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Market Watch: September 2014, Financial News from Chornayk & Associates

Sep 10, 2014

  U.S. markets shoot higher

August was another very strong month for U.S. stock markets, even as the conflict in Ukraine worsened and signs of weaker global economic growth appeared. After a slow first week, gains were steady through month-end, with the S&P 500 Index closing out August up 4 percent, the Dow Jones Industrial Average up 3.6 percent, and the Nasdaq up 4.82 percent. The larger uptick for the Nasdaq suggests that investors were becoming more focused on gains than on market risks.

In the power business, it's all about managing the peaks.

During the hottest days of summer, electric utilities run at full capacity to keep giant cities comfortably cool. But most of the rest of the year, half that capacity goes unused — and that's highly inefficient.

The August jobs report from the Bureau of Labor Statistics is a mixed one: It shows that hiring slowed in August, but the unemployment rate dipped a tenth of a percent.

Here are the two big numbers:

-- The economy added 142,000 jobs; way below the 200,000 level needed to continue pushing down the unemployment rate and way below that of the previous six months.

Pittsburgh International Airport employee Bob Mrvos jokes that you could golf in the terminals' corridors — they're that empty, especially compared with other airports he flies into in cities like Los Angeles and Chicago.

"You walk through those airports and you can barely get through the hallway there's so many people," Mrvos says. "And when you land in Pittsburgh, it's like the airport's closed."

Mine-resistant, ambush-protected troop carriers, known as MRAPs, were built to withstand bomb blasts. They can weigh nearly 20 tons, and many U.S. troops who fought in Iraq and Afghanistan are alive today because of them. But many of the vehicles are now considered military surplus, so thanks to a congressionally mandated Pentagon program, they're finding their way to hundreds of police and sheriff's departments.

Arthur Andersen is back. Or at least the old accounting firm's name will be, for the first time since its association with accounting scandals at Enron more than a decade ago.

The firm was criminally convicted — a decision that was later overturned, although that came too late to save the company.

As of Monday, a company called WTAS is adopting the Andersen name and, in doing so, hopes clients will have forgotten the bad associations.

'That Was The End'

Detroit's historic bankruptcy case is entering the home stretch. The crucial, final trial phase begins Tuesday in a Detroit courtroom.

The trial will decide the fate of a plan to wipe out billions of dollars in debt and help Detroit emerge from bankruptcy as a new, revitalized city.

This trial is a big deal, but don't expect anything with lots of courtroom drama. For one thing, it's federal bankruptcy court — and there's no jury.

BP's 2010 oil spill in the Gulf of Mexico disrupted business all along the coastline. Through the end of July, the oil giant paid more than $13 billion to compensate people, businesses and communities affected. The company is disputing some of those claims in court battles that could drag on for years.

For millions of Americans, August is a month for relaxing and basking in the summer sunlight.

Those are the people without children.

The households with students are likely to be scurrying around under the bright florescent lights of big-box stores, searching for back-to-school bargains on clothes, shoes, notebooks, backpacks, computers and dorm furniture.

And many shoppers are timing their purchases to take advantage of sales-tax holidays for school-related items, hoping to keep a bit more in their wallets.

Of all the U.S. currency in the world, nearly 80 percent is in $100 bills. That's about a trillion dollars.

Some people want to get rid of the bill altogether. Ken Rogoff, an economist at Harvard University, says the $100 bill helps criminals:

Inequality Is Falling On Planet Earth

Aug 12, 2014

Inequality is rising in the U.S. You know this. As the graph below shows, incomes since 1988 have been flat for poor and middle-class people, and rising for the upper-middle-class and, especially, for the wealthy.

A bunch of causes are commonly cited for rising inequality. One is globalization: Competition from foreign workers has kept a lid on wages for low-skilled workers, and added to gains for some at the top of the income ladder.

Lynn Eldredge has worked hard for the past three decades. But somehow, it's still not quite enough.

Eldredge started his working life in the Air Force, and eventually found a steady job in a factory in Kansas. But then, in 2000, he was laid off — and has had six different jobs since then.

Over the past several decades in the U.S., wages have stayed flat or even gone down, while the cost of living has gone up. Economists say that's because jobs went overseas, technology replaced human labor and labor unions have seen their influence decline.

