July 23, 2015

Wall Street's Attorney General

(Truthout) Well, well, well. Eric Holder is returning to his cushy job at Covington & Burling where he reportedly pulled in $2.5 million the last year he was there. Holder didn't think it was strange he was returning to one of Wall Street's most highly regarded defense firms after all the bankers he let breezily carry on with fraud, bribery, money laundering, tax evasion and plenty of other very prosecutable offenses during his tenure as US attorney general.

Holder explained simply: "The firm's emphasis on pro bono work and being engaged in the civic life of this country is consistent with my worldview that lawyers need to be socially active." Yeah, and what about the $2.5 million, Mr. Holder? That's got nothing to do with it surely.

Holder had just spent six years in Washington handing out slaps on the wrist to financial institutions that claimed they were "too big to fail" while secretly receiving government assistance. His help almost certainly amounted to billions of dollars of aid to Wall Street. Now he's trotting back on his high horse to go collect millions for his top position in the firm.

There should be a massive public outcry, an uproar reverberating across social media, demanding this issue be scrutinized by the federal government in an inquiry with a fine-toothed comb. But what is the actual response? A few articles in various magazines and newspapers, and that's about it, ladies and gentlemen! Even those articles refused to point the finger at President Obama for tolerating in his administration someone who consistently toed Wall Street's line. Long decried as a "socialist" by the Tea Party, Obama, through Holder's nomination, has paradoxically endorsed the agenda of the GOP. ................(more)

http://www.truth-out.org/opinion/item/32025-shame-on-eric-holder-wall-street-s-attorney-general

July 23, 2015

How Berlin’s Futuristic Airport Became a $6 Billion Embarrassment

(Bloomberg) Confronted with the fire system fiasco, Rainer Schwarz, chief executive officer of Flughafen Berlin Brandenburg (FBB), the airport company owned by the city of Berlin, the state of Brandenburg, and the federal government, downplayed it. Schwarz and his staff told the airport’s board of oversight, as well as Stephan Loge, the commissioner of Dahme-Spreewald County, who had the final authority to issue the airport an operating license, that they were working through some issues, but that the situation was under control. Schwarz also appointed an emergency task force to propose solutions that would allow the airport to open on time. In March 2012 the group submitted its stopgap: Eight hundred low-paid workers armed with cell phones would take up positions throughout the terminal. If anyone smelled smoke or saw a fire, he would alert the airport fire station and direct passengers toward the exits. Never mind that the region’s cell phone networks were notoriously unreliable, or that some students would be stationed near the smoke evacuation channels, where in a fire temperatures could reach 1,000F.

It was, says Martin Delius, “an idiotic plan.” Delius is a physicist and member of Berlin’s parliament who has conducted an extensive investigation of the airport’s troubled infrastructure. “They thought that this would at least eliminate the need for wiring,” he says, “because [the spotters] could see with their own eyes if there is a mass of smoke lower than 6 feet above the ground.”

Schwarz continued to prepare for the opening, and the German public remained oblivious. By April 2012, airport fever was consuming Berlin. Mayor Klaus Wowereit sent out 3,000 invitations for the Hoffest, the annual mayoral ball at the 19th century City Hall, printing the entry tickets on mock boarding cards. Billboards went up, showing a photomontage of the airport’s namesake and famous Cold War leader embracing passengers, with the legend, “Willy Brandt greets the world!” Preparations continued for an extravagant inaugural. Angela Merkel, the chancellor, was to disembark from a government jet and stroll down a red carpet to the glass-walled terminal, which would have been filled with expensive food and drink. On the night of June 2, in a stunt-like mobilization, thousands of workers would shuttle 600 truckloads of equipment and a fleet of 60-ton aircraft tugs 19 miles down a sealed-off expressway from Berlin-Tegel, Berlin’s main airport, in the northwest corner of the city, and Tegel would shut down forever the same day the new airport came online.

But in the town of Lübben, in what used to be East Germany, Commissioner Loge had his doubts. He and his own staff of building inspectors had spent many hours examining the fire protection system at the Tropical Islands Resort, an indoor paradise set in a former airship hangar in Brandenburg. One of the world’s largest freestanding structures, it draws up to 6,000 warmth-and-beach-deprived Germans a day. “It was far more complicated than the one at Berlin Brandenburg airport, and it worked,” Loge says.

