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Corporate America Sounds Alarm on Trump's Threats Over China BloombergU.S. companies are concerned about President Donald Trump's threats to ban them from doing business in China, and they're poised to halt new investments if ...
In a surprise move, more than 20,000 union workers for AT&T in the Southeast went out on strike as of midnight Friday, officials said.
Members of the Communication Workers of America – including 4,000 in Georgia – charged the huge telecommunications company with unfair labor practices during negotiations aimed at securing a new contract.
The previous agreement expired Aug. 3.
Since then, the talks have gone nowhere because the company has made sure that an agreement cannot happen said Richard Honeycutt, the union’s vice president for the Southeast in a statement issued late Friday. “Our talks have stalled because it has become clear that AT&T has not sent negotiators who have the power to make decisions so we can move forward toward a new contract.”
The company, which is based in Dallas, has annual revenue of about $170 billion a year. It includes the remnants of Atlanta-based BellSouth, which for more than two decades was the largest of the seven regional phone companies.
Company officials said they were blindsided and mystified by the strike call.
“We’re baffled as to why union leadership would call one when we’re offering terms that would help our employees – some of whom average from $121,000 to $134,000 in total compensation – be even better off,” said AT&T spokesman Jim Kimberly.
Company officials were adamant about being prepared for a walk-out. In the days before the contract expired, AT&T officials said they would be prepared for a strike and that business operations would go on smoothly with managers, executives and contractors picking up the slack.
“We’re prepared for a strike and in the event of a work stoppage, we will continue working hard to serve our customers,” Kimberly said on Friday night
Union leaders scoffed at the notion, arguing that the company will have to prioritize work delaying new installations and non-emergency maintenance.
The union said it has filed an unfair labor practice charge with the National Labor Relations Board, arguing that the company has not bargained in good faith.
The union’s Southeast region includes technicians, customer service representatives and others who “install, maintain and support” the company’s landline and internet line services. The region includes Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee.
Union officials have said that the key issues are job security and a steady rise in healthcare costs.
The timing of the strike gives the union leverage in some ways, but favors the huge company in others.
To the workers advantage is a tight labor market in which a low unemployment rate has many employers complaining of a shortage in skilled workers.
But changes in technology allow the company's day-to-day operations to continue smoothly, which may encourage AT&T to try waiting out the strike.
And the federal agency that the union is making its complaints to, the NLRB, has become more conservative over the years even as the influence of unions nationally has shrunk.
Moreover, the South has long been a region with fewer union members and governments that are typically not sympathetic.
That backdrop has made many southern unions reluctant to strike. But some telecom workers have said they are under continued pressure, that wages are rising more slowly than costs while the company shifts to lower-paid jobs and contract workers.
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President Trump stands to save millions of dollars annually in interest on outstanding loans on his hotels and resorts if the Federal Reserve lowers rates as he has been demanding, according to public filings and financial experts.
In the five years before he became president, Trump borrowed more than $360 million via four loans from Deutsche Bank for his hotels in Washington, D.C., and Chicago, as well his 643-room Doral golf resort in South Florida.
The payments on all four properties vary with interest rate changes, according to Trump’s official financial disclosures. That means he has already benefited from falling interest rates that were spurred in part by a cut the Federal Reserve announced in July, the first in more than a decade — and his payments could drop by millions of dollars more annually if the central bank grants Trump’s wish and further lowers short-term rates, experts said.
“It will reduce his borrowing costs quite a bit if he gets what he wants,” said Phillip Braun, a finance professor at Northwestern University’s Kellogg School of Management. Braun said Trump’s savings could be even greater if Deutsche Bank permits his company to pay down the loans more quickly without a penalty, which banks sometimes allow.
The White House and the Trump Organization did not respond to requests for comment.
While Trump’s adult sons, Donald Trump Jr. and Eric Trump, are managing the family business, the president insisted on retaining ownership of his company after his election, bucking the practice of past presidents. That decision, ethics experts warned, would lead to potential conflicts of interest between his personal interests and public policy goals.
The Trump administration has argued that lower interest rates would spur more consumers to buy homes and cars and businesses to invest in new factories. Cutting rates also typically lowers the value of the dollar, making U.S. products cheaper to overseas buyers, a goal of the president.
But most economists and business leaders say Trump’s trade war is the biggest threat to the economy, not interest rates, which are already at historically low levels.
