Global air travel is growing at a quicker pace than global GDP. 

Despite the advances we have made in air travel, are there blank spots that allow for manipulation? How can the industry grow when there is no accountability? 

Amazon's entrance into the office supplies world will have an undeniable impact to the industry as a whole. 

While I understand the antitrust action as a legal theory in this case, as far as blocking a deal for fear of antitrust and or monopoly is ridiculous. 

Amazon has a history of selling $1.00 for $0.99 - NOW they sell $1.00 for $0.95 - next is $1.00 for $0.75. Small business and household enterprises are as effected as listed companies. Amazon has a total monopoly - a monopoly on item prices. 

--- NEWS ON SUBJECT---

By Diane Bartz WASHINGTON, May 17 (Reuters) - The U.S. judge who stopped Staples Inc's SPLS.O proposed merger with Office Depot Inc ODP.O last week agreed with antitrust enforcers that the deal would have meant higher prices for big business customers and that Amazon.com Inc's AMZN.O entry into office supplies would have done little to counter that. Judge Emmet Sullivan's opinion, released in redacted form on Tuesday, closely followed the Federal Trade Commission's arguments and took swipes at Staples' decision not to present a defense. The two companies scrapped the $6.3 billion merger on May 10 after Judge Sullivan issued an order temporarily stopping the deal. (Full Story) The judge at least twice noted a decision by Staples' attorney, Diane Sullivan, to scrap plans to present a defense after saying that the FTC failed to prove its case. Judge Sullivan wrote: "Defendants could have presented expert testimony to support" their position. The Staples attorney took issue with an FTC witness' reasoning to support the government's case, but Judge Sullivan noted that "defendants produced no expert evidence during the hearing to rebut that methodology." The FTC had stopped a previous merger attempt between the two companies in 1997. Since then, Amazon and other online sellers exploded onto the scene, while megastores such as Costco Wholesale Corp COST.O and Wal-Mart Stores Inc WMT.N further crowded the market. Staples was more recently emboldened to offer to buy Office Depot after the smaller chain succeeded in buying No. 3 OfficeMax in November 2013 with no divestitures.  (Editing by Matthew Lewis)  ((Diane.Bartz@thomsonreuters.com)(+ 1 202 898-8313)) 

Everything did appear rosy towards the start of the year, but that is far from the case today.  One can argue that the tipping point came when she attempted to promote Luiz Inacio Lula da Silva to a cabinet position in a last ditch effort to help him avoid prosecution (for scandals inside Petrobas).

From US Today: Rousseff has been terribly unpopular for at least a year. Opinion polls show her public approval hovering around 10%. And the last 12 months have been spectacularly brutal for her: The economy is imploding; multiple corruption investigations are ensnaring — and jailing — rich and powerful politicians and business execs; and the Zika crisis is exposing drastic problems with health care - Link 

