President Donald Trump launched a new attack against his own Federal Reserve chairman in a pair of Monday morning tweets.
The president has been publicly pressuring Fed chairman Jerome Powell to lower interest rates in hopes of staving off a recession, but the Trump appointee has so far resisted his calls.
“Producer prices in China shrank most in 3 years due to China’s big devaluation of their currency, coupled with monetary stimulus,” Trump tweeted. “Federal Reserve not watching? Will Fed ever get into the game? Dollar strongest EVER! Really bad for exports. No Inflation…Highest Interest Rates…”
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Trump has publicly questioned Powell’s judgment on numerous occasions and even suggested he was an “enemy” of the United States, and he hurled another disparaging remark at the Fed chairman.
“The United States, because of the Federal Reserve, is paying a MUCH higher Interest Rate than other competing countries,” he tweeted. “They can’t believe how lucky they are that Jay Powell & the Fed don’t have a clue. And now, on top of it all, the Oil hit. Big Interest Rate Drop, Stimulus!”
…The United States, because of the Federal Reserve, is paying a MUCH higher Interest Rate than other competing countries. They can’t believe how lucky they are that Jay Powell & the Fed don’t have a clue. And now, on top of it all, the Oil hit. Big Interest Rate Drop, Stimulus!
… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and legal efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. And unlike other news outlets, we’ve decided to make our original content free. But we need your support to do what we do.
Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from billionaires and corporate overlords, we fight to ensure no one is forgotten.
… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. Unlike other news sites, we’ve decided to make our original content free. But we need your support to do what we do.
Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from corporate overlords, we fight to ensure no one is forgotten.
United Auto Workers President Gary Jones speaking at the opening of GM-UAW contract talks on July 16 in Detroit.
The deadlock comes at an awkward time for the United Auto Workers union, one of the most powerful labor groups in the country.
UAW President Gary Jones was directly implicated late Thursday in a growing scandal involving the union and its finances, the Detroit News reported.
It could further damage the necessary trust that rank and file union members have in the union's leadership during negotiations.
The scandal involves misappropriation of union funds, and in some cases, union officials accepting bribes from officials at one of the automakers, Fiat Chrysler.
Agents from the FBI, IRS and Labor Department had searched Jones' home late last month, an FBI spokesman confirmed to CNN.
On Thursday a top union official, Vance Pearson, became the first active union official to be indicted in the scandal.
Nine other people who have pleaded guilty in the scandal were former union officials, the widow of one union official, or employees at Fiat Chrysler who dealt with the union.
The indictment did not name Jones, but the Detroit News reported that he's one of the unidentified co-conspirators named in the government's filing, identified only as "UAW Official A." The News cited three unnamed sources for its report.
The allegation against the UAW president, even if only in a news report, could be bad news for GM in its hope of reaching a deal with the union at a difficult time for the industry, said Kristin Dziczek, vice president of industry labor and economics for the Center for Automotive Research, a Michigan think tank.
The union's 46,000 hourly workers walked out at 31 GM factories and 21 other facilities, spread across nine states, mostly in the center of the country. It's the largest strike by any union against any business since the last strike at GM in 2007.
The strike started at 11:59 pm Sunday night. The two sides did not formally meet Sunday after the union declared its intention to strike at a morning press conference, although union spokesman Brian Rothenberg said that the dialogue between the two sides was ongoing. A new meeting of the two sides is set for 10 a.m. Monday.
The union said that GM was putting profits ahead of employees who helped to turn the company around when it went through bankruptcy and federal bailout a decade ago.
The company said it made a substantial offer that includes improved pay and profit sharing for union members, along with investment to bring new jobs. It also promised a "solution" for two of the four plants currently slated for closure: one in Detroit and another in Lordstown, Ohio.
The company did not say what the solution would be. But a person familiar with GM's offer said it included a promise to build a new electric truck at Detroit Hamtramck, and to build new batteries for electric vehicles in Lordstown. That work wouldn't start immediately, so the plants would likely remain dark for some time. Work would start sometime in the next four years if the offer is accepted.
