Category: business and finance

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Midland Park bank raises millions to repay US

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SEPTEMBER 3, 2015    LAST UPDATED: THURSDAY, SEPTEMBER 3, 2015, 1:21 AM
BY RICHARD NEWMAN
STAFF WRITER |
THE RECORD

Stewardship Financial Corp. of Midland Park is the latest northern New Jersey bank to raise millions of dollars from investors to repay capital provided by the U.S. government to spur lending after the most recent recession.

The parent of 30-year-old Atlantic Stewardship Bank said late Friday that it raised $16.6 million to replace $15 million in funding received in 2011 from the U.S. Treasury through the Small Business Lending Fund, which was part of the Small Business Jobs Act signed into law by President Obama in September 2010.

The program gave banks with less than $10 billion in assets an incentive to make loans to businesses with less than $50 million in annual sales. The more loans they made, the less they had to pay to the government in dividends. The kinds of loans that qualify include commercial and industrial loans and owner-occupied commercial real estate loans.

Many banks, including Atlantic Stewardship, used the money to replace the government’s Troubled Asset Relief Program funds. The participating banks have been making quarterly dividend payments to the Treasury at an annual rate of as low as 1 percent or as high as 5 percent of the amount of the government’s investment, depending on the amount of small-business loans the banks make.

As of March 31, the total increase in small-business lending since the program began amounted to $16.4 billion, according to a Treasury survey of participants.

https://www.northjersey.com/news/business/stewardship-financial-repaying-u-s-1.1403175

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‘Death cross’ patterns spread to all corners of the stock market

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By Tomi Kilgore

Published: Sept 1, 2015 1:37 p.m. ET

“Death cross” patterns continue to spread through the stock market like an epidemic, even infecting market segments believed to be more insulated from overseas turmoil.

The Russell 2000 index RUT, -2.71%  of small-capitalization stocks became the latest victim among the major market indexes. The index’s 50-day moving average fell to 1,222.95 in midday trade Tuesday, crossing below the 200-day moving average (MA), which slipped to 1,224.11, according to FactSet.

Many chart watchers believe a death cross, when the 50-day MA crosses below the 200-day MA, indicates that a shorter-term decline has developed into a longer-term downtrend.

The Russell 2000’s last death cross appeared on Sept. 22, 2014. The index fell another 7.1% in the three weeks after that before bottoming at a one-year low.

That follows the death cross that appeared in the S&P MidCap 400 Index MID, -2.83%  on Monday.

https://www.marketwatch.com/story/death-cross-patterns-spread-like-a-bearish-virus-2015-08-28

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East Hampton Police shut down Jerry Seinfeld’s lemonade stand

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By ANDREA PARK CBS NEWS August 28, 2015, 1:50 PM

Jerry Seinfeld’s son got in trouble with the police — and he’s only 12 years old!

Don’t worry — the comedian doesn’t exactly have a derelict kid on his hands.

Seinfeld and his family were shut down by East Hampton, New York, police on Tuesday, Aug. 18 for setting up a lemonade stand, reports CBS New York.

Seinfeld’s wife Jessica posted a photo on Instagram of her son, Julian, and two of his friends with their hands up (jokingly) amidst the police drama.

When officers arrived after a neighbor complained about illegally parked cars, they informed the Seinfelds that it is not legal to run a lemonade stand on village property.

“Lemonade dreams crushed by local neighbor, but not before raising lots of money for @loverecycled,” Jessica Schneider wrote on Instagram. “Thanks to all of our customers and big tippers!”

https://www.cbsnews.com/news/jerry-seinfeld-lemonade-stand-gets-shut-down-by-police/

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How “Shark Tank” Embodies the New American Dream

shark tank

If there’s one phrase that can inspire patriotism, it’s the American Dream. That concept was defined by James Truslow Adams as being the “dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.”  The pursuit of this dream has driven the American people for generations, and recently, it has driven them directly into ABC’s Shark Tank.

But I’m getting ahead of myself.

