ‘‘very distorted policy mix’’ following the 2008 financial crisis for the current market turmoil, because it put the burden of boosting economic growth mainly on central banks. His suggestion to help soften the impact of future shocks is to make the banking sector more resilient and transparent.
OMFG!!
I can't read this apologi$t $lop anymore!
Yes, the poor banks sitting on $7 trillion in deposits.
The plunge in oil prices was also identified as a growing threat to the world’s goal to reduce emissions.
Why? Burning of fossil fuels is down, or so we have been told, due to the economic slowdown.
Related:
"Fresh off his Golden Globe win, “The Revenant” star Leonardo DiCaprio was honored Tuesday for his work against the climate crisis at the World Economic Forum in Davos, Switzerland, where he ripped into Big Oil. ‘‘We simply cannot allow the corporate greed of the coal, oil, and gas industries to determine the future of humanity,’’ said DiCaprio."
I see global nuclear war as the more immediate threat, but that's me.
The head of the International Energy Agency, which advises oil-importing countries, said the drop in costs for oil and gas is likely to reduce governments’ incentives to improve energy efficiency — in transportation networks, for example — as well as the installation of renewable energy plants.
Fatih Birol said energy efficiency has been driven not so much by environmental concerns in recent years but an interest in saving money, which is disappearing as fossil fuels become cheaper.
Isn't everything when it comes to the$e people?
World governments agreed in Paris in December to limit the rise in global temperatures, a move that will require a ramp-up in the amount of energy that comes from renewable sources.
‘‘For renewables, life will not be easy,’’ he warned.
When has it been?
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Related: Draghi renews vow on Europe stimulus
Ju$t in time!
"Global markets roiled by plunging oil, economic worries" by Beth Healy Globe Staff January 20, 2016
Cheaper energy has gone from a plus to a minus for the US economy.
Low energy costs are a boon for consumers and many businesses, but investors are worried about the impact on energy companies and their lenders.
There is also concern that with interests rates still low, the Federal Reserve won’t be able to help if the domestic economy is hurt by slowdowns elsewhere.
“There’s been a rule of thumb that falling oil is great,’’ said Jeff Knight, the head of Global Asset Allocation at Columbia Threadneedle Investments in Boston. But with the sustained plunge, “The fortunes of the oil-producing world have also shifted very, very suddenly.’’
While the US economy is generally strong, market specialists warn that the deluge of negativity from overseas could continue to depress stock prices. The worst start of the year on record for global stocks has moved into bear territory — markets were pulled down by such oil producers as Royal Dutch Shell, which estimated its 2015 profit would be less than half of the 2014 level of about $22.6 billion. Large bank stocks also slumped, on concerns about energy-related loan losses. Bank of America Corp. this week said it has $21 billion in such loans on its books, or 2 percent of total loans.
Oh, poor BoA!
Related: Bank of America raises quarterly profit to $3b
That's some slump.
Broader fears of corporate earnings weakness were fueled by the technology giant IBM Corp., which cut its 2016 profit outlook.
See: IBM profit forecast pulls stock to 5-year low
“The thinking is that maybe the US economy isn’t strong enough on its own to withstand these shocks from around the world,’’ said Lewis Piantedosi, director of growth equity at Eaton Vance Management, a mutual fund and investment firm in Boston.
Opposite as little as two weeks ago, and it is what the "alternative" media have been saying.
Why is pre$$ always so $low?
The finances of consumers and banks are healthier than they were in the market dives of the 2008 financial crisis, Piantedosi said. But the spiral of global negativity can be difficult to overcome in the near term. “In environments like this, the market does have a tendency to throw the baby out with the bath water.”
What a rotten $y$tem then!
And are consumers really better off?
He and others cautioned long-term investors not to overreact. But few were predicting that the market has reached bottom yet, and there are forces that could continue to drive stock prices down.
First, oil prices are likely to keep dropping, as China’s economy slows and the lifting of Western sanctions paves the way for Iran to again sell its oil, adding to the glut.
At the same time, sovereign wealth funds are taking a hit. These giant investment pools in oil-producing nations, from the Middle East to Norway, have been some of the world’s largest buyers of stocks, bonds, and other assets in recent years.
Investors sought the relative safety of US government bonds and increasingly doubt that the Federal Reserve will raise interest rates as aggressively as it had planned, given the global market turmoil.
