All posts by Mike Price

U.S. judge signs Peabody bankruptcy exit after environmental deal

CHICAGO A U.S. judge formally approved Peabody Energy Corp’s (BTUUQ.PK) plan to emerge from bankruptcy late Friday after the coal producer struck a settlement with the U.S. government over legacy environmental claims at a gold and metal mining subsidiary.

Under a last-minute deal with the U.S. Department of Justice, Peabody agreed to create a $43 million trust to manage environmental liabilities stemming from its dormant Gold Fields Mining subsidiary, according to court papers.

“This is a great day for Peabody and, more importantly, our multiple stakeholders who benefit from the many products and services we provide,” Peabody spokesman Vic Svec said on Saturday.

St. Louis-based Peabody, the world’s largest private-sector coal producer, owns mines in Australia and the United States and supplies the global market with the metallurgical coal used in steelmaking and the thermal coal used to generate electricity.

Peabody expects to exit bankruptcy in early April with about $2 billion of debt amid dramatically improved short-term prospects for its business versus a year ago, when it sought Chapter 11 protection with more than $8 billion of debt.

In the environmental settlement, the Department of Justice was negotiating on behalf of the Environmental Protection Agency, the Interior Department, five states and seven Indian tribes. The parties filed claims worth billions of dollars, which Peabody disputed but said it agreed to settle to avoid drawn-out litigation.

Peabody agreed earlier in March to cover about $1 billion in future coal mine cleanup costs with third-party bonds.

The company is financing its reorganization plan through a $1.5 billion stock sale, consisting of a $750 million rights offering available to bondholders and a $750 million private placement of preferred equity for institutional investors.

It was still in talks over a settlement with four individual investors who filed a lawsuit alleging that Peabody and other parties in the bankruptcy case violated their fiduciary duties by blocking individuals from the lucrative private stock sale.

It was unclear on Saturday whether the settlement would apply only to the four investors who filed the lawsuit or to all individual owners of the same unsecured bonds.

At least one investor, Mark Gottlieb, told Reuters he had not been included in the deal. Lawyer David Kovel, who filed the lawsuit for the four investors, declined to comment.

U.S. Bankruptcy Judge Barry Schermer, who oversaw Peabody’s bankruptcy, denied a request on Friday by a group of dissenting bondholders to stay the Chapter 11 confirmation while they prepared an appeal.

(Reporting by Tracy Rucinski; Editing by Tom Hals and Leslie Adler)

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VW CEO offices searched in Audi investigation: Bild am Sonntag

FRANKFURT Munich prosecutors searched the offices of Volkswagen (VOWG_p.DE) Chief Executive Matthias Mueller as part of an investigation into diesel emission test cheating at Audi, German weekly Bild am Sonntag said.

Some 100 officials searched Audi’s headquarters in Ingolstadt, Germany, and its Neckarsulm plant last week, as well as the Wolfsburg base of Audi’s parent Volkswagen.

Bild am Sonntag said prosecutors targeted 47 VW employees including Mueller and Audi CEO Rupert Stadler, searching personal calendars, notebooks and even memory cards in smartphones.

Mueller was targeted because he is also supervisory board chairman at VW’s premium car unit Audi, Bild am Sonntag said.

Volkswagen was not immediately available for comment.

(Reporting by Edward Taylor; editing by David Clarke)

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Unilever prepares 6 billion pound sale of food brands: newspapers

LONDON Unilever (ULVR.L) (UNc.AS) is preparing a 6 billion pound ($7.44 billion) sale of some of its food brands, British newspapers reported on Saturday.

The Anglo-Dutch company is planning to sell Flora margarine and Stork butter brands, the Sunday Times said.

The Sunday Telegraph, which also cited a 6 billion pounds figure, cited sources as saying private equity firms Bain Capital, CVC and Clayton Dubilier and Rice have started working on offers for the “spreads” business, citing sources.

Unilever did not immediately respond to a Reuters request for comment.

The maker of Knorr soups, Dove soap and Ben Jerry’s ice cream rebuffed a surprise $143 billion takeover offer from Kraft Heinz (KHC.O) last month.

The company has launched a business review to consider returning cash to shareholders, making medium-sized acquisitions and more aggressive cost cuts, the Financial Times reported on Wednesday.

(Reporting by Andy Bruce; Editing by James Dalgleish)

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Wall Street bonuses may show first uptick since 2009, firm says

Wall Street bonuses may climb as much as 15 percent this year in their first meaningful uptick since 2009, compensation firm Johnson Associates Inc said on Friday.

An increase in market volatility since the election of U.S. President Donald Trump may boost trading profits, the firm said in a presentation to an industry group. It described the forecast for financial services pay as “upbeat.”

The improved outlook for the banking industry is a shift from 2016, when bankers and traders received slightly lower bonuses on average.

Bank stocks have touched peak levels since the 2007 crisis on hopes that higher interest rates, as well as lighter regulation, lower taxes and faster economic growth promised by Trump, would boost profits for lenders.

The KBW Nasdaq Bank Index, which measures the largest U.S. banks, has risen 48 percent in the last 12 months, compared with the SP 500’s .SPX 17 percent gain.

Banking executives are particularly hopeful that looser regulation under Trump will lift trading profits. Wall Street firms’ bond trading revenue has fallen for about seven years as new rules on trading and capital have curbed profits.

Bankers may also see more creativity with their pay packages as regulations are lifted. While today, most bankers are paid heavily in restricted stock, Johnson Associates expects a move to more stock options and unique products.

(Reporting by Olivia Oran in New York; Editing by Lisa Von Ahn)

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Missing from Trump’s grand Navy plan: skilled workers to build the fleet

WASHINGTON U.S. President Donald Trump says he wants to build dozens of new warships in one of the biggest peace-time expansions of the U.S. Navy. But interviews with ship-builders, unions and a review of public and internal documents show major obstacles to that plan.

The initiative could cost nearly $700 billion in government funding, take 30 years to complete and require hiring tens of thousands of skilled shipyard workers – many of whom don’t exist yet because they still need to be hired and trained, according to the interviews and the documents reviewed.

Trump has vowed a huge build-up of the U.S. military to project American power in the face of an emboldened China and Russia. That includes expanding the Navy to 350 warships from 275 today. He has provided no specifics, including how soon he wants the larger fleet. (For graphics on projected strength of U.S. Navy, shipyard employment see:

The Navy has given Defense Secretary Jim Mattis a report that explores how the country’s industrial base could support higher ship production, Admiral Bill Moran, the vice chief of Naval Operations with oversight of the Navy’s shipbuilding outlook, told Reuters.

He declined to give further details. But those interviewed for this story say there are clearly two big issues – there are not enough skilled workers in the market, from electricians to welders, and after years of historically low production, shipyards and their suppliers, including nuclear fuel producers, will struggle to ramp up for years.

To be sure, the first, and biggest, hurdle for Trump to overcome is to persuade a cost-conscious Congress to fund the military buildup.

The White House declined to comment. A Navy spokeswoman said increases being considered beyond the current shipbuilding plan would require “sufficient time” to allow companies to ramp up capacity.

The two largest U.S. shipbuilders, General Dynamics Corp (GD.N) and Huntington Ingalls Industries Inc (HII.N), told Reuters they are planning to hire a total of 6,000 workers in 2017 just to meet current orders, such as the Columbia class ballistic missile submarine.

General Dynamics hopes to hire 2,000 workers at Electric Boat this year. Currently projected order levels would already require the shipyard to grow from less than 15,000 workers, to nearly 20,000 by the early 2030s, company documents reviewed by Reuters show.

Huntington Ingalls, the largest U.S. military shipbuilder, plans to hire 3,000 at its Newport News shipyard in Norfolk, Virginia, and another 1,000 at the Ingalls shipyard in Mississippi this year to fulfill current orders, spokeswoman Beci Brenton said.

Companies say they are eager to work with Trump to build his bigger Navy. But expanding hiring, for now, is difficult to do until they receive new orders, officials say.

“It’s hard to look beyond” current orders, Brenton said.

Smaller shipbuilders and suppliers are also cautious.

“You can’t hire people to do nothing,” said Jill Mackie, spokeswoman for Portland, Oregon-based Vigor Industrial LLC, which makes combat craft for the Navy’s Special Warfare units. “Until funding is there … you can’t bring on more workers.”



Because companies won’t hire excess workers in advance, they will have a huge challenge in expanding their workforces rapidly if a shipbuilding boom materializes, said Bryan Clark, who led strategic planning for the Navy as special assistant to the chief of Naval Operations until 2013.

Union and shipyard officials say finding skilled labor just for the work they already have is challenging. Demand for pipeline welders is so strong that some can make as much as $300,000 per year, including overtime and benefits, said Danny Hendrix, the business manager at Pipeliners Local 798, a union representing 6,500 metal workers in 42 states.

Much of the work at the submarine yards also requires a security clearance that many can’t get, said Jimmy Hart, president of the Metal Trades Department at the AFL-CIO union, which represents 100,000 boilermakers, machinists, and pipefitters, among others.

To help grow a larger labor force from the ground up, General Dynamics’ Electric Boat has partnered with seven high schools and trade schools in Connecticut and Rhode Island to develop a curriculum to train a next generation of welders and engineers.

“It has historically taken five years to get someone proficient in shipbuilding,” said Maura Dunn, vice president of human resources at Electric Boat.

It can take as many as seven years to train a welder skilled enough to make the most complex type of welds, radiographic structural welds needed on a nuclear-powered submarine, said Will Lennon, vice president of the shipyard’s Columbia Class submarine program.

The Navy envisioned by Trump could create more than 50,000 jobs, the Shipbuilders Council of America, a trade group representing U.S. shipbuilders, repairers and suppliers, told Reuters.

The U.S. shipbuilding and repairing industry employed nearly 100,000 in 2016, Labor Department statistics show. The industry had as many as 176,000 workers at the height of the Cold War in the early 1980s as the United States built up a fleet of nearly 600 warships by the end of that decade.



Apart from the labor shortage, there are also serious capacity and supply chain issues that would be severely strained by any plan to expand the Navy, especially its submarine fleet.

Expanding the Navy to 350 ships is not as simple as just adding 75 ships. Many ships in the current 275-vessel fleet need to be replaced, which means the Navy would have to buy 321 ships between now and 2046 to reach Trump’s goal, the Congressional Budget Office said in a report in February.

The shipyards that make nuclear submarines – General Dynamics’ Electric Boat in Groton, Connecticut, and Huntington’s Newport News – produced as many as seven submarines per year between them in the early 1980s. But for more than a decade now, the yards have not built more than two per year.

The nuclear-powered Virginia class and Columbia class submarines are among the largest and most complex vessels to build. The first Columbia submarine, which is set to begin construction in 2021, will take seven years to build, and two to three additional years to test.

Retooling the long-dormant shipyard space will take several years and significant capital investments, but a bigger problem is expanding the supply chain, said Clark, the former strategist for the Navy and now a senior fellow at the Center for Strategic and Budgetary Assessments.

Makers of submarine components such as reactor cores, big castings, and forgers of propellers and shafts would need five years to double production, said a congressional official with knowledge of the Navy’s long-term planning.

“We have been sizing the industrial base for two submarines a year. You can’t then just throw one or two more on top of that and say, ‘Oh here, dial the switch and produce four reactor cores a year instead of two.’ You just can’t,” the official said.

In his first budget proposal to Congress on Thursday, Trump proposed boosting defense spending by $54 billion for the fiscal 2018 year – a 10 percent increase from last year. He is also seeking $30 billion for the Defense Department in a supplemental budget for fiscal 2017, of which at least $433 million is earmarked for military shipbuilding.

A 350-ship Navy would cost $690 billion over the 30-year period, or $23 billion per year – 60 percent more than the average funding the Navy has received for shipbuilding in the past three decades, the Congressional Budget Office said.

Senator John McCain, chairman of the Senate Armed Services Committee, who will have a major say in approving the defense budget, said in a statement to Reuters that he supported Trump’s vision to increase the size of the Navy to deter adversaries.

“However, this is not a blank check,” he said.



(Click here for a graphic on ‘Fleet expansion’ here)


(Additional reporting by Luciana Lopez in New York, Editing by Soyoung Kim and Ross Colvin)

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Post-Fed boost for small-cap stocks may be limited

NEW YORK Small-cap stocks benefited from a dovish lining to the U.S. Federal Reserve’s decision to raise interest rates this past week, but strategists warn it will take more to make these pricey stocks outperform their larger brethren in the long haul.

The Fed on Wednesday raised rates by a quarter of a percentage point, as expected, but did not flag any plan to accelerate the pace of monetary tightening. A less aggressive monetary policy may benefit small-caps, which tend to get hit harder as borrowing costs increase when rates rise.

Stocks in the small-cap space rallied after the Nov. 8 election that put Donald Trump in the White House as investors bet Trump’s plans to cut back on regulations and taxes would especially help small companies.

That hasn’t panned out in the new year, as they have underperformed the SP 500 year-to-date. Their near-term performance hinges on how much the profit picture improves, but so far small-cap earnings have yet to rebound in the same way that large caps have.

Investors consider small-cap stocks comparatively expensive.

“We’re in a show-me state for small caps,” said Steve DeSanctis, equity strategist at Jefferies. “We’ve gotten (price-to-earnings) multiple expansion, so you need earnings growth.”

Fourth-quarter earnings for companies in the small-cap SP 600 .SPCY were down 1.0 percent from a year ago, while the benchmark SP 500’s earnings .SPX rose 7.8 percent, Thomson Reuters data show.

Analysts expect profit growth for the SP 600 in the first quarter of 2017, but at a rate still well below that of the SP 500.

The SP 600 is up just 1.4 percent since Dec. 31, after rising 24.7 percent in 2016. The SP 500 by comparison has gained 6.2 percent since the start of the year.

At 20.4 times forward earnings estimates, the SP 600 looks expensive compared with its long-term average of 17, Thomson Reuters data showed. The SP 500 trades at about 17.8 times forward earnings, also above its long-term average.

The Russell 2000 , a widely used gauge for small-caps, has a forward price-to-earnings ratio of 25.4, brushing against its highest level since 2009. Its 10-year average sits at 20.7.

“Growth and the interest rate trajectory are going to be two key factors,” said Dan Suzuki, senior U.S. equity strategist at Bank of America Merrill Lynch in New York. He thinks small caps may have more room to gain in the short run, especially if earnings surprise to the upside, but that valuations remains a negative.

On the flip side, rising rates also tend to boost the U.S. dollar, which would have a bigger negative impact on large-cap multinationals as a stronger dollar weighs on offshore revenues when they are translated into the U.S. currency.

Investors also worry that any tax reductions under the Trump administration may not come for many months, or even until 2018.

“Small-caps generally pay more in terms of U.S. corporate taxes,” said Nicholas Colas, chief market strategist at Convergex, a global brokerage company based in New York.

“You can somewhat view small-caps as a bit of a proxy for confidence in the tax reduction piece of the Trump economic plan.”

(Reporting by Caroline Valetkevitch; Editing by Daniel Bases and Leslie Adler)

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Do Pro-Lifers Want the Government to Regulate a Woman’s Body?

The slogan made a compelling point: “No part of a man’s body is regulated by politicians. Equality cannot exist until the same is true of a woman’s body.” They’re right in a sense. The government doesn’t regulate a man’s body. It can’t force him to tattoo his back, ingest a certain food, or amputate his arm. Why should the government regulate a woman’s body, specifically her reproductive organs, and demand her to continue a pregnancy against her will?

Though this reasoning seems correct, there are three missteps in thinking that radically alter the conclusion.

The government shouldn’t regulate your body, but it should regulate what you do with your body

I agree that politicians should stay out of the private affairs of law-abiding citizens. The government has no business forcing people to do — or not do — things to their body. What the government can do, though, is regulate what people do with their bodies. For example, we have laws against using your body to assault another person. The government, in this case, is regulating a part of your body — your fists. We also have laws preventing you from killing another innocent person, thereby regulating your body another way. In both of these examples, you’ll notice we find it reasonable for the government to regulate what you do with your body in a particular instance: whenever you use it to harm another person. That brings us to the next point.

What is done during an abortion is not done to the woman’s body, but to another person’s body.

The unborn is not part of the mother’s body, like her appendix, tonsils, or uterus. Those parts belong to the woman. When they’re surgically removed (denoted by the addition of the suffix “-ectomy”), we recognize that part of a woman’s body has been removed. An appendectomy removes the woman’s appendix, a tonsillectomy removes a woman’s tonsils, and a hysterectomy removes her uterus. But if the unborn is just part of the mother’s body, then what part of the woman is missing after an abortion? We know a mother has not lost any body part after such a procedure. That’s because the unborn is not part of her body, but it’s her child’s body. An abortion doesn’t merely affect her body, but another body that has been growing inside her own.

That the unborn is a unique individual human being is also proven by the science of embryology. From the moment of conception, the unborn’s DNA is different from the mother, a detail that forensic scientists use to distinguish between different people. The unborn also has its own fingerprints, heart, and brain. The unborn can also be conceived outside of the mother’s body — in a laboratory dish — and placed inside her uterus days later. That’s proof it’s not her body, but another body being implanted in her womb.