Since taking office, Trump has aggressively sought to lower interest rates and rejected the mostly hands-off approach other presidents have taken to the Fed, repeatedly blasting Chair Jerome H. Powell — whom Trump appointed to the post last year — for not falling in line.
On Friday, after Powell made no announcement of a rate cut and instead voiced concerns about Trump’s trade war with China, the president immediately attacked him on Twitter, writing that “As usual the Fed did NOTHING!” and comparing Powell to Chinese President Xi Jinping.
“My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?” Trump posted.
Trump and his advisers have privately discussed creating a rotation among the Federal Reserve governors that would reduce Powell’s influence, The Washington Post reported this past week.
Asked Friday night by reporters if he wanted Powell to resign, the president responded, “If he did, I wouldn’t stop him.”
[Trump calls the Fed chair an ‘enemy’ after Powell said trade war is ‘turbulent’]
The central bank’s benchmark rate is one factor in determining interest owed on variable-rate loans, the kind the president has on his properties. Mortgage rates have also been driven down because of the trade war with China and anxieties about global growth.
Experts said it’s difficult to ascertain exactly how much Trump would save if he gets the reduction in short-term interest rates that he has urged, from 2.25 percent to 1.25 percent — a move typically reserved for economic emergencies.
But the president would be substantially impacted by a rate cut, they agreed.
Beginning in 2012, Deutsche Bank provide Trump’s company with about $364 million in loans by working through the bank’s private wealth division, rather than through traditional commercial lending units, according to public loan documents.
The borrowing was for two loans totaling $125 million to buy and renovate the Doral golf resort in Florida, a $170 million loan to renovate Washington’s Old Post Office Pavilion into a Trump hotel and a $69 million loan to refinance an existing Trump hotel in Chicago.
Trump’s financial disclosures and loan records indicate that all four of the loans remain outstanding. His company has paid down at least $19 million of the Chicago loan, according to the filings, though the documents do not show the amount of the remaining balances for any of the properties.
Trump could save at least $600,000 and as much as $1.1 million annually on just the larger of the two Doral loans if the Fed made a percentage point reduction, depending on the loan agreement, according to Clifford Rossi, a professor at the University of Maryland’s business school.
Even a quarter-point reduction, which most Wall Street investors now predict will occur in mid-September, could save Trump as much as $275,000 annually on that single Doral loan.
“If you’re a consumer borrower with a car loan or a credit card, a quarter-point reduction is significant savings,” Rossi said. Trump “has more loans and a bigger dollar size, so he would get certainly a larger reduction on the amount owed than most Americans out there.”
An analysis by Bloomberg News found that for every quarter-point reduction, Trump could save $850,000 in annual interest rate payments, which would mean more than $3 million in annual savings if the Fed dropped rates a full percentage point as Trump has demanded.
During his years as a real estate developer, Trump was famous for his aggressive efforts to save money, even when it meant breaking up relationships or shattering professional norms.
Trump has been sued dozens of times for nonpayment of bills, by building contractors, bartenders and even his own lawyers. He used money from a nonprofit charity to pay off legal settlements for his for-profit businesses. He once sued his own lender, Deutsche Bank, to get out of a large mortgage.
Before entering politics, Trump often advocated for lower interest rates, which are key for a business that relies on large sums of debt.
“Interest rates are very critical to the real estate industry, and [Trump has] spent his whole career there, so he has strong opinions about where interest rates should be,” said James Bullard, president of the Federal Reserve Bank of St. Louis. “Every real estate person I’ve ever met in my life has always wanted lower rates in all circumstances, so I think that’s part of [Trump’s] nature.”
In the 1980s, Trump became one of the most aggressive borrowers in the country, using cheap loans to finance an Atlantic City casino empire that ultimately failed and forced four of his companies to file for bankruptcy.
In the wake of that collapse, Trump was largely frozen out by big banks. He used cash to fund much of his company’s more recent real estate expansion, then turned to an increasingly risk-taking Deutsche Bank for some big loans starting in 2012, as The Post has previously reported.
Democrats in Congress have subpoenaed his Deutsche bank records, but Trump sued to stop the bank from responding and the matter remains mired in court.
