Daily Archives: February 2, 2015

UPDATE 1-Nationwide considers halting controversial child safety ad

(Rewrites throughout with additional Nationwide comment and
reaction to advertisement)

Feb 2 (Reuters) – Nationwide Mutual Insurance Company is
considering whether or not to drop a TV advertisement featuring
a dead boy speaking to viewers after a backlash on social media
as soon as the commercial about child safety aired during
Sunday’s Super Bowl broadcast.

Nationwide spokesman Joe Case said on Monday that some of
the reaction “was stronger than we anticipated” and “we’ll gauge
whether or not to run the ad more.”

The ad, Case said, was intended to start a conversation
around child safety and accidents in the home, part of the
insurer’s Make Safe Happen campaign. “We care. We have a heart,”
he said.

Viewers quickly criticized the company on Twitter after
seeing the ad of a boy narrating a list of milestones in life he
would never achieve, such as learning to ride a bike, ending: “I
couldn’t grow up, because I died from an accident.”

Comedian Patton Oswalt, for example, sent a number of tweets
making fun of the ad. “The second I see a kid in one of these
commercials I immediately assume they’re going to die. Thanks,
Nationwide! #SuperBowl” he wrote in one.

Other tweets played on the “Nationwide is on your side”
jingle, with one variant by riley_fox reading “Nationwide, your
kid has died.”

Some called the ad everything from grim to depressing to a
loser for the insurance company.

Among the groups who previewed or consulted on the ad,
company spokesman Case said, were family members who themselves
had lost children.

“We did test it with a wide variety of audiences, and based
on that feedback we adjusted the tone of the ad through the
creative process,” he said. Case declined to say how the ad’s
tone was changed.

On Sunday, the company set up a command center ready to
respond on social media to that ad and to another, more
lighthearted commercial featuring actress Mindy Kaling.

“When the ad aired on Sunday evening we knew there were
going to be strong reactions both ways, and we were prepared for
that,” Case said.

The Super Bowl is one of the most-watched stages for
advertisements in the United States. Companies paid up to a
record $4.5 million for 30 seconds during Sunday’s game, won
28-24 by the New England Patriots over the Seattle Seahawks on
Comcast Corp’s NBC network, and seen by an estimated
114.4 million viewers, the most-watched telecast in U.S. TV
history.

(Reporting by Luciana Lopez; additional reporting by Jennifer
Saba in New York and Tanya Agrawal in Bangalore; Editing by
Grant McCool)


Source: Newsjyoti US Media

UPDATE 1-Nationwide considers halting controversial child safety ad

(Rewrites throughout with additional Nationwide comment and
reaction to advertisement)
Feb 2 (Reuters) – Nationwide Mutual Insurance Company is
considering whether or not to drop a TV advertisement featuring
a dead boy speaking to viewers after a backlash on social media
as soon as the commercial about child safety aired during
Sunday’s Super Bowl broadcast.Nationwide spokesman Joe Case said on Monday that some of
the reaction “was stronger than we anticipated” and “we’ll gauge
whether or not to run the ad more.”The ad, Case said, was intended to start a conversation
around child safety and accidents in the home, part of the
insurer’s Make Safe Happen campaign. “We care. We have a heart,”
he said.Viewers quickly criticized the company on Twitter after
seeing the ad of a boy narrating a list of milestones in life he
would never achieve, such as learning to ride a bike, ending: “I
couldn’t grow up, because I died from an accident.”Comedian Patton Oswalt, for example, sent a number of tweets
making fun of the ad. “The second I see a kid in one of these
commercials I immediately assume they’re going to die. Thanks,
Nationwide! #SuperBowl” he wrote in one.Other tweets played on the “Nationwide is on your side”
jingle, with one variant by riley_fox reading “Nationwide, your
kid has died.”Some called the ad everything from grim to depressing to a
loser for the insurance company.Among the groups who previewed or consulted on the ad,
company spokesman Case said, were family members who themselves
had lost children.”We did test it with a wide variety of audiences, and based
on that feedback we adjusted the tone of the ad through the
creative process,” he said. Case declined to say how the ad’s
tone was changed.On Sunday, the company set up a command center ready to
respond on social media to that ad and to another, more
lighthearted commercial featuring actress Mindy Kaling.”When the ad aired on Sunday evening we knew there were
going to be strong reactions both ways, and we were prepared for
that,” Case said.The Super Bowl is one of the most-watched stages for
advertisements in the United States. Companies paid up to a
record $4.5 million for 30 seconds during Sunday’s game, won
28-24 by the New England Patriots over the Seattle Seahawks on
Comcast Corp’s NBC network, and seen by an estimated
114.4 million viewers, the most-watched telecast in U.S. TV
history.