This fact makes the first point even more relevant. If it’s reasonable for the government to regulate what you do with your body when you harm another person, then abortion can also be regulated (or prevented). That’s because the unborn is another body and abortion clearly harms that body.

The demand for equality should not grant a woman the right to an abortion, but restrict her ability to get an abortion.

If women want equal treatment — and I agree they should get it — then they should be prevented from procuring an abortion. After all, men are prevented from killing an innocent human being. Equality cannot exist until women are prevented from doing the exact same thing. All that pro-lifers are asking is for the law to be applied equally to both men and women.

Currently, the law does not prohibit abortion. What the pro-life community demands is consistency. Men can’t kill a toddler on a playground. Women can’t either. Laws regulate what men and women can and can’t do to toddlers. That’s consistent. But although a man can’t kill a woman’s unborn child, a woman can kill the very same child if she desires. That’s not consistent. We’re not asking the government to regulate what a woman can do to her own body, but to regulate what she can do with her body, especially when it involves killing an innocent human being. That’s genuine equality for men, women, and unborn children.


Copyright 2017 Stand to Reason. Republished with permission.

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Why It’s Important to Inoculate (Rather Than Isolate) Our Young People

One Sunday, after the morning church service, I picked my daughter up from the youth ministry where she was still visiting with her pastor, his wife and their two baby daughters. The twins were five months old and were sleeping peacefully in their strollers, even though the room was filled with activity. Students were running back and forth, laughing with one another and playing the worship instruments on the stage. Music was blaring through the PA system and one student was even pounding on the drum set.

Through all of this, the babies seemed undeterred. They slept as though they were nestled in the corner of a quiet library. Their mother, Rachael, noticed my interest and said, “Don’t worry about them, they can sleep through anything, they’ve been in this group since the day they were born. They’re used to the noise.” I struck me that Rachael’s babies were a great example of our need to inoculate Christian students rather than isolate them from the noise of our culture.

As a parent of teens, a former youth pastor and now a Christian Case Maker, I’ve given this issue a lot of thought over the years, especially after my first year as a youth leader. In my early years in youth ministry, I witnessed the spiritual exodus of many of my students once they graduated from our youth group. I had to make a decision about my strategy going forward. How could I best prepare young people to face the challenges of the secular culture?

Should I equip them with strategies to isolate themselves from the influences they would ultimately face, or would it be better to expose them to the cultural challenges from the onset? Should we encourage isolation or embrace inoculation? I think you probably know my preference. Youth pastors need to think of themselves as “inoculators”: we possess the one true cure that can protect our students from the hazards of the culture. Have we been preparing them in our ministries or simply pacifying them? If we want to move from “entertaining” to “intentional training,” we’re going to need to become good inoculators.

Good Inoculators Prepare Their Inoculation

Inoculations are created from small quantities of the virus we are trying to treat. We expose patients to the virus in a limited, controlled way to allow their immune systems to develop the antibodies necessary to fight the virus should they encounter it more robustly in the future. If we are trying to help students resist the lies of the culture, we’re going to need to prepare an inoculation that exposes them to the secular worldview.

Good Inoculators Have Supply On Hand

Doctors can’t provide an inoculation unless they have a supply from which to draw. If we want to inoculate our students from the false teaching of the culture, we’re going to have to stock up our dispensaries with all the training materials necessary for the task. This means many of us, as youth pastors are going to need to start training ourselves so we will have a deep well from which to draw. We’re going to have to become good Christian Case Makers if we hope to be good inoculators.

Good Inoculators Treat Prior to Exposure

Inoculations are useless once the patient have been exposed to the virus. Inoculations must precede exposure in order to be effective. That’s why we need to start training young Christians very early in order to help them resist the influences of the culture. You might not think junior-highers are capable of (or even interested in) Christian Case Making, but you’re wrong. If we take an approach that is accessible and relevant, we can engage young people on the toughest issues facing us as Christians.

Good Inoculators Are Careful About Dosage

Doctors use a very small dose in order to train the body to resist greater exposure. We need to do something similar as we train young people to resist errant thinking. Start small; begin training logic and critical thinking. Then move on the evidences that support our beliefs as Christians. Finally, begin to address the claims of the culture and the objections to the Christian worldview. Begin modestly, but allow yourself time to eventually address the most critical and vigorous objections. Be careful not to create straw men you can easily overcome; represent the opposing views faithfully and richly. Then take the time to demonstrate the fallacies.

Young people are going to encounter doubts about their Christian worldview. All of us have questions at one time or another. It was my goal as a youth pastor to make sure my students didn’t encounter a single objection in their secular environment they didn’t first encounter (and address) in my youth ministry. I tried to make sure my students weren’t surprised by anything a professor or fellow student might offer. I wanted my students to be fully inoculated and prepared to make a case for Christianity and be a good ambassador for Christ; to stand confidently in a noisy world, just like Rachael’s babies. I knew I couldn’t accomplish that by isolating and entertaining them. Instead I tried to expose my students to the cultural “noise” in an effort to inoculate and train them.

J. Warner Wallace is a Cold-Case Detective, a Christian Case Maker, and the author of Cold-Case ChristianityCold-Case Christianity for KidsGod’s Crime Scene, and Forensic Faith.


Copyright 2017 Cold-Case Christianity. Republished with permission.

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Caterpillar seeks ex-U.S. attorney general’s help over govt probe

Caterpillar Inc (CAT.N) has tapped former U.S. Attorney General William Barr to help the company address an ongoing government investigation of its import and export practices.

Earlier this month, U.S. law enforcement officials raided three of the heavy machinery manufacturer’s Illinois facilities as part of an Internal Revenue Service probe related to profits earned by the company’s Swiss parts unit, Caterpillar SARL.

The IRS has demand that the company pay $2 billion in taxes and penalties for profits assigned to the Swiss unit.

The unit was also the subject of a 2014 Senate committee report that concluded Caterpillar shifted billions in profits abroad and had $2.4 billion in taxes deferred or avoided from 2012.

“I have asked Bill – who has no prior connection with Caterpillar – to draw on his experience … to take a fresh look at Caterpillar’s disputes with the government,” Chief Executive Jim Umpleby said in a statement on Thursday.

Barr served as the 77th attorney general when George H.W. Bush was president. Before that he was the deputy attorney general and assistant attorney general in charge of the U.S. Department of Justice’s Office of Legal Counsel.

He also served for over 14 years as executive vice president and general counsel of Verizon Communications Inc (VZ.N).

(Reporting by Ankit Ajmera in Bengaluru; Editing by Maju Samuel)

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Wall Street slips with healthcare stocks, Nasdaq flat

NEW YORK U.S. stocks slipped on Thursday pressured by healthcare shares as traders cashed in gains from one of the best performing sectors so far this year.

Proposals in President Donald Trump’s budget signaled higher regulatory costs for the sector and a cut in federal funding for medical research. Though still a ways away from becoming a reality, they gave traders a reason to sell.

The SP 500 healthcare index .SPXHC dropped 0.9 percent.

Financials .SPSY outperformed in a rebound after the sector was the worst performer on Wednesday and as the benchmark U.S. Treasury note yield rose, while utilities .SPLRCU weakened.

Biogen (BIIB.O) weighed down the SP 500, falling 4.7 percent to $278.96 after two brokerages downgraded the stock.

“Healthcare is being dragged down by equipment and supplies, biotechnology, and tools and services. These sectors have actually done quite well year-to-date, so this is just a little speed bump,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

“There’s a push and a pull with these stocks as the President has promised to accelerate the (drug and device) approval process, but now he’s proposing to cut the budget of the FDA, which could make it difficult to get expedited approvals.”

The Dow Jones Industrial Average .DJI fell 15.55 points, or 0.07 percent, to close at 20,934.55, the SP 500 .SPX lost 3.88 points, or 0.16 percent, to 2,381.38 and the Nasdaq Composite .IXIC added 0.71 point, or 0.01 percent, to 5,900.76.

Oracle (ORCL.N) surged to a record high of $46.99 before closing up 6.2 percent at $45.73, after it posted a better-than-expected quarterly profit.

Tyson Foods (TSN.N) slipped 1.7 percent to $62.00 on news that a form of bird flu that is highly lethal for poultry had infected a second farm that supplies Tyson.

Advancing issues outnumbered declining ones on the NYSE by a 1.29-to-1 ratio; on Nasdaq, a 1.49-to-1 ratio favored advancers.

The SP 500 posted 52 new 52-week highs and one new low; the Nasdaq Composite recorded 145 new highs and 52 new lows.

About 6.60 billion shares changed hands in U.S. exchanges, below the 6.96 billion daily average over the last 20 sessions.

(Additional reporting by Sinead Carew; Editing by James Dalgleish)

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Snap shares drop 4 percent, fall below $20 for the first time

SAN FRANCISCO Snap Inc shares tumbled below $20 on Thursday for the first time since the company’s $3.4 billion public listing after the Snapchat owner received another “sell” rating from an analyst.

The social media company this month pulled off the hottest technology offering in three years, but after two days of explosive gains its stock has steadily retreated from a peak of more than $29 as investors worry about Snap’s high valuation and lack of profitability.

Snap was down 4 percent at $19.92 in afternoon trade.

(For a graphic on Snap Inc since its IPO, click

MoffettNathanson analyst Michael Nathanson on Thursday launched coverage of Snap with a “sell” rating, warning in a note that “the market has priced SNAP for perfection.”

Others on Wall Street have flagged Snap’s slowing user growth, widening losses and lack of voting rights for outside investors. Snap has warned it may never be profitable.

Including Nathanson, six analysts recommend selling shares of Snap, while three have neutral ratings and none recommend buying, according to Thomson Reuters data.

The stock remains up 17 percent from its $17 IPO price set on March 1.

(Reporting by Noel Randewich; Editing by Meredith Mazzilli)

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NAR HOME Survey: Economic, Financial Optimism Surges; Renters Lukewarm About Buying

WASHINGTON (March 15, 2017) — Multiple years of uninterrupted job gains and hope that the best is yet to come in 2017 are igniting consumer confidence across the country, and especially in rural and middle America, according to new consumer survey findings from the National Association of Realtors®. The survey additionally found a growing disparity among renters who think it’s a good time to buy and homeowners who think it’s a good time to sell. 

In NAR’s ongoing quarterly Housing Opportunities and Market Experience (HOME) survey 1, respondents were asked about their confidence in the U.S. economy and various questions about their housing expectations.

In the first three months of 2017, the share of households believing the economy is improving soared to its highest share in the survey’s five-quarter history (62 percent), and is up from 54 percent last quarter and 48 percent in March 2016.

In an extraordinary reversal from previous quarters, NAR Chief Economist Lawrence Yun says the surge in positive sentiment about the economy is primarily from respondents living in the Midwest (67 percent; 51 percent last quarter) and rural areas (63 percent; 43 percent last quarter). Last March, only 49 percent of Midwesterners and 35 percent of those living in rural areas thought the economy was improving.

“Confidence levels generally rise after a presidential election as the nation hopes for the best. Even though it is a highly polarized country, consumers for the most part have upbeat feelings about the economy right now,” he said. “Stronger business and consumer morale typically lead to even more hiring and spending, which in turn encourages more households to make big decisions like buying a home. These positive developments would be especially good news for prospective homebuyers in the more affordable Midwest region.”

Higher confidence in the economy is also translating to better feelings about households’ financial situation. The HOME survey’s monthly Personal Financial Outlook Index 2 showing respondents’ confidence that their financial situation will be better in six months, jumped to its highest reading in the survey, climbing to 62.6 in March from 59.8 in December 2016. A year ago, the index was 58.1.

Affordability and inventory challenges dimming renter optimism

On the cusp of the busy spring season, most households believe now is a good time to buy a home. However, confidence continues to trickle backwards among renters. Fifty-six percent of renters said now is a good time to buy, which is down both from last quarter (57 percent) and a year ago (62 percent). Eighty percent of homeowners (78 percent in December 2016; 82 percent in March 2016) think now is a good time to make a home purchase. Younger households, renters and those living in the costlier West region – where prices continue to spike – are the least optimistic.

“Inventory conditions are even worse than a year ago 3 and home prices and mortgage rates are on an uphill climb,” added Yun. “These factors are giving many renter households a pause about it being a good time to buy, even as their job prospects improve and wages grow. Unless there’s a significant boost in supply levels this spring, these constraints will unfortunately slow or delay some prospective buyers’ pursuit of purchasing a home.”

Led by the West, more homeowners view selling favorably right now

One promising trend that could alleviate supply shortages is the notable bump in the share of respondents this quarter who believe now is a good time to sell a home. Sixty-nine percent of homeowners think now is a good time to sell, which is up from last quarter (62 percent) and a year ago (56 percent). Continuing the trend over the past year, those in the West continue to be the most likely to think now is a good time to sell (77 percent), while also being the least likely to think it’s a good time to buy (61 percent).

NAR President William E. Brown, a Realtor® from Alamo, California, says homeowners looking to trade up or move down this spring could find themselves in a tricky spot without careful planning and a reliable expert on their side. “Demand far outpaces supply in many parts of the country right now, which means homeowners will likely sell their home much quicker than the time it takes to buy another,” he said. “Before listing, it’s best to have a carefully crafted plan in place. In addition to assisting in the hunt for a new home, a Realtor® is an invaluable negotiating partner in the common situation where a buyer’s new home purchase is contingent upon selling their property currently up for sale.”

About NAR’s HOME survey

In January through early March, a sample of U.S. households was surveyed via random-digit dial, including half via cell phones and the other half via land lines. The survey was conducted by an established survey research firm, TechnoMetrica Market Intelligence. Each month approximately 900 qualified households responded to the survey. The data was compiled for this report and a total of 2,698 household responses are represented.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1 NAR’s Housing Opportunities and Market Experience (HOME) survey tracks topical real estate trends, including current renters and homeowners’ views and aspirations regarding homeownership, whether or not it’s a good time to buy or sell a home, and expectations and experiences in the mortgage market. New questions are added to the survey each quarter to reflect timely topics impacting real estate.

HOME survey data is collected on a monthly basis and will be reported each quarter. New questions will be added to the survey each quarter to reflect timely topics impacting the real estate marketplace. The next release is scheduled for Monday, June 12, 2017 at 10:00 a.m. ET.

2 Index ranges between 0 and 100: 0 = all respondents believe their personal financial situation will be worse in 6 months; 50 = all respondents believe their personal financial situation will be about the same in 6 months; 100 = all respondents believe their personal situation will be better in 6 months.

3 Total housing inventory at the end of January was at 1.69 million existing homes available for sale, which is 7.1 percent lower than a year ago (1.82 million) and has fallen year-over-year for 20 straight months.

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Dollar crunched, bonds boosted as Fed goes gradual

SYDNEY The dollar nursed bitter losses in Asia on Thursday while sovereign bonds savored their biggest rally in nine months after the Federal Reserve hiked interest rates as expected but signaled no pick up in the pace of tightening.

The euro got an added bonus when exit polls showed the anti-EU party of Geert Wilders won fewer seats than expected in Dutch elections, soothing fears that public opinion was swinging inexorably toward a break-up of the union.

The sigh of relief was heard across Asia as investors had feared faster U.S. hikes and more political upheaval in Europe could spook funds out of emerging markets.

“The Fed makes the world safe for risk until June,” said CitiFX strategist Steven Englander. “Buy emerging market FX, equities, commodities.”

Somebody seemed to be listening as gold, copper and oil all rallied as the dollar dropped. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.7 percent to its highest since mid-2015.

The Dow .DJI had ended Wednesday with gains of 0.54 percent, while the SP 500 .SPX added 0.84 percent and the Nasdaq .IXIC 0.74 percent.

Japan’s Nikkei .N225 looked set to go the other way as a jump in the yen pressured exporters. Futures pointed to an opening drop of more than 100 points JNIc1.

The Fed lifted its funds rate by 25 basis points to a range of 0.75 percent to 1.00 percent, but said further increases would only be “gradual.”

Crucially, officials stuck to their outlook for two more hikes this year and three more in 2018, when many had expected an accelerated spate of moves.

Rather, the Fed said its inflation target was “symmetric,” indicating that after a decade of below-target inflation it could tolerate a quicker pace of price rises.

That was painful news for bond bears who had built up huge short positions in Treasuries in anticipation of a hawkish Fed.


Yields on two-year notes US2YT=RR were down at 1.30 percent, having fallen 8 basis points overnight in the biggest daily rally since June last year. They had been at their highest since June 2009.

The drop pulled the rug out from the dollar, which sank to a three-week low of 100.540 against a basket of currencies .DXY.

The euro was taking in the view at $1.0735 EUR=, having climbed 1.2 percent overnight in its steepest rise since June. The dollar suffered similar losses on the yen to huddle at 113.37 JPY= in early trade.

Richard Franulovich, a forex analyst at Westpac, noted history showed a strong positive correlation between the dollar and yields one week after a Fed meeting and the direction and magnitude of the change in the dots from meeting to meeting.

“The absence of any overt hawkish guidance from the Fed and their dots should leave the dollar trading on the back foot over the next month,” he said.

The yen and the Swiss franc tended to move the most in the first week, he added, but the impact tended to be longer lasting on the Australian and Canadian dollars.