Fed Mins - Link Below

In my remarks today, I will explain why the Committee anticipates that only gradual increases in the federal funds rate are likely to be warranted in coming years, emphasizing that this guidance should be understood as a forecast for the trajectory of policy rates that the Committee anticipates will prove to be appropriate to achieve its objectives, conditional on the outlook for real economic activity and inflation. Importantly, this forecast is not a plan set in stone that will be carried out regardless of economic developments. Instead, monetary policy will, as always, respond to the economy's twists and turns so as to promote, as best as we can in an uncertain economic environment, the employment and inflation goals assigned to us by the Congress. The proviso that policy will evolve as needed is especially pertinent today in light of global economic and financial developments since December, which at times have included significant changes in oil prices, interest rates, and stock values. So far, these developments have not materially altered the Committee's baseline--or most likely--outlook for economic activity and inflation over the medium term. Specifically, we continue to expect further labor market improvement and a return of inflation to our 2 percent objective over the next two or three years, consistent with data over recent months. But this is not to say that global developments since the turn of the year have been inconsequential. In part, the baseline outlook for real activity and inflation is little changed because investors responded to those developments by marking down their expectations for the future path of the federal funds rate, thereby putting downward pressure on longer-term interest rates and cushioning the adverse effects on economic activity. In addition, global developments have increased the risks associated with that outlook. In light of these considerations, the Committee decided to leave the stance of policy unchanged in both January and March. I will next describe the Committee's baseline economic outlook and the risks that cloud that outlook, emphasizing the FOMC's commitment to adjust monetary policy as needed to achieve our employment and inflation objectives. Recent Developments and the Baseline Outlook Readings on the U.S. economy since the turn of the year have been somewhat mixed. On the one hand, many indicators have been quite favorable. The labor market has added an average of almost 230,000 jobs a month over the past three months. In addition, the unemployment rate has edged down further, more people are joining the workforce as the prospects for finding jobs have improved, and the employment-to-population ratio has increased by almost 1/2 percentage point. Consumer spending appears to be expanding at a moderate pace, driven by solid income gains, improved household balance sheets, and the ongoing effects of the increases in wealth and declines in oil prices over the past few years. The housing market continues its gradual recovery, and fiscal policy at all levels of government is now modestly boosting economic activity after exerting a considerable drag in recent years. On the other hand, manufacturing and net exports have continued to be hard hit by slow global growth and the significant appreciation of the dollar since 2014. These same global developments have also weighed on business investment by limiting firms' expected sales, thereby reducing their demand for capital goods; partly as a result, recent indicators of capital spending and business sentiment have been lackluster. In addition, business investment has been held down by the collapse in oil prices since late 2014, which is driving an ongoing steep decline in drilling activity. Low oil prices have also resulted in large-scale layoffs in the energy sector and adverse spillovers to output and employment in industries that support energy production. On balance, overall employment has continued to grow at a solid pace so far this year, in part because domestic household spending has been sufficiently strong to offset the drag coming from abroad. Looking forward however, we have to take into account the potential fallout from recent global economic and financial developments, which have been marked by bouts of turbulence since the turn of the year. For a time, equity prices were down sharply, oil traded at less than $30 per barrel, and many currencies were depreciating against the dollar. Although prices in these markets have since largely returned to where they stood at the start of the year, in other respects economic and financial conditions remain less favorable than they did back at the time of the December FOMC meeting. In particular, foreign economic growth now seems likely to be weaker this year than previously expected, and earnings expectations have declined. By themselves, these developments would tend to restrain U.S. economic activity. But those effects have been at least partially offset by downward revisions to market expectations for the federal funds rate that in turn have put downward pressure on longer-term interest rates, including mortgage rates, thereby helping to support spending. For these reasons, I anticipate that the overall fallout for the U.S. economy from global market developments since the start of the year will most likely be limited, although this assessment is subject to considerable uncertainty. All told, the Committee continues to expect moderate economic growth over the medium term accompanied by further labor market improvement. Consistent with this assessment, the medians of the individual projections for economic growth, unemployment, and inflation made by all of the FOMC participants for our March meeting are little changed from December.2 A key factor underlying such modest revisions is a judgment that monetary policy remains accommodative and will be adjusted at an appropriately gradual pace to achieve and maintain our dual objectives of maximum employment and 2 percent inflation. Reflecting global economic and financial developments since December, however, the pace of rate increases is now expected to be somewhat slower. For example, the median of FOMC participants' projections for the federal funds rate is now only 0.9 percent for the end of 2016 and 1.9 percent for the end of 2017, both 1/2 percentage point below the December medians. As has been widely discussed, the level of inflation-adjusted or real interest rates needed to keep the economy near full employment appears to have fallen to a low level in recent years. Although estimates vary both quantitatively and conceptually, the evidence on balance indicates that the economy's "neutral" real rate--that is, the level of the real federal funds rate that would be neither expansionary nor contractionary if the economy was operating near its potential--is likely now close to zero.3 However, the current real federal funds rate is even lower, at roughly minus 1-1/4 percentage point, when measured using the 12-month change in the core price index for personal