A source close to the UAW with direct knowledge of negotiations said most of the proposals the company disclosed publicly on Sunday came very late in negotiations Saturday.
The UAW has vowed that keeping the plants open would be a key bargaining demand. Late Saturday it said while there had been progress in the talks there was still "significant differences between the parties on wages, health care benefits, temporary employees, job security and profit sharing."
GM says its average hourly employee earns about $90,000 per year, not including benefits. But the number of hourly workers at GM has declined sharply in recent decades, due to a combination of automation, lost market share and outsourcing. But GM still builds the overwhelming majority of cars it sells in the US market in North America. And it has far more factories in the United States than it does in Mexico or Canada.
The union had earlier extended the contracts at two other US automakers with UAW contracts, Ford(F) and Fiat Chrysler(FCAU), as it targeted GM in an effort to reach a deal that would set a pattern for the industry. The union announced late Saturday while membership would work past the original 12:01 a.m. ET contract expiration early Sunday, there would be no long-term extension of the contract at GM if the two sides did not reach a deal on Sunday.
All three automakers are dealing with slower sales and the need to make huge multi-billion-dollar investments in developing electric and self-driving vehicles that have more long-term potential than current market demand.
It was the need to save money for those efforts that GM halted operations at three US plants — including the assembly line in Lordstown, and announced plans to shut the Hamtramck plant, its last Detroit factory, early next year.
But negotiations come as the union is hit by a scandal involving misappropriation of union funds, and in some cases, union officials accepting bribes from officials at Fiat Chrysler. Nine people associated with the union or Fiat Chrysler have already pleaded guilty to federal charges.
Last week, the Detroit News reported the union's president, Gary Jones, was the unnamed union official identified in the most recent indictment as "UAW Official A." The union has not responded to a request for comment about that report.
Experts say the scandal will make it more difficult to get rank and file union members at the automakers to ratify any tentative deal reached by union leadership. Four years ago the deals all passed by only narrow margins, even though there was no scandal at that time.
The last strike 12 years ago lasted only three days, but some strikes against GM in the past have stretched on for months. For many of the employees hired since 2007, this is their first work stoppage.
The union's 46,000 hourly workers walked out at 31 GM factories and 21 other facilities, spread across nine states, mostly in the center of the country. It's the largest strike by any union against any business since the last strike at GM in 2007.
The strike started at 11:59 pm Sunday night. The two sides did not formally meet Sunday after the union declared its intention to strike at a morning press conference, although union spokesman Brian Rothenberg said that the dialogue between the two sides was ongoing. A new meeting of the two sides is set for 10 a.m. Monday.
The union said that GM was putting profits ahead of employees who helped to turn the company around when it went through bankruptcy and federal bailout a decade ago.
The company said it made a substantial offer that includes improved pay and profit sharing for union members, along with investment to bring new jobs. It also promised a "solution" for two of the four plants currently slated for closure: one in Detroit and another in Lordstown, Ohio.
The company did not say what the solution would be. But a person familiar with GM's offer said it included a promise to build a new electric truck at Detroit Hamtramck, and to build new batteries for electric vehicles in Lordstown. That work wouldn't start immediately, so the plants would likely remain dark for some time. Work would start sometime in the next four years if the offer is accepted.
A source close to the UAW with direct knowledge of negotiations said most of the proposals the company disclosed publicly on Sunday came very late in negotiations Saturday.
GM announced plans in November of 2018 to shut the Detroit and Lordstown assembly plants, along with transmission plants in Baltimore and Warren, Michigan. The UAW has vowed that keeping the plants open would be a key bargaining demand. Late Saturday it said while there had been progress in the talks there was still "significant differences between the parties on wages, health care benefits, temporary employees, job security and profit sharing."
GM says its average hourly employee earns about $90,000 per year, not including benefits. But the number of hourly workers at GM has declined sharply in recent decades, due to a combination of automation, lost market share and outsourcing. But GM still builds the overwhelming majority of cars it sells in the US market in North America. And it has far more factories in the United States than it does in Mexico or Canada.