Indeed, the Aussie currency rose a rousing 2 percent on Wednesday to stand at $0.7710 AUD=D4.

A protracted bout of weakness for the U.S. dollar would be seen as positive for commodities priced in the currency.

Spot gold XAU= was up at $1,218.46 an ounce, after enjoying its biggest daily jump since September.

U.S. crude futures CLc1 rose 25 cents to $49.11 per barrel, adding to a 2.4 percent gain on Wednesday. Brent LCOc1 stood at $52.00, after rising more than a dollar overnight.

(Editing by Richard Borsuk)

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Tesla to raise about $1.15 billion in stock, notes; Musk to buy shares

SAN FRANCISCO Tesla Inc (TSLA.O) said on Wednesday it expects to raise about $1.15 billion from a stock and senior notes offering, an infusion of needed capital as the electric car maker enters pre-production of its upcoming Model 3 electric sedan.

A capital raise by Tesla has been anticipated since late last year, gaining steam last month after Chief Executive Elon Musk said the company could be “close to the edge” on cash needs.

Some Wall Street analysts had predicted that Tesla would seek to raise as much as $2.5 billion in capital.

Tesla has repeatedly turned to Wall Street for fresh capital throughout its history. It has had negative cash flow since 2014 and has posted a quarterly profit only twice since going public.

Tesla had $3.39 billion in cash and cash equivalents at the end of 2016, but most comes from a May stock offering, cash from its SolarCity acquisition and nearly $1 billion in draws on its credit facilities.

Tesla’s warning that it would spend $2 billion-$2.5 billion in the first half of 2017 in capital expenditures left little cushion at a critical time ahead of its Model 3 production, which the company says will begin in July.

The company’s shares, which are down 9 percent since a 52-week year high in February, rose 2.1 percent to $261.11 in after-hours trade.

Tesla said it would offer $250 million of common stock and $750 million of convertible senior notes due in 2022 in concurrent underwritten registered public offerings.

Tesla said it would use the proceeds to “strengthen its balance sheet and further reduce any risks associated with the rapid scaling of its business due to the launch of Model 3, as well as for general corporate purposes.”

The Silicon Valley-based company also said Musk will participate by purchasing $25 million of the company’s stock.

(Reporting By Alexandria Sage and Ankit Ajmera in Bengaluru; Editing by Bernard Orr)

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Fed raises rates as job gains, firming inflation stoke confidence

WASHINGTON The U.S. Federal Reserve raised interest rates on Wednesday for the second time in three months, a move spurred by steady economic growth, strong job gains and confidence that inflation is rising to the central bank’s target.

The decision to lift the target overnight interest rate by 25 basis points to a range of 0.75 percent to 1.00 percent marked a convincing step in the Fed’s effort to return monetary policy to a more normal footing.

Fed Chair Janet Yellen pointed to growing faith in the economy’s trajectory.

“We have seen the economy progress over the last several months in exactly the way we anticipated,” Yellen said in a press conference following the end of a two-day policy meeting. “We have some confidence in the path the economy is on.”

The Fed also stuck to its outlook for two additional rate increases this year and three more in 2018. The central bank lifted rates once in 2016.

Stock markets extended gains .SPX and bond yields fell on the benign economic outlook and the continued steady path of rate rises signaled by the central bank. The dollar .DXY was trading lower against a basket of currencies.

Fed policymakers noted that inflation was now “close” to the central bank’s 2 percent target, and that business investment had “firmed somewhat” after months of weakness.

However, they did not flag any plan to accelerate the pace of monetary tightening, with the policy-setting committee reiterating and Yellen emphasizing that future rate increases would be “gradual.” At the current pace, rates would not return to a neutral level until the end of 2019.

Rather, the Fed’s statement said the inflation target was “symmetric,” indicating that after a decade of below-target inflation it could tolerate a quicker pace of price rises.

“It relieves some of the fears we’ve had that perhaps the Fed was going to raise rates faster in the future. They’ve chosen not to signal that,” said Brad McMillan, chief investment officer at Commonwealth Financial.


Labor groups have urged the Fed to raise rates as slowly as possible so hiring can continue and wage increases take hold.

U.S. job gains have averaged 209,000 per month over the past three months, well above the 75,000 to 100,000 needed to keep up with growth in the working-age population. The jobless rate is 4.7 percent, at or near a level consistent with full employment.

The Fed projected that the unemployment rate would fall to 4.5 percent this year and remain at that level through 2019.

Yellen, who has consistently said that the Fed was better equipped to fight inflation than a fresh downturn or surge in joblessness, did not rule out inflation edging above target.

“This seemed like a good time to remind Americans that … sometimes it (inflation) is going to be below 2 percent, sometimes it is going to above 2 percent,” Yellen told reporters. “Two percent is not a ceiling.”

Fresh economic forecasts released with the statement were largely unchanged from those of the December policy meeting and gave little indication the Fed has a clear view of how President Donald Trump’s policies may impact the economy.

“We have not discussed in detail potential policy changes that could be put into place and we have not tried to map out what our response would be,” Yellen said. “We have plenty of time to see what happens.”

She added that she had held meetings with Treasury Secretary Steven Mnuchin, and met with Trump once since he took office.

The Fed’s projections showed the economy growing 2.1 percent in 2017, unchanged from its December forecast. The median estimate of the long-run interest rate, where monetary policy would be judged as having a neutral effect on the economy, held steady at 3.0 percent.

Core inflation was seen as slightly higher at 1.9 percent versus the previous 1.8 percent forecast.

The rate increase came amid a broad improvement in the world economic outlook and a sense among Fed policymakers that the U.S. economy is close to the central bank’s employment and inflation goals.

According to the policy statement, the risks to the outlook remained “roughly balanced.”

Minneapolis Fed President Neel Kashkari was the only official to dissent in Wednesday’s decision, saying he preferred to leave rates unchanged.

(Reporting by Howard Schneider and Jason Lange; Editing by Paul Simao and David Chance)

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Menstruating Men and the Latest Examples of Transanity

Have you heard about Toni the Tampon who teaches children that men can get periods too? Or about the mother and son who are about to become father and daughter? What about the transgender pastor who teaches that God is transgender?

This morning, as I was planning to write this very article, I received three emails from three different friends in three different parts of the country, all with links to different news headlines on major news websites, all with one theme in common: radical transgender activism. In fact, the links were to the three stories I mentioned here. My reply to each person was the same: This will be included in my latest article!

Transanity at Our Door

You see, this is something knocking at our doors, not something we went looking for. This is something being reported in the NY Post and the Daily Mail, which are major news outlets, albeit with a touch of sensationalism. This is what our kids are dealing with in their schools, what’s coming their way (and ours) via Hollywood, what’s being debated from the White House down to the local courthouse.

That’s why I address these issues, and that’s why I’ll continue to sound the wake-up call to our nation: There is an all-out war on sexual difference (often referred to as “gender”), and if it wins the day, it will lead to societal chaos.

But first, my standard caveat. We’re not just dealing with issues, we’re dealing with people. Some of them have biological or chromosomal abnormalities and are classified as intersex, and do not fit conveniently into our simple male or female boxes. We should treat them with compassion and respect, helping them find wholeness, just as we would treat anyone else with a physical handicap or defect.

Others – perhaps the larger number and the more vocal – are not intersex and simply suffer from gender identity confusion (now called gender dysphoria, primarily due to political pressure put on the APA by transgender activists). They too deserve our compassion (who can imagine the pain they have lived with?), but compassion calls us to dig deeper and helps us get to the root cause of their struggles, with the goal being transformation from the inside out (rather than from the outside in).

So, I do not write to mock or to degrade others in their struggle. I write to say (in loud, bold terms): God has a better way!

Five Recent Examples of Transanity

Here, then, are 5 recent examples of transanity.

1) Dr. Susan Berry reports, “The author of a children’s coloring book has invented a character named ‘Toni the Tampon’ to instruct children that men can menstruate.

“Cass Clemmer, the author of The Adventures of Toni the Tampon, has been using her coloring book character to ‘destigmatize’ menstruation. Now, however, she also wants to ‘de-gender’ the female biological process and to persuade children that men get periods too.”

Note to Cass: Men do not get periods, because menstruation is the result of ovulation, when the ovaries release an egg for fertilization. As explained by the Mayo Clinic, “If ovulation takes place and the egg isn’t fertilized, the lining of the uterus sheds through the vagina. This is a menstrual period.”

Fact: A man doesn’t have a uterus or a vagina or ovaries or eggs, which is why men can’t menstruate. Toni the Tampon is hereby corrected!

And sorry, Toni, but saying that a woman (especially one who still has her female organs intact and still menstruates) who identifies as a man is now a man is like saying that a woman who dresses up as her team’s tiger mascot is actually a tiger. Not so!

2) An article on LGBTQ Nation announces, “Father daughter both come out as transgender, will transition together.” So, this is about a man and his daughter who now want to become a woman and a boy, right? Not at all. It’s about a mother and her son who want to become a man and a girl, yet the article refers to them as “father and daughter.”

On the one hand, I would encourage Christian conservatives to read this article, since it forces us to look at people and not just issues, and it’s hard not to feel pain for these two as they share their stories.

It’s not like they’re perverted sinners engaging in all kinds of horrific acts. Rather, they both have struggled deeply with their gender identity, with the mother saying, “When I was younger I used to wish for cancer so I would have to get a mastectomy.”

But compassion would say, “Let’s find out why you have struggled so deeply with a being a woman,” (and to the son, “Let’s find out why you have struggled so deeply with a being a boy”). In contrast, confusion says, “The woman has become this child’s father because she no longer identifies as a woman, and the son has become her daughter because he no longer identifies as a boy.”

May God help this family.

3) The Christian Post reports that a transgender pastor who opposes Texas’s bathroom bill teaches that “God is transgender.”

This pastor argues, “In the beginning, God created humankind in God’s image. … So God is transgender. We’re all created in the image of what is holy and divine and sacred, and we should all be treated that way.”

I addressed this deeply mistaken notion last year in my article, “A Rabbi Claims That God Is Transgender.” But in short, Genesis 1 does not teach that God is transgender (because He creates human beings in His image, male and female), any more than it teaches that God has sexual body parts or that He physically procreates.

Rather, it teaches that the fullness of male and female distinctives are found in Him, which does not mean that God is not transgender. Rather, it means that He transcends gender. And so, while male pronouns are used to describe and refer to Him, and while He is called the heavenly Father (not Mother), He can be likened to a compassionate mother, because, as stated, as an eternal Spirit, He transcends gender categories.

More importantly – really, much more importantly when it comes to the bathroom controversies – in the beginning He created us as male and female and called us to procreate (“Be fruitful and multiply”), which only a distinct male and a distinct female can do. There is no ambiguity here, nor is there ambiguity regarding male and female distinctives throughout the entire Bible.

4)  Over at College Fix, we learn that “U. Minnesota drops homecoming ‘King and Queen’ — replaces with genderless ‘Royals’.”

Yes, “The University of Minnesota has become the latest university to do away with the traditional Homecoming King and Queen titles and replace them with the gender-neutral ‘Royals’ term.

“Taking it one step further, University of Minnesota officials also point out that the winners don’t even have to be one biological male and one biological female, stating on its website: ‘“Royals”… can be any combination of any gender identity.”

This kind of cultural insanity is so absurd that simply repeating these words is enough to expose the madness.

But there’s more: “Campus officials called the change a move ‘toward gender inclusivity’ that promotes ‘a spirit of inclusion at the University of Minnesota.’”

This is not “a spirit of inclusion”; this is a spirit of confusion.

5) Finally, an article on Vice tells the story of “The Trans Women Who Become Lesbians After Years as Gay Men.” (The article, which contains offensive language, actually celebrates this, noting, “There aren’t many people who are fortunate enough to have lived their lives first as gay men and later as lesbian women.”)

So, this is the story of biological men, who then identified as women, but who discovered they were attracted to women, and who now identify as lesbians.

The better course of action would have been to identify as biological males (which they are) who are attracted to women, as the vast majority of biological males are. But no. These biological males who have normal attractions to women now identify as lesbians.

This is why these examples of “transanity,” and this is why I will continue to raise my voice. The madness must stop. God has a better way.

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Justice Department Sued for Records About Lynch’s Tarmac Meeting With Clinton

In this Feb. 25, 2016, file photo, U.S. Attorney General Loretta Lynch testifies before the Senate Appropriations Committee on Capitol Hill in Washington, D.C.


Published on March 15, 2017

Judicial Watch filed a lawsuit Wednesday against the Department of Justice for records related to the meeting between then-Attorney General Loretta Lynch and former President Bill Clinton while his wife was under an FBI investigation in the 2016 presidential campaign.

The conservative nonprofit watchdog group filed the suit after the Justice Department failed to respond to a June 29, 2016, Freedom of Information Act (FOIA) request seeking transcripts of the June 2016 meeting, communications regarding the encounter, and any references to the meeting in Lynch’s calendar.

“The infamous tarmac meeting between President Clinton and AG Lynch is a vivid example of why many Americans believe the Obama administration’s criminal investigation into Hillary Clinton was rigged,” Judicial Watch President Tom Fitton said.

“Now it will be up to Attorney General Sessions at the Trump Justice Department to finally shed some light on this subversion of justice,” Fitton said.

Clinton and Lynch met privately on a plane parked at the Phoenix Sky Harbor International airport on June 27, 2016. The FBI was investigating a private email server Clinton’s wife and then-Democratic presidential nominee Hillary Clinton used during her time as secretary of state. The FBI interviewed her just days after her husband met with Lynch.

Lynch admitted that the meeting “cast a cloud” over the investigation. Clinton was not punished for what FBI Director James Comey called “extremely careless” actions surrounding her server.

Judicial Watch also requested the Justice Department’s inspector general investigate the meeting. The watchdog group also filed a lawsuit in October seeking FBI interviews into Clinton’s email practices, related communications, and records regarding the tarmac meeting.


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McDonald’s, late to mobile ordering, seeks to avoid pitfalls

CHICAGO McDonald’s Corp this month will begin testing its long-awaited U.S. mobile ordering app with the goal of avoiding the kinds of service hiccups that have haunted digital debuts by companies such as Starbucks Corp.

Digital ordering has been challenging for many restaurant chains and their customers. Domino’s Pizza Inc, now the industry leader, took years to perfect it. Starbucks’ technology took far less time, but in January the chain said mobile orders poured in faster than they could be processed, creating backlogs that drove away time-crunched walk-in customers.

McDonald’s sees mobile as a way to win back customers after four straight years of traffic declines, but the project is not without risks.

“We can’t impact the speed or the quality of our food,” Jim Sappington, McDonald’s executive vice president of operations, digital and technology, told Reuters in an interview at a temporary warehouse space in Chicago’s West Loop where the company has built a new high tech restaurant. It features a redesigned kitchen to speed order flow and show off its technology initiatives.

If its famous french fries are served cold or if mobile customers have to wait for orders, “you get a question of ‘Why did I use the app?’,” Sappington said. “Our focus is to make the overall experience clearly better.”

McDonald’s said that automating more orders should cut transaction times, reduce errors and free up workers to do things like deliver food to tables or cars in spots designated for mobile orders.

“It’s better to be right than to be first to market,”

McDonald’s Chief Executive Steve Easterbrook said recently.

To that end, Sappington plans multiple pilot tests to work out any kinks and streamline the integration with the company’s existing technology systems before rolling out the finished app in nearly all 14,000 U.S. restaurants and some 6,000 others in Canada, the UK, France, Germany, Australia and China, by the end of this year.


Kitchens are the heart of McDonald’s business and crucial to the success of mobile ordering.

“The potential is that they can screw up the flow of the whole restaurant,” said Janna Sampson, co-chief investment officer at Oakbrook Investments LLC, which holds 65,000 McDonald’s shares. McDonald’s appears to be taking steps to protect itself from kitchen hiccups, she added. McDonald’s is bringing restaurant operators to its Chicago warehouse space to show off a “hub and spoke” kitchen layout developed in French restaurants after the installation of self-service ordering kiosks.

Among other things, that kitchen system clusters food preparation to increase efficiency, shaving miles off the daily distances covered by a restaurant’s crew.

Franchisees who operate most U.S. McDonald’s restaurants will be tasked with sorting out the human elements of mobile ordering – namely how to best adjust kitchen layouts, work flows and staffing, said Richard Adams, a former McDonald’s franchisee who now advises McDonald’s restaurant operators.

Unlike many others, McDonald’s app will track a customer’s location to ensure that orders are sent to the right restaurant and timed so that food is not left to wilt under heat lamps.

When the customer arrives at the restaurant, the app asks for confirmation and payment before sending orders to the kitchen.

“If they don’t start your order until you pull in the lot, are you really gaining that much time?” investor Sampson asked.

The final version of the app will also ask customers to choose table service, counter or drive-through pickup, or curbside delivery.

Easterbrook said that if 20 percent of drive-through customers use curbside and another 20 percent use the lanes for pickup only, restaurants could serve another 20 cars per hour, lifting business at U.S. drive-throughs that account for some 70 percent of U.S. sales.

(Reporting by Lisa Baertlein, editing by Peter Henderson and Cynthia Osterman)

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Energy drags on Wall St. as oil falls further; airlines slide

U.S. stocks fell on Tuesday as oil prices dropped to their lowest since November and airlines pulled industrial stocks down as a blizzard hit the U.S. Northeast.