consumption expenditures (PCE), which excludes food and energy. Thus, the current stance of monetary policy appears to be consistent with actual economic growth modestly outpacing potential growth and further improvements in the labor market.4 Looking beyond the near term, I anticipate that growth will also be supported by a lessening of some of the headwinds that continue to restrain the U.S. economy, which include weak foreign activity, dollar appreciation, a pace of household formation that has not kept up with population and income growth and so has depressed homebuilding, and productivity growth that has been running at a slow pace by historical standards since the end of the recession. If these headwinds gradually fade as I expect, the neutral federal funds rate will also rise, in which case it will, all else equal, be appropriate to gradually increase the federal funds rate more or less in tandem to achieve our dual objectives. Otherwise, monetary policy would eventually become overly accommodative as the economy strengthened.5 Implicitly, this expectation of fading headwinds and a rising neutral rate is a key reason for the FOMC's assessment that gradual increases in the federal funds rate over time will likely be appropriate. That said, this assessment is only a forecast. The future path of the federal funds rate is necessarily uncertain because economic activity and inflation will likely evolve in unexpected ways. For example, no one can be certain about the pace at which economic headwinds will fade. More generally, the economy will inevitably be buffeted by shocks that cannot be foreseen. What is certain, however, is that the Committee will respond to changes in the outlook as needed to achieve its dual mandate. Turning to inflation, here too the baseline outlook is little changed. In December, the FOMC anticipated that inflation would remain low in the near term due to the drag from lower prices for energy and imports. But as those transitory effects faded, the Committee expected inflation to move up to 2 percent over the medium term, provided the labor market improves further and inflation expectations are stable. This assessment still seems to me to be broadly correct. PCE prices were up only 1 percent in February relative to a year earlier, held down by earlier declines in the price of oil. In contrast, core PCE inflation, which strips out volatile food and energy components, was up 1.7 percent in February on a 12 month basis, somewhat more than my expectation in December. But it is too early to tell if this recent faster pace will prove durable. Even when measured on a 12-month basis, core inflation can vary substantially from quarter to quarter and earlier dollar appreciation is still expected to weigh on consumer prices in the coming months. For these reasons, I continue to expect that overall PCE inflation for 2016 as a whole will come in well below 2 percent but will then move back to 2 percent over the course of 2017 and 2018, assuming no further swings in energy prices or the dollar. This projection, however, depends critically on expectations for future inflation remaining reasonably well anchored. It is still my judgment that inflation expectations are well anchored, but as I will shortly discuss, continued low readings for some indicators of expected inflation do concern me. Risks to the Outlook for Real Economic Activity Although the baseline outlook has changed little on balance since December, global developments pose ongoing risks. These risks appear to have contributed to the financial market volatility witnessed both last summer and in recent months. One concern pertains to the pace of global growth, which is importantly influenced by developments in China. There is a consensus that China's economy will slow in the coming years as it transitions away from investment toward consumption and from exports toward domestic sources of growth. There is much uncertainty, however, about how smoothly this transition will proceed and about the policy framework in place to manage any financial disruptions that might accompany it. These uncertainties were heightened by market confusion earlier this year over China's exchange rate policy. A second concern relates to the prospects for commodity prices, particularly oil. For the United States, low oil prices, on net, likely will boost spending and economic activity over the next few years because we are still a major oil importer. But the apparent negative reaction of financial markets to recent declines in oil prices may in part reflect market concern that the price of oil was nearing a financial tipping point for some countries and energy firms. In the case of countries reliant on oil exports, the result might be a sharp cutback in government spending; for energy-related firms, it could entail significant financial strains and increased layoffs. In the event oil prices were to fall again, either development could have adverse spillover effects to the rest of the global economy. If such downside risks to the outlook were to materialize, they would likely slow U.S. economic activity, at least to some extent, both directly and through financial market channels as investors respond by demanding higher returns to hold risky assets, causing financial conditions to tighten. But at the same time, we should not ignore the welcome possibility that economic conditions could turn out to be more favorable than we now expect. The improvement in the labor market in 2014 and 2015 was considerably faster than expected by either FOMC participants or private forecasters, and that experience could be repeated if, for example, the economic headwinds we face were to abate more quickly than anticipated. For these reasons, the FOMC must watch carefully for signs that the economy may be evolving in unexpected ways, good or bad. Risks to the Inflation Outlook The inflation outlook has also become somewhat more uncertain since the turn of the year, in part for reasons related to risks to the outlook for economic growth. To the extent that recent financial market turbulence signals an increased chance of a further slowing of growth abroad, oil prices could resume falling, and the dollar could start rising again. And if foreign developments were to adversely affect the U.S. economy by more than I expect, then the pace of labor market improvement would probably be slower, which would also tend to restrain growth in both wages and prices. But even if such developments were to occur, they would, in my view, only delay the return of inflation to 2 percent, provided that inflation expectations remain anchored. Unfortunately, the stability of longer-run inflation expectations cannot be taken for granted. During the 1970s, inflation expectations rose markedly because the Federal Reserve allowed actual inflation to ratchet up persistently in response to economic disruptions--a development that made it more difficult to stabilize both inflation and employment. With considerable effort, however, the FOMC gradually succeeded in bringing inflation back down