(Reporting by Luciana Lopez; additional reporting by Jennifer
Saba in New York and Tanya Agrawal in Bangalore; Editing by
Grant McCool)
Source: Newsjyoti Environment

NFL great Warren Sapp arrested for soliciting escort, assault in Phoenix

Former Tampa Bay Buccaneers player Warren Sapp speaks after being named to the Pro Football Hall of Fame at the 2013 Class of Enshrinement show in New Orleans, Louisiana, February 2, 2013.
Credit: Reuters/Brian Snyder

(Reuters) – National Football League Hall of Fame defensive tackle Warren Sapp was arrested at a Phoenix hotel on Monday on suspicion of soliciting a prostitute and assault, authorities said.
Sapp, who had been covering the Super Bowl as an analyst for the NFL Network, was booked into Maricopa County jail after an incident involving two escorts in an apparent dispute over money, said Phoenix police spokesman Sergeant Trent Crump.Sapp, 42, faces misdemeanor charges of one count of soliciting and two counts of assault for the post-game incident in downtown Phoenix. Police said officers working security at the hotel were told by one of the escorts that Sapp assaulted her and another escort after an argument over money in one of the guest rooms. “The altercation turned physical, spilling into the hallway,” Crump said in a statement, adding that both women suffered minor injuries consistent with such a struggle.Crump said Sapp admitted to police that he engaged in “an act of prostitution” with one of the women, but denied assaulting them.One of the women was cited for prostitution and the other was cited and released for violating the city’s escort permit requirements.An NFL Network spokesman said on Monday that Sapp has been terminated.    Sapp, a 6-foot-2-inch, 300-plus pounder, was inducted in the NFL Hall of Fame in 2013 after playing 13 seasons in the league with the Tampa Bay Buccaneers and the Oakland Raiders.     The former University of Miami player amassed 96.5 sacks in his career and was the cornerstone of the defense that played a major part in the Super Bowl XXXVII success. (Editing by Cynthia Johnston)
Source: Newsjyoti