Hospital operator shares were hit after a nonpartisan research report showed 14 million Americans would lose medical insurance by next year under a Republican proposal.

Trading volume was light ahead of a Federal Reserve statement due on Wednesday in which the U.S. central bank is expected to raise interest rates by 25 basis points.

Airline stocks dropped as a blizzard swept through the heavily populated northeastern United States, grounding thousands of flights. United Continental (UAL.N) fell 4.7 percent to $66.55 while Southwest Airlines (LUV.N) dropped 3.0 percent and American Airlines (AAL.O) lost 2.7 percent.

Oil prices slid to the lowest since late November after OPEC reported a rise in global crude inventories and raised its forecast of production in 2017 from outside the group, suggesting complications in an effort to clear a glut and support prices.

The SP energy sector .SPNY fell 1.1 percent to close at its lowest since Nov. 4. Chevron (CVX.N) was off 1.8 percent and was the biggest drag on the Dow and the SP 500.

“None of the data you’re getting is good if you’re trying to increase (crude) prices; it doesn’t look like oil supply is diminishing,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

She said energy sector earnings have little upside potential so their stocks’ underperformance is to be expected.

The Dow Jones Industrial Average .DJI fell 44.11 points, or 0.21 percent, to 20,837.37, the SP 500 .SPX lost 8.02 points, or 0.34 percent, to 2,365.45 and the Nasdaq Composite .IXIC dropped 18.97 points, or 0.32 percent, to 5,856.82.

About 6.23 billion shares changed hands on U.S. exchanges, compared with the 6.93 billion daily average over the last 20 sessions.

Shares of hospital operators fell after the U.S. Congressional Budget Office forecast that 14 million Americans would lose medical insurance by next year under a Republican plan to dismantle Obamacare. Among hospital stocks, HCA Holdings (HCA.N) slipped 1.5 percent, Tenet Healthcare (THC.N) fell 3.3 percent, Community Health Systems (CYH.N) shed 2.2 percent and LifePoint Health (LPNT.O) was down 1.5 percent.

Valeant (VRX.N) plunged 10.1 percent to $10.89 after billionaire investor William Ackman said his hedge fund, Pershing Square Capital, sold its entire stake in the company.

Declining issues outnumbered advancing ones on the NYSE by a 1.99-to-1 ratio; on Nasdaq, a 2.09-to-1 ratio favored decliners.

The SP 500 posted 14 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 55 new highs and 60 new lows.

(Reporting by Rodrigo Campos; Editing by Dan Grebler)

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Valeant shares fall as Ackman exit highlights company’s challenges

BOSTON Valeant Pharmaceuticals Inc’s stock price fell to its lowest level in eight years on Tuesday after the abrupt exit of its biggest supporter put renewed focus on the Canadian company’s most pressing problem: raising capital to cut its roughly $30 billion debt pile.

Billionaire investor William Ackman spent more than a year trying to revive Valeant’s stock price by helping to overhaul management, refresh the company’s board, and push for asset sales. But in a surprise move announced on Monday he said he had sold his entire stake, some 27 million shares, and would be leaving the company’s board.

He explained the investment was requiring a “disproportionately” large amount of time and resources. [nL2N1GQ1IN]

This has been his biggest loser since launching his fund in 2004.

On Tuesday, the Canadian company’s U.S. listed shares dropped 10 percent to $10.50, their lowest since May 2009, and a fraction of the near $190 a share Ackman’s Pershing Square Capital Management paid for them in early 2015. He announced his stake in March 2015 and shares surged to $260 a share a few months later.

Probes into its business practices, accounting and drug pricing caused a collapse in Valeant’s shares and the company is now offloading assets to try and pay down debt, amassed during a years-long acquisition spree.

Its new management team refinanced the company’s debt burden last week, giving it more breathing room to repay creditors. Its newly issued notes traded down about 0.8 percentage points on Tuesday.

Last week, Valeant told investors that revenue could fall as much as 8 percent this year but that it had paid down about $1 billion in debt and would put proceeds from the sale of its Dendreon cancer treatment business and three skincare brands for $2.12 billion, announced earlier, to that purpose.

“At Valeant right now, it is all about divestitures,” said Umer Raffat, an analyst at Evercore ISI. The company committed itself to raise some $5 billion in assets from asset sales by the middle of next year.

The company has also mulled selling the surgical tools unit of its Bausch Lomb eye care division and letting go of some additional dermatology brands plus several international businesses.

Ackman played a critical role in trying to push management to sell assets, according to an analyst and three people familiar with his actions.

However, his biggest goal of selling the company’s gastrointestinal unit Salix to Japan’s Takeda was not reached after a disagreement over price, one person said on Tuesday.

There were mixed reactions to Ackman’s exit.

“With … one of its most vocal supporters selling its stake near the low for the past 10 years, we see this as a vote of no confidence for the stock and that things are continuing to go from bad to worse for Valeant,” said Wells Fargo analyst David Maris, who rates the stock an underperform.

But one investor in Ackman’s fund, Pershing Square Capital Management, said his departure could give management more room to act and eventually pave the way for other investors to step back in.

Ackman’s concentrated bets and brash declarations – he once said Valeant would hit $448 a share by 2019 – have made him a polarizing figure on Wall Street with some investors keen to take the opposing view from him.

Hedge funds, which can flip stocks quickly, owned 28 percent of Valeant’s shares at the end of last year, according to data from Goldman Sachs. Valeant has long been one of the hedge fund industry’s favorite bets. But some 9 percent of Valeant’s shares were lent out to short sellers betting that the stock would go down, according to the bank.


Ackman first bought Valeant as a passive investment, saying he was happy with management. He shifted gears a year ago when the company faced several probes.

Ackman secured board seats for himself and a colleague, fired then chief executive Michael Pearson, and helped persuade Joseph Papa to join Valeant as CEO.

He played a significantly more hands-on role than other investors, including activist fund ValueAct, which had helped build the company by recruiting Pearson to the top job years ago.

John Paulson’s Paulson Co, which tends to keep a low profile and serve on few boards, is now Valeant’s biggest investor with ValueAct, which has one board seat, its second largest.

ValueAct did not respond to requests for comment and Paulson could not be reached.

With Ackman and his firm’s vice chairman, Steve Fraidin, stepping off the board at the next annual meeting, there is a question of who might take their seats. It is unclear whether Paulson might put forth a representative or ValueAct, which once had two seats but has been trimming its exposure, might add another person.

(Reporting by Svea Herbst-Bayliss Additional reporting by Caroline Humer and Carl O’Donnell; Editing by Toni Reinhold)

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Intel’s $15 billion purchase of Mobileye shakes up driverless car sector

JERUSALEM/DETROIT Intel Corp (INTC.O) agreed to buy Israeli autonomous vehicle technology firm Mobileye (MBLY.N) for $15.3 billion on Monday in a deal that could thrust the U.S. chipmaker into direct competition with rivals Nvidia Corp (NVDA.O) and Qualcomm Inc (QCOM.O) to develop driverless systems for global automakers.

The pricey acquisition of Mobileye could propel the world’s largest computer chipmaker into the front ranks of automotive suppliers at a time when Intel has been reaching for market beyond its core computer semiconductor business.

It also promises to escalate the arms race among the world’s carmakers and suppliers to acquire autonomous vehicle technology, and could fuel already-overheated valuations of self-driving start-ups.

The stakes are enormous. Last year, Goldman Sachs projected the market for advanced driver assistance systems and autonomous vehicles would grow from about $3 billion in 2015 to $96 billion in 2025 and $290 billion in 2035.

Skeptics have questioned whether auto companies and suppliers will be able to deploy fully self-driving cars safely in the next four years, as several have promised. Investment analysts on Monday raised concerns about the potential synergies between Intel and Mobileye, as well as the acquisition’s price.

Intel has not been a significant player in the sector, although it has invested in at least half a dozen start-up companies developing different components for self-driving systems, from robotics to sensors.

Mobileye brings a broad portfolio that includes cameras, sensor chips, in-car networking, roadway mapping, machine learning, cloud software and data fusion and management.

“This is a tremendous opportunity for them to get into a market that has significant growth opportunities,” said Betsy Van Hees, an analyst at Loop Capital Markets. “Mobileye’s technology is very critical… The price seems fair,” she added.

Still, the industry newsletter Semiconductor Advisors on Monday wrote that Intel’s acquisition of Mobileye indicates a strategic move “very far outside its core business franchise.”

The price is about 21 times expected 2017 revenue, making it more than six times more expensive than the semiconductor industry’s three-year deal average, said B. Riley analyst Craig Ellis. He said the “very expensive transaction” improved Intel’s position in the automated driver assistance market, but left Nvidia the leader on the highest end.

Intel is paying a premium of 60 times Mobileye’s earnings, about four times the premium that Qualcomm is paying to acquire the Netherlands’ NXP.

The $63.54-per-share cash deal represents a premium of about 33 percent to Mobileye’s closing price of $47 on Friday, but below its all-time high closing price of $64.14 in August 2015.

Mobileye’s shares rose 28.2 percent to close at $60.62, while Intel’s shares were down 2.1 percent.

The market for self-driving technology is becoming crowded, including mapping company Here, as well as technology companies ranging from Alphabet Inc’s Waymo (GOOGL.O) to Chinese Internet giant Baidu Inc (BIDU.O).

Shares of systems integrator Delphi Automotive PLC (DLPH.N), which has partnerships with Intel and Mobileye, rose 4.0 percent. Delphi said in a statement that it expected the deal would let it accelerate adoption of new technologies.


Intel has a mixed record of capitalizing on technology outside computer chips. Last year it spun out its cyber security division, formerly known as McAfee, in a deal valuing it at $4.2 billion including debt, five years after having bought McAfee for $7.7 billion.

Intel will give Mobileye unusual autonomy, integrating its own automated driving group with Mobileye’s operations under Mobileye Chairman Amnon Shashua, who will lead the unit from Israel.

Intel Chief Executive Brian Krzanich said the acquisition was akin to merging the “eyes of the autonomous car with the intelligent brain that actually drives the car.”

Mobileye supplies integrated cameras, chips and software for driver-assist systems – the building blocks for self-driving cars – to more than two dozen vehicle manufacturers.

In an interview in January, Shashua told Reuters: “If you want to build a truly autonomous car, this is a task for more than one player… The idea is to have a number of partners to share resources and data.”

Mobileye was an early supplier of vision systems to Tesla, but the two companies had an acrimonious and public break-up last summer after the driver of a Tesla Model S was killed while operating the vehicle using Tesla’s Autopilot system.

Mobileye, founded in 1999, accounts for 70 percent of the global market for driver-assistance and anti-collision systems. It employs 660 people and had adjusted net income of $173.3 million last year.

Shashua and two other senior Mobileye executives stand to do well by the deal: together they own nearly 7 percent of the company. Shmuel Harlap, Israel’s biggest car importer and one of Mobileye’s earliest investors, also holds a 7 percent stake.


Mobileye and Intel are already collaborating with German automaker BMW (BMWG.DE) on a project to put a fleet of around 40 self-driving test vehicles on the road in the second half of this year.

At the same time, Mobileye has teamed up with Intel for its fifth-generation of chips that will be used in fully autonomous vehicles that are scheduled for delivery around 2021. Mobileye also has partnered with Delphi on a self-driving platform that is being shopped to smaller car companies that may not have the resources to develop their own systems.

Last October, Qualcomm announced a $47 billion deal to acquire NXP, the largest automotive chip supplier, putting pressure on other chipmakers seeking to make inroads in the market, including Intel, Mobileye and Nvidia.

The Qualcomm-NXP deal, which will create the industry’s largest portfolio of sensors, networking and other elements vital to autonomous driving, is expected to close later in 2017.

(Additional reporting by Edward Taylor, Eric Auchard, Supantha Mukherjee and Narottam Medhora)

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Wall Street drifts with eyes on Fed; Intel drops

NEW YORK U.S. stocks ended little changed in light volume on Monday, with traders eyeing a Federal Reserve meeting expected to result in an interest rate increase later this week.

The SP 500 traded in its tightest range of the year, in and out of slight losses, while the CBOE Volatility index .VIX was on track to close at its lowest in more than a week.

Shares of Mobileye (MBLY.N) jumped nearly 30 percent to a high of $61.51 after chipmaker Intel (INTC.O) agreed to buy the driverless technology maker for $15.3 billion. Mobileye closed up 28.2 percent at $60.62 and Intel fell 2.1 percent to $35.16.

Investors looked ahead to the Fed’s two-day meeting that starts on Tuesday. Traders saw a 94 percent chance that the U.S. central bank will lift interest rates by 25 basis points on Wednesday.

“Other than the Fed on Wednesday, I don’t see anything going on to make any (investment) decisions on,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

“Intel buying Mobileye is the story of the day, moving into that market sector,” he said, adding that they advised some clients to “fade in” into Intel stocks. “We think this is a very good support point,” said Mendelsohn.

Nvidia (NVDA.O) rose 2.8 percent to $101.85 while Delphi Automotive (DLPH.N) added 4.0 percent to $80.20. Both are involved in developing technology for cars.

The Dow Jones Industrial Average .DJI fell 21.5 points, or 0.1 percent, to 20,881.48, the SP 500 .SPX gained 0.87 point, or 0.04 percent, to 2,373.47 and the Nasdaq Composite .IXIC added 14.06 points, or 0.24 percent, to 5,875.78.

After the bell, U.S.-traded shares of Valeant Pharmaceuticals (VRX.N) dropped 9.3 percent to $10.98 after investor William Ackman, who had been its biggest cheerleader for two years as the share price climbed and then plummeted, on Monday said his hedge fund had sold its entire position.

During regular trading hours, Citrix Systems (CTXS.O) jumped 6.8 percent to $84.93 after Bloomberg reported that the cloud-services company is working with advisers to seek potential suitors.

Wynn Resorts (WYNN.O) gained 4.8 percent to $104.30 after Morgan Stanley reiterated its “buy” rating and said the company could gain a meaningful market share in Macau.

About 6.18 billion shares changed hands in U.S. exchanges, compared with the 6.93 billion daily average over the last 20 sessions.

Advancing issues outnumbered declining ones on the NYSE by a 1.54-to-1 ratio; on Nasdaq, a 1.68-to-1 ratio favored advancers.

The SP 500 posted 39 new 52-week highs and three new lows; the Nasdaq Composite recorded 107 new highs and 48 new lows.

The SP 500’s average true range hit 5.9, its lowest of the year. The year-to-date average of that daily measure of volatility is 14.

(Reporting by Rodrigo Campos; Editing by Meredith Mazzilli and Jonathan Oatis)

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Ackman’s Pershing Square exits ailing investment in Valeant

BOSTON Billionaire investor William Ackman walked away from Valeant Pharmaceuticals International Inc on Monday with a roughly $3 billion loss after he sold his entire stake in the ailing drug company after trying to rescue it for some 18 months.

Ackman’s Pershing Square Capital Management became one of the firm’s biggest investors in 2015 when it sunk some $3.2 billion into the company.

Now he walks away with about $221 million, having sold his entire stake of 18.1 million shares after months of turmoil that have left his fund with two years of double-digit losses and a tarnished reputation.

“We elected to sell our investment and realize a large tax loss which will enable us to dedicate more time to our other portfolio companies and new investment opportunities,” Ackman said in a statement.

Pershing Square was Valeant’s second largest owner after hedge fund Paulson Co, a regulatory filing shows. Hedge fund ValueAct Holdings is the third-biggest owner.

Ackman’s fund bought into Valeant when the stock was trading near $190 a share and he watched it surge to $260 a share during the summer of 2015. But governmental scrutiny of the company’s pricing policies coupled with scandals surrounding Valeant’s specialty pharmacy unit, Philidor, caused the stock price to sharply tumble after August 2015.

On Monday, it closed at $12.11 on the New York Stock Exchange, having fallen 16 percent since January even as many other stocks were climbing again, buoyed by hopes of stronger economic growth and increased merger activity.

During his one year on the board, Ackman replaced Valeant’s CEO, refreshed the board with 10 new directors and worked to pay down some $2.7 billion in debt through the sale of non-core assets. Still, the company’s stock price kept sinking despite hopes that a merger deal might be around the corner.

(Reporting by Svea Herbst-Bayliss; Editing by Bernard Orr and Bill Rigby)

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Prosecutor, Store Lawyer Say Ferguson Video Edited for Film

In this Wednesday, Nov. 26, 2014, file photo, Kush Patel, right, carries out bags of merchandise while helping his uncle Andy Patel, rear, clean up the looting damage from Monday’s riots at his store, Ferguson Market and Liquor, in Ferguson, Mo. The store is disputing a new documentary’s claims that surveillance video suggests Michael Brown didn’t rob the store before he was fatally shot by police in Ferguson.


Published on March 13, 2017

FERGUSON, Mo. (AP) — Surveillance video showing Michael Brown in a Ferguson, Missouri, convenience store in the early hours of the day he was fatally shot by a police officer was heavily edited by a documentary film crew, a prosecutor said Monday.