If the union goes on strike, it will be the largest by any union against any US business since the last time UAW members struck GM in 2007.
The union had earlier extended the contracts at two other US automakers with UAW contracts, Ford(F) and Fiat Chrysler(FCAU), as it targeted GM in an effort to reach a deal that would set a pattern for the industry. The union announced late Saturday while membership would work past the original 12:01 a.m. ET contract expiration early Sunday, there would be no long-term extension of the contract at GM if the two sides did not reach a deal on Sunday.
All three automakers are dealing with slower sales and the need to make huge multi-billion-dollar investments in developing electric and self-driving vehicles that have more long-term potential than current market demand.
It was the need to save money for those efforts that GM halted operations at three US plants — including the assembly line in Lordstown, and announced plans to shut the Hamtramck plant, its last Detroit factory, early next year.
But negotiations come as the union is hit by a scandal involving misappropriation of union funds, and in some cases, union officials accepting bribes from officials at Fiat Chrysler. Nine people associated with the union or Fiat Chrysler have already pleaded guilty to federal charges.
Last week, the Detroit News reported the union's president, Gary Jones, was the unnamed union official identified in the most recent indictment as "UAW Official A." The union has not responded to a request for comment about that report.
Experts say the scandal will make it more difficult to get rank and file union members at the automakers to ratify any tentative deal reached by union leadership. Four years ago the deals all passed by only narrow margins, even though there was no scandal at that time.
The last strike 12 years ago lasted only three days, but some strikes against GM in the past have stretched on for months. For many of the employees hired since 2007, this is their first work stoppage.
The US Federal Reserve looks set to follow the European Central Bank, and cut rates next week by perhaps a quarter of a percentage point. Fed Chairman Jerome Powell has made clear that he doesn't think a US recession is likely, but he has acknowledged that economic headwinds are intensifying.
"There are all these risks, and we're monitoring them very carefully and we're conducting policy in a way that will address them," he said earlier this month.
The comments helped bolster investor expectations that a rate cut will be announced following the central bank's meeting on September 17 and 18. The Fed slashed interest rates for the first time in a decade in July as the cost of the US-China trade war mounted.
"The domestically focused, consumer-orientated parts of the economy are holding up, but with inflation looking non-threatening the Federal Reserve has scope to offer support to the economy," wrote analysts at ING, a Dutch bank.
The Trump factor: US President Donald Trump has been using his Twitter feed to keep the pressure on the central bank. "The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt," he tweeted last week.
Lest Trump's own nominee to lead the Fed not get the message, the president used the ECB's decision last week to push interest rates further into negative territory to drive his point home.
"They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports.... And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest!" he tweeted.
Over to you, Mr. Powell.
US stock records on tap?
Fed action could lead the S&P 500 and Dow to new all-time highs. Last week was stellar for stocks, with concessions by the United States and China raising hopes that trade negotiations could yield a breakthrough if they resume next month as expected.
China agreed last week to exempt shrimp, cancer drugs, pesticides and more than a dozen other products from tariffs. US President Donald Trump responded by delaying a planned tariff increase from October 1 until October 15 in what he called "a gesture of good will." Then, on Friday, Beijing cleared the way for more purchases of US soybeans and pork.
The Dow added 1.6% last week for its third consecutive weekly gain. The S&P 500 rose nearly 1% and Nasdaq rose 0.5% last week, matching the Dow's winning streak.
Apple's next big test
The iPhone 11 and its more expensive Pro brothers go on sale in a large handful of countries Friday.
Apple(AAPL) could use a sales win: iPhone sales have fallen in three of the past four quarters, and with China's economy in a prolonged slump, there's little chance of a turnaround in the near future.
That's why Apple is banking on its $5-a-month Apple TV+ and Arcade subscription services to help boost revenue.
But investors will still pay close attention to reports about how well Apple's iPhone 11 sales performed during its opening weekend. The lower-than-expected $699 price could give those sales a boost.