Previous presidents have avoided publicly criticizing the Fed to maintain the board’s insulation from politics. Trump decided otherwise from the get-go and as global economic concerns mounted in recent weeks, he escalated his already routine attacks on Powell, tweeting at different times in July that “the Federal Reserve doesn’t have a clue!” and “They raised rates too soon, too often, & tightened, while others did just the opposite.”
Four former Fed chairs, collectively appointed and reappointed by six presidents, then published a Wall Street Journal op-ed urging that the Fed be allowed to act “free of short-term political pressures and, in particular, without the threat of removal or demotion of Fed leaders for political reasons.”
Trump further amped up the pressure Friday after Powell spoke at a meeting of central bankers in Jackson Hole, Wyo. The chair said the U.S. economy was in a “favorable place” but that the trade war Trump launched against China had created a “complex, turbulent” situation.
Trump responded with a tirade on Twitter, blaming China for a boatload of issues and demanding that U.S. companies avoid doing business there. Stock market investors, already wary of a shaky bond market and declining consumer confidence, began a sell-off that resulted in steep market losses.
Braun, the Northwestern professor, said Trump’s constant pressure on the Fed chair and his colleagues to adjust rates to suit the president’s liking could hurt the U.S. economy.
“I don’t think the Fed should be accommodating Trump’s trade war, and the risk is potential inflation and the reputation of the Fed in the future,” he said.
More than 20,000 union workers for AT&T in the Southeast are on strike as of midnight Friday, officials said.
Members of the Communication Workers of America – including 4,000 in Georgia – charged the huge telecommunications company with unfair labor practices during negotiations aimed at securing a new contract.
The previous agreement expired Aug. 3.
Since then, the talks have gone nowhere because the company has made sure that an agreement cannot happen said Richard Honeycutt, the union's vice president for the Southeast in a statement issued late Friday. "Our talks have stalled because it has become clear that AT&T has not sent negotiators who have the power to make decisions so we can move forward toward a new contract."
The company, which is based in Dallas, has annual revenue of about $170 billion a year. It includes the remnants of Atlanta-based BellSouth, which for more than two decades was the largest of the seven regional phone companies.
Company officials said they were blindsided and mystified by the strike call.
"We're baffled as to why union leadership would call one when we're offering terms that would help our employees – some of whom average from $121,000 to $134,000 in total compensation – be even better off," said AT&T spokesman Jim Kimberly.
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Company officials were adamant about being prepared for a walk-out. In the days before the contract expired, AT&T officials said they would be prepared for a strike and that business operations would go on smoothly with managers, executives and contractors picking up the slack.
"We're prepared for a strike and in the event of a work stoppage, we will continue working hard to serve our customers," Kimberly said on Friday night
Union leaders scoffed at the notion, arguing that the company will have to prioritize work delaying new installations and non-emergency maintenance.
The union's Southeast region includes technicians, customer service representatives and others who "install, maintain and support" the company's landline and internet line services. The region includes Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee.
Union officials have said that the key issues are job security and healthcare costs.
Workers could have stayed on the job without a contract, even if negotiators failed to reach a deal. More than 30,000 Verizon workers last summer ratified a contract after working for a year without one.
This article was written by Michael E. Kanell, The Atlanta-Journal Constitution.
© 2019 Cox Media Group.
Amazon is reportedly selling thousands of products that are mislabeled, banned, or declared unsafe by federal agencies, according to an investigation from The Wall Street Journal. It found that no fewer than 4,152 items fitting those criteria were freely available to buy on Amazon’s storefront.
The list of mislabeled, banned, and unsafe products found by the Journal is shocking, including “FDA-approved” products that the agency never vetted, medication that lacked child safety warnings, banned sleeping wedges for babies, illegally imported prescription drugs, electronics that falsely claim UL-certified safety ratings, toys with unsafe amounts of lead or potential choking hazards, and more. Many of the products found had the company’s Amazon Choice label, which isn’t something you should automatically put any trust in. Perhaps worst of all, the investigation found at least 157 items that Amazon said it explicitly banned.
The issue here is Amazon’s massive network of third-party sellers that sell freely on Amazon and even ship from the company’s warehouses if they participate in the “Fulfilled by Amazon” program. Product pages for third-party sellers can be hard to tell apart from “Sold by Amazon.com” items. A small line of text is the only thing that indicates who the actual seller is.