St. Louis County Prosecuting Attorney Robert McCulloch dismissed the footage from the documentary Stranger Fruit during a news conference. The filmmakers and others say the video suggests Brown, a black 18-year-old, didn’t rob Ferguson Market Liquor before white Ferguson officer Darren Wilson shot him on a neighborhood street in August 2014.

Meanwhile, a lawyer for Ferguson Market Liquor, says he will release an unedited version of the video showing Brown in the store. Attorney Jay Kanzler said he planned to do so Monday after saying on Sunday he wants to disprove the claims that Brown didn’t rob the store on Aug. 9, 2014, just minutes before his death.

The documentary premiered Saturday at the South By Southwest festival in Austin, Texas.

Kanzler also says the video used in the documentary was edited.

About 100 protesters gathered outside the store Sunday night in response to the documentary. The St. Louis Post-Dispatch reports that seven or eight shots were heard, but no injuries reported. Police arrested some protesters and cleared the scene when the market closed.

Prosecutors on Monday charged a St. Louis man with trying to set a Ferguson police car on fire during the protests. Police say Henry Stokes, 44, put a napkin in the gas tank opening of the police car and tried to use a lighter to set it aflame, but fled when police saw him.

One of the filmmakers, Jason Pollock, told The New York Times he believes the footage shows Brown trading a small amount of marijuana for a bag of cigarillos around 1 a.m. on Aug. 9, 2014. The video doesn’t clearly show what was exchanged, but shows Brown leaving behind the cigarillos.

Pollock reasons Brown intended to come back later for the bag of cigarillos. But a lawyer for the store and its employees said no such transaction took place, and that Brown stole the cigarillos when he returned to the store about 10 hours later.

“There was no understanding. No agreement. Those folks didn’t sell him cigarillos for pot. The reason he gave it back is he was walking out the door with unpaid merchandise and they wanted it back,” Kanzler told the New York newspaper.


Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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University Criticized for Banning Weight Scale at Gym


Published on March 13, 2017

A Canadian university is under fire after it removed the weight scale from its gym last week. Carleton University replaced the scale with a sign explaining that the removal is “in keeping with current fitness and social trends,” reports Heat Street.

Bruce Marshall, the manager of health and wellness programs at the college, explained that they removed the scale because it’s not healthy to constantly measure weight.

“Although it can be used as a tool to help measure certain aspects of fitness it does not provide a good overall indication of health and here at athletics we have chosen to move away from focusing solely on bodyweight,” Marshall said.

Some students have come out against the move, claiming that the college is being overly sensitive.

Aaron Bens, a communication and media studies student, found the decision to be “frustrating.” “We stand up for free speech and defend the books that offend certain people because of their merits. They can simply choose not to read them. This is the same thing. Those who are offended by the scale can simply choose not to use the scale,” Bens wrote to CBC News.

Other students agreed with Bens, saying that the scale can be necessary for athletes to use. “We shouldn’t remove something because some people abuse it,” another student said. “If they can’t handle the number that shows up on the scale then don’t step on it.”

A freshman at the university, Samar El Faki, agreed with taking the scale away. “Scales are very triggering,” she said. “I think people are being insensitive because they simply don’t understand. They think eating disorders are a choice when they are actually a serious illness.”

Due to the outrage, the college gym might consider bringing back the scale. “We will weigh the pros and cons and may reconsider our decision,” Marshall said.


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Exclusive: ‘Car vending machine’ firm Carvana hires banks for IPO

U.S. used-auto retailer Carvana LLC, which allows customers to pick up cars they buy on the internet from vending machine-like towers, has tapped investment banks for an initial public offering, according to people familiar with the matter.

The move comes as more consumers become comfortable with online used-car purchases. TrueCar Inc (TRUE.O), for example, a car-shopping service that matches buyers with dealers online, has seen its shares rise 150 percent in the last 12 months.

Carvana has hired Wells Fargo Co (WFC.N) and Bank of America Corp (BAC.N) to lead its IPO, the people said this week.

The Phoenix, Arizona-based company hopes to go public in the first half of the year at a valuation of well over $2 billion, the people added.

The sources asked not to be identified because the matter is confidential. Carvana declined to comment. Wells Fargo and Bank of America did not respond to requests for comment.

Demand for cars, sport utility vehicles and pickup trucks has remained robust among U.S. consumers, even as it dipped slightly in February to an annualized pace of 17.6 million vehicles, compared with 17.7 million a year earlier, according to Autodata Corp.

Carvana sells cars through its website and operates automated towers that store cars in U.S. cities such as Austin and Dallas in Texas, and Nashville, Tennessee.

Customers can purchase cars online and either have them delivered or pick them up from the ‘vending machine’ towers using a special coin. Carvana also provides auto financing for customers making purchases.

The company reported revenue of $140 million in 2015, and projected revenue of more than $350 million in 2016. It is not yet profitable, according to one of the sources.

Founded in 2013, Carvana is one of a handful of companies trying to disrupt how cars are traditionally bought in dealerships and take on Carmax Inc (KMX.N), the largest used-car retailer in the United States.

The road has not been always been smooth for new entrants to the car retail market. One of Carvana’s competitors, the online car marketplace Beepi, went out of business earlier this year.

Ally Financial Inc (ALLY.N) announced in January it would finance up to $600 million of Carvana’s customers’ loans. Carvana also said last August that it closed a $160 million funding round, bringing the total it has raised to nearly $500 million.

One of Carvana’s backers is DriveTime Automotive Group, a network of used-car dealerships and car refurbishment centers.

(Reporting by Liana B. Baker in San Francisco; Editing by Bernadette Baum)

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HSBC set to nominate AIA’s Tucker as next chairman: sources

LONDON HSBC Holdings Plc is lining up Mark Tucker, currently chief executive of insurer AIA Group Ltd, to be the next chairman of Europe’s biggest bank, sources with direct knowledge of the matter said on Sunday.

Regulators in Hong Kong and London have signaled they will approve the appointment, one of the sources said, paving the way for Tucker to take up the role in the autumn.

Tucker, the former head of insurer Prudential, and once a trainee professional soccer player in Britain, would become HSBC’s first ever externally-appointed chairman at a bank renowned in the industry for recruiting from within.

The appointment would mark the end of an era at HSBC, ending one of the longest-serving chairman and chief executive pairings at a European bank and would likely trigger the search for a replacement to CEO Stuart Gulliver.

A spokeswoman for HSBC said the lender would nominate a chairman to replace Douglas Flint this year, as previously announced.

“Our process remains on track and the timetable is unchanged,” she said in an email.

Tucker took the helm of Hong Kong-based insurer AIA, formerly the Asian arm of U.S. insurer AIG, in 2010.

Having led AIA’s stock market flotation in the same year, Tucker has since overseen the insurer’s expansion in Asia across 18 markets to become the world’s second-largest life insurer with a market capitalization of over $78 billion.

His experience leading both a large Britain-based company and a Hong Kong-listed insurer will stand him in good stead to oversee HSBC, whose most profitable markets are in Britain and the Asian financial hub.

Tucker is currently a non-executive director at U.S. investment bank Goldman Sachs, a role he will have to resign from when he takes the chairman’s seat at HSBC.

Last month, HSBC said the bank was not a position where it had a shortlist of candidates to replace Flint, but expected to identify his successor this year.

Sky News first reported the potential appointment on Saturday.

Flint, 61, became chairman of HSBC in 2010 after serving as its finance director since 1995. He and Gulliver have spent the last few years shrinking HSBC, exiting more than 80 businesses and cutting over 43,000 jobs as the post-2008 crisis environment proved harsh for global mega-banks.

Flint in recent years attempted to strike a conciliatory tone with often hostile investors at the bank’s annual general meetings, where he often came under fire over perceived excessive pay for top HSBC bankers.

He has also been at the forefront of the banking industry’s lobbying after Britain’s vote to leave the European Union, testifying before the upper house of parliament that banks need a longer transition period than the two years currently set out after article 50 is triggered to start exit talks.

(Reporting by Lawrence White; Editing by Mark Potter)

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Millennial love for Snapchat extends to the stock

NEW YORK For some millennial investors, loyalty to one of their favorite apps matters more than financial details in the case of Snap Inc (SNAP.N).

The stock of Snapchat’s parent company has been on a roller-coaster ride since its market debut last week, surging more than 70 percent from the initial public offering price in the first two days of trading and plunging back down by a quarter since.

Some seasoned investors have been wary of the volatile, relatively high-priced stock of a company that has yet to report a profit. But novice investors said their deep affinity with the disappearing-message app prompted them to jump in.

“I bought it even when I was pretty positive I would not make a profit in the short run, but just because I am a fan of the product,” said Chris Roh, a 25-year-old software engineer in San Francisco, who has only been trading stocks for about a month on Robinhood, a mobile trading app popular among millennials.

Snap sold shares at $17 a piece in its IPO on March 1. The day after, on the first day of trading on the New York Stock Exchange, the stock popped as high as $26.05.

Roh said he bought the stock on that first trading day at $25 a share.

Trading activity on Robinhood jumped by 50 percent on the day of Snap’s debut, with more than 40 percent of those who traded that day buying Snap shares. The median age of Snap shareholders on the platform were 26, the same age as Snap Chief Executive Evan Spiegel, according to Robinhood.

Snap’s surge extended into the second day of trading, March 3, when its stock went as high as $29.44. It has sunk 25 percent since, closing on Friday at $22.07.

Kaleana Markley, a 29-year-old human resources consultant in San Francisco, bought Snap shares as her first stock market investment.

“Snap just felt like the IPO of my time and seeing where Facebook and Amazon are now, I really think Snap has the potential to grow (like them),” said Markley, who bought the shares through Stockpile, another online brokerage aimed at millennials, generally defined as people reaching young adulthood in the early part of this century.

Markley said she bought some shares in Snap on the first day of trading and some more on the second day, when the stock hit the highest level of its short lifetime.

“There are a lot of companies I don’t know or recognize, but Snap, I use the product, and know everyone – my friends, my co-workers, even my parents – uses it.”

Although some more experienced investors have avoided loss-making Snap, millennials were not alone in their hunger for shares of the company, which now has a market value of more than $25 billion.

Many sophisticated institutional money managers were also intent on getting a piece of the hottest tech IPO in years, despite concerns about the company’s slowing user growth and lack of voting rights for new shareholders.

Snap declined to comment on trading in its shares.


Companies with especially enthusiastic customer bases, such as action-camera maker GoPro Inc (GPRO.O), social games company Zynga Inc (ZNGA.O) and English football club Manchester United Plc (MANU.N), have in the past attracted fans to dabble in their IPOs.

But the wildly popular Snapchat – with an average of about 158 million daily active users – appears to be taking the enthusiasm to another level, some analysts and brokers said.

“One of the non-fundamental reasons driving the stock is that many millennials purchased Snap shares at inflated levels due to their preference for the product,” said Shebly Seyrafi, managing director at FBN Securities. “That is, not due to a real understanding of the number or valuation.”

Snapchat’s users, mostly in the 18-34 age range coveted by advertisers, spend an average of 25 to 30 minutes on the app and visit it more than 18 times a day, according to the company, making it more visited than any other social media platform.

“Snap is tapping into the pride of ownership (for millennials) which we don’t see often in the stock market,” said Dan Schatt, chief commercial officer at Stockpile.

Snap’s IPO gave Stockpile its biggest single day since it launched in 2015, nearly 10 times the service’s daily average in transaction and sales.

“Snap is offering the comfort of buying something that you know so well, understand and use it every day, which is what these young investors want,” said Schatt, whose teenaged daughter and son also bought Snap shares with his approval on Stockpile.

On StockTwits, a Twitter-like platform for sharing trading ideas, where 40 percent of users are between the ages of 18 and 34, Snap has been the most talked-about stock for days.

There are concerns about slowing user growth and competition from Facebook Inc (FB.O). The overall sentiment on the stock is now 44 percent bullish and 56 percent bearish, compared to early February when bullish sentiment was 100 percent, according to StockTwits.

That has not deterred Tiffany Dun, a San Francisco-based mortgage consultant in her late 20s who purchased 125 shares in Snap on the first day of trading at about $22 a share.

“There’s always risk to everything,” she said. “I use the product and I like it, so I bought some.”

(Reporting by Angela Moon; Editing by Jonathan Weber and Bill Rigby)

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Tesla’s Musk discusses energy proposal with South Australian government

SYDNEY Tesla Inc boss Elon Musk spoke with the premier of South Australia on Saturday after the tech entrepreneur offered to install $25 million of battery storage within 100 days to prevent recurring blackouts that have disrupted the state.

The proposal follows a string of power outages, including a blackout that left industry crippled for up to two weeks and stoked fears of more outages across the national electricity market due to tight supplies.

“Just spoke with Premier of South Australia (Jay Weatherill). Very impressed. Govt is clearly committed to a smart, quick solution,” Musk wrote on Twitter on Saturday.

Weatherill said in a statement on Saturday the conversation about the battery proposal was “positive”.

Musk made the offer on Twitter on Friday, saying if the work was not completed in 100 days it would be free.

His proposal made headlines in Australia, which is in the midst of a heated debate about the national electricity market and energy security.

Musk proposed the battery storage fix in response to a comment on social media by Mike Cannon-Brookes, the co-founder of Australian software maker Atlassian Corp.

Cannon-Brookes said he would be willing to line up funding and political support if Tesla could supply batteries that would solve South Australia’s problems.

Musk responded by tweeting: “Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?”

He quoted a price of $250 per kilowatt hour for 100 megawatt hour systems, which would imply a price of $25 million for the battery packs.

(Reporting by Harry Pearl; Editing by Sam Holmes)

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Starbucks says boycott threats over refugee hiring hasn’t hurt brand

LOS ANGELES Starbucks Corp on Friday said its business has not been hurt by a social media boycott campaign started in response to the chain’s promise to hire 10,000 refugees globally over the next five years.

Starbucks made its Jan. 29 refugee hiring announcement on the heels of President Donald Trump’s first executive order that temporarily banned travel from seven mostly Muslim nations. The move angered some Trump supporters, who called on other customers to stop frequenting the coffee chain.

Matt Ryan, Starbucks’ chief strategy officer, said results from a YouGov BrandIndex survey suggesting that the boycott had dented the brand, “do not reflect the customer satisfaction and perception trends we are seeing so far in 2017.”

Kantar Millward Brown, a market research firm that has provided continuous Brand Equity measurement for Starbucks since 2013, said the chain has not suffered a consumer backlash related to its refugee hiring promise.

“In February 2017 — after the announcement — we did not observe any substantive impact on Customer Consideration, Future Visitation Intent or Brand Perceptions or any other key performance metrics for the Starbucks brand,” Brian James, president of Kantar Millward Brown’s brand and communications practice, said in a letter released by Starbucks.

The coffee company declined to release related data, citing confidentiality.

James said his firm’s measurements do not substantiate findings from YouGov BrandIndex, whose data showed declines in consumer perception and purchase consideration after the refugee hiring statement.

A YouGov spokesman told Reuters it stood by the accuracy of its data.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Sam Holmes)

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Some bank bulls grow wary on policy uncertainty

Bank shares have been the runaway winners of the post-election U.S. stock market boom as investors wagered that higher interest rates, lighter regulation, lower taxes and faster economic growth would boost profits for lenders.

Up 32 percent since the election of Donald Trump, the SP 500’s bank index has outpaced the wider market’s gain by roughly 3-to-1. Now, however, a changing dynamic in the bond market as the U.S. Federal Reserve gears up to raise interest rates at a faster pace than many had previously expected is beginning to give pause to some early bank stock bulls.

With another strong U.S. jobs report in the books, the Fed is widely expected to raise overnight interest rates on Wednesday, and is now seen delivering three rate hikes in 2017.

Rising rates can boost bank profits, but bank profitability also hinges on the difference between short-term rates, like those set by the Fed and which tend to mark the cost for banks to acquire their funds, and long-term rates, which serve as benchmarks for what banks charge their customers for loans.

When that difference, or spread, is large, bank profits can rise rapidly. When it narrows, or flattens, profit growth can suffer.

At issue now is what some investors see as a growing risk of a flattening yield curve under a more aggressive rate-hike path by the Fed. Forwards pricing for 2- and 10-year Treasury yields suggests the spread between them will narrow to about 93 basis points by year-end from the current 122 points.

That is why Jeffrey Gundlach, chief executive officer at DoubleLine Capital and an early buyer of the Trump rally, said he has sold his financial stocks.

“When the Fed tightens more than once a year, historically it is very consistent with a flatter curve,” Gundlach said. “The yield curve won’t help the sector.”

In the month after the Nov. 8 U.S. Presidential election the SP 500 bank index rose 24 percent. Since then the stocks have risen 5.7 percent as many investors awaited concrete signs of regulatory and tax reform.

“Post-election, that was the easy money on financials right there,” DoubleLine’s Gundlach said.


To be sure, the bank rally has been grounded on more than just rate hike expectations and yield curve forecasts. Investor interest has also been stoked by assumptions about Trump’s agenda in Washington.

Investors have been betting that Trump’s promises of tax cuts would boost consumer spending and company profits, which would drive loan demand. Meanwhile, his promise to slash regulations could also cut compliance costs and allow banks to expand their loan portfolios more rapidly than possible under restrictions imposed following the financial crisis.

