Starbucks to Hire 10,000 Refugees Over the Next 5 Years


Starbucks chief executive officer Howard Schultz has pledged to hire 10,000 refugees over the next five years in the wake of US President Donald Trump’s recent immigration ban. The 63-year-old CEO and chairman of the Seattle-based company wrote an open letter to his staff stating that the president’s order had caused “confusion, surprise and opposition”. “We are living in an unprecedented time, one in which we are witness to the conscience of our country, and the promise of the American Dream, being called into question,” Schultz said in a touching letter.

With this, Schultz has become the latest in a growing list of US-based corporate chiefs who have questioned the ban. Earlier, the ink had barely dried on President Trump’s immigration order on Friday when the backlash from all corners of the industry began. Big corporate giants like Facebook, Google, Apple, Microsoft, Amazon and Tesla have criticized the presidential order. Airbnb has even offered free accommodation to people affected by travel restrictions who find themselves unable to enter the U.S.

It is worth mentioning that President Trump had signed an executive order on Friday barring refugees from Syria for an indefinite period besides imposing temporary travel bans to immigrants from six other Muslim-majority nations including Iran, Iraq, Libya, Somalia, Sudan and Yemen. The order also suspended the US refugee program for 120 days.

In his letter to the employees, Schultz said that the hiring would be applicable to Starbucks’ stores worldwide and that the recruitment would begin in the United States, with the focus being on hiring refugees “who have served with U.S. troops as interpreters and support personnel.”

In a letter written with “deep concern, a heavy heart and a resolute promise”, the CEO added that he wanted his staff to know that the firm would “neither stand by, nor stand silent, as the uncertainty around the new administration’s actions grows with each passing day”. He termed the recruitment pledge as “a concerted effort to welcome and seek opportunities for those fleeing war, violence, persecution and discrimination”.

Schultz, who had supported Hillary Clinton during the build-up to the presidential elections, also targeted other parts of Trump’s agenda focused on immigration, repealing ex-President Barack Obama’s health care law and building a wall with Mexico.

He vowed to support coffee growers in Mexico, provide health insurance to eligible workers if the health care law is repealed and support an Obama-era immigration program that allowed young immigrants brought to the States as children to apply for a two-year reprieve from deportation, besides a work permit.

Schultz promised that Starbucks would aim to communicate with employees on a more frequent basis. “I am hearing the alarm you all are sounding that the civility and human rights we have all taken for granted for so long are under attack.”

Starbucks is one of the most popular coffee companies and coffeehouse chains worldwide. It has almost 238,000 employees working at more than 25,000 stores in 75 countries across the globe.

Delta Air Lines Resume Operations After 150 Flights Canceled, More Expected


A computer glitch in the systems of Delta Air Lines led to 150 domestic flights being canceled across the country along with numerous delays at the Minneapolis-St. Paul International Airport. The company attributed the issue to an automation issue. More cancellations are expected in the days to come, with the company adding that not all delays and cancellations were being reflected in its systems, on the app, on airport information screens or through reservation agents.

According to Delta’s social media handle, flights began departing again as the glitch was resolved at around 11 P.M. However, over 25 flight delays and some entirely canceled flights left passengers in a limbo on Sunday.

Delta CEO Ed Bastian issued a statement expressing his apologies to all the stranded travelers who had been “impacted by this frustrating situation”.

“This type of disruption is not acceptable to the Delta family who prides itself on reliability and customer service. I also want to thank our employees who are working tirelessly to accommodate our customers,” Bastian added.

“Some customers are experiencing delays upon landing, particularly at Delta’s hub airports,” the airport announced. “Delta apologizes to customers for the inconvenience”.

It is noteworthy that Atlanta is Delta’s largest hub.

Social media reports showed flight disruptions at airports in Atlanta, New York City, Houston, Tucson, Austin, and some other U.S. cities.

Although the service resumed about an hour prior to midnight, the MSP website showed that five flights were canceled as of 11:30 P.M., with three still delayed.

The travelers were left waiting for hours with little information about the situation of the outage. After enraged passengers took to social media to express their displeasure over the delay, a representative on Delta’s official Twitter handle told them that the systems were down and that the company’s IT department was working to rectify the glitch. A company news release at about 8:45 P.M. assured the passengers that it was “expeditiously working to fix a systems outage that has resulted in departure delays” without pointing out the time it would take to resolve the issue.

MSP spokesman Patrick Hogan stressed the dependence of airlines on their computer reservation systems.

Systems outages have become increasingly common much to the chagrin of passengers. United Airlines had to ground its domestic flights for about an hour owing to a computer outage exactly a week prior to this incident. Just like in this case, international flights had remained unaffected.