.....(snip).....

In the two years since Schwarz and Wowereit’s dual exit, the owners of the airport have reshuffled the board of oversight and burned through another management team. Schwarz’s successor, a short, stocky official named Hartmut Mehdorn, 72, is a close friend of former German Chancellor Gerhard Schröder. While head of Deutsche Bahn, the German national railway, Mehdorn supervised the construction of Berlin’s Hauptbahnhof, the central train station, in a contentious collaboration with von Gerkan. Hauptbahnhof is considered a German triumph: “If all Americans could compare Berlin’s luxurious central train station today with the grimy, decrepit Penn Station in New York City,” Thomas Friedman wrote in the New York Times in 2008, “they would swear we were the ones who lost World War II.” ................(more)

http://www.bloomberg.com/news/features/2015-07-23/how-berlin-s-futuristic-airport-became-a-6-billion-embarrassment

July 23, 2015

World Trade Drops Most Since Financial Crisis

World Trade Drops Most Since Financial Crisis
by Wolf Richter • July 22, 2015


Maybe we shouldn’t take our daily corporate samples too seriously. Maybe they don’t adequately represent the global economy. So IBM’s revenues last quarter plunged 13% from a year ago. It blamed China and the dollar, among other culprits. But IBM’s revenues have dropped for 13 quarters in a row. It’s a normal IBM condition and not a reflection of the global economy.

A whole slew of other tech companies chimed in with either disappointing revenues or disappointing outlooks, or both, each blaming a variety of issues, among them China and the dollar. Chip maker Qualcomm just reported a 14% plunge in its quarterly revenues. It’s having trouble in the smartphone market and will lay off a bunch of people. But maybe they’re just running into tougher competitors, rather than a lousy global economy. And the PC business, which is cratering, is dragging down all those involved. That’s structural and has little to do with the state of the global economy.

Then there’s industrial giant United Technology which reported that its revenues last quarter dropped 5%. Today Caterpillar reported that global machine sales plunged 15% in June compared to a year ago, after having dropped 12% in May and 11% in April, In Asia, machine sales plunged 19%, in Latin America 50%. And in booming North America? Down 5%, after having been up for the prior two months.

So CAT is facing Japanese, Chinese, and German competitors. It’s having to slug it out with them in China precisely when China is slowing. So it may be just CAT that’s having a hard time.

But don’t look at energy. Energy is getting clobbered….

So maybe we’re cherry-picking negative data. There are companies with actual revenue increases and positive outlooks, like Equifax, the credit bureau, which just reported a 10% jump in revenues (14% “in local currency,” as it says). Consumer borrowing is king, and Equifax expedites the process.

So what the heck is going on? .....................(more)

http://wolfstreet.com/2015/07/22/global-trade-drops-most-since-2009-cpb-merchandise-world-trade-monitor/

July 23, 2015

World Trade Drops Most Since Financial Crisis

World Trade Drops Most Since Financial Crisis
by Wolf Richter • July 22, 2015


Maybe we shouldn’t take our daily corporate samples too seriously. Maybe they don’t adequately represent the global economy. So IBM’s revenues last quarter plunged 13% from a year ago. It blamed China and the dollar, among other culprits. But IBM’s revenues have dropped for 13 quarters in a row. It’s a normal IBM condition and not a reflection of the global economy.

A whole slew of other tech companies chimed in with either disappointing revenues or disappointing outlooks, or both, each blaming a variety of issues, among them China and the dollar. Chip maker Qualcomm just reported a 14% plunge in its quarterly revenues. It’s having trouble in the smartphone market and will lay off a bunch of people. But maybe they’re just running into tougher competitors, rather than a lousy global economy. And the PC business, which is cratering, is dragging down all those involved. That’s structural and has little to do with the state of the global economy.

Then there’s industrial giant United Technology which reported that its revenues last quarter dropped 5%. Today Caterpillar reported that global machine sales plunged 15% in June compared to a year ago, after having dropped 12% in May and 11% in April, In Asia, machine sales plunged 19%, in Latin America 50%. And in booming North America? Down 5%, after having been up for the prior two months.