Greece says not in 'Wild West showdown' with Europe

NICOSIA/LONDON (Reuters) – Greece sought to reassure international investors on Monday that it was not in a Wild West-style standoff with European partners over a new debt agreement, although sparring partner Germany gave no ground after a tough first week.
Spurning neckties, new Prime Minister Alexis Tsipras and his pugnacious finance minister Yanis Varoufakis are touring European capitals in a diplomatic offensive to replace Greece’s bailout accord with the European Union, European Central Bank (ECB) and International Monetary Fund, known as the “troika”.Varoufakis said he was confident he could reach a negotiated settlement soon, telling Britain’s Channel 4 news it was time to stop Greece being a “festering wound” on Europe and dismissing a suggestion the ECB could block a new deal.After a tumultuous first week during which the new left-leaning government made clear it intends to keep campaign promises to ditch the tough austerity conditions imposed under its existing bailout, the emphasis this week appears to be on maintaining that a new deal is still possible.”We are in substantial negotiations with our partners in Europe and those that have lent to us. We have obligations towards them,” Tsipras said at a news conference in Cyprus during his first foreign visit as prime minister.When asked whether Greece would seek aid from Russia, which has suggested it could be willing to listen to a request for support from Athens, he said: “Right now, there are no other thoughts on the table.”Greece, unable to borrow on the markets and facing pressure to extend the current support agreement when it expires on Feb. 28, is looking for a bridging deal to provide breathing space to propose a new debt arrangement.Exactly how much time Athens has to reach a deal with its creditors remains to be seen. In theory, there are only weeks left: once the bailout expires at the end of February, the ECB could be obliged to pull the plug on funding for Greek banks. In practice, however, an alternative interim funding mechanism for the banks may be found.After that, Greece has large debt payments due in March, although officials say it could have enough cash on hand to meet them, avoiding a crunch until later in the spring.”NEIN”It has so far met a tough line from European partners, above all Germany, whose Finance Minister Wolfgang Schaeuble told Reuters in an interview on Monday that Berlin would not accept any unilateral changes to Greece’s debt programme.”We want Greece to continue going down this successful path in the interests of Greece and the Greeks but we will not accept one-sided changes to the programme,” he said at the Reuters Euro Zone Summit.Tsipras repeated calls already made by Varoufakis for a mechanism of inspections by experts from the “troika” overseeing Greek finances to be dismantled and replaced by direct negotiations between Athens, the EU and IMF.”I believe that this would be a mature and necessary development for Europe,” he said. But Germany said “Nein”.”The German government sees no reason to scrap this mechanism of evaluation by the troika,” Finance Ministry spokeswoman Christiane Wirtz said in Berlin.To some degree, both sides are posturing ahead of what are certain to be difficult negotiations. The Greeks appear to be searching for more sympathetic ears first, before meeting the Germans.Varoufakis, an outspoken economist who has likened EU austerity policies to “waterboarding”, has been arriving for meetings with besuited European leaders in a rumpled black coat and untucked, open-collared shirt.He began over the weekend in Paris, where the centre-left government is thought to be more sympathetic than others to the case for relaxing lending conditions, before moving to London to meet international investors whose confidence is crucial.He said he was not in “a kind of Wild West showdown” with the EU, but aimed to strike a mutually beneficial deal to minimise the cost of the crisis for the average European.French Finance Minister Michel Sapin said after meeting Varoufakis that Athens could not expect a straight debt write-off, but left the door open to other options that include giving Athens more time for repayment.SOOTHING INVESTORSVaroufakis met about 100 banks and financial institutions in London. An organiser said one of the meetings had to be moved from a upmarket London members’ club, because Varoufakis wouldn’t wear a tie.A Greek government source said Varoufakis would tell the private sector investors they had nothing to worry about.”We will be able to service the Greek debt on terms that will have no detrimental impact on, especially private, bond holders,” said the source who spoke on condition of anonymity due to the sensitivity of the matter.Varoufakis also met British officials, seeking more European allies, although Britain is not a euro zone member.After meeting him, Britain’s finance minister, George Osborne, called the stand-off between Greece and the euro zone “the greatest risk to the global economy”.”I urge the Greek finance minister to act responsibly but it’s also important that the euro zone has a better plan for jobs and growth,” Osborne said.On Tuesday, Tsipras will meet Italy’s Prime Minister Matteo Renzi, a young centre-left leader thought to be among those most sympathetic to calls for leniency. He sees European Commission President Jean-Claude Juncker and French President Francois Hollande on Wednesday. So far no date has been set for a meeting with German Chancellor Angela Merkel, although they will meet at a European summit on Feb. 12.Despite German resistance, Tsipras said the tide of debate in Europe had been unexpectedly encouraging for Athens, with more and more backing for the idea of a change of direction.”I never expected that there would be such strong forces helping the new government create a new framework and set a new course, not only about Greece but Europe as a whole, because Europe is in a crisis,” he said. (Reporting by Reuters bureaux; Writing by Peter Graff and Philippa Fletcher; Editing by Sonya Hepinstall and Pravin Char)
Source: Newsjyoti Business

