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US GDP Growth For Last Quarter Is Lesser Than Expected

The GDP growth of USA is one of the most important factors considered to analyze the economic growth. During the Presidential election, Trump promised that a GDP growth of 4% is achievable and sustainable. Experts, however, disagree stating that a GDP growth of even 3% is not sustainable for a decade or more. According to the economists, a maximum achievable GDP growth is 2.5% if President Donald Trump follows through his plans for economic recovery. The GDP growth was 1.9% in the last quarter of 2016 and the figures agree with the opinions of the experts. The expected growth rate was 2.1%, but the achieved growth rate is much less.

Even though customer spending increased in the fourth quarter of 2016, government and business investment declined, offsetting the difference. The output increased by 3.5%. The overall economic growth for 2016 was 1.6%. In 2015, the economic growth reached 2.6% and 2016 proved to be the worst since 2011. The industry hopes that there would be economic growth as the Trump White House has plans to introduce tax reforms, deregulations, and infrastructure spending.

The economic growth will be capped at 2.5% because only that is sustainable. The labor force is rapidly shrinking in the US compared to the total population. There will be more retirees in the near future than those who seek employment. This means that there will be a decrease in the production in the upcoming years. One method to solve this problem is to allow more immigrants to come and work in the USA. However, the POTUS will not be interested in this policy.

For the economic growth to be very good, there must be slack at the present moment. The growth has slowed down because the country is not in recession anymore. The economy has been stabilized and there is no potential for exorbitant growth. The employment rate has also increased and only a negligible percentage seeks unemployment benefits. Even if you consider indirect unemployment, the percentage is very less. This means that there is no slack in the economy and a big boost is not imminent.

New economic growth is only possible through advancements in production and technology. The president is right for once that deregulation is a key to boosting economic growth. The deregulation doesn’t mean that anyone can open their shop in the USA. It simply means that small and medium-sized enterprises that are innovative will get more opportunities for growth. Often, the growth of small businesses is hindered by the extremely strict laws that were introduced at the time of recession. When the regulations are relaxed, innovative companies can move forward with their advanced ideas and contribute to the economic growth.

The Treasury Secretary, Steve Mnuchin is on board with the President as he hopes that the new policies and reforms will make way the for a normalized economic growth of 3% viable in the upcoming years. Mnuchin is hopeful that the President’s forecast of 4% GDP is within reach if the appropriate steps are taken by the new administration.

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Trump To Address The Bicameral Congress For The First Time

All the eyes are now focused on what President Donald Trump would say during his speech to the bicameral congress. Some of the proposals of Trump were not welcomed even by the Republicans while some plans were well received by Democrats. It would be extremely difficult for the POTUS to satisfy both the sessions of the congress, despite what he says. It has been a month since the Trump White House was formed, but the President is criticized heavily for his executive orders.

In the upcoming years, Trump has to work with both the chambers of the Congress in order to get anything done. The speech gives an opportunity for Trump to communicate his views to the Congress and it would be a huge task to make the Congress understand what he really wants to accomplish during his presidency.

Trump’s recent budget proposal to increase funding for the military has upset the conservative people in the Congress. Cutting down domestic funding will make it impossible for the other departments to proceed with innovation. Traditional Republicans want to improve military strength, but they are not fond of restraining federal spending. Even the conservative Republicans may not offer their full support to Trump.

Trump’s proposal to spend $1 trillion to strengthen the infrastructure will be welcomed by the Democrats. In January, the Democratic Senators proposed their infrastructure plan hoping that Trump would adopt it. However, after Trump has become the President, the Democrats try in every possible way to hinder his plans.

Trump also has plans to introduce federal help for childcare to reduce the burden on the working population. It will be warmly welcomed by Democrats while the Republicans may not provide as much support. The House Republicans were requested by the White House administration to write off child care in the tax bills. Again, complete support from the Democrats may not be possible with this proposal.

