Off the Wires

Secret Service manpower shortage as campaigns ramp up

March 16th, 2016  |  Source: Reuters

The Secret Service, tasked with simultaneously protecting President Barack Obama and some of the Republican and Democratic candidates now running to replace him next year, is facing a manpower shortfall at a time of peak demand, the agency told Congress on Tuesday.

Secret Service Director Joseph Clancy told a House Appropriations panel the agency is focused on “human capital needs across the organization” and accruing enough agents to ease overtime demands on the existing force.

The Secret Service hopes to have 7,600 agents in its ranks by fiscal year 2019, up from the current figure of approximately 6,200, Committee Chairman John Carter of Texas said during Tuesday's hearing.

While Clancy said the Secret Service was making progress in hiring more agents, "we have yet to see the desired impact on our overall staffing levels due to increased attrition.”

Clancy testified at a hearing to review the agency's funding needs for the fiscal year starting on Oct. 1.

Demands of the mission are peaking, he added, with Republican and Democratic presidential nominating conventions slated for this summer, the general elections in November and presidential inaugural events in January.

Carter cited the loss of 19 agents in the last four months and the large amounts of overtime hours agents have had to put in on the president’s detail, on the campaign trail and in the uniformed division.

Carter, a Republican, questioned whether the service’s hiring goals were “obtainable” with the agency “losing more agents than they have brought on board.”

Clancy responded that the agency is exploring initiatives to lure more applicants and retain current agents.

The Secret Service was rocked in 2012 when it surfaced that some agents working a presidential trip to Colombia were involved with prostitutes. In 2014, agents failed to stop a man who jumped the White House fence, ran across the lawn and made it into the mansion before he was apprehended.

More recently, during a rally for presidential candidate Donald Trump in Radford, Virginia, a Time magazine photographer was grabbed by the neck and shoved to the ground by a Secret Service agent. An agency spokeswoman said the service is investigating the incident.

Besides protecting the president and presidential candidates, Secret Service agents investigate financial crimes such as counterfeiting of U.S. currency and credit card and fraud.


Russian warplanes leave Syria, raising U.N. hopes for peace talks

March 15th, 2016  |  Source: Reuters

 

Russian warplanes began leaving Syria on Tuesday as Moscow started to draw down forces that have tipped the war President Bashar al-Assad's way, and the U.N. envoy said he hoped the move would have a positive impact on peace talks under way in Geneva.

As the first aircraft touched down in Russia, U.N. envoy Staffan de Mistura called it a "significant development" and said he hoped President Vladimir Putin's move would advance progress toward a solution and a peaceful political transition in Syria.

Putin's announcement of the withdrawal of the "main part" of Russian armed forces in Syria has led Assad's opponents to speculate Moscow may be trying to press him toward a political settlement, though Damascus has dismissed any talk of differences with its ally and says the move was coordinated.

It was unclear what the withdrawal would mean for the outcome of the war or for the future of Assad.

The talks under way in Geneva are part of a diplomatic push launched with U.S.-Russian support to end the five-year-long war that has killed more than 250,000 people, created the world's worst refugee crisis, and allowed for the rise of Islamic State.

U.S.-Russian cooperation had already brought about a lull in the war going into the talks via a "cessation of hostilities agreement" that led to a sharp decline in fighting between rebels and the government in western Syria.

But the Syrian government, which had been losing ground to rebels before Russia intervened, had indicated it was no mood to compromise on the eve of the talks, calling the presidency a "red line" and ruling out a negotiated transfer of power.

Read on here: http://www.reuters.com/article/us-mideast-crisis-syria-russia-idUSKCN0WH0LT


The Gold Medal for Questionable Spending Goes to Olympic Sportswear Sponsors

March 14th, 2016  |  Source: Bloomberg

To judge by revenue, perhaps Nike, Adidas, and company would be better off without the Games.

Let the Olympic marketing games begin.