Obama proposes $3.99 trillion budget, draws scorn from Republicans

By Jeff Mason

WASHINGTON
Tue Feb 3, 2015 12:14am IST

WASHINGTON (Reuters) – President Barack Obama on Monday proposed a $3.99 trillion budget that drew scorn from Republicans and set up battles over tax reform, infrastructure spending, and the quest to prove which party best represents the middle class.
In his fiscal year 2016 budget blueprint, a political document that must be approved by Congress to take effect, Obama proposed a series of programs to help middle-income Americans that he would pay for with higher taxes on corporations and wealthy individuals.He also sought to show that the United States could increase spending in a fiscally responsible way. The budget foresees a $474 billion deficit, which is 2.5 percent of U.S. gross domestic product, a level economists view as sustainable.Obama’s budget fleshes out proposals from his State of the Union address last month and helps highlight Democratic priorities for the last two years of his presidency and the beginning of the 2016 presidential campaign.”I know there are Republicans who disagree with my approach. And I’ve said this before: If they have other ideas for how we can keep America safe, grow our economy, while helping middle-class families feel some sense of economic security, I welcome their ideas,” Obama said.”But their numbers have to add up. And what we can’t do is play politics with folks’ economic security, or with our national security.”Obama spoke from the headquarters of the Department of Homeland Security, a site the White House chose to emphasize its insistence that Republicans fund the agency charged with implementing his controversial executive actions on immigration.The president said the opposing party would put the nation at risk if they did not fully fund the department. Republicans have threatened to curtail department spending in order to block Obama’s executive orders on immigration.They have said they see room for compromise in areas such as tax reform and infrastructure, but many of Obama’s programs, which were rolled out in the weeks before the budget’s release, have landed with a thud.”Today, President Obama laid out a plan for more taxes, more spending, and more of the Washington gridlock that has failed middle-class families,” said John Boehner, Republican speaker of the House of Representatives.”It may be Groundhog Day, but the American people can’t afford a repeat of the same old top-down policies of the past.”Democrats, however, viewed the budget as a statement of their priorities and a chance to demonstrate that they represent the party that champions middle-income Americans.”(It) affords him an opportunity to contrast his vision of helping the middle class with the Republican Congress’ approach of exacerbating inequality, ignoring the middle class and making the burdens of those who want to enter it even greater,” said Neera Tanden, president of the Center for American Progress, which has close ties to the Obama White House.INFRASTRUCTURE, TAX REFORMThe budget achieves some $1.8 trillion in deficit reduction over the next 10 years, officials said, through healthcare, tax and immigration reform, but the forecast assumes Republican support for Obama’s programs, which is unlikely. Republicans have blocked immigration reform legislation in the House, for example, and Obama’s budget assumes passage of such a bill.   The administration foresees a continuation of the decline in unemployment, forecasting a rate of 5.4 percent in 2015. It currently stands at 5.6 percent.It also proposes a new infrastructure bank, a 6 percent increase in research and development, and a controversial consolidation of U.S. government agencies. Obama has previously proposed combining trade agencies, but the proposal fizzled.The budget sets aside $14 billion to strengthen U.S. cybersecurity defenses after a spate of high-profile hackings.It calls for a one-time, 14 percent tax on an estimated $2.1 trillion in profits piled up abroad by companies such as General Electric and Microsoft, while imposing a 19 percent tax on U.S. companies’ future foreign earnings.It proposes a 7 percent rise in U.S. domestic and military spending, ending “sequester” caps with reforms to crop insurance programs and closing tax loopholes such as one on “carried interest.” Those moves would help fund investments in infrastructure and education.The budget also would reform rules governing trust funds and raise the capital gains and dividend rates to 28 percent from the current top rates of 23.8 percent.In foreign policy, the budget funds efforts to support NATO and European allies against Russian aggression. It requests $8.8 billion to fund U.S. efforts to fight Islamic State militants, bolster Iraq’s army and strengthen the “moderate” opposition in Syria. (Additional reporting by Susan Heavey, David Lawder, Roberta Rampton, and Julia Edwards; Editing by Paul Simao)
Source: Newsjyoti Business

RPT-INSIGHT-US companies face billions in Venezuela currency losses, Reuters analysis shows