The US-Mexico border wall will face the most opposition from the Congress. Even the House Republicans are not happy with Trump’s plan. Initially, Trump insisted that Mexico would pay for the wall. The Mexican president denied paying anything for the wall. So, Trump has now said that the US will spend $25 billion which will be reimbursed by Mexico later through taxpayer funds. Will Hurd has commented that a wall on the US-Mexico border will be least effective and most expensive in preventing illegal immigration. Conservative hawks are not interested in investing $25 billion for a physical wall that will not serve its purpose.

Another proposal that doesn’t sit right with the Republicans is Trump’s views on Medicare and Social Security. Paul D. Ryan, the House Speaker has a strong opinion that these programs are not beneficial and they drain the resources. However, Trump wants to preserve these programs for the future generations. The complete repeal and replacement of Obamacare make the Republicans nervous because they don’t have a proper replacement plan. The repeal policy could easily kill the coverage for 20 million Americans and it could be politically expensive.

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Seaworld Reports Loss Of Revenue Exceeding The Forecast

Seaworld Entertainment Inc, which is popular for its shows with Orcas and killer whales reported a net loss in the last quarter of 2016. The company experienced some revenue growth, but due to the high maintenance cost of the exotic sea animals, the company reported a net loss for the last quarter. The increase in attendance was negligible and it also contributed to the total loss of the company. Experts predicted that the last quarter would end in a loss, but the amount of money lost exceeded the expectations.

Seaworld was constantly under criticism for its treatment of the orcas and killer whales. As a result, Seaworld announced that it will end the trademark Shamu killer whales. The company also announced that it will stop breeding the orcas and the current generation of orcas will be its last. In an attempt to redeem the reputation, Seaworld has decided to collaborate with the Humane society to ensure ethical treatment of the sea animals. The Shamu Killer Whales show will be phased out in the upcoming months.

Seaworld, based in Orlando reported a net loss of $11.9 million in the final quarter of 2016, which is a significant increase from the reported net loss of $11 million in the last quarter of 2015. For the whole year, Seaworld reported a total loss of $12.5 million. In 2015, Seaworld reported a net income of $49.1 million. The overall net loss in the first quarter of 2017 is also reported to be $84 million while it was $43.5 million in the last year. There is an increase of 3% in the revenue of the company as the overall revenue increased to $220.2 million.

The attendance for the last quarter also decreased by 30,000. The company reported that the decrease in attendance is probably due to the Hurricane Mathew in October. The number of international audience who visited the shows also significantly reduced. The theme parks at California and Texas received more visitors compared to the last year, but the increase in attendance was offset by the lack of buzz at the Florida parks. As a result, the total attendance also dropped by 2.1%.

In another report, the net loss is due to the investments in the development of theme parks in other areas. The cost savings efforts resulted in some loss for the company as it has decided to expand. Reports on a partnership to create Seaworld Abu Dhabi surfaced earlier. It is rumored that one-of-a-kind marine life theme park will be established on the Yas Island. It is alleged that it will contain new features like Yas Waterworld, Ferrari World and Formula One Racing on the infamous Yas Marina circuit. There are no official reports from Seaworld regarding this plan. Also, it is speculated that the Orlando theme park will get a new raft ride in 2018 while a new roller coaster will be built in Busch Gardens before 2019.

The predictions of Seaworld are not so favorable this year as the summer season will be shortened due to the change in the Memorial Day holiday. The company speculates that its revenue will cap at $365 million slightly higher than the last year’s revenue of $361 million.

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Trump’s Budget Focuses On Increasing Military Spending While Cutting Non-Defense Departments

The White House announced on Monday that the budget proposal by Donald Trump would focus on increasing military spending by historic numbers. It is speculated that the defense spending will increase by $54 billion while the cuts will be made for non-defense programs to bring in the money. This would increase the defense spending to about $603 billion while the other domestic departments have to face a major lack of cash as the spending is limited to $462 billion.