But there’s a big difference between buying from Amazon and buying from someplace else through Amazon. Namely, Amazon doesn’t take legal responsibility for unsafe products because it’s technically not the one selling it. Any disputes have to be taken up with the third-party seller.
It didn’t use to be this way, but as marketplace sellers have exploded onto the scene through Amazon, the company’s moderation of those listings (done by a combination of human workers and machine learning flags) simply hasn’t been able to keep up with the sheer volume of products. Barring a major shift in policy on Amazon’s end, it seems that customers will continue to be on their own when it comes to making smart purchases from the online retail giant, especially where third-party sellers are concerned. The Journal’s Joanna Stern has some suggestions on how you can avoid unsafe or other iffy purchases.
Amazon has since responded to the WSJ’s investigation with a blog post, where the company shared more information about how it approves third-party sellers and the tools it uses to try and weed out problematic listings. Per the post, “We invest significant resources to protect our customers and have built robust programs designed to ensure products offered for sale in our store are safe and compliant.”
Update August 23rd, 3:25pm: Added statement from Amazon regarding preventative measures for problematic products.
JACKSON HOLE, Wyo. (Reuters) - When Federal Reserve Chair Jerome Powell speaks in Jackson Hole, Wyoming, on Friday, traders will comb through his remarks for clues on whether the U.S. central bank will deliver more rate cuts this year.
FILE PHOTO: Federal Reserve Chair Jerome Powell holds a news conference following the Federal Reserve's two-day Federal Open Market Committee Meeting in Washington, U.S., July 31, 2019. REUTERS/Sarah Silbiger/File Photo
They may be disappointed.
For all his reputation as the most plain-spoken person to run the U.S. central bank in decades, if not ever, Powell may be reluctant in his remarks to fellow central bankers at this year’s Kansas City Fed economic symposium to say much about where rates will go. The reason: he may not actually know, and does not want to get locked in.
Fellow Fed policymakers, even those who supported July’s rate cut, are signaling reluctance to do more, with Philadelphia Fed chief Patrick Harker calling for a wait-and-see approach and Dallas Fed chief Robert Kaplan saying he is “open minded” but would “like to avoid having to take further action.”
Since the Fed cut rates in July, the U.S. economic picture has darkened.
New threats by President Donald Trump to impose additional tariffs on China, and then a decision to defer some of those new taxes until December, are boosting already heightened uncertainty for businesses.
U.S. factory activity is on the decline.
Globally, dozens of central banks are cutting rates and some economies look poised to fall into recession.
Finally, in a signal that investors are increasingly worried about a U.S. recession, yields on 2-year Treasuries sank below those 10-year debt on Thursday in yet another “yield curve inversion.”
At the same time, labor markets remain strong and consumers continue to spend at stores and online.
Part of the reason the yield curve inverted is because the U.S. economy remains so much stronger than much of Europe: investors would rather have “safe” U.S. Treasuries, even with their dropping yields, than say, German bonds with a negative yield.
Beyond the conflicting economic data, dire market signals and dissent from within the Fed, Powell may also want to lay low to avoid attracting even more vitriol than he already has as the first Fed chief to be publicly called "clueless" by the president who appointed him.
“The Economy is doing really well. The Federal Reserve can easily make it Record Setting!,” Trump said on Twitter on Thursday. “Be early (for a change), not late. Let America win big, rather than just win!”
Even if Powell sticks to a set piece, characterizing last month’s move as a “mid-cycle” adjustment and preserving his options going forward, he could still disappoint markets and court even more turbulence.
Investors though, have high hopes that the Fed will stimulate the economy, placing overwhelming bets that the central bank will lower borrowing costs again at its Sept. 17-18 policy meeting.
Reporting by Ann Saphir, Howard Schneider and Trevor Hunnicutt; Editing by Dan Grebler
JACKSON HOLE, Wyo. (Reuters) - Federal Reserve Chair Jerome Powell comes to this year’s meeting of central bankers in Jackson Hole, Wyoming, caught between discord within the U.S. central bank over appropriate monetary policy and mounting outside pressure for more interest rate cuts.
FILE PHOTO: U.S. President Donald Trump looks on as Jerome Powell, his nominee to become chairman of the U.S. Federal Reserve, speaks at the White House in Washington, U.S., November 2, 2017. REUTERS/Carlos Barria
In navigating that divide, Powell is unlikely to use his keynote speech on Friday at the Kansas City Fed’s annual economic symposium to veer much from the message he sent last month after the Fed cut rates for the first time in a decade: That the move was a “mid-cycle adjustment” and not the start of a rate-cutting cycle.
