A JPMorgan Chase & Co. logo is displayed outside a bank branch in Chicago, Illinois, U.S., on Tuesday, July 10, 2017. JPMorgan Chase & Co. is scheduled to release earnings figures on July 13. , Bloomberg
A U.S. bank says it is letting some Canadian consumers off the hook for credit card debt as it exits the market.
New York-based Chase Bank says it is forgiving all outstanding debt owed by users of its two Canadian credit cards.
As part of its exit from the Canadian credit card market, Chase folded all Amazon and Marriott Visa accounts last year and recently opted to cut its loan losses completely.
The company says users with an outstanding balance as of June will no longer see red on their statements.
Chase declined to share how much debt was wiped or how many customers were affected.
Chase Bank, owned by JPMorgan Chase & Co., decided to quit the Canadian credit card market in March 2018 after 13 years north of the border.
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August 09, 2019 at 03:05AM
The decision of the Trump administration to label China a “currency manipulator,” taken in response to the decision by Beijing on Monday to slightly devalue the renminbi by allowing it to fall in value below the level of seven to the US dollar, has implications that go far beyond the trade war launched by the US.
The immediate impact of the decisions taken in Washington and Beijing was to send financial markets spiralling downward around the world, including in the US, where Wall Street experienced a significant decline. The downturn was the recognition that economic warfare has entered a new and even more dangerous phase.
While the initial financial turbulence has subsided, with the markets experiencing something of a rebound in light of a slight shift upwards in the value of the renminbi (also known as the yuan), currency war has been firmly placed on the agenda.
Since the global financial crisis of 2008, all the major international economic organisations have continually warned that protectionism and competitive currency devaluations must be avoided at all costs. These warnings have been based on the understanding that such measures played a crucial role in the 1930s in deepening the Great Depression and creating the conditions for the eruption of World War II.
The proscription against protectionist tariff measures has well and truly gone by the board as far as the US is concerned. Not only has the Trump administration imposed tariffs on hundreds of billions of dollars’ worth of Chinese goods—the latest tariff threat against China will mean that virtually all Chinese exports to the US will be covered—it has made it clear that tariffs will be used as a crucial instrument in advancing its economic agenda everywhere.
The European Union is at present involved in negotiations with the US over a trade deal under the threat that if it does not accede to Washington’s demands, particularly on agriculture, then a 25 percent auto tariff will be imposed on “national security” grounds. That threat extends to Japan, which is also involved in bilateral trade negotiations with the US, a situation Prime Minister Shinzo Abe sought to prevent, rightly fearing it would give Washington the whip hand.
Furthermore, in its dealings with Mexico, the Trump administration threatened a tariff on its exports to the US unless it acceded to demands for action to curb the flow of refugees and immigrants. While that conflict has been settled—at least for the moment—it sent out a global shock wave because it involved the use of economic measures to enforce a political agenda.
The same modus operandi has been employed, albeit in a slightly different way, with regard to Iran. Exploiting its command of the world’s major international currency, the dollar, Washington has threatened with financial penalties companies and countries that refuse to adhere to its sanctions, imposed after its unilateral withdrawal from the 2015 nuclear agreement with Iran.
Now, whatever the immediate twists and turns in events, the threat of a currency war means a new stage in the ongoing breakdown of the world capitalist order has been reached.
Under conditions of a marked slowdown in the global economy—the signs of which are already apparent in Europe, China, Southeast Asia and in the US itself, where business investment and manufacturing are in decline—it will set off a dog-eat-dog struggle for markets, with no end in sight.
On top of the labelling of China a “currency manipulator,” there are other clear indications of the shift to such a policy. Trump has railed against the US Federal Reserve for not lowering interest rates fast enough in order to counter the effects of a fall in the value of the euro and the renminbi, saying the Fed’s actions have placed him at a disadvantage in dealing with the European Union and China.
The shift towards currency warfare is not confined to the administration. Last week, a piece of legislation was introduced in the US Senate, jointly sponsored by a Republican and a Democratic senator, aimed at lowering the value of the US dollar.
According to its sponsors, the legislation was necessary because for “two decades” foreign countries, including China, had “manipulated their currencies to boost their exports while making American products more expensive abroad” and foreign purchases of US financial assets had “also led to an overvalued American dollar.”