Those U.S. suckers, 'er taxpayers, can always be counted on to pay up.
“The financial markets are saying we can’t be hiking rates,” Columbia’s Knight said.
The US consumer is unlikely to be able to counter a global slowdown that started in China and is spreading across emerging markets and beyond.
Even though we are in better shape than.... never mind.
Even as markets eventually adjust to the world’s second-largest economy growing below a 7 percent pace, there could be a hangover for oil producers.
“In the grand scheme of things, China wants to contain its total energy demand,’’ said Megan Wu, lead Asian analyst at Energy Security Analysis Inc., a consulting firm in Wakefield.
According to new research by the firm, the growth of China’s oil demand will slow by almost 60 percent over the next 15 years, as compared with 2000-2015, as it shifts to natural gas and other sources of energy.
Then why did they just sign some huge oil deals with Saudi Arabia and Egypt?
“Whenever they don’t have to use oil, they’re not using oil,’’ Wu said.
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Globe always leaves me feeling slick and like I need a shower.
"Wealth inequality rising fast, Oxfam says, faulting tax havens" by Patricia Cohen New York Times January 19, 2016
NEW YORK —Just 62 people own as much wealth as the 3.5 billion people in the bottom half of the world’s income scale, the charity Oxfam reported on Monday in its annual study of inequality, which found that the gap between rich and poor has continued to widen at an alarming rate. As recently as five years ago, the fortunes of 388 billionaires were needed to reach that halfway mark.
I didn't highlight the #s because they are absolutely mind-boggling.
62 individuals own as much as half the planet, some 3.5 BILLION -- with a b -- people?
The study — released before the world’s business and government elite gather at the annual World Economic Forum in Davos, Switzerland, this week — noted that a global network of tax havens contributed to the divide by allowing the rich to hide trillions of dollars in assets from their countries’ governments.
I'm not saying giving it to governments is the best use, but....
Related: To shield their fortunes, the wealthiest put tax system to work
Even the "good" rich.
Taxpayer advocate warns of ‘pay to play’ IRS system
Same old $hit.
“Tax havens are at the core of a global system that allows large corporations and wealthy individuals to avoid paying their fair share,” said Raymond C. Offenheiser, president of Oxfam America, “depriving governments, rich and poor, of the resources they need to provide vital public services and tackle rising inequality.”
And if you do raise taxes on them they will move like GE.
Oxfam said publicly available data on some 200 companies — about half of them described by the World Economic Forum as its strategic partners — showed that 9 out of 10 had a presence in at least one tax haven, including the Cayman Islands and Switzerland itself.
The banking sector plays an essential role in the tax-haven issue, the report notes — just 50 big banks manage a majority of offshore wealth. At the same time, the financial sector is a prime source of rising inequality; 1 in 5 billionaires comes from that industry.
The global economy has more than doubled in size in the last 30 years. Its value reached nearly $78 trillion in 2014. But even as countries like China and India have built a vast middle class, those gains have disproportionately flowed to those at the very top of the income ladder.
As intended!
Workers in nearly all of the world’s most developed nations and in most developing countries have been getting a smaller and smaller share of the pie, Oxfam notes.
In a separate report released on Monday, the Dutch research firm Motivaction International said that at least some of the world’s high earners could be recruited to join a campaign to reduce inequality. The firm surveyed more than 48,000 people in 20 countries who are part of the top 5 percent of income earners.
“There’s a huge divide not between the rich and the rest of the population but between the social- and the self-oriented rich,” said Martijn Lampert, Motivaction’s research director. The self-oriented “do not like to step outside the rich bubble,” he said, but the social-oriented “get more involved, have more compassion, and have more contact with what is happening elsewhere in society.”
OMG!
Looks who is shoveling $hit!
Yeah, the real divide is amongst the super-rich and not with the rest of the ma$$es below!
SIGH!!!!
“They are in a position to work together with mainstream segments to make change happen,” Lampert said.
So WHAT HAS HAPPENED?
WHAT WENT WRONG these last 30+ YEARS?
Jeffrey A. Winters, a political scientist at Northwestern University who studies economic elites, said the Oxfam report highlighted what has been an acceleration of wealth accumulation among a few individuals. Even within the tiny slice of the top 1 percent, the gap between the ultrawealthy and everyone else in that group has been growing, he noted.
Where the real divide is!