Saudi oil capacity
Oil traders are on alert after coordinated strikes knocked out 5.7 million barrels a day of Saudi Arabia's crude oil and gas production, about half the country's total output.
Two Saudi Aramco sites including the world's biggest petroleum processing facility were struck. State-owned Aramco "hopes to have that capacity restored within days," a source told CNN Business. The outage will affect 5% of daily global oil output.
US Secretary of State Mike Pompeo pinned the strikes directly on Iran. Tehran has dismissed the claim.
"Oil prices will jump on this attack," said Jason Bordoff, founding director, Center on Global Energy Policy at Columbia University. "The risk of tit-for-tat regional escalation that pushes oil prices even higher has gone up significantly."
The International Energy Agency said it was in touch with Saudi authorities. "For now, markets are well supplied with ample commercial stocks," it said.
Monday: China retail sales, industrial production
Tuesday: US industrial production for August; FedEx(FDX) earnings
Wednesday: Fed rate decision; General Mills(GIS) and Lloyd's of London earnings
Thursday: BOE and BOJ rate decisions; US existing home sales
Friday: Apple's iPhone 11 goes on sale in select countries
CNN Business' Victoria Cavaliere contributed to this report
NEW YORK (Reuters) - Adam Neumann showed he can capitalize on troubled times a decade ago, tapping into demand for workspace by those forced out of jobs in the aftermath of the financial crisis to grow WeWork into a global brand commanding a $47 billion valuation.
FILE PHOTO: Adam Neumann, CEO of WeWork, speaks to guests during the TechCrunch Disrupt event in Manhattan, in New York City, NY, U.S. May 15, 2017. REUTERS/Eduardo Munoz -/File Photo
Yet his plans to take WeWork’s corporate parent the We Company public have backfired, as his company becomes the poster child for a bubble in venture capital fundraising that has pushed some start-ups to unsustainable valuations.
The We Company is contemplating slashing its valuation to as low as $10 billion from the $47 billion billing clinched in a private fundraising round in January backed by Japan’s SoftBank Group Corp, people familiar with the matter said on Friday.
The sharp drop comes amid investor criticism of widening losses and Neumann’s firm grip on the company.
Neumann, 40, is under pressure to proceed with the initial public offering (IPO) to raise cash to keep WeWork’s operations going. The New York-based company rents workspace to clients under short-term contracts, even though it pays rent for them itself under long-term leases.
It is by far the biggest crisis Neumann has faced in his career, after arriving in New York at the age of 22 following service in the Israeli military.
He failed in several ventures before selling his first co-working firm, Green Door, for $300,000 with business partner Miguel McKelvey a decade ago. Neumann and McKelvey used the proceeds from that sale to start WeWork, with its first customers coming to the lower Manhattan site just off Chinatown in February 2010, after seeing ads in Craigslist.
Community was a driving force behind the new venture, launched at a time when millions who had lost jobs during the 2008 financial crisis were looking for flexible work space.
“It quickly became apparent that people were ready for a new approach to work, not just their workspace,” Neumann said in a blog post in 2016, marking the launch in Berlin of WeWork’s 100th site.
Neumann’s parents divorced when he was a boy and he moved 13 times as a child and adolescent, living awhile in Indianapolis where his mother, an oncologist, finished her medical residency. He has called his childhood challenging because of the moves.
They returned to Israel where he lived in kibbutz Nir Am, near the Gaza Strip, and later served in the Israeli military, which he says taught him to be something greater than himself.
Neumann’s experience on a kibbutz and McKelvey’s growing up in a five-mother commune in Oregon have been cited as a reason the pair hit it off. McKelvey is an architect with the title of chief culture officer at WeWork.
Neumann, now a billionaire as the majority owner of We Company, also has said he thought money was the goal in life until he met his wife Rebekah, a cousin of actress Gwyneth Paltrow.