The proposed Competitive Dollar for Jobs and Prosperity Act, the sponsors declared, would “manage the US dollar exchange rate” and bring it into alignment by placing a “market access charge” on foreign purchases of US stocks, bonds and other assets.
At this stage it is not clear how much support this specific piece of legislation may attract. But it is a clear indication of which way the economic winds are blowing.
There is another crucial aspect to the shift towards competitive devaluations and the eruption of a currency war that goes far beyond the sphere of trade, significant as that is. In the capitalist economy, money does not function solely as the means of exchange for trade and investment, it is also a store of value. But if the value of paper currencies, that is, fiat money created by central banks and not backed by gold or some other store of value, is continually driven down in a global conflict, then this vital function is called into question.
This issue is now attracting greater attention in financial circles. It is rooted in the vast changes that have taken place in the operation of the US economy over the past three decades and more.
Starting in the 1980s under the Reagan administration, there was a significant shift in the mode of US profit accumulation as it increasingly began to depend, not on investment in new plant and equipment and the expansion of production, but on the development of what has become known as financialisation—the accumulation of profits through speculative operations in shares and other financial assets.
Beginning with the stock market crash of October 1987, there were a series of financial storms—the bailout of Long Term Capital Management in 1998, the tech-wreck at the turn of the century, to name but two, which pointed to the growing instability of the entire financial system.
However, these storms were weathered because of monetary interventions by the Fed—the so-called “Greenspan put” as it became known. While these operations were “successful” in that they overcame immediate problems, they increased the underlying instability of the financial system. In the final analysis, their short-term success rested on the boost to global growth and profits resulting from the exploitation of cheap labour resources first of the so-called Asian tigers and increasingly, from the mid-1990s, of China.
But in 2008 the chickens came home to roost and the growing rot at the heart of the US and global financial system was exposed in the financial meltdown.
The Fed, together with other central banks, responded by pouring trillions of dollars into the global financial system, lowering interest rates to record lows and purchasing financial assets—so-called quantitative easing. The official mantra was that this would eventually bring about a restoration of economic growth, making possible a return to “normal” monetary policies.
That has not taken place. So addicted has the financial system become to the inflow of cheap money that any return to “normalisation” threatens to spark a new financial meltdown. The trillions of dollars pumped into the system have not disappeared. Rather they continue to circulate, seeking profit through speculative operations. Unable to find profitable outlets in the real economy, this ocean of money has poured into government debt, lifting bond prices and driving down yields, such that some 13.74 trillion dollars’ worth of bonds are now trading at negative yields.
The move towards currency warfare, through the devaluation of paper currencies, means that a new crisis is in the making, rooted in the global monetary system. The signs are already beginning to be noted.
In a recent blog post, Ray Dalio, the head of the Bridgewater hedge fund, one of the largest in the world, pointed out that under conditions where central banks are printing ever-increasing amounts of paper money, there will be a shift to alternative forms of money, gold, for example, or other forms of wealth. He posed the question of what would function as a store of wealth “when most central bankers want to devalue their currencies in a fiat currency system.”
It is not possible to predict exactly how this crisis will unfold. But one thing is certain: there is no solution through some changes or adjustment to the financial system. The only way the financial oligarchy can put value back into its mountain of cash is by intensifying the attacks on the working class, whose labour is the sole source of real wealth in the capitalist economy.
The clear shift towards currency warfare, therefore, not only signifies the development of a crisis for entire global economy and financial system. It also portends the eruption of class struggle on a global scale, the first indications of which are already apparent, in which the working class will more and more be confronted with the necessity to fight for political power as the means to end the profit system and reorganise the world economy on socialist foundations.
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August 08, 2019 at 11:47AM
United States stock indices tumbled early on Wednesday, as the latest signals from the bond market pointed to a heightened risk of a recession.
The Dow Jones Industrial Average sunk over 500 points in morning trading, before clawing back some ground to register a loss of 350 points just after noon. But by the end of the day, it was only down 22 points.
The S&P 500 was down significantly before recovering by the time trading finished, while the tech-heavy Nasdaq Composite Index performed slightly better.