So CAT is facing Japanese, Chinese, and German competitors. It’s having to slug it out with them in China precisely when China is slowing. So it may be just CAT that’s having a hard time.

But don’t look at energy. Energy is getting clobbered….

So maybe we’re cherry-picking negative data. There are companies with actual revenue increases and positive outlooks, like Equifax, the credit bureau, which just reported a 10% jump in revenues (14% “in local currency,” as it says). Consumer borrowing is king, and Equifax expedites the process.

So what the heck is going on? .....................(more)

http://wolfstreet.com/2015/07/22/global-trade-drops-most-since-2009-cpb-merchandise-world-trade-monitor/

July 23, 2015

A grim warning Hillary supporters can’t ignore: The fundamentals of her campaign are looking weak

from Salon.com:


A grim warning Hillary supporters can’t ignore: The fundamentals of her campaign are looking weak
General election match-ups this early are irrelevant. The real worry is in her sinking favorability ratings

JIM NEWELL



.....(snip).....

This does not mean that the entirety of Quinnipiac’s results can be dismissed, though. Look down and you’ll see something ugly for Clinton: her fundamentals — favorability rating, trustworthiness, strength as a leader etc. — are moving very much in the wrong direction.

“Hillary Clinton’s numbers have dropped among voters in the key swing states of Colorado, Iowa and Virginia. She has lost ground in the horserace and on key questions about her honesty and leadership,” said Peter A. Brown, assistant director of the Quinnipiac University Poll. “On being a strong leader, a key metric in presidential campaigns, she has dropped four to 10 points depending on the state and she is barely above 50 percent in each of the three states.”

Not many candidates’ favorability ratings are all that great in this poll (did the pollsters interrupt a lot of family dinners after long days at work?) but Clinton’s have fallen into some gruesome territory, at least in these three states. Hold your breath: Save for Virginia, Clinton’s net favorables are scraping the infamously bleak deep-water ocean bed known as Trump’s Abyss:

Clinton gets markedly negative favorability ratings in each state, 35 – 56 percent in Colorado, 33 – 56 percent in Iowa and 41 – 50 percent in Virginia.

The worst favorability ratings for any Democrat or Republican in the presidential field belong to Trump: 31 – 58 percent in Colorado, 32 – 57 percent in Iowa and 32 – 61 percent in Virginia.

These numbers seem worse than normal and we shouldn’t take near 2-to-1 unfavorables as the definitive picture of the public’s receptiveness to Hillary Clinton. ...................(more)

http://www.salon.com/2015/07/22/a_grim_warning_hillary_supporters_cant_ignore_the_fundamentals_of_her_campaign_are_looking_weak/

July 23, 2015

Fundraiser for Baltimore cops charged in Freddie Gray’s death to feature blackface performance

A fundraiser for the “Baltimore 6? — the police officers charged in the death of 25-year-old Freddie Gray — will feature a blackface performance by a former police officer who was compelled to leave force in 1984 for performing in blackface, Ebony’s Jamilah Lemieux reports.

Among the list of entertainers on the invitation to the fundraiser is one “Bobby ‘Al Jolson’ Berger — out of retirement,” which as Lemieux noted is one of the stranger ways “to raise funds for a group of police implicated in the death of a black man.” When she contacted number listed on the invitation, however, she discovered why Berger had been booked — “I’m hosting the event,” he told her.

“I was a Baltimore city policeman,” he said by way of explaining why he was hosting the fundraiser, “and then I had no income, no insurance, and a wife and child. We’re trying to get something together for them for Christmas.” ................(more)

http://www.salon.com/2015/07/22/fundraiser_for_baltimore_cops_charged_in_freddie_grays_death_to_feature_blackface_performance/

July 23, 2015

Wal-Mart Is Ending Overnight Hours at Some Stores

(Bloomberg) Wal-Mart Stores Inc. will start closing some of its 24-hour supercenters for at least a few hours each night, aiming to use the time to better stock shelves and organize stores for the peak shopping rush.

The move will affect about 40 stores, including those in Philadelphia, New Jersey and Maryland, beginning next week, said spokesman Brian Nick. About two dozen 24-hour locations already had their hours reduced this spring, and more stores are slated to go through the process later, he said.