He will likely nod to the possibility that trade tensions, which have escalated since the July 30-31 policy meeting, may worsen a global economic slowdown and ultimately make more U.S. rate cuts necessary.
But he is expected also to try to ensure he is not seen as bowing before repeated attacks from President Donald Trump for not easing policy further, or caving to a bond market where investors appear to be heavily betting the policy-setting Federal Open Market Committee will end up doing so.
“We cannot rule out this year’s Jackson Hole being another fundamental shift in policy as it has been in years past,” UBS economists wrote in a note earlier this week. “But more likely, Powell will give another speech on risk management to try to lean dovish without committing to bold actions that the committee may not ratify.”
Since last August’s annual central bank gathering in Grand Teton National Park, Powell has faced an increasingly difficult terrain both politically and economically.
Trump has steadily ratcheted up his criticism of the Fed and Powell, who was handpicked by the president in late 2017 to head the central bank.
Last week, Trump called Powell “clueless” and urged the Fed to reduce borrowing costs by a full percentage point to boost the economy, which is feeling the drag from the U.S.-China trade war.
Some Fed policymakers point to low U.S. unemployment, which is near a half-century low, strong consumer spending and other bullish data as reason to hold the line on any further interest rate moves.
But the economy has slowed as the stimulus from Trump’s tax cuts and increased government spending have faded, and business sentiment and spending have declined amid mounting uncertainty over the outcome of the White House’s trade policies.
As trade wars and other economic developments have slowed growth in countries from Germany to Turkey to Australia, central banks have responded by cutting interest rates, setting up an international trend the Fed may find it hard to buck.
Powell’s colleagues inside the Fed are nowhere near a broad consensus on how to proceed. The Fed chief mustered a majority among the current voting policymakers to back last month’s rate cut, but the minutes of the meeting released on Wednesday showed a wider gulf inside the broader committee than was reflected in the decision.
Caught between these moving levers, Powell may opt to stand still.
“(Powell) does not want to surprise with a 100-basis-point cut ... (he wants to) telegraph it methodically and achieve the easing in a way that everybody around the world can see and anticipate and prepare for,” said Julia Coronado, who runs the consulting firm MacroPolicy Perspectives and follows the Fed closely.
Powell faces other complications that have emerged since last year’s Jackson Hole conference.
On trade, his conundrum is this: If he cuts rates to offset risks from uncertainties over Trump’s policies, the president may simply go harder at China, creating more uncertainty in markets and among businesses and making further rate cuts necessary.
After the rate cut last month, Trump vowed to impose tariffs on an additional $300 billion in Chinese imports on Sept. 1, though he later deferred some of the levies to December.
One index tracking world trade uncertainty has spiked recently, driving up overall global uncertainty that in the past has set the stage for downturns. (For a graphic, please see here)
“If the Fed cuts rates as Trump demands, that will ease pressure on the stock market, which Trump may take as giving him a stronger hand in his trade spat with China,” said Nicholas Bloom, an economics professor at Stanford University and one of the authors of the policy uncertainty index.
“Central banks can’t really provide insurance against potential trade wars.”
Markets are also creating a difficult-to-navigate feedback loop. A yield curve inversion last week that reversed itself and then returned on Thursday underscores investors’ fears that a recession may be around the corner, and while some Fed policymakers have cautioned against taking too much of a signal from falling long-term borrowing rates, others say they can’t be ignored.
The feedback loop between the Fed and bond markets “might not be broken until the economic data signal very decisively that further easing is inappropriate,” Goldman Sachs economist Jan Hatzius wrote this week.
Last year at Jackson Hole, Powell tried to fundamentally reset U.S. monetary policy expectations toward a data-centric practice and away from theory-based models. This year, though, the challenge is that the data itself is giving mixed signals.
“Part of the problem is that the Fed has raised transparency and guidance to such a level that when they are in a situation where things are really, literally, uncertain and it is hard to give that guidance, the markets don’t know what to do,” said Maurice Obstfeld, an economics professor at the University of California, Berkeley. “You don’t know what is going to happen next.”
Reporting by Ann Saphir; Editing by Dan Burns and Paul Simao