Investors were heeding warning signs from the bond market that the US economy could be heading for troubled times. The premium on three-month bill rates - well above 10-year note yields - was at its most elevated levels since March 2007. This so-called inversion of the yield curve - measuring the difference between the two maturities - has preceded every US recession in the past 50 years.
Traders raised bets that the Federal Reserve will respond by cutting key borrowing costs three more times by the year's end, with markets fully pricing in a rate cut in September.
Expectations of more rate cuts from the Fed come on the heels of monetary easing from central banks in New Zealand, India and Thailand on Wednesday.
Investors and policymakers are concerned over how ongoing US-China trade tensions could impact global growth, after President Donald Trump last week threatened to slap 10 percent levies on the rest of $300bn in imports from China.
"[Markets] are moving lower on global growth concerns," said Mike Loewengart, vice president of investment strategy at E*TRADE Financial Corp. "And coming into question is the broader fundamental strength of economies around the world."
Global markets fell under pressure at the start of the week over investor concerns that the US-China trade war could escalate into a currency war, after China's central bank allowed the yuan to slip below the key seven-per-dollar mark. That milestone prompted the Trump administration to label China a "currency manipulator."
On Wednesday, China's offshore yuan fell past that level again, after a partial recovery on Tuesday that sparked a one percent gain in the three main Wall Street indexes.
With the second-quarter earnings season winding down, about 73 percent of the 426 S&P 500 companies that have reported results so far have topped earnings estimates.
Walt Disney Co dropped 4.94 percent on the day after its quarterly earnings missed analysts' forecasts as the company invested heavily in its streaming platform and began folding in assets purchased from 21st Century Fox.
Meanwhile, CVS Health Corp rose 7.45 percent after the drugstore chain posted profit above estimates, boosted by strong sales in the Aetna health insurance business it acquired last year.
SOURCE: Reuters news agency
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August 07, 2019 at 11:13PM
TORONTO -- The owner of Canada's largest chain of movie theatres says its strategic diversification into multiple forms of entertainment helped drive the company's second-quarter revenue to a record high $439.2 million.
In the main theatre business, Cineplex Inc. (CGX.TO) said a 1.7 per cent decline in attendance from last year was offset by higher box office revenue per patron and higher concession revenue per patron.
Secondary businesses -- including advertising sales and alternative forms of entertainment -- helped push up total revenue by $30 million or 7.3 per cent from $409.1 million in last year's second quarter.
Cineplex says its media increased 21.5 per cent or $8.8 million to a second quarter record of $49.6 million due to the growth in both in-theatre advertising and out-of-theatre digital signage.
Revenue from its amusement solutions business, which supplies equipment to third party arcades, bowling alleys and amusement parks, was up 16.8 per cent or $7 million to $48.4 million.
The Rec Room group of leisure locations grew revenue by 33.4 per cent or $5.2 million to $20.9 million.
However, net income was down compared with last year, a decline that Cineplex chief executive Ellis Jacob attributed largely to a couple of unusual circumstances.
For one thing, "Avengers: Endgame" -- one of the biggest box office draws in history -- added to expenses at its theatre business because it was three hours long.
"So to make up the revenue, you had to extend the hours . . . and you end up with higher labour costs," Jacob said.
In addition, he said, last year's profit included an unusual insurance payment received in the second quarter.
As a result, Cineplex's 2019 second quarter net income fell to $19.4 million, or 31 cents per share, from $24.4 million, or 38 cents per share, in the comparable period last year.
Analysts had estimated $429.08 million of revenue and $15.35 million or 24 cents of net income, according to financial markets data firm Refinitiv.
Cineplex shares gained about six per cent to $24.41 in afternoon trading, but remained at the low end of a 52-week range between $22.34 and $36.65.
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August 09, 2019 at 03:52AM
Les Wexner, the CEO of Victoria's Secret parent company L Brands, is speaking out regarding his complicated relationship with his former financial advisor, convicted sex offender Jeffrey Epstein.
In a letter to his namesake foundation, Wexner reflected on his decades-long relationship with his former financier, condemning the actions Epstein has been accused of and noting that he was "sickened by the revelations." Epstein pleaded guilty to state charges of soliciting a minor for prostitution in 2008 and was arrested and charged with sex trafficking minors in July.