The Environmental Protection Agency has to deal with about 25% of budget cuts which could be devastating according to EPA officials. The agency will only be able to execute the most basic functions with such a limited budget.

The Office of Management and Budget announced that the cuts have to be faced by federal agencies that execute low priority programs. Duplication will be removed and consolidation will be executed to make the budget cuts possible.

The announced proposal is not final because it is just a blueprint sent to the agencies. The White House will figure out how to incorporate the elements of the blueprint in the final budget, which is expected to be complete in the beginning of May. Apart from EPA, foreign aid department will also experience a major budget cut according to the new plan.

Mick Mulvaney, director of the Office of Management and Budget said that the new budget is designed keeping the policies of the president in mind. The 2018 budget also includes funds required to construct the border wall between USA and Mexico. Republican senator John McCain is dissatisfied with the budget as it proposes just a 3% raise from Obama’s budget, which according to the senator is not sufficient to increase defense security.

It is not mandatory for the Congress to proceed with the budget plan from Donald Trump. The Republicans who are unhappy with the proposed budget plan to invite the officials to explain the policy to the Congress. Republicans who criticized funding of IRS by the Obama White House would be happy with the proposed 14% budget cut. Grants that support local development and community banks will also have to face a hard time with the new budget. The Democrats won’t have any mercy in thrashing the new budget that affects American communities and families.

In an attempt to protect the security of the country, Trump’s plan cuts finances for major programs pertaining to the environment, education, poverty, and science. The budget lacks entitlement cuts and it is more likely to be rejected even by the Republicans in the House. Domestic cuts could have serious impacts and the proposed increase in military funding is not balanced.

Trump White House will have a tough time in introducing tax reforms when the proposed blueprint is rejected by the Congress. The budget resolution would allow tax cuts to escape from Democratic filibuster. The domestic discretionary funds are already squeezed enough and Trump’s new proposal challenges the orthodox ways of the Republicans.

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Replacement Samsung Galaxy Note 7 Also Has Smoking Hot Issues

Note 7Note 7The United States Consumer Product Safety Commision (CPSC) has been called into assist with determining what is going on with the Samsung Galaxy Note 7. As you may or may not be aware most companies just added the Note 7 back to the available lists this past week after receiving their newest shipment of Samsung Galaxies said to have been fixed.

Currently it is appearing as if the main primary issue that enacted the global based recall is continuing to remain. The past few days we have heard of at least six new incidents that have taken place with the replaced Samsung Galaxy Note 7 that customers received after turning in their recalled model.

On October 9, 2016, AT&T and T-Mobile both went public saying they WILL NOT be continuing to issue the recall replacements due to the issues that have been making headlines. They will still honor the recall for either a full refund of the purchase price or any other phone in their inventory. The specifics as to what changing phone types would entail has not been discussed at this time.

The world is currently awaiting the decision from the CPSC to see if there is to be a SECOND globally based recall of the Samsung Galaxy Note 7 in the same calendar year. The initial recall involved more than one million phones

Primarily the CPSC is needing to discover if the latest headlines are from the replacement line of cellular phones or fun the original release. To do this they are going to need to speak with the customers, review company records and phones if any parts of them are still in reviewable condition.

The beginning of September when the recall was issued there had been no reported injuries being caused by the phones that would burn, smoke, and catch on fire. The same can no longer be said.

A Florida couple is currently involved in an investigation that concerns there Samsung Galaxy Note 7 and there Jeep Grand Cherokee. In this case one can see images of the Jeep in a burst of flames. In this case the Samsung was plugged in and charging on the Jeep’s console when the Jeep burst into flames.

In South Carolina, investigators are trying to discover just what part the Samsung Galaxy Note 7 had in a garage that caught fire. The insides now being a torched mess. In this case the fire started on the wall near an electrical outlet that had the Samsung Galaxy Note 7 plugged in and being charged.