“These are unprecedented levels of stratification in all of human history,” Winters said, whether compared with ancient Rome or authoritarian dictatorships that exert near-total control of a country’s resources. “No other system has concentrated wealth as much as this system has.”
The result of globali$m, with more on the way!
According to the Motivaction report, wealthier people in general have more faith in governments, multinational companies, and the legal system than the rest of the population. They tend to be more distrustful of religion and trade unions.
That is because the $y$tem works for and is controlled by them, and they distrust those institutions that might possibly challenge them.
The survey also revealed that the rich who were considered more social-minded tended to work for smaller companies and were more optimistic. By contrast, the self-oriented have “a more fatalistic attitude, often believing in the existence of a particular destiny for every individual, which one cannot deny or escape.”
“They are more likely to expect that nothing will change,” therefore doubting whether it is worth it to try, the report said of the self-oriented.
But even these individuals might be influenced by the philanthropic initiatives of business icons they admire, like Mark Zuckerberg or Richard Branson, the report said.
Winters noted that the Motivaction survey did not capture the ultrawealthy, but a much broader segment that, at least in the United States, included people who consider themselves to be upper middle class. And whatever their public spiritedness, he says, the most promising way to reduce inequality is through policy and tax changes rather than the good will of people at the top.
Tell it to Fairfield, Connecticut.
“We can adopt policies that make it harder for the ultrawealthy to shape our government and our society,” Winters said, “or we can do what we have been doing, which is greatly facilitating the ability of the rich to shape society.”
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At least Bo$ton is different:
"Boston’s income divide largest in US" by Katie Johnston Globe Staff January 15, 2016
Boston is No. 1, but nobody’s celebrating this ranking.
Well, $ome are $omewhere.
The city has the highest rate of income inequality among the 100 largest cities in the country, according to a new analysis of 2014 Census data by the Brookings Institution, a nonprofit research organization in Washington D.C.
Households in the top 5 percent of earners in Boston made at least $266,000, nearly 18 times as much as households in the bottom 20 percent. The income gap continues to grow in Boston, which ranked fourth in 2012 and third in 2013, according to Brookings.
New Orleans and Atlanta had the second and third largest divides, respectively.
In some ways, Boston’s success is contributing to the problem. The city has become a major player in the innovation economy — reinforced by General Electric’s decision earlier this week to relocate its headquarters here — and salaries continue to grow in the already higher-paying tech and life science sectors. Indeed, annual household income among the top 5 percent of earners in Boston grew by nearly $22,000 between 2007 and 2014.
In the bottom 20 percent, however, incomes fell by almost $1,400. Of the jobs added in Boston between 2009 and 2014, the majority have been in low-paying sectors such as janitorial services, home health care, and food services, with more than 85 percent of positions paying less than $38,000 a year, according to a recent study by the Boston Foundation.
“The kind of economy we are building rewards educational attainment and punishes harshly those that don’t have it,” said Paul Grogan, president of the Boston Foundation, a philanthropic nonprofit. “We’re now wrestling with side effects of the extraordinary Boston renaissance that has occurred.”
Boston’s high number of students, who tend to have lower incomes, also partly explains Boston’s ranking, he noted.
Overall, in cities with bigger divides between rich and poor, housing tends to be less affordable for lower-income households, according to the Brookings report. And despite its commitment to add more affordable housing, Boston is still one of the nation’s most expensive housing markets.
“It could undermine the success we’re having if we don’t deal with it,” Grogan said. “If we can’t house these bright young people that want to work in our tech companies, in our life science companies, they’ll go elsewhere.”
GE is coming here!
The Brookings report looked at metropolitan areas as well as cities, and found that Greater Boston had the sixth biggest income divide in 2014. Households in the top 5 percent earned more than $294,000, while the bottom 20 percent topped out at $28,000. The Bridgeport, Conn., area topped the list of unequal metro areas.
Inequality has grown nationwide since the last recession, with the top 5 percent earning 9.3 times more than those in the bottom 20 percent in 2014, up from 8.5 in 2007.
Oh yeah?
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It's all good -- until it's not!
"Boston Fed chief upbeat about region’s economy" by Deirdre Fernandes Globe Staff January 18, 2016
The United States has been one of the few bright spots in the global economy as China slows and Europe continues to struggle with fallout from the global financial crisis of 2008, Eric S. Rosengren, president of the Federal Reserve Bank of Boston said. US employers added 2.7 million jobs last year, and the unemployment rate fell to 5 percent, from 5.7 percent at the beginning of 2015.