Under Armour already has released a commercial featuring Michael Phelps that made the god of swimming cry. Dick’s Sporting Goods put out a tear-jerker of its own, featuring employees who are bound for the Summer Games in Rio de Janeiro. Nike, meanwhile, is gathering a dozens of journalists in New York on Wednesday for a product unveiling expected to be heavily geared toward athletes competing for medals in Brazil.

"The Olympics give us the opportunity to deliver our very best," Jeanne Jackson, Nike president of product and merchandising, recently told a Wall Street crowd. "We get to inspire the consumer, we get to accelerate the business through our product."

"Accelerate" might be overselling it a bit. Sure, the Olympic marketing blitz is powerful, emotional stuff and it may win some brand loyalty. But track spikes, fencing foils, and skin-tight swimsuits won’t be flying off the shelves this summer. When it comes to actually selling sportswear, the Olympics are downright unimpressive. Compared with the global might of the FIFA World Cup, for example, the Olympic Games are indeed amateur hour.

heart-rending marketing doesn't come cheap. Operating expenses during Olympic quarters outpaced sales gains, with an average 12.2 percent increase. All things considered, the return on Olympic marketing for companies such as Nike may actually be negative, depending on what kind of expected lifetime value executives put on badminton maniacs.

“At the end of the day, what are these companies really going to sell?” asks Morningstar analyst Paul Swinand. “Are you going to go out and buy a track suit? Maybe a javelin?”

An aggressive Olympics strategy can even backfire on sponsors. During the Sochi Games in 2014, Under Armour was stuck in a public-relations disaster after struggling U.S. speed skaters cast aspersions on its aerodynamic suits.

Rick Burton, a professor of sports management at Syracuse University, said that even though direct sales may be sluggish, it's increasingly important for big brands to have a presence at the Games. "The revenue gains by Under Armour have produced a very legitimate third entrant in the race with Adidas and Nike," he explained. "While the ROI is always hard to prove, the risk of not investing is too great. "

Read on here: http://www.bloomberg.com/news/articles/2016-03-14/the-gold-medal-for-questionable-spending-goes-to-olympic-sportswear-sponsors


Oil Crash Risks $19 Billion Wave of Junk Debt Defaults

March 11th, 2016  |  Source: Bloomberg

Investors are facing $19 billion in energy defaults as the worst oil crash in a generation leaves drillers struggling to stay afloat.

The wave could begin within days if Energy XXI Ltd., SandRidge Energy Inc. and Goodrich Petroleum Corp. fail to reach agreements with creditors and shareholders. Those are three of at least eight oil and gas producers that have announced missed debt payments, triggering a countdown to default.

"Shale was a hot growth area and companies made the mistake of borrowing too much," said George Schultze, founder and chief investment officer of Schultze Asset Management in New York, which has been betting against several distressed energy companies. "It’s amazing that so many people were willing to lend them money. Many are going to file for bankruptcy, and bondholders and equity are going to get wiped out en masse."

Bondholders are paying dearly for backing a shale boom that was built on high-yield credit. Since the start of 2015, 48 oil and gas producers have gone bankrupt owing more than $17 billion, according to law firm Haynes and Boone. Fitch Ratings Ltd. predicts $70 billion of energy, metal and mining defaults this year, and notes that $77 billion of energy bonds are bid below 50 cents, according to a note Thursday.

A representative at Energy XXI declined to comment. Representatives for SandRidge and Goodrich didn’t respond to requests seeking comment.

“Absent a material improvement in oil and gas prices or a refinancing or some restructuring of our debt obligations or other improvement in liquidity, we may seek bankruptcy protection,” Energy XXI said in a March 7 public filing.

Read on here and watch the video: http://www.bloomberg.com/news/articles/2016-03-11/oil-boom-fueled-by-junk-debt-faces-19-billion-wave-of-defaults


Background checks for gun buyers could save lives, U.S. study finds

March 11th, 2016  |  Source: Reuters

Laws requiring background checks for buyers of guns and ammunition, as well as requirements that firearms be traceable, could sharply reduce gun deaths in the United States, according to a study published on Thursday.