Wexner also mentioned that Epstein had "misappropriated vast sums of money" from him. The Wall Street Journal reportedthat tax records indicated that Epstein made a $46 million transfer to a Wexner charitable fund in January 2008.
Lawyers for Epstein did not immediately return Business Insider's request for comment on Wexner's letter.
During Wexner's nearly 20-year relationship with his financial advisor, Epstein was given power of attorney and was reportedly involved in the model-selection process for Victoria's Secret. Epstein reportedly received millions of dollars in fees from Wexner, as well as other benefits.
Read the full text of Wexner's letter to the Wexner Foundation:
Dear Wexner Foundation Community,
For 35 years, the work we have achieved together in this community has continued to be one of the great honors of my life, and that is why I am writing to you now.
In recent weeks, there has been considerable media attention on my past connection to Jeffrey Epstein. To be clear, I never would have imagined that a person I employed more than a decade ago could have caused so much pain. I condemn his abhorrent behavior in the strongest possible terms and am sickened by the revelations I have read over the past weeks. I sincerely value your trust, and that is why it is important you hear details and context from me directly.
I first met Mr. Epstein in the mid-1980s, through friends who vouched for and recommended him as a knowledgeable financial professional. Mr. Epstein represented that he had various well-known and respected individuals both as his financial clients and in his inner circle. Based on positive reports from several friends, and on my initial dealings with him, I believed I could trust him.
Eventually, he took over managing my personal finances. He was given power of attorney as is common in that context, and he had wide latitude to act on my behalf with respect to my personal finances while I focused on building my company and undertaking philanthropic efforts.
In the early 1990s Mr. Epstein became a trustee of The Wexner Foundation, but he had no executive responsibilities in the running of the Foundation. He did not work directly with Foundation staff, and he did not engage with leadership initiatives in any way.
As the allegations against Mr. Epstein in Florida were emerging, he vehemently denied them. But by early fall 2007, it was agreed that he should step back from the management of our personal finances. In that process, we discovered that he had misappropriated vast sums of money from me and my family. This was, frankly, a tremendous shock, even though it clearly pales in comparison to the unthinkable allegations against him now.
With his credibility and our trust in him destroyed, we immediately severed ties with him. We were able to recover some of the funds. The widely reported payments Mr. Epstein made to the charitable fund represented a portion of the returned monies. All of that money - every dollar of it - was originally Wexner family money.
I am embarrassed that, like so many others, I was deceived by Mr. Epstein. I know now that my trust in him was grossly misplaced and I deeply regret having ever crossed his path.
As the story has unfolded further, and the extent of the pain caused by Mr. Epstein continues to grow, I have spent time reflecting and searching for answers as to how this could have happened. My heart goes out to each person who has suffered unthinkable pain and I pray for their healing.
I want to convey my gratitude to the many who have written to express your trust. Abigail and I deeply appreciate your well wishes.
As I reflect on the situation, I know that we will together seek the wisdom that can be gleaned even from such troubling events. And, my friends, I want you to know that I remain fully committed to supporting your amazing and enduring leadership across the globe. Keep leading.
Les
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August 08, 2019 at 10:48PM
A growing cohort of rich, aging baby boomers will contribute to even tighter housing supply for younger generations in Toronto over the next decade, according to a new report.
Seniors have traditionally downsized or switched to rentals and retirement homes, which has freed up supply for younger homeowners. Rising employment and income among older generations along with growing social-support services has turned that trend on its head, the Canada Mortgage & Housing Corp. said in a report Thursday.
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“Rising home-ownership rate among seniors may continue, which will translate into less supply being freed up for younger generations,” the country’s housing agency said.
A quarter of homes in Toronto were owned by seniors age 65 and over in 2016, up 4.5 percentage points from 2006, the CMHC said. The share of townhouses owned by seniors reached 17 per cent from 12 per cent over the same period.
Like other parts of the world, the ranks of seniors in Toronto is growing. Average yearly population growth for the segment will be about 4 per cent over the next decade, bringing the share of seniors in Toronto to 18 per cent by 2026 from 14 per cent in 2016, according to the Ontario Ministry of Finance.
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August 08, 2019 at 09:27PM