Business in America has changed drastically in recent years. At a time when business idols are college drop outs who built companies from their garagesand Silicon Valley is a household name (and a tv show!), the goal of entrepreneurship has trumped all. The idea of rising through the ranks of your company has been surpassed by fast-paced success stories about startups improving and conquering old industries in record amounts of time (looking at you, Uber). This shifting business environment paired with the underlying hope to be the next overnight million-dollar company is what makes Shark Tank so interesting.

https://decider.com/2015/08/28/how-shark-tank-embodies-the-new-american-dream/

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Bear Trap: U.S. stocks stage dramatic reversal, erasing rally and raising new fears

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By Drew Harwell and Simon Denyer August 25 at 4:48 PM

U.S. stocks plunged in the last hour of trading Tuesday to wipe out a day-long rally, adding fresh uncertainty to markets that had seemed to be on the rebound.

The wild swing highlighted investors’ anxieties over an expansive Chinese slowdown and hinted at fault lines in an American economy otherwise seen as strong.

The surprise setback dropped the Dow Jones industrial average more than 650 points from its mid-day peak, its biggest reversal since 2008, and pushed the index of 30 blue-chip stocks down 204 points, or about 1 percent, to 15,666.44.

Investors had spent most of the day climbing back from a dismal Monday and from several days of carnage in Chinese stock markets. China’s central bank on Tuesday cut interest rates in a bid to stimulate the country’s economy, and for a while that appeared to reassure European and U.S. markets.

But by late afternoon, Wall Street went back into selling mode, as lingering fears about a slowdown in the global economy undercut the brief surge of confidence.

 

https://www.washingtonpost.com/world/chinas-market-slides-again-but-rest-of-asia-enjoys-some-respite/2015/08/25/b1b8381a-4aa3-11e5-9f53-d1e3ddfd0cda_story.html

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NJ craft brewers hope bills boost industry

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Members of the New Jersey’s craft brewers guild— a group small enough to fit in one restaurant booth a few years ago and now numbering around 70 — worry state law is murky on whether they can sell their suds at farmers markets or if local food trucks can serve patrons at microbreweries. Associated Press Read more

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Market Sell off Wall Street like deer in the headlights

deer in a headlight

“Black Monday” Brings Global Market Rout, Investors Mourn The Death Of Central Bank Omnipotence

Submitted by Tyler Durden on 08/24/2015 16:07 -0400

https://www.zerohedge.com/news/2015-08-24/black-monday-brings-global-market-rout-investors-mourn-death-central-bank-omnipotenc

Peter Schiff Warns “The Fed Is Spooking The Markets, Not China”

Submitted by Tyler Durden on 08/24/2015 – 16:35

The correction may soon morph into a full-fledged bear market if the Fed makes good on its supposed intentions to raise interest rates this year. Have no illusions, while most market observers are quick to blame the sell-off on China, this market was given life by the Fed, and the Fed is the only force that will keep it alive. Unfortunately for the Fed, it won’t be able to get away with doing nothing for too much longer. Events may soon force it to show its hand. Then perhaps some may notice that the Fed is holding absolutely nothing and has been bluffing the entire time.

https://www.zerohedge.com/news/2015-08-24/fed-spooking-markets-not-china

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China Poised to Raise Banks’ Liquidity to Boost Lending

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Move would signal yuan maneuvering in the past two weeks is backfiring

By
LINGLING WEI
Updated Aug. 23, 2015 6:38 a.m. ET

BEIJING—The People’s Bank of China is preparing to flood the banking system with liquidity to boost lending, according to officials and advisers to the central bank, as its recent currency moves are squeezing yuan funds out of the market and renewing concerns over capital leaving Chinese shores.

The planned step—which involves cutting the deposits banks are required to hold in reserve—signals that the Chinese central bank’s exchange-rate maneuvering in the past two weeks is backfiring, forcing it to again resort to the reserve-requirement reduction, the same easing measure that so far has failed to help spur economic activity.

The move, which could come before the end of this month or early next month, would involve a half-percentage-point reduction in the reserve-requirement ratio, potentially releasing 678 billion yuan ($106.2 billion) in funds for banks to make loans.