(Repeating to additional subscribers)
By Tim McLaughlinFeb 2 (Reuters) – At least 40 major U.S. companies have
substantial exposure to Venezuela’s deepening economic crisis,
and could collectively be forced to take billions of dollars of
write downs, a Reuters analysis shows.The companies, all members of the S&P 500, and including
some of the biggest names in Corporate America such as autos
giant General Motors and drug maker Merck & Co Inc
, together carry at least $11 billion of monetary assets
in the Venezuelan currency, the bolivar, on their books.The official rate is at 6.3 bolivars to the dollar and there
are two other rates in the government system – known as SICAD 1
and SICAD 2 – at about 12 and 50. The black market rate, though,
was at about 190 bolivars to the dollar on Sunday, according to
the website dolartoday.com.The problem is that the dollar value of the assets as
disclosed in many of the companies’ accounts is based on either
the rates at 6.3 or 12 and only a limited number of transactions
are allowed at those rates. The assets would be worth a lot
fewer dollars at the 50 rate in the government system and the
dollar value would almost be wiped out at the black market rate.The currency system is also about to be shaken up following
an announcement by Venezuela President Nicolas Maduro on Jan.
21, leading to fears of a further devaluation.American companies will also have additional exposure to the
bolivar that isn’t disclosed because they don’t see the size of
that exposure as material to their results. The Reuters analysis
also doesn’t look at the thousands of publicly traded and
private American companies that aren’t in the S&P 500 and will
in some cases have bolivar assets.BLACK MARKET RATESome leading American companies have already decided that
the stronger exchange rates – the official rate at 6.3 and the
SICAD 1 exchange market at 12 – are not reflective of the
currency conditions they face in the South American country.Diaper and tissue maker Kimberly-Clark Corp recently
announced a charge of $462 million for its Venezuelan business,
leading to a fourth-quarter loss for the company, after it
concluded that the appropriate exchange rate was the SICAD 2
exchange rate at 50 rather than the 6.3 it had previously used.Using the stronger exchange rates is unrealistic because of
how hard it is to repatriate profits earned in Venezuela back to
the United States at any rate, let alone those rates, securities
analysts say. Citigroup Inc says it has not been able to
buy U.S. dollars from the Venezuelan government since 2008.Companies can seek dollars at the official rate if they are
using those dollars to import raw materials for production of
priority goods such as food and medicine, and some can buy
dollars at the SICAD 1 rate at around 12 bolivars to the dollar
through auctions that are typically held several times per month
but are only targeted at specific sectors. As tumbling oil
prices have left Venezuela with fewer dollars, its currency
board has steadily reduced approval for repatriation of
dividends at the official rate – leaving companies with growing
quantities of bolivars trapped by currency controls.”It’s a huge deal and companies will get hit big,” said Ali
Dibadji, an analyst at Sanford C. Bernstein & Co Inc. “Take a
look at what Kimberly-Clark did last week and what Clorox did a
few months ago by getting out of Venezuela.”Cleaning and household products maker Clorox last
year decided to exit Venezuela altogether. Its CEO Don Knauss
said at the time: “We saw no hope that we could create a
sustaining business in that country.”The currency issues are hurting many U.S. companies much
more than their sales might suggest. Many of the companies in
the analysis have been getting between 1-3 percent of their