The Massachusetts economy, supported by its health care, education, and technology sectors, is performing even better. Unemployment in Massachusetts is down to 4.7 percent, and job growth — the state added 68,000 jobs in the first 11 months of 2015 — is the strongest in 15 years, according to the Labor Department.
Yes, “there’s a lot of optimism, it was a great year,” but banks are at risk of losses from loans in the oil and energy sector.
Other New England states are also faring well, Rosengren noted. Unemployment in New Hampshire is 3.8 percent, Vermont is down to 3.6 percent, and Maine’s rate is 4.7 percent. Connecticut and Rhode Island are slightly above the national average, at 5.1 percent and 5.2 percent, respectively.
High housing and other costs remain among the biggest challenges to the Greater Boston and Massachusetts economies, Rosengren said. Those costs could discourage the young educated workers on which the local economy will depend from coming to or staying in the region.
Federal Reserve officials are also watching the run-up in commercial real estate prices. In Greater Boston, office buildings and other commercial properties are selling at record prices, and rents in neighborhoods such as Kendall Square are among the highest in the nation. Rosengren said the region learned a painful lesson in the late 1980s and early ’90s, when a tech boom came to an end and a commercial real estate bubble burst.
The collapse in the commercial real estate market took down many banks that had lent heavily to developers and created a credit crunch that led to one of the deepest recessions in New England’s post-World War II history.
And here we are again.
“A really good story can become too good of a story,” he said. “I’m not saying that’s the case right now. It’s something to watch that the optimism doesn’t become over exuberance.”
We are.
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Related:
"More Americans applied for unemployment benefits last week, but the level remains near historic lows that point to a healthy job market. The Labor Department says applications for jobless aid rose 4,000 to a seasonally adjusted 284,000. The less volatile four-week average rose 3,000 to 278,750. Layoffs generally tend to rise in the early weeks of January as retailers let go of holiday workers, but even on an unadjusted basis jobless claims are lower than a year ago. Weekly jobless claims have stayed below 300,000 for the past 10 months, a sign that employers are holding onto workers and possibly looking to expand their staff."
"The number of people seeking unemployment benefits rose last week to the highest level since July, though applications remained at historically low levels. The Labor Department says weekly applications for jobless aid rose 10,000 to a seasonally adjusted 293,000. The four-week average, a less volatile measure, increased to 285,000, the highest since April. The unemployment benefits figures are volatile after the winter holidays, when many temporary retail employees are laid off. The government adjusts the figures to reflect those seasonal trends, but isn’t always able to do so perfectly. Global financial markets have plunged since the year began over fears that world economic growth is slowing. Applications for unemployment aid are a proxy for layoffs and can indicate whether businesses are sufficiently nervous about the economy to cut jobs."
Are you sick of the excuses yet?
"There is comfort to be found in context. Remember that strong jobs report from December? In addition, consumer confidence was up last month. Taken as a whole, they make a decent case for an economy that can withstand a month or two of white-knuckle markets. As long as investors don’t buy into fear."
Says the fear-promoting paper!
Also see: Candidates need to be louder on economic issues
And see GE leave?
"Best Buy’s shares sank Thursday after the nation’s largest consumer electronics chain reduced its sales outlook for the fourth-quarter as it reported weak holiday business in mobile phones and personal devices. The Minneapolis-based company said it now expects a larger drop in fourth-quarter revenue, though the company improved its outlook for operating income. During a conference call with the media Thursday, Hubert Joly, Best Buy’s chairman and CEO, said that he had expected that sales of mobile devices would be weak as fewer customers upgraded their devices because of a lack of new technology. But he said sales were softer than expected and the declines more than offset sales growth in home theater, major appliances, and wearable tech items like smart watches. Excluding mobile phones, domestic revenue increased year over year."
At least the wealthy splurged, right?
"Tiffany reported a worldwide decline in jewelry sales during the holiday period as consumer spending remained tepid in an uncertain global economy. The company reported a 9 percent drop in global same-store sales, or sales at stores open at least a year. Every region experienced a decline, except for Japan. Same-store sales fell 10 percent in the company’s America’s region, mainly on lower tourist spending in New York and other markets. The Asia-Pacific region saw a 14 percent drop and Europe experienced a 10 percent drop."