to a low and stable level over the course of the 1980s and early 1990s. Since this time, measures of longer-run inflation expectations derived from both surveys and financial markets have been remarkably stable, making it easier to keep actual inflation relatively close to 2 percent despite large movements in oil prices and pronounced swings in the unemployment rate. Lately, however, there have been signs that inflation expectations may have drifted down. Market-based measures of longer-run inflation compensation have fallen markedly over the past year and half, although they have recently moved up modestly from their all-time lows. Similarly, the measure of longer-run inflation expectations reported in the University of Michigan Survey of Consumers has drifted down somewhat over the past few years and now stands at the lower end of the narrow range in which it has fluctuated since the late 1990s. The shifts in these measures notwithstanding, the argument that inflation expectations have actually fallen is far from conclusive. Analysis carried out at the Fed and elsewhere suggests that the decline in market-based measures of inflation compensation has largely been driven by movements in inflation risk premiums and liquidity concerns rather than by shifts in inflation expectations.6 In addition, the longer-run measure of inflation expectations from the Michigan Survey has historically exhibited some sensitivity to fluctuations in current gasoline prices, which suggests that this measure may be an unreliable guide to movements in trend inflation under current circumstances.7 Moreover, measures of longer-run expected inflation gleaned from surveys of business and financial economists, such as those reported in the Survey of Professional Forecasters, the Blue Chip survey, and the Survey of Primary Dealers, have largely moved sideways in the past year or two. Taken together, these results suggest that my baseline assumption of stable expectations is still justified. Nevertheless, the decline in some indicators has heightened the risk that this judgment could be wrong. If so, the return to 2 percent inflation could take longer than expected and might require a more accommodative stance of monetary policy than would otherwise be appropriate.8 Despite the declines in some indicators of expected inflation, we also need to consider the opposite risk that we are underestimating the speed at which inflation will return to our 2 percent objective. Economic growth here and abroad could turn out to be stronger than expected, and, as the past few weeks have demonstrated, oil prices can rise as well as fall. More generally, economists' understanding of inflation is far from perfect, and it would not be all that surprising if inflation was to rise more quickly than expected over the next several years. For these reasons, we must continue to monitor incoming wage and price data carefully. Monetary Policy Implications Let me now turn to the implications for monetary policy of this assessment of the baseline outlook and associated risks. The FOMC left the target range for the federal funds rate unchanged in January and March, in large part reflecting the changes in baseline conditions that I noted earlier. In particular, developments abroad imply that meeting our objectives for employment and inflation will likely require a somewhat lower path for the federal funds rate than was anticipated in December. Given the risks to the outlook, I consider it appropriate for the Committee to proceed cautiously in adjusting policy. This caution is especially warranted because, with the federal funds rate so low, the FOMC's ability to use conventional monetary policy to respond to economic disturbances is asymmetric. If economic conditions were to strengthen considerably more than currently expected, the FOMC could readily raise its target range for the federal funds rate to stabilize the economy. By contrast, if the expansion was to falter or if inflation was to remain stubbornly low, the FOMC would be able to provide only a modest degree of additional stimulus by cutting the federal funds rate back to near zero.9 One must be careful, however, not to overstate the asymmetries affecting monetary policy at the moment. Even if the federal funds rate were to return to near zero, the FOMC would still have considerable scope to provide additional accommodation. In particular, we could use the approaches that we and other central banks successfully employed in the wake of the financial crisis to put additional downward pressure on long-term interest rates and so support the economy--specifically, forward guidance about the future path of the federal funds rate and increases in the size or duration of our holdings of long-term securities.10 While these tools may entail some risks and costs that do not apply to the federal funds rate, we used them effectively to strengthen the recovery from the Great Recession, and we would do so again if needed.11 Of course, economic conditions may evolve quite differently than anticipated in the baseline outlook, both in the near term and over the longer run. If so, as I emphasized earlier, the FOMC will adjust monetary policy as warranted. As our March decision and the latest revisions to the Summary of Economic Projections demonstrate, the Committee has not embarked on a preset course of tightening. Rather, our actions are data dependent, and the FOMC will adjust policy as needed to achieve its dual objectives. Financial market participants appear to recognize the FOMC's data-dependent approach because incoming data surprises typically induce changes in market expectations about the likely future path of policy, resulting in movements in bond yields that act to buffer the economy from shocks. This mechanism serves as an important "automatic stabilizer" for the economy. As I have already noted, the decline in market expectations since December for the future path of the federal funds rate and accompanying downward pressure on long-term interest rates have helped to offset the contractionary effects of somewhat less favorable financial conditions and slower foreign growth. In addition, the public's expectation that the Fed will respond to economic disturbances in a predictable manner to reduce or offset their potential harmful effects means that the public is apt to react less adversely to such shocks--a response which serves to stabilize the expectations underpinning hiring and spending decisions.12 Such a stabilizing effect is one consequence of effective communication by the FOMC about its outlook for the economy and how, based on that outlook, policy is expected to evolve to achieve our economic objectives. I continue to strongly believe that monetary policy is most effective when the FOMC is forthcoming in addressing economic and financial developments such as those I have discussed in these remarks, and when we speak clearly about how such developments may affect the outlook and the expected path of policy. I have done my best to do so today, in the time you have kindly granted me.