global revenue from Venezuela.Ford Motor Co and oil services company Schlumberger NV
took big-ticket hits to their quarterly profits because
of their Venezuelan operations. Ford took a fourth-quarter
charge of $800 million and Schlumberger $472 million.A Ford spokeswoman said that it still values its Venezuela
assets at about 12 bolivars per US dollar. But for Ford, the
currency system and other conditions are so tough in the South
American country that it has made an accounting change that will
allow it to ring fence its Venezuela business so that it doesn’t
have a direct impact on the company’s operating results.Schlumberger, which previously used the 6.3 rate, said it is
now using the SICAD 2 rate of 50 as it “best represents the
economics of Schlumberger’s business activity in Venezuela.”Another S&P 500 company to switch to the 50 rate from 6.3 in
recent weeks was industrial gases producer Praxair Inc,
which took a fourth-quarter charge of $131 million as a result.
It also said the switch will hurt its revenue and earnings in
2015.ANOTHER DEVALUATION?Those changes don’t reflect the prospect of another currency
devaluation in Venezuela, as recently telegraphed by Maduro, who
is struggling to keep a lid on consumer prices amid a 64
percent inflation rate and a plunge in oil revenue. The
official rate was last devalued by 32 percent to the current 6.3
from 4.3 in February 2013, at that time the fifth devaluation in
a decade.Maduro said in the Jan 21 announcement he would merge the
two existing SICAD rates (the ones at 12 and 50 per U.S.
dollar). He also would introduce another new rate to offer
dollars via private brokers to vie with the black market
rate. There has yet to be a further announcement providing
details of the new system and the rates.Currency uncertainties aside, foreign companies face a
myriad of other problems in Venezuela, from weak demand to
shortages of many goods, difficulty in importing parts and
products, and relying on the government to approve price
increases to keep pace with hyperinflation.Most of the S&P 500 bolivar exposure is concentrated among
10 companies that have disclosed about $7.3 billion in assets
linked to the country’s currency system, according to the
Reuters analysis of their latest quarterly financial statements.But if those companies used Venezuela’s SICAD 2 currency
rate, the one at about 50 bolivars to the dollar, their assets
would decline by as much as $5.8 billion. All of these companies
currently either use the rates at 6.3 and 12.It would be far worse if they used Venezuela’s black market
rate of about 190 for the currency. The companies’ bolivar
assets would be worth only a tiny fraction of their current
estimated value if they used that rate.GM, which ranked No. 1 out of the group analyzed, with $1.5
billion in Venezuela exposure, said it is closely monitoring
conditions there. “We have nothing to announce at this time,”
spokesman Tom Henderson said.Some U.S. companies, such as Merck, justify valuing
their Venezuela assets at the most preferential rate because
they are providing essential services and goods, like medicine,
to the country. They report some success in translating bolivars
into dollars at the 6.3 rate. Merck did not respond to a message
seeking comment.Still, some of these same companies have prepared their
investors for a currency hit in their latest round of quarterly
disclosures. PepsiCo Inc said it would take an after-tax
charge of up to $440 million if it revalued its Venezuela assets
at the 50 rate. As of early September, the company disclosed
$505 million in bolivar-denominated net monetary assets.”I do think that more companies may consider exiting
Venezuela if the inability to remove cash or take prices to
offset devaluations persist,” said Dibadji, the Sanford
Bernstein analyst.