The coal industry made its presence known in Pittsburgh this week for public hearings on President Obama's controversial plan to address climate change. A key element is rules the Environmental Protection Agency proposed in June. They would cut greenhouse gas emissions — chiefly carbon dioxide — from existing power plants. The national goal is 30 percent by 2030, based on 2005 levels.

Yesterday in New York, representatives from Argentina and some of its creditors emerged from negotiations to announce that they had failed.

As NPR's Jim Zarroli reports, this meant that the country had fallen into default for a second time in more than 12 years. The repercussions of the default are unpredictable, but it could mean that the country is shut out of the international debt markets, perhaps pushing interest rates and inflation higher.

With that here are five headlines that tell the story of Argentina's default:

New York City Mayor Bill de Blasio's administration is under fire for signing off on a building plan that allows a new luxury high-rise on Manhattan's western edge to have a separate entrance for low-income residents.

About 20 percent of the units in the 33-story tower will be reserved for low- and middle-income residents. But all the affordable units will be grouped in one area, and those tenants will have to enter through a separate door.

New Jersey used to be known as "the nation's medicine chest," but over the past two decades, many of the state's pharmaceutical industry jobs have dried up or moved elsewhere, and left millions of square feet of office space, warehouses and laboratories sitting empty.

This week is summer's sweet spot — the peak time for pool parties, fresh-picked berries and cool drinks. But for economists, it may feel more like Christmas — so much to unwrap!

Each day will bring new decisions and reports that could have a big impact on the nation's economy. So economists, investors and workers will have plenty to ponder. Here's what's happening this week:

Are corporations people? The U.S. Supreme Court says they are, at least for some purposes. And in the past four years, the high court has dramatically expanded corporate rights.

When Do Chefs And Doctors Buy Generic?

Jul 25, 2014

Pharmacists and doctors are more likely than the general public to buy generic medicine, as we reported last year. And chefs are more likely than the general public to buy generic food.

The economists who figured this stuff out recently published a new update (PDF) to their research, which caught our eye.

"Foreclosure, foreclosure, foreclosure."

Real estate broker John Susani drives down a Paterson, N.J., street where every third house seems to be abandoned or boarded up. During the boom years, money flooded into Paterson.

"The banking industry allowed everyone to be a homeowner; they gave mortgages to people [just because they were] breathing," Susani says.

In some cases, he says, home prices jumped as much as 50 percent. The homes on these streets aren't worth nearly that much anymore.

Credit Suisse Reports $770 Million Loss

Jul 22, 2014

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The Johns Hopkins Health System will pay $190 million to former patients of a gynecologist who used a small camera to secretly film examinations, in one of the largest sexual misconduct settlements involving a physician.

The Baltimore-based hospital is settling a class-action lawsuit that includes more than 7,000 women and at least 62 minors; more women will likely register with the suit.

From member station WYPR, Christopher Connelly reports:

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Young people are being chased out of the labor market. Though the national unemployment rate has fallen steadily in recent months, youth unemployment remains stubbornly high, and the jobless rate is even higher among young minorities. For young people between the ages of 16 and 24, unemployment is more than twice the national rate, at 14.2 percent. For African-Americans, that rate jumps to 21.4 percent.

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A federal grand jury indicted FedEx last week on charges the company knowingly shipped drugs from illegal online pharmacies. NPR's Yuki Noguchi reports the disputes over shippers' responsibilities in the illegal drug trade go back many years.

R.J. Reynolds Tobacco Co., the nation's second-largest cigarette maker, is vowing to fight a verdict of $23.6 billion in punitive damages to the widow of a smoker who died of lung cancer.

Calling the massive award "grossly excessive and impermissible under state and constitutional law," the tobacco company's CEO, J. Jefferey Raborn, said the verdict was "beyond the realm of reasonableness and fairness, and is completely inconsistent with the evidence presented."

New data released by the Department of Labor shows that raising the minimum wage in some states does not appear to have had a negative impact on job growth, contrary to what critics said would happen.

In a report on Friday, the 13 states that raised their minimum wages on Jan. 1 have added jobs at a faster pace than those that did not. The data run counter to a Congressional Budget Office report in February that said raising the minimum wage to $10.10 an hour, as the White House supports, could cost as many as 500,000 jobs.

Between the Comcast kerfuffle and big layoffs at Microsoft, we weren't at a loss for tech news this week. So here's what happened since your last wrap-up, from NPR and beyond.

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