This isn’t the first time passengers have been left red-faced by Delta flight cancellations. According to Associated Press reports, Delta Air Lines was in the thick of things last year in August, with over 2,000 of its flights canceled over three days after an identical glitch in the computer systems at its operations center.

U.S. officials issued a statement last Sunday saying that the Aircraft Communications Addressing and Reporting System (ACARS) was having bandwidth issues.

With an eye on disaster mitigation, Delta issued a waiver for flights scheduled on January 29 and January 30, whereby passengers have to rebook their travel by February 3. The airline also added that unaccompanied minors will not be allowed to board through noon ET on Monday, January 30.

Exxon Mobil 4th Quarter Earnings Increase Despite One-Time Impairment Charge


Exxon Mobil, the oil giant based in Irving, Texas, reported increased earnings for the fourth quarter of 2016 despite the one-time impairment charge of $2 billion consequent to reduction of the value of some of the company’s assets in the US.

The impairment charge was a result of the company’s valuation of some of its US assets’ potential cash flow which was determined to be less than its carrying value. These assets were largely those in the Rockies.

Not including this non-recurring aberration, the company reported Q4 Q16 earnings $3.7 billion which translate to 90 cents per share as against Wall Street projections of 70 cents per share. For the same period last year, Exxon Mobil reported earnings of $2.8 billion which translated to 67 cents per share.

Weaker profit margins on the back of low oil prices added pressure to the earnings of Exxon Mobil’s refining business for the whole of 2016. Yet, a strictly implemented regimen of controlled costs through the year contributed to the earnings increase.

Darren Wood, CEO and Chairman of the US-based oil giant said, “Financial results for the year were negatively impacted by the prolonged downturn in commodity prices and the impairment charge.” Resultantly, the share price of the company fell by approximately 1% on the last day of January.

Analysts opined that the charges component is critical and the company has actually missed the profit projections if it were to be included.

The revenue number for the 4Q16 for the company was $61.01 billion which is lower than the projected figure of $62.28 billion.

While in 2016, the company’s capital spending decreased 38% to $19.3 billion, it is expected to increase the capital spending component in 2017 especially in the exploration segment.

As compared to last year’s 4Q earnings, this year’s earnings for Exxon Mobil fell in all its 3 major divisions including chemicals, exploration and production, and refining divisions.

The company had sent out warnings in the third quarter that it might have to revise the value of its unproduced resources if low prices persisted. The company, at that time, had said that the resources they hold may not qualify as proven assets at the current value under the rules and regulations of Securities and Exchange Commission.

The price rise of liquid petroleum products over last year has been offset by lower profit margins of the company’s refining business. Since the oil price downturn which started in 2014, refining profit margins increased backed by lowered crude oil prices. However, in 2016, crude prices stabilized at around $50 per barrel resulting in weaker profit margins for many integrated oil companies like Exxon Mobil.

The operations-generated cash flow, which is a critical measuring component in the oil and gas industry, for Exxon showed positive results over last year’s figures. Operations-based cash flow for 4Q16 was $7.4 billion, an increase of $2.1 billion over 4Q15. Asset sales-based cash flow also increased. The 4Q16 figure was $2.1 billion as against that of 4Q15’s $800 million.

DOJ Sues AT&T, DirecTV for Collusion



AT&T and DirecTV are the targets of an antitrust lawsuit recently filed the U.S. Department of Justice for their involvement in an unlawful plot that kept the Los Angeles Dodgers’ channel off air.

DirecTV, and its parent company AT&T, unlawfully shared private negotiation information with rivals such as Cox Communications and Charter Communications in 2014 in order to gain collective competitive advantage, according to the DOJ suit filed in the District Court for the Central District of California on Wednesday.

The pay TV provider, which was acquired by AT&T in 2014, provided sensitive information to these direct competitors to help them in their negotiations with the Dodgers’ SportsNet LA, a channel which has exclusive rights to almost all live telecasts of the baseball team in the LA area.

The Justice Department said these companies shared information on whether or not to carry the channel so as to have an upper hand over Time Warner Cable, which sold licenses to other networks for them to air the channel. The pay TV providers hoped to gain bargaining leverage by ensuring other companies would not carry live Dodgers games, so customers wouldn’t have to switch providers.

Many people in the Los Angeles area are without access to the Dodgers Channel – as many as 3 million homes, according to the Washington Post.

“Dodgers fans were denied a fair competitive process when DirecTV orchestrated a series of information exchanges with direct competitors that ultimately made consumers less likely to be able to watch their home team,” DOJ Deputy Attorney General Jonathan Sallet said in a release. “Competition, not collusion, best serves consumers and that is especially true when, as with pay-television providers, consumers have only a handful of choices in the marketplace.”