Formerly called chief brand director, Rebekah Neumann is referred to as a co-founder of WeWork. She is also a filmmaker and introduced Neumann to Kabbalah, a form of Jewish mysticism that has attracted celebrity followers. They have five children.
ELEVATING WORLD’S CONSCIOUSNESS
The early success of the shared workspace validated the global community Neumann envisioned where people can achieve more together than alone, or in the words of the company’s famous mantra: “to make a life, not just a living.”
Neumann arrived in New York in 2001 where he lived with his sister Adi, an Israeli model, and started a handful of businesses that failed, including women’s shoes and a line of baby clothes with knee pads called Krawlers.
“When I came to New York I was angry about my history,” Neumann told a luncheon at the New York Stock Exchange in June 2017, adding he learned that you don’t deserve anything. “I became happy. My past helped make who I am today,” he said.
Neumann, described as key to setting WeWork’s strategic direction and execution priorities in the IPO filing, can come off as a bit zany. In the 2016 blog post he said the future of cities would require a healthy mix of 70% magic and 30% logic.
The We Company also said in the filing that its mission is to elevate the world’s consciousness and that as a community company it is committed to maximum global impact, a vision Neumann endorses.
Reporting by Herbert Lash in New York; Editing by Daniel Wallis
Lucas McClain started smoking cigarettes in high school but switched to vaping after he heard e-cigarettes were a safer alternative.
His vape of choice became the Juul, the king of electronic cigarettes — which comes with a king-size nicotine hit.
Now 21, McClain wants to quit so badly that he’s turning back to the problem he fled in the first place: good old-fashioned cigarettes.
“Juul made my nicotine addiction a lot worse,” the Arlington, Va., resident said. “When I didn’t have it for more than two hours, I’d get very anxious.”
Even though McClain knows the dangers of cigarettes — lung cancer runs in his family — he thinks it might be easier to kick cigarettes than his Juul. Plus, his mom keeps warning him about the mysterious vaping-related illnesses that have sickened hundreds across the country.
So last month, McClain bought his first pack of cigarettes in years. Then he tweeted about it.
“Bought a juul to quit smoking cigarettes,” he wrote, “now I’m smoking cigarettes to quit the juul.” He ended with this hashtag: #circleoflife.
Bought a juul to quit smoking cigarettes... now I’m smoking cigaretttes to quit the juul #circleoflife
One Juul pod, which provides about 200 puffs, contains as much nicotine as a pack of cigarettes. On stressful days, McClain could finish a pod in three hours — and as he and others figure out just how potent these and other e-cigarettes are, many want out.
Some are turning back to combustible cigarettes — or taking them up for the first time — in a dangerous bid to lower their nicotine intake and ultimately get off their vapes.
“Isn’t it ironic that to quit juul I bought cigarettes,” says one Twitter user. Another points out that it’s “strange” that she used the device to quit smoking cigarettes but is now “far more addicted to my Juul than I ever was to cigs.”
“It sucks,” she said.
Lucas McClain holds a pack of cigarettes and his Juul at his home in Arlington, Va. McClain is back to smoking cigarettes in the hope of quitting the Juul.Lynne Shallcross/KHN
It isn’t a complete surprise that some young people are “going back to the product they were trying to quit in the first place,” said Pamela Ling, a professor of medicine at the University of California-San Francisco who studies tobacco and its marketing.
But it is worrisome because cigarettes contain toxins and chemicals that are dangerous to their health, she said.
Vaping may not be safe either.
The Centers for Disease Control and Prevention is investigating at least 380 cases of lung disease in 36 states — mostly among young people — possibly linked to vaping nicotine and marijuana. Six people have died. California is investigating at least 60 cases.
The back-to-smoke trend flies in the face of the e-cig industry’s most insistent PR pitch: Vaping helps people quit smoking cigarettes. In fact, San Francisco-based Juul Labs, which commands 75 percent of the e-cig market, says in its mission statement that the company aims to eliminate cigarettes by giving adult smokers “the tools to reduce or eliminate their consumption entirely.”