That is among the reasons why David Lebovitz, global market strategist at J.P. Morgan Asset Management, still expects more gains for financial stocks.

Even if regulatory and tax reform looks like it will take a long time, investors will likely be patient as long as Trump’s administration provides more specifics on its plans including timetables, Lebovitz said.

But he cautioned that “disappointment on the policy front is the biggest risk” to stocks right now as investors have priced in policy changes already.

Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, said that the bank sector’s outperformance may be “done” but stopped short of calling for a correction.

“I’m not sure investors are looking at the shifting yields and market conditions. It seems to be buy and worry about the ‘why’ later,” he said.

(Additional reporting by Jennifer Ablan and Richard Leong in New York.; Editing by Dan Burns and Meredith Mazzilli)

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Is Christian Belief Really ‘Blind Faith’?

What is “faith”? Is it a blind leap into the unknown? I hear atheists talking about “blind faith” all the time. One Facebook commenter  wrote,

The core problem is that religion teaches that holding absolute beliefs without evidence (aka faith) is a virtue.

That’s what some people think Christianity is all about: Faith is holding on to beliefs we have no evidence for. Unfortunately it isn’t just atheists who say that. A lot of Christians think faith is “believing without having actual reasons to believe” or something like that. It’s almost embarrassing when you think about it — if it’s true.

It Might Look Like Blind Faith

Thankfully it isn’t like that, as is easy to illustrate from the gospels, Matthew, Mark, Luke and John. All four gospels tell of Jesus calling Peter and Andrew to be His followers. The accounts in Matthew and Mark are similar. Here’s one of them. It could almost confuse you if you don’t get the full story.

While walking by the Sea of Galilee, he saw two brothers, Simon (who is called Peter) and Andrew his brother, casting a net into the sea, for they were fishermen. And he said to them, “Follow me, and I will make you fishers of men.” Immediately they left their nets and followed him. (Matthew 4:18-20)

This almost looks a lot like the way some people conceive of faith: with no background information, no knowledge, no reason whatsoever, they dropped everything, leaving their whole livelihood behind, and followed this Jesus they had just met for the first time. It looks a lot like what the atheist called “holding absolute beliefs without evidence.”

But They Had Good Information Beforehand

But is this what they really did? Not really. We’re supposed to draw our information from the whole Bible, so let’s do that, starting with John 1:35-42, which (scholars say) records something that happened a full year before the events of Matthew 4.

They trusted Him because they had good reasons to trust Him.

Jesus was walking by John the Baptist and two of John’s disciples. John saw him and called out, “Behold the Lamb of God!” Based on that solid reference, John’s two disciples turned and followed Jesus for that day. This wasn’t exactly leaving everything to follow him — yet.

The passage continues, “One of the two who heard John speak and followed Jesus was Andrew, Simon Peter’s brother. He first found his own brother Simon and said to him, ‘We have found the Messiah’ (which means Christ).”

Andrew had been a disciple of John the Baptist, who had been preaching about Jesus Christ. As for Peter, he had a lot more than just a glance from Jesus to go on. He had strong personal references.

Finally a year later, after they’d had  plenty of time to think about this great man they had met, to ponder His teachings, and to hear of His reputation, He came back and called them to follow.

They Had Seen Jesus in Action, Too

But wait! — as they say — there’s more! Peter and Andrew had even more reasons to trust Christ enough to follow him. It’s in the book we haven’t looked at yet, Luke.

Before He ever called Peter and Andrew from their fishing boats, Jesus had already healed Peter’s mother-in-law of a serious fever. (Luke 4:38-39) Then in Luke 5:1-11 Jesus led these fishermen to a miraculously great catch of fish.

It wasn’t until after those two miracles, plus the healing of Peter’s mother-in-law, plus (before that) the year to think about him, plus the strong personal reference from John the Baptist before that, that they “left everything and followed him.”

Their faith in following Jesus was no blind leap. It was based on an experienced reality, on data they had had a chance to reflect upon. They trusted Him because they had good reasons to trust Him.

Of course they still had to have faith in Him to follow. They were trusting their whole lives and futures to this teacher Jesus, and to the God whom Jesus taught. But it was not belief against the evidence. It was belief built upon evidences and experience.

Jesus kept giving evidences for who he was throughout his ministry. After he rose from the dead, “He presented himself alive to them after his suffering by many proofs.” (Acts 1:3)

A tried and tested faith knows from study and experience that God is real and God is good.

That doesn’t mean God can’t turn a person’s heart around in an instant, for no outwardly visible reason at all. God can do whatever he wants. It also doesn’t mean that evidence is all it takes for a person to believe, for even where evidences and reasons exist, God still needs to draw people to Himself in His own way before they are converted.

Still, a tried and tested faith knows from both study and experience that God is real and God is good. For those who will explore it, Christian faith rests on the trustworthy testimony of history where the reports of Jesus’ life can be tested like any other historical report; and also on evidences from nature, human experience and philosophical reflection.

“Blind faith” isn’t what Christianity is about. Faith isn’t a leap into the dark against evidence. It’s a leap into the light of God, based on knowledge and experience.


Adapted from the Thinking Christian blog. Used by permission.

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How Faith and Free Markets Can Save Education

In the wake of the campus riot at Middlebury where leftist students attacked an invited speaker and hospitalized a professor, I’ve had to paint a distressing, though truthful picture of the advanced state of decay reached by most of the existing, “legacy” institutions of higher education in America. Put bluntly:

If our civilization is to continue in a recognizable form, if the Christian humanism blended from faith and reason that has blessed the West is to have a sustainable future, we must try something different. But what are the prospects for restoring some apparatus that will pass along our values?

The stewards of the great works of our ancestors have become politicized vandals, as bad as any Bolshevik smashing up churches in 1918.

Think of the issue concretely, using this handy historical metaphor: In the eighth century, the Islamic conquest of Egypt cut off Europe’s supply of papyrus. Indeed, as Henri Pirenne argues in Mohammad and Charlemagne, the Islamic economic boycott on most goods, especially grain, did much more to bring on the chaos of the “Dark Ages” than the collapse of the sclerotic Roman empire. Without a supply of papyrus, how would Europeans replace the copies of ancient manuscripts from Greece and Rome, as the old ones dried up and perished?

The answer is that they couldn’t: countless works of science, literature and philosophy would never be recopied, and would be forever lost to history. Those works which did get recopied were the ones that monks considered important enough to inscribe on the much more expensive medium of parchment, made from animal skins.

Can we find alternative methods of passing along our beliefs and our ancestors’ hard-won achievements — or will they be lost, like the vanished plays of Sophocles?

Today we find that forces which are in some ways as hostile to Christian civilization as Muhammad’s own jihadis have captured the choke-points of culture and values: schools, major media, popular entertainment and especially higher learning. In other words, they control the paper supply. Can we find or found alternative methods of passing along our beliefs and our ancestors’ hard-won achievements — or will much of what we have inherited simply be lost, like the vanished plays of Sophocles? (He wrote 120. We have complete texts of only 7.)

Can We Create Alternative Institutions?

These are huge questions, so let’s limit ourselves to higher education here: Can Christians and other friends of the West create institutions that will:

  • Pass along the complex and beautiful content of our Christian civilization;
  • Prepare young people for productive livelihoods while supporting their walks of faith;
  • Let them emerge free of crushing student debt that inhibits them from getting married and having children; and
  • Support enough teachers at living wages, so that such institutions can carry on into the future?

It’s sobering to admit this, but the answer may well be “no.”

Certainly, we cannot educate millions of people through the tiny, niche, intentionally Christian colleges which have sprung up in the past few decades. Good as many of them are, they are barely a drop in the bucket of American education. What is more, hostile bureaucrats could easily regulate them out of existence, using anti-discrimination laws to make their religious missions effectively illegal. The narrow legal exceptions that protect such schools are shrinking all the time.

We should welcome and work with the serious Christian intellectuals who emerge from Patrick Henry or Thomas Aquinas colleges. But they would surely agree that we need a more broad-based solution — one that benefits, evangelizes and empowers the millions no longer well-served by public schools or public universities.

Online Education Could be the Answer

Here is where MOOCs come in. Massive Open Online Courses are already threatening the education monopoly enjoyed by “legacy” educational institutions. MOOCs offer high-quality lectures, discussion groups and opportunities for distance learning that once were restricted to bricks and mortar colleges.

For-profit online academies such as the University of Phoenix are already competing with traditional colleges for students, while religious colleges such as Regent University enroll large numbers of distance students. The massive waste entailed in today’s universities, from “diversity officers” to rock-climbing walls and dorms that resemble four-star hotels, makes online education extremely competitive.

We still have enough highly educated Christian, conservative and moderate scholars to offer the courses needed in liberal arts, theology, history, civics, economics and other disciplines. But we won’t for long, as such people age, and politicized graduate schools and hiring policies freeze out the next generation almost completely. So we’d better get cracking.

The Education Cartel

But there are major obstacles that face anyone trying to offer serious online education as a competitor to traditional universities. No one knows them better than Dick Bishirjian, who founded Yorktown University to accomplish exactly the mission laid out here: offering a balanced program of liberal arts, business, religion, history, economics and other subjects now neglected or perverted at most traditional colleges. He recruited qualified teachers, designed real curricula, found willing students … and after years of effort finally stopped offering courses in 2012. The insuperable problem he faced, and anyone like him will face? Accreditation.

While the regional cartels of colleges that control the accrediting process like to claim that they’re all about academic standards and keeping students from getting fleeced by shady operators, there are less high-minded reasons that administrators at bricks and mortar colleges won’t vote to accredit their online competitors.

In fact, as Bishirjian recounts, these regional accrediting bodies work hard to keep in place strict regulations which prevent almost any online educator from offering accredited college courses that will transfer between institutions unless … those courses are being offered by a school that also operates a physical campus. So state universities or overpriced private colleges can offer hundreds of online classes, with full accreditation, but a purely “virtual school” cannot.

Now it may be reassuring to know that somewhere a school has red brick buildings covered with ivy, and beer-soaked dorms full of athletes. But it is hardly decisive to whether a program offers actual educational benefits.

No, this is a crony capitalist monopoly operation, by which “legacy” institutions keep out competitors. Since most of the brick and mortar schools have been captured by leftists and secularists, these regulations hurt Christians disproportionately — just as laws against home-schooling did decades ago. Indeed, sometimes these regulations are used against us explicitly, as New England’s accreditors did when they targeted Gordon College.

Learn from the Home Schooling Movement

So we must get behind efforts to pry education loose from the tight fists of politicized and secularized colleges, and open up new and entrepreneurial means to provide our students with good educations, valid degrees and the stepping stones to success. Bishirjian lays out the legal steps that will be needed to let online education step forward and start to replace the top-heavy, wasteful and massively biased educational establishment. As Bishirjian writes:

By lowering the importance of academic  “accreditation,” or completely eliminating it by creative state and federal legislation, a free market in competing education products can be created in which education entrepreneurs can begin to shape the future of American higher education.

Bishirjian offers detailed legal and regulatory reforms that would make this possible:

  • Prohibit members of Congress and congressional staff from employment with colleges or universities.
  • Repeal the Negotiated Rulemaking Act of 1990.
  • Direct the regional accreditation agencies to accredit institutions from outside their “regions.”
  • Direct the regional agencies to immediately recognize solely Internet-based institutions for accreditation.
  • No longer require institutions not participating in Title IV programs to adhere to U.S. Department of Education Title IV regulations.
  • Lower the percentage of three-year default rates from 30% to 20%. Institutions with three-year default rates will immediately lose access to Title IV programs.
  • No longer permit regional agencies to accredit Internet-based programs and recognize a new national agency for accreditation of Internet delivered programs.  
  • Charter an agency solely for the accreditation of MOOCs and adjust Title IV regulations to permit offering MOOCs for degree credit, if an institution offering MOOCs chooses not to participate in Title IV.
  • Shift Title IV funds to the States in block grants.
  • Encourage the States to subsidize corporations that create training programs.
  • Abolish NACIQI or reform its method of appointing members.
  • Abolish the U.S. Department of Education.
  • Form an “Education Consumer Revolt” political action committee.

If you want more of Bishirjian’s perspective, or would like to hear his story, check out his remarks here:


Whether or not you agree with each of these proposals, it is clear that we Christians must use the means available to us to pass along the Gospel and the civilization it created. If existing laws and institutions make that impossible, we must change them or work around them. Home-schooling was once an exotic, often illegal phenomenon. Now it’s a thriving alternative to failing primary and high schools. Online education, carefully crafted and intelligently advocated, may be the next revolution we need to lead.

Online education might sound odd or quixotic to us — as the prospect of monks writing on stretched-out calfskin might have seemed to Christians in 700 or so, as the paper supply dried up. But those monks saved civilization using the means that God allowed them. We can do it again today.

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Wall Street ends up; jobs data points to economic strength

NEW YORK U.S. stocks rose on Friday after a solid jobs report pointed to strength in the domestic economy and supported expectations the Federal Reserve will raise interest rates next week.

Indexes ended lower for the week, however, with the SP 500 and Nasdaq breaking a six-week streak of gains.

Government data showed 235,000 jobs were added in the public and private sectors in February, far exceeding economists’ average estimate of 190,000.

Fed Chair Janet Yellen signaled last week the U.S. central bank is set to raise rates this month if employment and other economic data hold up. The Fed meets March 14-15.

With inflation edging up closer to the Fed’s 2 percent target, traders were pricing in a 92 percent chance of a rate increase at the Federal Open Market Committee’s meeting next week, up from 85 percent before the data.

Gains were broad-based, though the utilities index .SPLRCU, which fell sharply earlier in the week and lost 1.2 percent for the period, was the day’s best-performing sector, ending up 0.8 percent.

At the same time, the SP financial index .SPSY, which has risen sharply on prospects of further rate hikes, ended flat, and strategists said the market has likely already priced in a March rate move.

“The strong (payrolls) number was a welcome surprise. It was a confirmation labor markets are holding up,” said Jeffrey Kravetz, regional investment director at the Private Client Reserve of U.S. Bank.

“The reaction is not huge because the market was expecting a good number.”

The Dow Jones Industrial Average .DJI ended up 44.79 points, or 0.21 percent, at 20,902.98, the SP 500 .SPX gained 7.73 points, or 0.33 percent, to 2,372.6 and the Nasdaq Composite .IXIC added 22.92 points, or 0.39 percent, to 5,861.73.

For the week, the Dow was down 0.5 percent, the SP 500 was down 0.4 percent and the Nasdaq was down 0.2 percent.

Friday marked the 50th day of Donald Trump’s U.S. presidency. Since he took office, the Dow has broken above 21,000 and the SP 500 has crossed $20 trillion in market value on bets he would usher in tax cuts, simpler regulations and higher infrastructure spending.

Still, the lack of detail on Trump’s plans and other issues have helped temper the post-election rally, along with valuations that some consider lofty.

“In the short term we’re a little bit cautious (in stocks) because valuations are stretched. But as long as the economic data keeps improving and without inflation being an issue, any weakness becomes an opportunity to add (to equity longs),” said Sameer Samana, global quantitative and technical strategist at Wells Fargo Investment Institute in St Louis.

Shares of U.S. hospital operators fell a day after the Republican plan backed by Trump to overhaul Obamacare cleared its first hurdles in Congress.

While passage of the bill remains uncertain, some analysts believe the bill will go through. Tenet Healthcare (THC.N) shares fell 5.3 percent.

Finisar Corp (FNSR.O) shares fell 22.7 percent after the network equipment maker gave disappointing revenue and profit forecasts for the current quarter.

Advancing issues outnumbered declining ones on the NYSE by a 2.04-to-1 ratio; on Nasdaq, a 1.39-to-1 ratio favored advancers.

The SP 500 posted 42 new 52-week highs and five new lows; the Nasdaq Composite recorded 82 new highs and 36 new lows.

About 6.9 billion shares changed hands on U.S. exchanges, close to the 7.0 billion daily average for the past 20 trading days, according to Thomson Reuters data.

(Additional reporting by Rodrigo Campos in New York and Yashaswini Swamynathan in Bengaluru; Editing by Meredith Mazzilli and James Dalgleish)

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Tesla’s Musk offers to fix South Australia’s power crisis in 100 days

MELBOURNE Tesla Inc boss Elon Musk on Friday offered to save Australia’s most renewable-energy dependent state from blackouts by installing $25 million worth of battery storage within 100 days, and offering it for free if he missed the target.

The offer follows a string of power outages in the state of South Australia, including a blackout that left industry crippled for up to two weeks and stoked fears of more outages across the national electricity market due to tight supplies.

Musk made the offer on social media, and the government said it could consider backing such a battery roll out by Tesla.

“The government stands ready through ARENA and the CEFC to work with companies with serious proposals to support the deployment of more storage,” Environment and Energy Minister Josh Frydenberg said in an email to Reuters.

ARENA is the Australian Renewable Energy Agency and the CEFC is the Clean Energy Finance Corp.

Musk made the offer in response to a comment on social media by Mike Cannon-Brookes, the co-founder of Australian software maker Atlassian Corp, who said he would be willing to line up funding and political support if Tesla could supply batteries that would solve South Australia’s problems.


Musk responded by tweeting: “Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?”