DirecTV, which was acquired by AT&T in a $49 billion deal, was described as the mastermind of the entire plot. Its chief content officer Daniel York was alleged to have intentionally traded information with Cox and Charter to cut the price TV providers would have to pay to air the Dodgers Channel. The DOJ said review of internal communications indicated CEO Mike White felt the companies could “have more leverage if we all stick together.”

Time Warner Cable, which paid $8.35 billion in 2013 for rights to air Dodgers games for 25 years, initially wanted to charge TV networks $4.90 a month per subscriber for licenses to air games of the LA Dodgers. It was forced to reduce the price to $3.50 in March as a result of opposition from pay TV providers, including DirecTV.

SportsNet LA is still not being aired on AT&T, DirecTV and Cox. But the channel is now available on Charter, which bought Time Warner Cable last year.

In a statement released after the announcement of the DOJ suit, AT&T defended its decision not to air Dodgers games. Its general counsel David McAtee said no other major pay-TV provider was ready to “force all their customers to pay the inflated prices that Time Warner Cable was demanding for a channel devoted solely to LA Dodgers baseball.”

The DOJ suit is a distraction AT&T could do without at a time it is trying to get regulators’ approval of its takeover of Time Warner. The telecom giant has argued that the illegal information sharing was done before it bought DirecTV.

Growing Number of Families Using Payday Loans to Buy Christmas Gifts


Christmas gifts

When people use payday loans, they primarily utilize the short-term, high-interest funds to cover a lighting bill, pay for an automobile repair or replace a broken down refrigerator. Although there might be a small number of borrowers who use it for shopping, a vast majority need the quick cash for financial emergencies and unforeseen events.

But, this year, many families are using payday loans for the wrong reason: Christmas shopping.

According to a new study from T. Rowe Price, a growing number of households are taking out payday loans and raiding savings accounts to ensure that they get everything their children want for Christmas and to show people that they are not an Ebenezer Scrooge when the holidays make their return.

The survey found that 25 percent of parents used a payday loan or withdraw from retirement or emergency savings accounts for Christmas last year. This is the worst thing you could for your net worth.

And most realize the errors of their ways. Nearly two-thirds (64 percent) felt remorseful that they spent more than they budgeted for; half concede they never meet their holiday budget.

Indeed, it does make sense that these people are using instant financing businesses because they are spending between $400 and $500 on gifts per child this year; most households in the United States, Canada or the United Kingdom are living paycheck to paycheck.

It isn’t just payday loans that parents are taking advantage of. They’re also pulling out their credit cards, whether it’s at the store or online. This isn’t any better because it takes three months to pay back.

You may personally scoff at these findings, but no one wants to be viewed as a Scrooge, says Marty Allenbaugh, a financial planner, who argues that you need to have a balanced approach.

“Between our inclination to be generous during the holiday season and the blockbuster retail deals, playing Santa can be kryptonite for even the savviest budgeters,” Allenbaugh told M2Now.

“But splurging a little shouldn’t turn into indulgence at the expense of financial well-being. Retirement accounts are meant to fund retirement. Emergency funds are meant to fund emergencies. Payday loans should be the last of last resorts. Nothing that comes wrapped in a ribbon is worth the consequence of bending these rules.”

Allenbaugh added that Christmas can come with a financial and an opportunity cost. This means that you can prioritize and make trade-offs, which can then teach kids important money lessons “that are missed if parents take an everything-or-bust approach to holiday shopping.”

Financial experts and payday loan businesses often warn that using a payday loan primarily for shopping is the worst thing you could ever do in both the short- and long-term. This is especially important for those who can borrow an immense sum of funds that are more than what they can afford.

Unfortunately, it’s these types of stories that are hurting the overall payday loan industry.

Critics argue that payday loans send borrowers into debt cycles and debt traps, but sometimes it’s the consumers who get themselves into pecuniary difficulties because they wanted to spoil their kids at Christmas time. The opponents are given more ammunition, while the proponents of this alternative financial product are left scratching their heads at the lack of personal responsibility.

Credit Suisse Profit Beats Estimates, But Outlook Remains “Challenging”


Credit Suisse

Credit Suisse fared better than analysts expected in the third quarter by posting a surprise profit, but its CEO warned that tough times are still ahead.

Net profit for the quarter came in at 41 million Swiss francs ($42 million), the Zurich, Switzerland-based lender said on Thursday. It was significantly down from $779 million francs posted in the same period a year, but it smashed expectations of analysts.

Analysts polled by Reuters had predicted a loss of 120 million francs.

The unexpected profit, the second in successive quarters, was mainly attributed to the sale of a historic building near the bank’s Zurich headquarters as well as reduction in costs. The lender reported a gain of 346 million francs from the sale of real estate and a 5 percent drop in operating expenses.