It would be the third comprehensive reduction in the reserve requirement this year. Another option being considered at the PBOC is to target the cut only at banks that lend large amounts to small and private businesses—the ones deemed key to China’s future growth—though such a strategy hasn’t proven effective in the past in channeling credit to those borrowers.

https://www.wsj.com/articles/china-poised-to-boost-banks-liquidity-to-counter-weaker-yuan-1440325663

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China’s Xi Jinping at center of concern as markets begin new week

Vladimir Putin signs 30-year gas deal with China

Y STUART LEAVENWORTH

In speeches and writings, Chinese President Xi Jinping often delivers the rhetoric of a Communist Party hardliner. And yet more than ever, capitalists worldwide are depending upon this Leninist – one who is in the midst of a power struggle – to prop up the global economy.

Concerns about China contributed to Wall Street’s biggest one-day sell-off last week since 2011, and the slide could continue when markets reopen on Monday.

Friday’s rout was triggered by a report that China’s manufacturing output had dipped to its lowest point since the 2009 global economic crisis. Investors increasingly fear China’s slowdown could be a tipping point for many emerging economies, many of whom grew dependent on selling commodities to China during its go-go days.

The 531-point drop in the Dow on Friday wasn’t all about China, of course. Investors also are worried about inflated equity prices, dropping oil prices, and the possibility the U.S. Federal Reserve could soon approve an interest rate hike. But China’s economic troubles loom large.

“The market may have overreacted,” said Charles Morrison, an Asia-Pacific expert who heads the East West Center in Honolulu. “But the Chinese manufacturing slowdown is a data point that creates concerns worldwide, because China’s manufacturing sucks up so much of the world’s resources.”

By some measures, China’s economy has grown to be equal in size with that of the United States, and it is still growing at a rate of roughly 7 percent yearly. But that’s a slowdown from previous years, and the impact is huge on China’s trade partners.

Read more here: https://www.mcclatchydc.com/news/nation-world/world/article31969311.html#storylink=cpy

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New Jersey’s Anti Business Climate Strikes again : State lost 26,100 jobs in two months

Alantic City

New Jersey lost 26,100 jobs in June and July, the state’s worst two-month loss since the spring of 2009 at the end of the recession, nearly wiping out all the gains for the year.
Hugh R. Morley, The Record Read more

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BOOM: Dow, Nasdaq plunge 3% into correction

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Evelyn Cheng | @chengevelyn

U.S. stocks closed deep in the red on Friday as global growth concerns accelerated selling pressure to push the Dow into correction territory. (Tweet This )

The Dow Jones industrial average fell more than 500 points, into correction territory for the first time since 2011 as all blue chips declined. In the last five years, the index has only had four instances with closing losses of more than 400 points.

“For investors the momentum and the drive of the market is now lower (than) it used to be because there’s no place to hide,” said Lance Roberts, general partner at STA Wealth Management. “Every time we hit the major technical points we kept selling.”

A traders noted that investors stopped looking at techincals and were plowing through them.

“It’s an expiration day and it looks like they’re to have for sale on the close maybe as much as a billion dollars,” said Art Cashin, director of floor trading for UBS.

The Nasdaq Composite lost more than 3 percent, also closing in correction territory and joining the other major averages in negative territory for the year.

https://www.cnbc.com/2015/08/21/us-markets-global-growth.html

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S&P erases gains for year as stocks plunge 2% on Fed, growth concerns

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Evelyn Cheng | @chengevelyn
12 Hours AgoCNBC.com

U.S. stocks closed near session lows on Thursday, off more than 2 percent, as investors weighed continued uncertainty about the timing of a rate hike and concerns about global growth headed by slowing in China.

The S&P 500 and Dow Jones industrial average both had their worst day since Feb. 3, 2014. ( Tweet This )

“I think the markets are overly pessimistic,” said Anthony Valeri, investment strategist at LPL Financial. “I think this sentiment is panicking over news from China, the Fed (and) oil at six-year lows.”