He quoted a price of $250 per kilowatt hour for 100 megawatt hour systems, which would imply a price of $25 million for the battery packs.

“You’re on mate. Give me 7 days to try and sort out politics funding,” tweeted Cannon-Brookes.

He said he was inundated with calls on Friday after the exchange and was eager to get the plan off the ground.

“My phone hasn’t stopped buzzing. The support is flooding in, both from individuals in terms of ‘Hell yes!’ and from corporates who are asking: ‘Can we buy power? Can we contribute dollars?’,” Cannon-Brookes told Reuters.

Tesla launched its Powerwall 2 in Australia, the world’s top market for rooftop solar, this week. Battery storage is just one of several options the government is looking at to help ensure reliable power supplies as the country grows more reliant on intermittent wind and solar power.

“We have been talking with a number of large-scale battery providers about potential storage solutions, including in South Australia. To the extent Tesla is interested, we’ll also talk with them,” Clean Energy Finance Corp Chief Executive Oliver Yates said in an emailed statement.

After a record-breaking summer, Australia’s energy market operator said this week that eastern Australia desperately needed more gas for power stations within the next two years to provide back-up electricity for wind and solar and avert blackouts.

(Reporting by Sonali Paul; Editing by Randy Fabia and Edmund Blair)

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Volkswagen pleads guilty in U.S. court in diesel emissions scandal

DETROIT/WASHINGTON Volkswagen AG (VOWG_p.DE) pleaded guilty on Friday to fraud, obstruction of justice and falsifying statements as part of a $4.3 billion settlement reached with the U.S. Justice Department in January over the automaker’s diesel emissions scandal.

It was the first time the company has pleaded guilty to criminal conduct in any court in the world, a company spokesman said, and comes as the automaker strives to put the most expensive ever auto industry scandal behind it.

The September 2015 disclosure that VW intentionally cheated on emissions tests for at least six years led to the ouster of its chief executive, damaged the company’s reputation around the world and prompted massive bills.

In total, VW has agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting U.S. vehicles.

Volkswagen’s general counsel Manfred Doess made the plea on its behalf after he said at a hearing in U.S. District Court in Detroit that he was authorized by the company’s board of directors to enter a guilty plea.

“Your honor, VW AG is pleading guilty to all three counts because it is guilty on all three counts,” Doess told the court.

U.S. District Judge Sean Cox accepted the company’s guilty plea to conspiracy to commit fraud, obstruction and entry of goods by false statement charges and set an April 21 sentencing date, where he must decide whether to approve the terms of the plea agreement.

Investors in VW stock took the news in stride after the expected guilty plea, sending shares up slightly in Germany to close up 0.3 percent at 143.70 euros.

VW has agreed to spend up to $10 billion to buy back diesels that emit up to 40 times legally allowable pollution, along with at least $5,100 per owner in additional compensation.

Cox said he was considering a motion made by a lawyer for some owners on whether to allow additional restitution for victims.

“This a very, very, very serious crime. It is incumbent on me to make a considered decision,” Cox said.

The Justice Department and VW have argued that the automaker has already agreed to significant restitution.

“Volkswagen deeply regrets the behavior that gave rise to the diesel crisis. The agreements that we have reached with the U.S. government reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear,” the company said in a statement. “Volkswagen today is not the same company it was 18 months ago.”


Under the plea agreement, VW agreed to sweeping reforms, new audits and oversight by an independent monitor for three years after admitting to installing secret software in 580,000 U.S. vehicles. The software enabled it to beat emissions tests over a six-year period and emit up to 40 times the legally allowable level of pollution.

An assistant U.S. attorney, John Neal, told the court that the emissions scheme “was a well thought-out, planned offense that went to the top of the organization.” He said VW could have faced $17 billion to $34 billion in fines under sentencing guidelines.

Volkswagen agreed to change the way it operates in the United States and other countries under the settlement. VW, the world’s largest automaker by sales, in January agreed to pay $4.3 billion in U.S. civil and criminal fines.

The company still faces ongoing investigations stemming from the excess emissions by the U.S. Securities and Exchange Commission, Internal Revenue Service and some U.S. states. New York Attorney General Eric Schneiderman told Reuters last month that there have been recent settlement talks, but didn’t elaborate.

The German automaker halted sales of diesel vehicles in late 2015 and has said it has no plans to resume sales of new U.S. diesels.

The Justice Department also charged seven current and former VW executives with crimes related to the scandal. One executive is in custody and awaiting trial and another pleaded guilty and agreed to cooperate. U.S. prosecutors said in January that five of the seven are believed to be in Germany. They have not been arraigned.

German prosecutors also have an ongoing criminal probe into VW’s excess diesel emissions.

VW Chairman Hans Dieter Poetsch said Monday the company expects to broaden disciplinary action beyond the two dozen employees it has already suspended.

As part of its U.S. emission settlements, VW agreed to spend nearly $3 billion to offset excess emissions and make $2 billion in investments in zero emission vehicle infrastructure and awareness programs over a decade.

(Writing by David Shepardson in Washington. Additional reporting by Jan C. Schwartz in Hamburg, Germany; Editing by Bernadette Baum)

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Bill Gross says investors should not be ‘allured’ by ‘Trump bull market’

NEW YORK Bond investor Bill Gross warned on Thursday that investors should not be tempted into buying high-flying equities and corporate bonds, given the possibility that U.S. President Donald Trump might fail to enact policies that fuel economic growth.

Wall Street’s main indexes have rallied since Trump was elected president and remain close to all-time highs, driven by optimism that his policies may stimulate growth in various industries and push share prices even higher.

“Don’t be allured by the Trump mirage of 3-4 percent growth and the magical benefits of tax cuts and deregulation,” Gross said in his latest Investment Outlook, which is released during the first week of every month.

“The U.S. and indeed the global economy is walking a fine line due to increasing leverage and the potential for too high (or too low) interest rates to wreak havoc on an increasingly stressed financial system. Be more concerned about the return of your money than the return on your money in 2017 and beyond.”

Gross, who runs the Janus Global Unconstrained Bond Fund, characterized the run-up as the “Trump bull market and the current ‘animal spirits’ that encourage risk.”

Details on Trump’s plans remain scarce, however, and equity gains have moderated on growing concerns that stock valuations may be high.

The SP 500 is trading at about 18 times forward earnings estimates against the long-term average of about 15 times, according to Thomson Reuters data.

Gross said the global economy has created more credit relative to GDP than that at the beginning of 2008’s great credit recession.

“In the U.S., credit of $65 trillion is roughly 350 percent of annual GDP and the ratio is rising,” Gross said.

“In China, the ratio has more than doubled in the past decade to nearly 300 percent. Since 2007, China has added $24 trillion worth of debt to its collective balance sheet. Over the same period, the U.S. and Europe only added $12 trillion each.”

Gross said central banks are attempting to walk a fine line between generating mild credit growth that matches nominal GDP growth – “keeping the cost of credit at a yield that is not too high, nor too low, but just right. (Federal Reserve chair) Janet Yellen is a modern day Goldilocks.”

While Gross rated Yellen as “so far, so good, I suppose,” he said the U.S. recovery has been weak by historical standards. Yet banks and corporations have recapitalized, job growth has been steady and importantly – at least to the Fed – markets are in record territory, “suggesting happier days ahead.”

But Gross said “our highly levered financial system is like a truckload of nitro glycerin on a bumpy road. One mistake can set off a credit implosion where holders of stocks, high yield bonds, and yes, subprime mortgages all rush to the bank to claim its one and only dollar in the vault.”

It happened in 2008, Gross said, noting central banks were in a position to drastically lower yields and buy trillions of dollars via Quantitative Easing (QE) to prevent a run on the system.

“Today, central bank flexibility is not what it was back then,” Gross said. “Yields globally are near zero and in many cases, negative. Continuing QE programs by central banks are approaching limits as they buy up more and more existing debt, threatening repo markets and the day to day functioning of financial commerce.”

(Reporting By Jennifer Ablan; Editing by Bernard Orr)

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After Snap IPO, U.S. regulator questions unequal voting rights

WASHINGTON/BOSTON One of two current members of the U.S. Securities and Exchange Commission raised questions on Thursday for companies like Snap Inc (SNAP.N) that offer shareholders unequal voting rights, saying the agency should “focus on how some innovations may prove detrimental to investors.”

“Unequal voting rights present complex and new issues that need to be understood and addressed,” Commissioner Kara Stein, a Democrat, said at a meeting of the SEC’s Investor Advisory Committee in Washington. “We also must be mindful of the precedent being created.”

In a unique move last week, the parent of social media app Snapchat sold $3.4 billion of shares to outside investors with no voting rights, prompting concerns that those stockholders would not get enough transparency or influence on matters like executive pay or strategy.

Snap’s structure has reignited a debate about how much leverage investors should have, at a time when money has flooded into passive index funds that cannot sell stock. Snap has said its voting structure is good for investors as a way to preserve founder control.

Although Snap was the first to offer outside investors no voting rights at all, other big technology companies have offered shares with limited voting rights to outsiders in recent years, despite calls from large institutional investors for increased rights to promote better corporate governance.

The topic of unequal voting rights comes at a time of uncertainty for the SEC. Three of its five commission seats are currently empty and the sole member other than Stein, Republican Michael Piwowar, is its acting chairman.

President Donald Trump has nominated Wall Street attorney Jay Clayton, also a Republican, as the top U.S. securities regulator’s permanent head. His confirmation would put Stein in the minority and possibly limit her influence.

During Thursday’s meeting Piwowar revealed little about his own thinking on voting rights.

Stein said companies offering IPOs without voting rights should be studied, since the expectation is that shareholders could act to check management.

“In the long run we need to critically assess our regime for initial public offerings. The current structure is premised on taking investors’ capital while giving the investor rights to hold that company’s management accountable of that capital,” she said.

A voice on behalf of tech companies at Thursday’s hearing was David Berger, a partner at the Wilson Sonsini law firm who advises Silicon Valley companies on corporate governance. Berger said many tech companies such as Google parent Alphabet Inc (GOOGL.O), which he has represented, have adopted new share structures as a response to the short-term pressures of Wall Street.

While technology companies must focus on long-term goals, they often have large cash balances or high spending on research and development, areas often targeted by shareholder activists, Berger said.

Berger said that “a governance system that focuses entirely on stockholders … ignores the broader interests of the corporation.”

Big institutional investors have already begun talks with stock index providers over whether Snap and companies like it should be included despite their lack of voting rights.

Ken Bertsch, executive director of the Council of Institutional Investors, which represents large pension funds and other asset managers, said share structures like Snap’s pose risks such as leaving founders in control decades after their prime.

The SEC should conduct further reviews, he said, including with stock exchanges that list companies with unequal voting rights.

Unequal voting structures also could complicate the strategies of index funds, he said, by introducing securities that resemble preferred shares or partnership structures. Most index fund providers prefer shares to have equal voting rights.

“At some point,” Bertsch said, “there’s some question of market confusion and a disabling of passive strategies.”

(Editing by Bernadette Baum and Bill Rigby)

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Volkswagen set to plead guilty on Friday in emissions case

WASHINGTON Volkswagen AG is set to plead guilty on Friday to three felony counts in the Justice Department’s diesel emissions investigation, as the German automaker seeks to move past its cheating scandal.

As part of a plea agreement with U.S. prosecutors announced in January, the company agreed to sweeping reforms, new audits and oversight by an independent monitor for three years after it admitting to installing secret software in vehicles to enable it to beat emissions tests over a six-year period.

Volkswagen agreed to change the way it operates in the United States and other countries under the settlement of charges that it installed secret software in 580,000 U.S. vehicles to allow them to emit up to 40 times the amount of legally permitted pollution.

On Friday, the German automaker is to be formally arraigned in U.S. District Court in Detroit and then is set to plead guilty to conspiracy to commit fraud, obstruction of justice and entry of goods by false statement charges, a court spokesman said.

A company lawyer is expected to appear to plead guilty on Volkswagen’s behalf. It is not clear if Judge Sean Cox will formally sentence VW on Friday.

VW, the world’s largest automaker by sales, also has agreed to pay $4.3 billion in U.S. civil and criminal fines.

The U.S. Justice Department in a court filing Monday called Volkswagen’s conduct “one of the largest corporate fraud schemes in the history of the United States.”

In total, VW has agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, states and dealers.

Lawyers for VW and the government said in a joint motion that Judge Cox should reject a request by a lawyer for some owners seeking individual criminal restitution.

The motion noted VW is spending up to $10 billion on buybacks and compensation for nearly 500,000 vehicle owners and nearly all agreed to take part.

The Justice Department also charged seven current and former VW executives with crimes related to the scandal. One executive is in custody and awaiting trial. Five of the seven are believed to be in Germany and have not been arraigned.

German prosecutors are also investigating.

VW chairman Hans Dieter Poetsch said Monday the company expects to broaden disciplinary action beyond the two dozen employees it has already suspended.

As part of its U.S. emission settlements, VW agreed to spend nearly $3 billion to offset excess emissions and make $2 billion in investments in zero emission vehicle infrastructure and awareness programs over a decade.

(Reporting by David Shepardson; Editing by Alistair Bell)

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Why Protectionism Won’t Work for America

Given the rising hostility towards free trade these days, you’d think that trade barriers had been falling like dominoes across the globe. Not so.

In June 2016, the World Trade Organization noted that over the preceding six months the world had witnessed one of the highest increases in protectionist measures in recent years. This outstripped removals of trade restrictions in the same period.

Protectionism is clearly on the march. It’s not hard to understand why. The economic change unleashed by free trade is always unsettling for some people, not all of whom are well-positioned to cope. Then there is the fact that free trade’s benefits for millions of Americans, such as falling prices over the long-term, go largely unnoticed by most of us.

These difficulties, however, shouldn’t distract us from a major problem with protectionism — the fact that it doesn’t deliver on its promises. Quite the contrary.

A Good Label for a Bad Cause

The very word “protectionism” is one of its selling points. It implies that those who favor protectionist measures want to shield, guard and defend Americans from forces which undermine their economic welfare. But does protectionism realize these goals?

Generally speaking, the answer is: no.

In the first place, measures to protect particular businesses don’t buffer them from the technological changes that are among the biggest disruptors of the economic status quo. No subsidy from the federal government in 1900 could protect the American horse-and-buggy industry from the birth of the modern car when Karl Benz built the first prototype in Germany in 1885. His technology crossed the Atlantic and Henry Ford eventually developed the Model-T. This created wealth for many, jobs for millions, and greater ease for all.

Technological change has also made parts of America’s economy, such as modern manufacturing, much more productive. That’s partly because machines increasingly perform many of the often highly-repetitive functions once done by humans. For the same reason, manufacturing probably will never again provide the same proportion of jobs for the American economy which it did until the 1970s. The point, however, is that tariffs and subsidies for American manufacturing won’t change that situation because tariffs and subsidies can’t stop technological innovation.

Imposing tariffs on other countries to retaliate for their protectionist measures against American products may well hurt those nations. But it also hurts Americans.

Second, it’s true that imposing tariffs on other countries to retaliate for their protectionist measures against American products may well hurt those nations. But they also hurt Americans.

Between 1981 and 1984, the US imposed import quotas on the car industry. In this case, the import quota sought to limit foreign car imports and thus ostensibly benefit American car manufacturers and workers. Indeed, approximately 22,000 jobs were saved.

Unfortunately, it also resulted in a 41 percent average price increase in the cost of a new American car over that same period. In other words, this protectionist policy encouraged the American car industry to be less efficient. Millions of American consumers picked up the bill. 

The problems didn’t end here. The price-increases contributed to lower demand for cars from those same American consumers. That led to fewer sales and subsequent lay-offs of over 50,000 American workers by car manufacturers. As one report retrospectively noted, “Thus, even though 22,000 jobs apparently were saved, the layoffs caused by the price increase actually produced a net loss of 30,000 jobs.”

This is a classic illustration of how the cost of protectionist measures can outweigh any benefits. The same is true of policies that seek to punish American companies who choose to relocate elements of their operations outside America to reduce costs.

The moment America starts to do that, other governments would likely retaliate by punishing any company in their countries who might want to invest in the United States or relocate operations to America. Do we really want Japanese car companies that have created almost 700,000 jobs in America by moving many of their operations and factories to America to transfer their facilities back to Japan?

Such decisions would mean less foreign investment and business activity in the United States. This means less competition, higher prices, less-efficient resource allocation, and lower productivity for the US. In other words, America loses.

Protectionist Privileges

There is, however, one group that benefits — albeit temporarily — from tariffs and subsidies: established businesses and those who lobby for them.

The competition created by free trade generally results in one of two responses from affected American businesses. The first response is to try to out-innovate and out-compete foreign competitors.

As a result, some businesses will not only survive but grow and prosper. Consumers benefit from better and cheaper products. Other businesses will, despite their best efforts, fail. This happens every single day. And sometimes the competition that drives an American company out of business comes mainly from other American companies.

Free trade isn’t without its downsides. But that’s not a reason to blind ourselves to protectionism’s many flaws.

The second response for businesses facing foreign competition is to request state assistance. This is usually made in the name of the national interest or American jobs. But it actually has more to do with (1) protecting what industries regard as “their” markets and (2) their inability to make the hard-decisions which are part-and-parcel of business.