"Investors also got some discouraging economic news on Friday: The Federal Reserve said US industrial production, which includes manufacturing, mining, and utilities, dropped for the third month in a row. And another government report indicated US retail sales dipped last month."
After I was told it was a grand Chri$tma$!
It was for some!
"Banking giant JPMorgan Chase & Co. said Thursday that its fourth-quarter profits rose 9 percent from a year earlier, helped by strong performance in its consumer banking division and lower legal expenses. The largest US bank by assets said it earned $4.91 billion, or $1.32 per share, after payments to preferred shareholders, compared to a profit of $4.49 billion, or a $1.19 per share, a year earlier. The results topped analysts’ forecasts, who were looking for JPMorgan to earn $1.26 per share, according to FactSet. JPMorgan’s latest results reflected similar themes CEO Jamie Dimon and the bank’s management have been pushing for several quarters. The bank remained focused on cutting expenses, including through layoffs or other head-count reductions and preparing itself for bigger profits once interest rates rise further, as many expect will happen this year. The bank’s total employees fell 3 percent year-over-year to 234,598 workers."
A-HA! They make out on both $ides!
"Morgan Stanley swung back to a profit in the fourth quarter as the bank moved on from large legal settlements, its wealth management division improved, and investment bank advisory activity picked up. The bank also announced a major reduction in its fixed income and commodities trading business, as the bank continues to move away from riskier businesses. The New York-based investment bank said Tuesday it had a profit of $908 million in the three-month period ending in December, or 39 cents per share. That’s compared to a loss of $1.6 billion, or $1.37 per share. Morgan Stanley had $3.1 billion in legal expenses in 2014, when the bank settled with state and federal regulators over its role in the housing bubble and subsequent financial crisis."
Speaking of $ettlements:
"Goldman Sachs settles mortgage probe for $5 billion" by Tom Schoenberg and Michael J. Moore Bloomberg News January 15, 2016
NEW YORK — Goldman Sachs Group Inc. said it agreed to settle a US probe into its handling of mortgage-backed securities for about $5.1 billion, cutting fourth-quarter profit by about $1.5 billion and closing out a year of record legal and litigation costs.
Related:
"Goldman Sachs’ revenue and profit shrank in the fourth quarter as a result of a large legal settlement, as well as turmoil in the markets. The Wall Street firm said Wednesday that revenue fell 5 percent in the fourth quarter of 2015 from the quarter a year earlier. For the year, revenue declined 2 percent. The bank, considered by many to be the most elite firm in the industry, had its business opportunities diminished by new regulations and volatility in the global markets. The bank’s profits were dragged down by a recent government settlement over mortgage securities the bank produced before the financial crisis."
Yeah, poor Goldman Sachs!
The proposed deal, which the bank announced in a statement Thursday, would be the latest multibillion-dollar settlement resulting from the government’s push to hold Wall Street firms to account for creating and selling subprime mortgage bonds that helped spur the 2008 financial crisis.
From which they also benefited handsomely. By betting against items they were telling others to buy.
Authorities have already penalized the three biggest US banks — JPMorgan Chase & Co., Bank of America Corp., and Citigroup Inc. — more than $37 billion in the form of cash and consumer relief. In those cases, the government said the banks misrepresented to investors the quality of mortgage loans they securitized into risky bonds.
New York-based Goldman Sachs will pay a $2.39 billion civil penalty, make $875 million in cash payments, and provide $1.8 billion in consumer relief under an agreement in principle with a US task force, according to its statement.
What you are looking at there is a kickback to the government after they allowed all this to happen.
The bank had planned ahead for some of the charges. Goldman set aside $2.41 billion for legal and litigation expenses in the first nine months of 2015, almost as much as the totals for the two previous years combined. The cost of the agreement will affect fourth-quarter earnings, allowing 2016 results to be free of the expense.
The deal would resolve claims from authorities, including the Department of Justice and New York and Illinois attorneys general, concerning the bank’s securitization, underwriting, and sale of bonds from 2005 to 2007. The accord would also resolve claims by the National Credit Union Administration and the Federal Home Loan Banks of Chicago and Seattle, according to the statement.
In other words, it's the federal government coming in and limiting the damage to Goldmans.