In China, Hui Renjie, the 25-year-old Samsung Galaxy Note 7 owner was injured by his Samsung along with his MacBook. Along with the damaged MacBook he was injured on two fingers. He had only had his Samsung Galaxy Note 7 for twenty-four hours.

Jonathan Strobel, of Florida, has begun a lawsuit against Samsung. This happened after he received second degree burns to his leg as the phone caught fire in his pocket. He then received burns to his hands while retrieving the device from his pocket.

One of the current week’s headlines involved a 13-year-old from Minnesota. In that case we learned of any injury being caused by the burning phone. In this instance Abby received burns to her hand from the replacement Samsung Galaxy Note 7 her father received from Verizon Wireless.

Michael Klering and his wife in Kentucky awoke this week to a hissing sound startling them this past week. Upon opening there eyes they looked over to discover that Michael phone was currently on fire. He had only had his replacement Samsung Galaxy Note 7 for about a week. Later in the day he began feeling very ill and was vomiting “black stuff” so he went to the hospital. Reports indicate that he suffered smoke inhalation as well as acute bronchitis from the incident. In this case the homes alarms were not set off by the devices issue.

Southwest Airlines had to evacuate an entire plane set to depart from the Louisville International Airport due to one of the replacement Samsung Galaxy Note 7 starting to smoke. This issue has led the Federal Aviation Administration (FAA) to release yet another statement in regards to a Samsung product in the past month. The latest FAA statement asks users of the Note 7 to power down the devices and not to stow them in luggage pieces that are to be checked.

Shawn Minter of VIrginia awoke in the same manner as the previous couple in Kentucky. In Shawn’s case his Samsung Galaxy Note 7 replacement caught fire on his night stand as he slept.

Daniel Franks of Texas had his replacement Galaxy Note 7 catch on fire this past week while it was sitting on the table not being used or charge while the family was eating lunch. This is the fifth known issue with a replacement phone coming to light in the past week alone.

At one point on September 15, 2016 those affected by the Samsung Galaxy Note 7 were as follows. On that same date reports from the CPSC indicates that only 130,000 of the 1 million delivered had been turned in via the recall. It is important to note that the following numbers are those from the United States alone and have not factored in the numbers from elsewhere.

  • 92 reports of overheating
  • 26 reports of burns
  • 55 reports of property damage

Let’s not forget about the small six-year-old boy from Brooklyn. He was playing with the families Samsung phone. When it exploded he was burned. He was rushed to the hospital. Due to the timing in which the phone exploded it was originally reported to have been caused by the Samsung Galaxy Note 7 which later turned out to not be the case. In this case it was the Samsung Galaxy Core Prime.

The fire from the now second device issued by Samsung, however, was not strong enough to set off any of the alarms in the family’s home. This creates yet another concern users of Samsung must also consider. Three different phone models have now been proven to be defective. The three are listed below.

  • Original Samsung Galaxy Note 7
  • Samsung Galaxy Core Prime
  • Replacement Samsung Galaxy Note 7

I myself am anxiously awaiting word of some sort to come from Samsung. Now to have at least 5 separate issues with the replacement model of the same phone with no statement has my family on edge. This mixed with the proven issue with another of the Samsung phones, the Galaxy Core Prime, as learned at the burning of a six-year-old child’s expense. How many more people must be hurt, places of business disturbed, or problems to property occur, before the Samsung company takes responsibility?

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Federal Regulators Offer New Protections to Prepaid Debit Card Users

greendotU.S. regulators have announced new rules that will enable prepaid debit card users benefit from some basic consumer protections not currently being enjoyed as the industry continues to grow at an impressive pace.

The use of prepaid debit cards has grown significantly over the past several years, with these transitioning from mere gift cards to a replacement to regular checking accounts for millions of people. In 2012, around $65 billion was reportedly loaded onto these cards – that figure was double the amount for 2009. It is estimated that the amount loaded on prepaid debit cards will once again double by 2018.