An entire industry may even calculate that it’s more cost-effective for them to spend resources on lobbyists to secure some sort of government subsidy. That’s called crony capitalism, which, because of its corrupting effects, is even more reason for America to resist protectionism.

There is an exception: A unprofitable product or business might merit some type of protection because it’s genuinely vital to national security. America is more than just an economy. Protecting national security is a prime responsibility of government. In such cases, the question to ask is whether a tariff or subsidy is the least-costly way of realizing this goal.

Such exceptions, however, can’t be the rule. Certainly free trade isn’t without its downsides. But that’s not a reason to blind ourselves to protectionism’s many flaws. In the long-term, protectionism isn’t in America’s national interest. It won’t make America great. Let’s hope we don’t have to rediscover that truth the hard way.


Samuel Gregg is Research Director at the Acton Institute and author of For God and Profit: How Banking and Finance Can Serve the Common Good (2016).

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Panhandling and the Pope: A Better Strategy to Help the Poor

Have you ever struggled with what to do when you encounter a person on the sidewalk of a major city or standing at a busy traffic intersection with a cup in hand? Have you given such individuals money or been deterred by the prospects of what your cash or coins might be used to purchase? Have you ever felt guilty if you did nothing to help?

In a recent interview in the Italian magazine Scarp de’ Tenis, Pope Francis argued that giving money to someone begging on the street is “always right.” What if the recipient of your gift decides to uses the money to buy a glass of wine instead of food? If “a glass of wine is the only happiness he has in life,” the pope replied, “that’s OK. Instead, ask yourself, what do you do on the sly? What ‘happiness’ do you seek in secret?”

The pope also urges us “to stop, look the person in the eyes, and touch his or her hands.” Doing this enables us to preserve the other person’s dignity and see him or her as “not as a pathology or a social condition, but as a human,” who has the same value we do.

Compassion is always the right response, but we can express it in better ways than simply giving money to strangers on the sidewalk who ask for handouts.

Responding to Pope Francis’ advice, the New York Times editorialized, “America is in the middle of a raging argument over poor outcasts,” which includes “building walls and repelling foreigners. That toxic mind-set can be … confronted on the sidewalk. You don’t know what that guy will do with your dollar. Maybe you’d disapprove of what he does. Maybe compassion is the right call.”

Compassion is Always the Right Response, But …

Compassion is always the right response, but we can express it in better ways than simply giving money to strangers on the sidewalk who ask for handouts. As my wife and I discuss in our book Suffer the Children: What We Can Do to Help the World’s Impoverished Children, some evidence indicates that the poor use monetary gifts they receive more effectively than many of us imagine. Most people who have received unconditional cash transfers as part of programs in Kenya, Vietnam, and Mexico have not squandered them on tobacco, booze, or brothels or used them to improve their creature comforts. Instead they have spent the cash to buy food and livestock, educate their children, or start businesses. Nevertheless, many aid organizations, like a local one with which we volunteered, only pay the bills of clients and never give them money, a policy many professionals, business people, and church leaders in our town supported.

We recognize that many, if not most, panhandlers have had extremely difficult lives. As we correctly fear, however, some are able-bodied and some will use the money to support their addiction to alcohol or drugs.

Therefore, if you want to help a person who is begging for money, why not instead carry nonperishable food in your car or gift cards for grocery stores or restaurants in case you encounter such a person? Or you could buy some food at a grocery store and bring it to her, or offer to take her to a restaurant to eat. If you do, you will know how your money was used and you can talk with the person and learn about his life story and particular problems.

Moreover, you can also become knowledgeable about nearby organizations, especially shelters and rescue missions, to refer or even take these people. Near me, for example, in Pittsburgh, you could direct a person asking for money to the Light of Life Rescue Mission, which since 1952 has been working to help the homeless and indigent by providing a variety of programs for men, women and children. Every city has similar organizations whose staff can establish relationships with these individuals, get to know them well, and furnish counseling, training, spiritual nurturing and aid to overcome addictions. You can also volunteer at one of these organizations to prepare and serve meals, talk with those who reside and/or eat there, and assist in outreach programs the mission operates in the community.

Finally, we can and should give more generously and wisely to organizations that are working to help the homeless and indigent. Various surveys indicate that only 3 to 8 percent of Americans donate 10 percent or more of their income to charitable causes of any kind. One survey found that 86 percent of Americans give less than 2 percent of their income to churches or charities.

Giving Money Away Intelligently

As Nicholas Kristof and Sheryl WuDunn argue in their book A Path Appears, “people rarely give money away as intelligently as they make it” and, as a result, “much charitable giving isn’t very effective.” Rather than simply dispensing charity, we should enable the poor to help themselves. We should offer a hand up rather than a handout by supporting programs that equip people to be self-sustaining by providing them with education, vocational training, business loans, or jobs.

Scripture teaches that God has designed the world so that giving provides many blessings. Proverbs 11:24-25 declares, “A generous person will prosper; whoever refreshes others will be refreshed.” The Psalms proclaim, “Good will come to those who are generous and lend freely, who conduct their affairs with justice” (112:5). Research indicates that those who practice generosity enjoy more happiness, better health, and a greater sense of satisfaction and purpose in life.

So, let’s heed Pope Francis’ counsel to help the homeless, destitute, and vulnerable, but let’s assist them in the ways that will benefit them the most.


Dr. Gary Scott Smith chairs the history department at Grove City College and is a fellow for faith and politics with The Center for Vision Values. He is the author of Suffer the Children (2017), Religion in the Oval Office (Oxford University Press, 2015), Faith and the Presidency From George Washington to George W. Bush (Oxford University Press, 2009), Religion in the Oval Office and Heaven in the American Imagination (Oxford University Press, 2011).

The article originally appeared on on March 9, 2017 and is reprinted with permission. 

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Pimco revamps BOND ETF, changing fund’s name and managers

NEW YORK Pacific Investment Management Co (Pimco) is replacing the full slate of managers on its Total Return Active Exchange-Traded Fund (BOND.P) and changing its name, a spokeswoman for the fund management company said on Wednesday, the latest transformation for what was once the largest actively managed ETF.

The fund’s new name will be the Pimco Active Bond ETF. Managers Scott Mather, Mark Kiesel and Mihir Worah are being replaced by David Braun, Jerome Schneider and Daniel Hyman.

The ETF’s ticker, BOND, will remain, a Pimco spokeswoman said.

Once run by Pimco co-founder Bill Gross, the ETF’s assets have fallen to $2 billion from $5.2 billion at its 2013 peak.

The new managers bring “the right mix of expertise and experience in an evolving ETF investing environment where clients are seeking more income,” at a time of low rates and low returns, the spokeswoman said in an emailed statement.

The ETF will change its stated goals, including adopting new rules that allow fund managers to build more exposure to high-yield junk bonds and have more flexibility on how much interest rate risk they will take on. Investors expect U.S. interest rates to rise.

The changes are expected to take effect by May 8, pending regulatory approvals.

The Pimco Total Return Active ETF was an actively managed intermediate-term ETF intended to mimic the strategy of Pimco’s flagship mutual fund, the Pimco Total Return Fund, which was also run by Gross.

BOND first began losing assets in September 2014 after the U.S. Securities and Exchange Commission said it was looking into whether Pimco inflated returns of the fund, then managed by Gross. That same month, Gross abruptly left Pimco in a messy split. He now works for Janus Capital Group Inc (JNS.N)

Pimco agreed in December to pay $20 million to settle charges it misled investors about the fund’s performance. The company did not admit or deny the findings, and said at the time that it has enhanced its policies.

Pimco, which managed nearly $1.47 trillion on Dec 31 and is based in Newport Beach, Calif., is a unit of German insurer Allianz SE (ALVG.DE).

“While BOND was a strong asset gatherer in early days, it has shed assets,” facing competition from funds managed by Fidelity Investments and DoubleLine Capital LP’s Jeffrey Gundlach, said Todd Rosenbluth, director of ETF and mutual-fund research at SP Global Market Intelligence.

“While investors will likely wait to see what changes in the exposures, the move could restart asset growth.”

Schneider currently manages Pimco’s largest ETF, the Pimco Enhanced Short Maturity Active ETF (MINT.P), and runs the company’s short-term and funding desk.

Mather, Kiesel and Worah will continue to manage the Pimco’s flagship mutual fund, the Pimco Total Return Fund, which was once the world’s largest bond fund at a peak of $292.9 billion in assets.

The Total Return Fund now oversees assets under management of $74 billion as of the end of February, despite solid performance over the last 12 months.

(Reporting by Trevor Hunnicutt and Jennifer Ablan; Editing by Frances Kerry and David Gregorio)

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Dow, S&P 500 end down, led by drop in energy

NEW YORK The SP 500 and the Dow Jones Industrial Average dipped on Wednesday as energy stocks suffered their worst drop in nearly six months.

Based on latest available data, the Dow Jones Industrial Average .DJI was down 69.14 points, or 0.33 percent, to 20,855.62, the SP 500 .SPX had lost 5.4 points, or 0.23 percent, to 2,362.99 and the Nasdaq Composite .IXIC had added 3.62 points, or 0.06 percent, to 5,837.55.

(Reporting by Caroline Valetkevitch; Editing by Nick Zieminski)

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Snap perks up after initial rush of short sellers

SAN FRANCISCO Shares of Snap Inc (SNAP.N) bounced back on Wednesday following a steep selloff while an initial rush to short sell the stock appeared to be slowing.

The owner of the Snapchat messaging app had fallen sharply in the previous two sessions as investors focused on its lofty valuation following a $3.4 billion public listing last week that was the hottest technology offering in three years.

Shares of Snap, which has warned it may never be profitable, closed up 6.4 percent at $22.81.

Traders betting against Snap on Wednesday added less than $50 million in new short sales of its stock, a slower pace than the day before, when initial short bets jumped to $300 million, according to S3 Partners, a financial analytics firm.

Short sellers borrow and then sell stocks they think will fall in value, hoping to profit by buying the stock back more cheaply later on and then returning it to its owner.

Reflecting a higher supply of Snap’s shares and potentially less demand, the annual interest rates brokers charged to lend the shares declined to around 15 percent from as much as 40 percent on Tuesday, said S3 Partners Managing Director of Research Ihor Dusaniwsky.

By comparison short sellers paid 19 percent to borrow Twitter’s (TWTR.N) stock after its 2013 listing, according to IHS Markit.

Traders looking for a piece of the action in Snap will get another way to bet when its options start trading on Friday.

Snap has been a roller-coaster ride for investors, surging 59 percent in its first two days of trading, and falling 15 percent since then.

Billionaire investor David Tepper, whose views on stocks are closely watched by other money managers, told CNBC on Wednesday he bought shares of Snap in the IPO, sold some, and would buy again if the price dropped.

FTSE Russell will consult with big investors on whether to include companies like Snap in its widely followed stock indexes even if their shares lack voting rights, an FTSE Russell executive said.

Snap would benefit if it were added to major stock indexes because index portfolios managers would have to buy its shares, and other investors whose performance is tracked against such benchmarks would likely follow suit.

(Reporting by Noel Randewich; Editing by Meredith Mazzilli)

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NAR Survey Finds Gen X on the Mend; More Children Living with Millennials and Boomers

WASHINGTON (March 7, 2017) — An improving economy, multiple years of strong job growth and the notable increase in home values in most markets fueled a greater share of purchases from Generation X households over the past year.

This is according to the National Association of Realtors® 2017 Home Buyer and Seller Generational Trends study, which evaluates the generational differences 1 of recent home buyers and sellers. The survey additionally found that a growing number of millennials and younger boomer buyers have children living at home; student debt is common among Gen X and boomer households; more millennials are buying outside the city; and younger generations are more likely to use a real estate agent.

Much of the spotlight in recent years has focused on the several challenges millennials are enduring on their journey to homeownership. According to Lawrence Yun, NAR chief economist, lost in this discussion are the numerous Generation X households who bought their first home, started a family and entered the middle part of their careers only to be rattled by job losses, falling home values and overall economic uncertainty during and after the Great Recession.

This year’s survey reveals that debt and little or no equity in their home slowed many Gen X households from buying sooner. Recent Gen X buyers delayed buying longer than millennials because of debt, were the most likely generation to have previously sold a distressed property and were the generation most likely to want to sell earlier but couldn’t because their home was worth less than their mortgage. Furthermore, Gen X buyers indicated they had the most student loan debt ($30,000).

“Gen X sellers’ median tenure in their previous home was 10 years, which puts many of them selling a property they bought right around the time home values were on the precipice of declining,” said Yun. “Fortunately, the much stronger job market and 41 percent cumulative rise in home prices since 2011 have helped a growing number build enough equity to finally sell and trade up to a larger home. More Gen X sellers are expected this year and are definitely needed to ease the inventory shortages in much of the country.”

The uptick in purchases from Gen X buyers this year (28 percent) was the highest since 2014 and up from 26 percent in 2016. Millennials were the largest group of recent buyers for the fourth consecutive year (34 percent), but their overall share was down slightly from a year ago (35 percent). Baby boomers were 30 percent of buyers, and the Silent Generation made up 8 percent.

Younger boomers increasingly consider adult children when buying

This year’s survey also brought to light how the soaring cost of rent in many areas is likely influencing the decision of middle-aged parents to buy a home with their young adult children in mind. Younger boomers were the most likely to purchase a multi-generational home (20 percent; 16 percent in 2016), and the top reason for doing so was that children over 18 years old either moved back home or never left (30 percent; 27 percent in 2016).

“The job market is very healthy for young adults with a college education, but repaying student debt and dealing with ever-increasing rents on an entry-level salary are forcing many to either shack-up with several roommates or move back home,” said Yun. “This growing trend of delayed household formation is one of the main contributors to the nation’s low homeownership rate.”

Student debt is not just a millennial problem

Debt, particularly from student loans, appears to be a portion of the household budget of buyers in every generation. While millennials were the most likely to have student debt (46 percent), their typical balance ($25,000) was lower than Gen X buyers ($30,000). A combined 16 percent of younger and older boomer buyers also had student debt, with a median balance of over $10,000 for each group.

Among the share of buyers who said saving for a down payment was the most difficult task, millennials were most likely to cite student loans as the debt that delayed saving (55 percent), followed by Gen X (29 percent) and younger boomers (9 percent).

“Repaying student debt also appears to be slowing some current homeowners who went to graduate school and now can no longer afford to sell and trade up because of their loans,” added Yun. “Nearly a third of homeowners in a NAR survey released last year said student debt is preventing them from selling a home to buy a new one.”

More millennials moving to the suburbs…with their kids

Similar to previous years, roughly two-thirds of millennial buyers are married. One aspect of their household that has changed is the number of children in them. In this year’s survey, 49 percent of millennial buyers had at least one child, which is up from 45 percent last year and 43 percent two years ago.

With more kids in tow, the need for more space at an affordable price is increasingly pushing millennial buyers outside the city. Only 15 percent of millennial buyers bought in an urban area, which is down from 17 percent last year and 21 percent two years ago.

“Millennial buyers, at 85 percent, were the most likely generation to view their home purchase as a good financial investment,” added Yun. “These strong feelings bode well for even greater demand in the future as more millennials settle down and begin raising families. A significant boost in new and existing inventory will go a long way to ensuring the opportunity is there for more of them to reach the market.”

Millennial buyers and sellers overwhelmingly go online and use a real estate agent

Regardless of age, buyers and sellers continue to see real estate agents as an integral part of a real estate transaction. In this year’s survey, nearly 90 percent of respondents said they worked with a real estate agent to buy or sell a home. This kept for-sale-by-owner transactions down at their lowest share ever (8 percent).

Not surprisingly, online and digital technology usage during the home search has increased in recent years. Although millennials and Gen X buyers were the most likely to go online during their search, they were also the most likely to buy their home using a real estate agent (92 percent and 88 percent, respectively). On the seller side, millennials were the most likely to use an agent (90 percent), followed closely by Gen X and younger boomer sellers (each at 89 percent).

“Online and mobile technology is increasingly giving consumers a glut of real estate data at their disposal,” said NAR President William E. Brown, a Realtor® from Alamo, California. “However, at the end of the day, buyers and sellers of all ages — but especially younger and often DIY-minded consumers — seek and value a Realtors®’ ability to dissect this information and use their expertise and market insights to coach buyers and sellers through the complexities of a real estate transaction.”

NAR mailed a 132-question survey in July 2016 using a random sample weighted to be representative of sales on a geographic basis to 93,171 recent homebuyers. Respondents had the option to fill out the survey via hard copy or online; the online survey was available in English and Spanish. A total of 5,465 responses were received from primary residence buyers. After accounting for undeliverable questionnaires, the survey had an adjusted response rate of 5.9 percent. The sample at the 95 percent confidence level has a confidence interval of plus-or-minus 1.32 percent.

The recent homebuyers had to have purchased a home between July of 2015 and June of 2016. All information is characteristic of the 12-month period ending in June 2016 with the exception of income data, which are for 2015.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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1 Survey generational breakdowns: younger millennials (ages 26 and under); older millennials (ages 27-36); Generation X (ages 37-51); younger boomers (ages 52-61); older boomers (ages 62-70); and the Silent Generation (ages 71-91).

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