A final resolution could still be weeks away. Morgan Stanley, which announced a proposed $2.6 billion agreement with the Justice Department in February last year to end probes into its creation and sale of mortgage-backed securities, has yet to resolve its case.
“We are pleased to have reached an agreement in principle to resolve these matters,” Lloyd Blankfein, Goldman Sachs’ chairman and chief executive, said in the statement.
Justice Department spokesman Patrick Rodenbush declined to comment.
“These are a continuation of investigations that have been ongoing now for many years and reflect the hard work and dedication of career prosecutors, investigators, and analysts from around the country,” said Geoffrey Graber, a former Justice Department lawyer who until September directed the group investigating the banks.
Yeah, you are all a bunch of troopers.
The government’s mortgage-backed security resolutions stem from a working group of prosecutors and other officials that President Obama ordered up in 2012 to punish Wall Street for fueling the financial crisis with bonds linked to souring mortgages. Until then, the Justice Department had been pilloried for years for not having brought significant cases against banks and their executives.
Anyone go to jail yet?
Settlements with Goldman or Morgan Stanley would be the first since Attorney General Loretta Lynch took over the department from Eric Holder in April. As US attorney in Brooklyn, Lynch had a hand in Bank of America’s $16.7 billion subprime-mortgage settlement, the biggest at the time against a US corporation.
Some lawmakers and public-interest advocates have criticized the government’s approach to holding mortgage lenders accountable. Without individual prosecutions, the settlements allow banks to pay money to atone for bad behavior, making financial penalties a cost of doing business.
The looting schemes of fraud were bad behavior, not a crime.
About $ays it all, doesn't it?
Investigators are using the Financial Institutions Reform Recovery and Enforcement Act, which allows the government to seek civil penalties for actions that occurred as long as a decade ago.
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And you can take that to the bank:
"State Street to pay $12 million in SEC settlement" by Beth Healy Globe Staff January 14, 2016
State Street Corp. agreed to pay $12 million to settle civil charges with federal securities regulators in an alleged pay-to-play scheme for Ohio pension contracts that also has ensnared a Boston lobbyist and major Democratic party fund-raiser.
An investigation by the Securities and Exchange Commission found that a former State Street executive made a deal with Ohio’s then-deputy treasurer to provide illicit cash payments and campaign contributions in exchange for business.
In return, the SEC said, the Boston-based financial services giant received contracts to handle administrative services for three public pension funds.
State Street disclosed the settlement in a public filing Thursday but neither admitted nor denied the SEC’s allegations.
A former State Street executive, Vincent DeBaggis, 56, of Plymouth, agreed to pay $174,203, including interest, plus a $100,000 penalty. DeBaggis also did not admit or deny the charges, according to the SEC.
DeBaggis allegedly led State Street to enter into a purported lobbying agreement with an immigration lawyer named Mohammed Noure Alo, the SEC said, who had connections to Ohio’s then-deputy treasurer, Amer Ahmad....
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Related: Firming Up State Street
It's enough to make you sick, isn't it?
"Johnson & Johnson to cut about 3,000 jobs in medical devices" Associated Press January 20, 2016
Johnson & Johnson said Tuesday that it plans to cut about 3,000 jobs over the next two years as the health care conglomerate works to restructure its medical devices business.
The New Brunswick, N.J., company said that amounts to more than 2 percent of its global workforce of around 127,000 people and 4 to 6 percent of its employee total in medical devices.
The cuts come after a tough year for the health care bellwether, which has seen sales of its prescription drugs, devices, and consumer medicines squeezed by a weakening global economy and unfavorable currency exchange rates.
‘‘These actions recognize the changing needs of the global medical device market,’’ said Gary Pruden, chairman of Johnson & Johnson’s medical device unit, in a statement.
The restructuring focuses on the company’s orthopedics, surgery, and cardiovascular businesses. It won’t affect consumer medical devices, pharmaceuticals, or consumer businesses.
J&J has struggled to revive sales of medical devices, particularly brands like DePuy orthopedic implants and Ethicon surgical equipment. The company’s actions will lead to annual pre-tax savings of $800 million to $1 billion, much of which will be realized by the end of 2018. J&J said it will consider ‘‘strategic options’’ for underperforming business units.
I'm struggling to finish this post.
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I'll have to revive the blog tomorrow, readers, depending on the weather.
NDU:
Did you know the rich are increasingly outliving the poor, and that demand for gasoline typically hits its lowest point in January?