The impressive showing in the prepaid card industry has come despite users not being able to enjoy many basic protections available for bank debit cards and credit cards. Users have often been subjected to high fees and inadequate disclosures among other concerns. But things are about to improve following new rules announced by the Consumer Financial Protection Bureau early Wednesday.

Changes required by the new rules, which comes into effect in October 2017, include clear disclosure of fees on packages containing prepaid debit cards. Charges for different activities, such as withdrawals, reloading and calls to customer service, will need to be detailed.

Fees charged on these cards have been compared to predatory payday loan websites like Landmark Cash by many consumer protection groups. The average fees paid by users are estimated at about $11 per month.

“Our new rule closes loopholes and protects prepaid consumers when they swipe their card, shop online, or scan their smartphone,” CFPB Director Richard Cordray said in a statement.

Under the new rules, prepaid card issuers will be required to provide their customers with basic account information, including balances and transaction history, at no charge. Users will also now be able to enjoying protection for stolen or lost cards.

These changes will no doubt delight prepaid card users, who are mostly financially-disadvantaged people. Those who use these cards are largely Americans with lower incomes. Pew Charitable Trusts said users are more likely to belong to a racial minority, be young or make lower than $25,000 per annum. The global non-profit, non-governmental organization says about 27 percent of regular prepaid card users do not operate a bank account, based on findings from a study.

Prepaid debit cards are mostly sold in grocery or convenience stores. They are offered by companies such as American Express, NetSpend and Green Dot. Independent research firm Mercator Advisory Group estimates that more than $100 billion would be loaded on general-purpose, reloadable cards in 2016.

The new rules will also give card issuers greater room to provide overdraft services. The National Consumer Law Center, an organization which lobbied for these changes, estimates just two percent of prepaid debit cards currently support overdraft facility.

The new overdraft rule is a controversial one however. Consumer advocates had been calling for total removal of overdraft facility on prepaid cards since this exposes customers to exorbitant fees.

The CFPB requires prepaid card issuers to assess the ability of a customer to pay before providing a credit line. New accounts must also be subject to a 30-day waiting period before such offer can be made on them.

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Samsung Biologics to Raise About $2 Billion in Korean IPO

Samsung BiologicThe biologic drug manufacturing division of Samsung Group has concluded plans to float its initial public offering in South Korea as it works towards becoming one of the leaders in the biological medicine space.

Samsung Biologics Co revealed in a regulatory filing Tuesday that it is seeking to raise up to 2.25 trillion won ($2 billion) in its South Korean IPO. It will offer 16.5 million shares at a price between 113,000 won and 136,000 won apiece. The listing values the Samsung drug-making arm at about $8.2 million.

Samsung Electronics Co. controls a 46.8 percent stake in the biological drug manufacturing company which is 51 percent owned by Samsung C&T Corp, the holding company of the Samsung Group. Pharmaceuticals constitute one of the areas the group hopes would continue to drive its growth potential into the future, as smartphone sales look to suffer.

As the name suggests, Samsung Biologics is into production of complex drugs which are known as biologics. The research process of these drugs, which are made of organic substances, is more complex than other traditional medications – so also is the manufacturing process. However, biologics are considered more potent and have fewer side effects compared to other drugs.

The market for biologics is expected to witness impressive growth over the next few years. In a report funded by Novartis, healthcare strategy consulting firm IMS Consulting Group estimated global market value to exceed $390 billion by 2020.

The Samsung Biologics IPO is one of the biggest ever in South Korea. It looks to become the third-largest IPO in the history of the Asian country, according to Dealogic. The biologic drug manufacturer said proceeds from the offer will be used for capacity expansion and investment in new technologies. Part of the proceeds would also be used for debt repayment to enhance the company’s financial structure.