The change is a sign of retreat for a company that helped bring convenience and all-hours shopping to many parts of America. Chief Executive Officer Doug McMillon is taking the step as part of his drive to improve the shopping experience at Wal-Mart’s U.S. stores, where customers have complained about empty shelves, long checkout lines and poor-quality produce. McMillon has already raised starting wages and cut a layer of management in stores to try to improve the situation.

“Based on a recent review of our customers’ shopping patterns, we have made the decision to adjust hours at some of our stores,” Nick said. “This is the kind of decision we make on a store-by-store basis and will allow us the ability to reallocate resources to serve our customers during peak shopping hours.” ................(more)

http://www.bloomberg.com/news/articles/2015-07-22/wal-mart-ends-overnight-hours-at-some-stores-as-part-of-revamp

July 23, 2015

Potholes and decrepit bridges at home, new and unused military warehouses abroad

Unlike many buildings commissioned by the U.S. in Afghanistan, the new military warehouse facility in Kandahar was well built, an inspector general investigation concluded.

There was, however, one glaring problem: no one was around to use the gleaming, $14.7 million complex. The four warehouses and an administration building were empty, because the intended occupants, the Defense Logistics Agency, had already ended their mission in Kandahar.

The Army had decided to send DLA home in August 2013, six months before the warehouses were completed. The project, however, "continued uninterrupted," without any attempts to reevaluate or downsize it, according to a report by the Special Inspector General for Afghanistan Reconstruction, or SIGAR. Instead, the military added $400,000 of modifications to the buildings — knowing DLA would never use it, SIGAR wrote in a report released today.

In the end, the facility finished two years behind schedule and cost $1.2 million more than anticipated.

As combat operations in Afghanistan concluded in 2014, a familiar pattern emerged with the military's construction projects: They were routinely over budget, past deadline and often never used. .................(more)

http://www.truth-out.org/news/item/32014-us-military-built-another-multimillion-dollar-building-in-afghanistan-that-no-one-used

July 22, 2015

Apple is playing a shell game with watch sales

(MarketWatch) Apple says that it is attempting to hurt competitors by hiding the performance of its newest product, but the true victim could be Apple stock.

Apple released earnings Tuesday for the quarter that included the debut of the Apple Watch, the first new product category from the tech giant since the launch of the iPad. Apple shares AAPL, +0.36% declined sharply in after-hours trading despite results beating expectations for profit and revenue.

It is impossible to know how Apple’s smartwatch did in its first months of release from Tuesday’s report. As Apple had previously announced, the company gave no hard numbers on sales of the device, instead grouping those results with iPods, Apple TV and other devices.

The numbers that Apple did give suggested that the Watch underperformed analysts’ expectations. The “Other” category that includes the smartwatch grew by less than $1 billion, both sequentially and year-over-year, and analysts on average expected Apple to collect more than $1.8 billion from initial sales of Apple Watch, according to a FactSet survey. ...............(more)

http://www.marketwatch.com/story/apple-hurts-itself-by-hiding-apple-watch-sales-2015-07-21?dist=afterbell

July 22, 2015

Twinkie leverage, a tale of contemporary capitalism

(Bloomberg) After dismissing a sale and initial public offering, Hostess Brands LLC still wants to reward its private-equity owners. It’s opting to pay them by levering up instead.

Two years after Apollo Global Management LLC and Metropoulos & Co. acquired the maker of Twinkies from liquidation, Hostess is selling $1.23 billion of term loans. Of that, $905 million will be used to pay a dividend to its shareholders, according to Standard & Poor’s. That’s more than double what they paid for the business.

The deal is just the latest example of how record-low borrowing costs from the Federal Reserve are encouraging risky companies to add cheap debt -- sometimes to enrich private-equity firms -- as investors clamor for yield.

So-called dividend deals reached almost $16 billion in the second quarter, the most in a year, according to Bloomberg data. The downside of the loans is they can increase a borrower’s risk of default by piling on debt, without any of the cash going to improving operations or boosting revenues.

“Dividends aren’t designed to create value for the company,” Moody’s Investors Service analyst Brian Weddington said by phone. “This is a return of capital and profits to the founding investors.” ...............(more)

http://www.bloomberg.com/news/articles/2015-07-22/apollo-metropoulos-leverage-twinkies-for-dividends-in-loan-deal