(Reporting by Tim McLaughlin, additional reporting by Jim
Finkle and Richard Valdmanis in Boston; Ashley Lau in New York
and Brian Ellsworth in Caracas; Editing by Linda Stern and
Martin Howell)
Source: Newsjyoti Environment

S&P 500 edges up in volatile day, energy shares higher

By Ryan Vlastelica

NEW YORK
Mon Feb 2, 2015 10:37pm IST

NEW YORK (Reuters) – The S&P 500 edged up in a volatile session on Monday as better-than-expected results from Exxon lifted energy shares and offset disappointing readings on consumer spending and the manufacturing sector.
While the data pointed to weakening economic conditions, major indexes are coming off their worst monthly performance in a year, leading many traders to seek out bargains in beaten-down sectors.The S&P 500 moved between positive and negative territory repeatedly, with energy strength a consistent theme. The sector rose 0.9 percent after Exxon Mobil reported a smaller-than-expected profit drop of 21 percent. Shares of the Dow component rose 1.4 percent to $88.63. Crude oil was extremely volatile, rising as much as 4.8 percent, though it pared most of those gains, last trading up 0.1 percent.The day’s swings continue a recent trend of volatility. The S&P fell more than 1 percent in three of the past four sessions, while market swings have gotten larger of late. Over the past 14 days the S&P has moved an average of 30 points between its high and low of the session. On January 9, that average was under 20.”Fundamentals still look strong, but earnings are really coming in under expectations, which is creating a general concern that is leading to heavy volatility,” said James Liu, global market strategist for JPMorgan Funds in Chicago. “We got used to good earnings growth and data and now we’re facing the first real test of that sentiment not always being true.”The Institute for Supply Management showed that the pace of growth in the U.S. manufacturing sector slowed more than expected in January. U.S. consumer spending recorded its biggest decline since late 2009 in December, with cheaper gas not translating to higher activity. The Commerce Department said consumer spending dropped 0.3 percent after a downwardly revised 0.5 percent increase in November. It was the largest drop since September 2009. “The big question is why we’re not seeing a stronger consumer. It may take a while for the impact of lower oil to work its way through the system,” Liu said.Solar power companies were among the strongest of the day after China said it aims to install 15 gigawatts of solar power capacity this year, 43 percent more than it added in 2014. First Solar climbed 5.9 percent to $44.83 while Canadian Solar rose 4.5 percent to $21.33.At 11:20 a.m. (1620 GMT) the Dow Jones industrial average rose 7.6 points, or 0.04 percent, to 17,172.55, the S&P 500 gained 3.98 points, or 0.2 percent, to 1,998.97 and the Nasdaq Composite dropped 3.69 points, or 0.08 percent, to 4,631.55.Advancing issues outnumbered declining ones on the NYSE by 1,751 to 1,212, for a 1.44-to-1 ratio; on the Nasdaq, 1,343 issues rose and 1,211 fell, for a 1.11-to-1 ratio.The benchmark S&P 500 was posting 2 new 52-week highs and 6 lows; the Nasdaq Composite was recording 14 new highs and 62 lows. (Editing by Nick Zieminski)
Source: Newsjyoti Business

Behind Obama's budget proposals, a gloomy view of the future

By Jason Lange and Howard Schneider

WASHINGTON
Mon Feb 2, 2015 10:04pm IST

WASHINGTON (Reuters) – Beneath President Barack Obama’s plan to fight income inequality lies a gloomy view of an economy that is growing slower and creating fewer rewards for its workers than it did in much of the last century.
In a budget proposal unveiled on Monday, the White House cut forecasts for an array of economic variables, depicting less growth, weaker inflation and lower interest rates than officials expected only a year ago. This comes despite an unemployment rate that the Obama administration expects to hit the 5.2 percent level considered to be roughly in line with full employment sometime this year. The administration’s take on the economy moves it closer to the growing view among economists that the United States could be stuck in a prolonged period of stagnation.”In the 21st century, real GDP growth in the United States is likely to be slower than it was in earlier eras,” the budget proposal says.Obama’s $3.99 trillion budget plan for fiscal 2016 would mark a spending increase of about $240 billion from the current year. [ID:nL1N0VC0VO] The economic vision presented in the plan is all-the-more pessimistic given that it incorporates the impact of higher spending on infrastructure and education, as well as overhauls of tax and immigration laws. Many of those proposals are unlikely to pass the Republican-controlled Congress.Even with these measures, which are aimed to counter rising income inequality, weaker growth would leave the economy about $500 billion smaller in 2020 than the administration projected a year ago. The administration expects the share of national income going to labor – as opposed to capital – to hold near historic lows for years to come.An aging population that is less inclined to work could help limit long-run economic growth to around 2.3 percent annually, the budget says, a rate that would be roughly a percentage point lower than the average since World War Two.In the White House view, the jobless rate could drop to as low as 4.9 percent in 2017. But even that is not expected to lead to substantial wage or price increases, suggesting officials are sympathetic to stagnation arguments made prominent by economists, such as former Treasury Secretary Lawrence Summers, who have argued the government should spend more to make up for weak private sector demand. While the White House’s estimate of potential growth was unchanged from a year ago, it now sees interest rates holding lower for years even under the assumption that the government boosts spending substantially, something that in other eras would lead lenders to jack up interest rates more.”The administration forecast projects that interest rates will stabilize below their historical averages,” while inflation is expected to remain low for years to come, according to the budget documents.    Other developed economies are confronting a similar set of circumstances, and slowly acknowledging that their long-run potential may be constrained. The Obama administration has been pressing European nations, primarily Germany, to act accordingly and lift government spending to make up for weak household and business demand.    In the wake of the 2007-2009 financial crisis, the administration was restrained in its own response, as it tried to control the deficits generated by stimulus programs set in motion to battle the deepest economic downturn since the Great Depression. The impact of budget cuts continued to be felt through last year.    The latest budget document marks a turn in that debate as Obama makes the case for more government pump priming. (Reporting by Howard Scheider and Jason Lange; Editing by Tim Ahmann and Tomasz Janowski)
Source: Newsjyoti Business