In an emailed statement, Juul didn’t directly address the decision by some of its users to revert to cigarettes, but again clung to the refrain that its products are “designed to help adult smokers switch from combustible cigarettes to an alternative nicotine delivery system.”
Ted Kwong, a Juul spokesman, said Juul is not designed to get people off nicotine or to treat nicotine dependence.
For those who criticize Juul’s high nicotine content, Kwong noted that pods come in two strengths — 5 percent and 3 percent nicotine concentrations — letting users customize their “switching journey.”
Monday, the Food and Drug Administration reprimanded Juul for promoting its products as being safer than cigarettes without FDA permission. It gave Juul 15 business days to respond.
Vaping has become big business, with the global market projected to hit $48 billion by 2023.
Smoke or vapor, cigarette makers win either way. Altria, which sells Marlboro and other tobacco brands in the U.S., invested nearly $13 billion in Juul for a 35 percent stake last year. Altria has proposed reuniting with Philip Morris International, a unit it sold off in 2008.
One Juul pod provides about 200 puffs and can contain as much nicotine as a pack of cigarettes. As young adults realize how potent the Juul and other e-cigarettes can be, some are turning back to combustible cigarettes.Ana B. Ibarra/KHN
Even though the industry says vaping is intended for adults, Juul and other vaping pens took off among young people about two years ago when teens began taking the devices to school and teachers mistook them for flash drives. Students took hits in campus bathrooms and halls, and even in class when teachers weren’t looking.
The e-liquids inhaled from the devices contain nicotine and come in thousands of fruity flavors that appeal to kids.
Michigan last week became the first state to ban sales of flavored e-cigarettes in an attempt to end teen vaping. In June, the San Francisco Board of Supervisors banned the sale of all e-cigarettes, beginning in early 2020. Juul is fighting back with a November ballot measure, Proposition C, backed by millions of its own dollars.
Many former smokers attest that vaping was the only thing that helped them quit cigarettes, but the science is mixed. Some studies have shown that many vapers continue to smoke cigarettes.
The FDA has approved seven treatments for smoking cessation, including patches, gums and lozenges. Vapes are not among them, said Dr. Elisa Tong, an associate professor of medicine at the University of California-Davis.
Tong said vapers may be using more nicotine than they realize. She understands why some choose to go back to cigarettes, but she doesn’t recommend it.
“What they’re doing is trying to taper down super high levels of nicotine,” she said. “Unfortunately, manufacturers don’t have a manual on how to quit their devices.”
Dr. Amanda Graham, senior vice president of innovations at the Truth Initiative, an anti-tobacco advocacy group, said she is seeing “desperation and misguided approaches” from teens and young adults trying to free themselves from nicotine.
“Young people are fumbling in the dark with what seems logical,” Graham said. “But there is no safe level of cigarette smoking.”
Early this year, Graham’s group launched a digital program to help teens and young adults quit their vaping devices. Since then, 41,000 people between 13 and 24 have enrolled in “This is Quitting,” which sends them tips and support via text messages.
Chris Gatus of Whittier, Calif., switched from traditional cigarettes to Juul because he thought the device would help him quit smoking, he said.
But because his Juul is always glued to his palm, he found himself using it everywhere and all the time.
“I’ve sort of forgotten what it’s like not to be on nicotine,” said Gatus, 21.
He switched back to cigarettes this year after noticing his growing addiction, but that only resulted in his using both. Now he’s trying different vaping pens, looking for something less harsh than the Juul or cigarettes, he said.
Last week, Ryan Hasson of New York City threw out his Juul after experiencing strong chest pains and labored breathing when exercising — and after hearing about the growing number of vape-related illnesses. He had never felt such strong symptoms when he smoked old-fashioned cigarettes, he said.
“I don’t plan on ever smoking again, but if I had to choose, I would much rather buy cigarettes over a Juul,” said Hasson, 25.
The same is true of his friends, he said.
“I think a lot of people are quitting completely or going back to cigarettes,” he said. “They’re waking up to the reality that maybe this isn’t as safe as we once thought.”