Weakening in emerging market currencies on the heels of China’s yuan devaluation last week added to worries of broad economic slowdown.

“I think the oil and the geopolitical problems are the real problems for the market because we’re looking at lower global economic growth, and lower global growth is going to weigh on the U.S. as well,” said Peter Cardillo, chief market economist at Rockwell Global Capital.

The S&P 500 fell into the red for 2015 and closed down 1.1 percent for the year. Consumer discretionary led all 10 sectors lower with a decline of 2.8 percent for its worst daily performance since June 1, 2012. Energy is the greatest laggard for the year so far, down more than 18 percent.

https://www.cnbc.com/2015/08/20/us-stocks-open-lower-as-oil-slide-growth-concerns-weigh.html

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Credit Traders Gird for the Worst as Fed Loses Its Grip on Debt

mother goose

Lisa Abramowicz

What happens when the Federal Reserve loses its stranglehold over debt markets? Investors are finding out.

The selloff in corporate bonds is deepening and investors are seeking safety in the longest-dated government debt, which does best when the economy does worst. Defaults are rising as oil tumbles and investors are looking for the best ways to hedge against credit losses.

All this comes as the Fed does, well, nothing much. Instead, it’s China that’s taken the lead with new rounds of financial stimulus in the face of slowing growth. But some days it’s a free for all, with even Kazakhstan wielding its influence.

https://www.bloomberg.com/news/articles/2015-08-20/credit-traders-gird-for-the-worst-as-fed-loses-its-grip-on-debt

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Garrett : SEC Pay Ratio Rule will do nothing to provide useful information to investors, improve our economy, or help struggling Americans find a job

scott garrett and interns

 

Aug 14, 2015

the staff of the Ridegwood blog

WASHINGTON, D.C. – Rep. Scott Garrett (R-NJ), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, issued the following statement after the SEC announced a finalized pay ratio rule as required by Dodd-Frank:

“The pay ratio rule will do nothing to provide useful information to investors, improve our economy, or help struggling Americans find a job.  What it will do is impose substantial costs upon American businesses and their shareholders, and make our capital markets less attractive for growing companies. We need to work to grow our economy and expand opportunity for all Americans—not create new red tape and regulations that do nothing to achieve those goal.

Garret also offered a special thanks to Ciaran, Jonathan, Michael, Allison, Catherine, Joe, and Kayla,all  interns from his Washington, D.C. office, Garret said “for all of your hard work this summer! You did a great job, and I hope you learned a lot during your time on Capitol Hill.”

 

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The Financial Deregulation That Never Was

dodd frank

Norbert Michel ,CONTRIBUTOR

I follow the evolution and devolution of monetary and financial policy

Opinions expressed by Forbes Contributors are their own.

Why do I write so much about the myth that financial market deregulation caused the financial crisis? Because that false narrative has spread so far and wide. Even some folks who are otherwise friendly to free-markets have bought into it.

So here’s one more shot: financial markets were not deregulated in any meaningful way during the last 100 years.

It is true that federal regulators changed many rules and regulations over the century, but the notion that the new rules amounted to a lack of rules is dead wrong. Federal regulators have increasingly told banks and non-bank financial firms what they can do and how they can do it.

Last week, when discussing this topic, my friend Mark Calabria mentioned some evidence I had missed: Todd Conover’s Congressional testimony in the 1980s.

Conover was the head of the Office of the Comptroller of the Currency (OCC) from 1981 to 1985, and his 1984 testimony (all 655 pages) is available on the St. Louis Federal Reserve Bank’s website. The testimony is yet another piece of evidence that banks were not deregulated.

But it also serves as evidence that Dodd-Frank and the new Basel III capital rules’ emphasis on so-called macro-prudential regulation is not as new as regulators would like us to believe.

As they tell the story, the new regulations will make markets safer because now, finally, regulators will focus onsystem-wide safety (a macro-view) as opposed to focusing only on the safety of individual banks.

https://www.forbes.com/sites/norbertmichel/2015/08/10/the-financial-deregulation-that-never-was/