UPDATE 1-Sweden's FSA watchdog says investigating Nordea's CEO over hunting trips

* Probe follows media storm over SCA corporate spending
* Nordea denies any wrongdoing by CEO

(Adds further details, background) Feb 2 (Reuters) – Sweden’s financial services
watchdog said on Monday it has launched an investigation
following media reports that the chief executive of Nordea
, the region’s biggest bank, went on hunting trips
organised by paper products group SCA.SCA has been in the spotlight over the media allegations of
extravagant spending by management on foreign travel and on
hunting trips in northern Sweden, with one newspaper saying
hunting dogs were flown in by helicopter and an empty jet was
sent back to Stockholm to collect a forgotten wallet.The chairman of investment group Industrivarden,
one of the biggest shareholders in SCA, subsequently said last
week that he would step down after his position had become
untenable.SCA has also been placed under a preliminary investigation
concerning the allegations by a public prosecutor, officials
said on Friday.Now Sweden’s Financial Supervisory Authority (FSA) has said
it is investigating the same allegations with regard to whether
Nordea’s chief executive Christian Clausen acted improperly.”It’s very important that banks have ethical guidelines and
that they are being followed,” FSA spokesman Jonatan Holst said.Holst said the FSA was in communication with Nordea over the
matter but declined to comment on the possible outcomes of the
probe.Nordea confirmed in a written response to Reuters it was
talking to the FSA but denied any wrongdoing by Clausen.”The FSA has asked some questions about our policies and
procedures that we obviously will answer,” the bank’s spokesman
said.”We understand the debate and have taken in the criticism,
but our view is that the CEO has followed the applicable
regulations when he represented Nordea at SCA’s events along
with several other business leaders.”

(Reporting by Johan Ahlander; Editing by Greg Mahlich)
Source: Newsjyoti Environment

Nationwide Insurance defends controversial Super Bowl ad

Feb 2 (Reuters) – Nationwide Insurance defended its Super
Bowl ad featuring a “dead” boy, saying on Monday that it was
intended to start a conversation about preventable accidents,
not sell insurance.

The ad, labeled by one Twitter user as “the most depressing
ever”, has a young mop-haired boy saying sadly that he won’t be
able to learn to ride a bicycle or get married because he “died
from an accident.”

The ad goes on to show an overflowing bathtub, a under-sink
cabinet containing cleaning materials with the doors ajar, and a
wall-mounted flatscreen TV that has crashed to the floor.

A female voice intones that at Nationwide, “we believe in
protecting what matters most – your kids.”

The response was overwhelmingly negative.

“Hope you guys are having a great day. Did you know your kid
is probably gonna die soon? Enjoy your nachos & funeral
planning!,” Rob Fee of Louisville, Kentucky tweeted.

Nationwide was unapologetic.

“While some did not care for the ad, we hope it served to
begin a dialogue to make safe happen for children everywhere,”
the company said on its website. (bit.ly/166llio)

Companies paid up to a record $4.5 million for 30 seconds
during the game on Comcast Corp’s NBC network seen by
an estimated 100 million-plus viewers, the year’s biggest
television audience.

Apart from Nationwide’s ad, Coca-Cola stood out with
an anti-bullying message, while brewer Budweiser, owned by
Anheuser-Busch InBev, played on happier emotions by
again featuring a labrador puppy.

The New England Patriots won Sunday’s game, beating the
Seattle Seahawks 28-24.

(Reporting by Tanya Agrawal; Editing by Ted Kerr)


Source: Newsjyoti US Media