Many state-level gun regulations have little effect on the number of gun-related homicides and suicides. But "stand-your-ground" laws, which allow people to use deadly force in self-defense even if fleeing is an option, tend to raise the number of gun deaths, the study by Boston University researchers published in the Lancet medical journal found.

"Very few of the existing state-specific firearms laws are associated with reduced mortality, and this evidence underscores the importance of focusing on relevant and effective firearms legislation," said Sandro Galea, dean of the School of Public Health at Boston University, an author of the study.

"Implementing universal background checks for the purchase of firearms or ammunition, and firearm identification nationally could substantially reduce mortality in the U.S."

About 90 people die of gun-related injuries, both homicides and suicides, in the United States each day. The study found that nationwide adoption of background check laws as well as measures making it easier to track spent ammunition back to the gun that fired it could reduce gun-related deaths by as much as 80 percent.

The study looked at how deaths in 2010 were influenced by gun laws put into place in 25 states the year before.

It found that closing loopholes allowing gun buyers to avoid background checks when purchasing guns was the most effective way of reducing gun-related deaths.

Other regulations, including requiring more stringent record-keeping by gun dealers or mandating gun locks, had no measurable effect on gun-related deaths.

Opposition to gun regulations is strong in the Republican-led U.S. Congress, which has resisted measures pushed by Democratic President Barack Obama after a series of mass shootings including the massacre of 26 young children and educators in Newtown, Connecticut, in 2012.

In a January executive order, Obama imposed gun control measures that included requiring more gun buyers to undergo background checks.


Amazon to Lease 20 Boeing 767s to Build Its Own Delivery Network

March 9th, 2016  |  Source: Bloomberg

Amazon.com Inc. is stepping up plans to build its own air delivery network, saying it will lease 20 Boeing Co. 767 freighters from Air Transport Services Group Inc., sending shares in the lessor up the most in six years.

The agreement shows Amazon’s commitment to expanding its own logistics network to make deliveries faster and more efficient. The Seattle-based company wants to lessen its dependence on United Parcel Service Inc. and FedEx Corp., which have sometimes run into delays during the busy holiday season.

“This is the first formal confirmation from Amazon that they are in fact pursing an air transportation network and more logistics services,” said Colin Sebastian, an analyst at Robert W Baird & Co. who rates the stock outperform. “We can dispense with all the speculation and actually look at something that’s real and happening.”

Shares of Air Transport Services surged the most since March 2010, rising as much as 27 percent. They gained 19 percent to $14.01 at 11:22 a.m. in New York. As part of the deal announced Wednesday, Amazon also has the right to buy as much as 19.9 percent of Air Transport Services common shares over five years at $9.73 per share, based on its Feb. 9 closing price. Amazon shares fell 1 percent to $554.47.

Read on:  http://www.bloomberg.com/news/articles/2016-03-09/amazon-to-lease-boeing-767s-from-air-transport-atsg-shares-soar


Ex-Goldman Banker to Malaysia Fund Subpoenaed in U.S. Probe

March 8th, 2016  |  Source: Bloomberg

A former Goldman Sachs Group Inc. banker has become entangled in a sprawling investigation of the Malaysian state investment fund as U.S. authorities turn to him for information.

Tim Leissner was issued a subpoena about the Malaysia matter in late February, according to three people briefed on the matter, just days after Goldman Sachs confirmed he had left the firm. Leissner, a German national, was most recently chairman of the firm’s Southeast Asia operations but had taken personal leaveand relocated to Los Angeles by early this year, according to people with knowledge of the move.

From Malaysia to Switzerland to the U.S. investigators have been trying to trace whether money might have flowed out of the fund and illegally into personal accounts. Accusations have boomeranged and been called politically motivated even as authorities outside Malaysia press ahead with their inquiries.