Chief Executive Officer Tidjane Thiam has been working to shift the bank’s focus away from investment banking to wealth management business, which has been receiving good inflows, since assuming the position last year. But like other lenders in Europe, Credit Suisse has been hurt by low and negative interest rates, which have suppressed revenue growth.

Revenue slumped 10 percent to $5.4 billion. The Swiss bank’s investment banking divisions saw its net revenue dip to 2.4 billion francs, down 6.5 percent from the year before.

“Looking ahead, we expect market activity to continue to be influenced by geopolitical and macro-economic uncertainty over the next several quarters and the outlook to remain challenging,” Thiam said in a statement.

The bank’s shares were down about 4 percent Thursday morning following the announcement of the results.

Investors think Credit Suisse still has a lot of work to do to guarantee steady profits despite impressive inflows in its wealth management unit. Analysts observed that net margins have been dropping since the beginning of the year.

Analysts at Morgan Stanley pointed out Credit Suisse’s return on tangible equity which stood at 0.4 percent during the quarter, compared to 8.9 percent a year ago.

The bank said it has cut 5,400 jobs out of the 6,000 targeted in its restructuring plan. It had announced in March that it was shedding 2,000 more positions in its investment banking division. Total head count in the third quarter dropped 1 percent.

The private banking division’s net new assets plunged to 200 million francs, from 3.1 billion francs a year ago, with greater emphasis now placed on the International Wealth Management unit.

Credit Suisse is also planning to sell up to 30 percent of its subsidiary in Switzerland to raise as much as 4 billion francs next year.

The wealth management operations of the bank posted a 24 percent jump in pretax profit during the third quarter, although net revenue declined by 1 percent.

Credit Suisse set aside additional 357 million francs to cover legal costs, mainly resulting from mortgage-backed securities cases. This follows similar action by fellow Swiss bank UBS which last week raised its legal reserves by $417 million to cover possible penalties from similar cases.

The bank said its common equity Tier 1 capital ratio, which is considered an important measure of capital strength, climbed to 12 percent in the third quarter, up from 10.2 percent a year earlier.

Wells Fargo to Pay $50 Million in Home Appraisal Suit Settlement


Wells Fargo

Wells Fargo has reached an agreement that will see it pay $50 million to settle a class-action suit brought against on allegations of that the embattled U.S. bank overcharged numerous homeowners for appraisals.

If approved by an Oakland, Calif. court, the settlement will call for the lender to mail checks to some 250,000 homeowners across the nation whom it had allegedly cheated through unusually high home appraisal charges. Customers qualified for checks are those whose home loans were serviced by Wells Fargo from the period 2005 to 2010.

The checks are to be distributed in 2017, if approved by a judge.

Homeowners who default on mortgage loans are typically charged a fee for an appraisal, also known as the broker price opinion, of the current value of their homes. Wells Fargo was accused in the lawsuit filed in 2012 of using a subsidiary of the bank for these appraisals while also inflating the cost.

Homeowners were charged between $95 and $120 per appraisal, according to the suit, even though the National Association of BPO Professionals put actual cost at $30 or less.

The complaint stated that these appraisal fees were usually hard to detect because they were given vague descriptions, such as “other charges” or “other fees.”

Roland Tellis, a lawyer with the law firm Baron & Budd which represented the homeowners, said checks will be for around $120 for each of the affected customers.

“People who are behind on their loans are the people who can least afford to be charged marked-up fees, but unfortunately, that’s exactly what happened,” Tellis said.

Wells Fargo has backed its procedures and disagreed with claims made in the lawsuit.

“While we believe our practices related to Broker Price Opinions were proper and disagree with the claims in the lawsuit, we have agreed to settle the matter to avoid further litigation,” spokesman Tom Goyda told USA TODAY.

The Wells Fargo spokesman said the settlement will cover payment to class members as well as attorney fees and legal costs.

The home appraisal overcharge lawsuit was just one of the legal battles Wells Fargo has been drawn into. Just recently, a scandal broke out over the bank’s sales strategy. Its employees were alleged to have opened as many as two million accounts without customer authorizations in a bid to meet sales target.

That scandal has put the bank under intense scrutiny, with some outraged customers moving accounts elsewhere. The lender has been questioned by both lawmakers and prosecutors on the sham account openings.

Senator Elizabeth Warren has been especially critical of Wells Fargo for its role in the sham-account scandal. The Democrat lawmaker, who represents Massachusetts, has also questioned the role of the bank’s independent auditor KPMG for failing to detect illegal activities in its audits.

In a survey by CG42, about 14 percent of 1,000 Wells Fargo customers said they had decided to move their accounts to another bank following the scandal. The advisory firm estimated that the unauthorized account openings could cost the San Francisco-based lender $99 billion in deposits and cause a $4 billion loss in revenue.