Lead managers for the IPO are Korea Investment & Securities Co. and Citigroup Inc. JPMorgan Chase & Co., NH Investment & Securities Co., and Credit Suisse Group AG are also assisting with the handling of the IPO.

There is plan for an IPO road show launch on October 17. Demand for the share sale would be assessed by Samsung Biologics from October 26 to 27 before revealing final share price on October 28. The company plans to list on the Korea stock exchange’s main board on November 10.

The company started the construction of its third large-scale manufacturing plant (valued at 850 billion Korean won) in December. It disclosed its intention was to become the largest biologics contract manufacturer in the world. The IPO is expected to help in making that goal reality. Samsung Biologics expects to attain 1 trillion won in operating profit when the plant becomes operational.

The drug-making business is a contract biological drug manufacturer for companies such as Bristol-Myers Squibb Co. and Roche Holding AG. It controls majority 91.2 percent stake in Samsung Bioepis, a company that develops biosimilars, or near-replicas, of existing biologic drugs with expired or soon-to-expire patents. Part of the IPO proceeds would be used for additional investment in the biosimilar maker, which has submitted a near-replica of the rave-making breast cancer medication Herceptin to European regulators for approval.

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LVMH to Buy Majority Stake in Luggage Maker Rimowa

lvmh LVMH Moet Hennessy Louis Vuitton SE has reached a €640 million deal with Rimowa that will see it take over the controlling stake in the German suitcase maker.

The deal was announced by LVMH on Tuesday. It gives the world’s largest luxury good conglomerate 80 percent stake in Rimowa and expands the number of brands now under the control of the renowned French company.

Louis Vuitton, Christian Dior, Loro Paina, Marc Jacobs, and TAG Heuer are some of the brands that were already part of the LVMH group before its latest acquisition of the German luggage brand.

The controlling stake was bought from Dieter Morszeck, grandson of the founder of the Cologne-based luggage company. LVMH disclosed that Morszeck, who is Romiwa’s chief executive, would continue to maintain an equity stake in the company while also retaining his leadership functions.

Rimowa is unlike an average LVMH brand, such as Louis Vuitton, given it deals in utilitarian suitcases which are common sight at most airports. These sell for as low as $400. Founded in 1898, the company is credited as the maker of the world’s first aluminum suitcase, which it produced in 1937. It makes luggage and leather accessories for both men and women, but it is best known for its grooved aluminum suitcases. Popular figures that been seen with these include Will.i.am, Kanye West, and Kim Kardashian.

A spokesman for LVMH disclosed that Rimowa has surpassed the average performance in its market in the last few years. Its expansion over the past five years has exceeded the wider luggage market’s 5 percent growth. Analysts at RBC Europe estimate its sales growth at 20 percent a year for the last two years. The suitcase maker is expected to post more than €400 million in revenue this year.

The acquisition will enable Rimowa gain access to a number of top locations where LVMH maintains presence. It will also give it access to cheaper advertising.

Morszeck will be joined by Bernard Arnault’s son Alexandre in the running of the luggage brand. The 24-year-old will become the third child of the LVMH chairman’s five children to be offered a leading role in one of the conglomerate’s brands. He is the eldest of Bernard Arnault’s three sons with second wife Helene Mercier.

Arnault’s 41-year-old daughter Delphine heads the Louis Vuitton brand, with her brother Antoine leading the Berluti and Loro Paina brands.

One of the latest products from Rimowa features an electronic tag in it to enable communication with the owner’s smartphone via Bluetooth. Products of this kind, which are referred to as “smart luggage,” are generating increasing demand on the market, boosting the company’s potential profitability.

Approval still needs to be obtained from regulators before the deal can be finalized. The transaction is expected to be concluded by January.

Rimowa will become the first asset to be acquired in Germany by LVMH, if the deal is approved. It will also be the world’s leading luxury good conglomerate’s largest acquisition since that of cashmere maker Loro Paina in 2013.

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