Prosecutors in the Justice Department’s kleptocracy asset-recovery unit are investigating whether funds were embezzled from 1Malaysia Development Bhd., known as 1MDB, by politically connected people in Malaysia, the people said. The FBI’s New York office is leading the investigation and is trying to determine if any U.S. laws were broken, according to one of the people briefed on the subpoena issued to Leissner.

Read on here: http://www.bloomberg.com/news/articles/2016-03-08/ex-goldman-banker-to-malaysia-fund-said-subpoenaed-in-u-s-probe


Oil rises above $40 a barrel as rally extends

March 7th, 2016  |  Source: FT.com

Oil jumped above $40 a barrel for the first time this year on Monday, extending its rebound from lows hit in January to almost 50 per cent, as more traders bet that the worst of a 20-month long rout is over.

Sentiment in the oil market has improved as major Opec and non-Opec oil-producing countries prepare to meet to discuss a possible output freeze.

Saudi Arabia, Russia, Qatar and Venezuela agreed last month to freeze production levels providing other countries join them, in the first co-ordinated action to tackle a global supply glut that has hammered the industry since mid-2014.

“It’s logical for everyone to freeze their production,” UAE energy minister Suhail Al Mazrouei told reporters in Abu Dhabi on Monday, according to wire services. “It doesn’t make sense for anyone to increase production at the current prices.”

The world’s biggest oil exporters have seen their budgets slashed by a near 75 per cent price collapse that culminated in the market plumbing a 13-year low near $27 a barrel.

Read on here: ($) :http://www.ft.com/intl/cms/s/0/3bc88aa4-e460-11e5-a09b-1f8b0d268c39.html?segid=0200112&ftcamp=engage/extensions/ft_1/chrome//auddev#axzz42ElbtVLj


Why the ruble is the world’s worst-performing currency

March 4th, 2016  |  Source: Marketwatch.com

The worst-performing major currency in the world in 2016 happens to be the Russian ruble, according to Barchart.com's Forex Year-To-Date Highs/Lows – Major Rates data. It is always a little tricky measuring those performance numbers, as the Russian ruble is quoted in rubles per dollar (like the yen), so more rubles per dollar reflects a weaker ruble. Regardless of whether you measure it in rubles per dollar or cents per ruble, it is not a pleasant experience to go from over 3.6 cents per ruble (under 30 rubles per dollar) five years ago to under 1.2 cents (over 85, see chart).

The trouble with the ruble, as with all commodity- and energy-dependent economies and their currencies, is oil (in green on the chart). I described the situation in my Marketmail commentary on Aug. 4, 2015https://navellier.com/get-to-know-us/weekly-marketmail/the-market-closes-july-week-of-august-3-2015/, including this passage: "Tell me where the oil rout may stop and I will tell you if there is more downside to the Russian ruble and Russia's stock market. If, indeed, oil is headed under $20/bbl. in due course as the Chinese situation unravels, the ruble may break 100 on the USDRUB cross rate. The Russian dollar-denominated RTS index is at 858 at the close last week. I think it is entirely possible that it ends up in the 400-500 range."


Chesapeake Jumps After Cooperating in Shale Bid-Rigging Probe

March 3rd, 2016  |  Source: Bloomberg

Chesapeake Energy Corp. is heading for the biggest two-day increase in its history after U.S. federal prosecutors rewarded the natural gas driller with immunity from prosecution in an antitrust case against its former CEO.

Shares rose 23 percent to $4.17 at 11:20 a.m. in New York and are up 51 percent since March 1.

Chesapeake has been rallying since a March 1 announcement that the Oklahoma City-based company was cooperating in the federal prosecution of former Chairman and Chief Executive Officer Aubrey McClendon for allegedly rigging auctions for drilling rights. Chesapeake received immunity under a Justice Department leniency program that shields companies from criminal charges if they are first to report antitrust violations.

McClendon died in an Oklahoma City car crash the next day.




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