https://www.federalreserve.gov/newsevents/speech/yellen20160329a.htm

From DB Research:

The chart below counts the number of times Janet Yellen in her recent economic outlook speeches has been using the words Global, Dollar, and China, and it is clear that the rest of the world is playing a more and more important role in Fed policy. Time will tell if this is an appropriate strategy.

Just when you thought Brazil was back on the rails - perhaps for the Olympics - they slip off again.

From Reuters:
Brazil's largest party will decide on Tuesday to break away from President Dilma Rousseff's floundering coalition, party leaders said, sharply raising the odds that the country's first woman president will be impeached amid a corruption scandal. The fractious Brazilian Democratic Movement Party (PMDB) will decide at its national leadership meeting on the pace of disengagement from the Rousseff administration, in which it holds seven ministerial posts and the vice presidency.

www.zermattcredit.blogspot.com

Whenever an industry hits the skids there is value to be found. That is, unless the whole industry is going under. In that case value would take a while to surface. An active example is oil. There have been plenty of opportunities over the past two years to invest in oil and lose it all. While oil was attractive last summer when everyone thought it hit a bottom, the buy calls were short lived as oil continued to fall. At the same time we had commodities slowing down as an asset class. Now an August '16 crude futures contract is at $36.82 per barrel compared to a $93.11 closing price February 25, 2013. Brent Crude is at $34.26. 




Despite the carnage there will be equities (and bonds) worth buying. If you are dividend focused it will pay to do your research if you are going to buy new investments as dividends are being slashed, cut back or stopped.

Kinder Morgan $KMI is a name that has popped up since they crashed - despite the gloomy future of the industry that lies ahead - as a group that can start again and perhaps go on an M&A streak picking up the soon to be cheap oil assets. Credit Suisse and Stifel recently upgraded KMI to buy status but some analysts forecast it staying around $17.50-$18.00 until Q1 2018. They are also unlikely to go bankrupt. An estimated 40% of oil related companies are entering bankruptcy protection. In mid-2015 many oil service groups extended additional credit to energy firms to pick up the slack in the industry and kick start growth. Now with global growth slowing down and a growing oil surplus there is real exposure and losses that will need to be funded. The turnaround is just beginning to be planned and an entrance at this point would be premature. But it is time to build out a new watchlist for energy groups and avoid the urge to be dragged down the road while oil finds its bottom.






















Full article at http://www.investing.com/analysis/waiting-out-the-long-oil-crash-200119414

Ping Zermatt Credit if you want the data points

- Chad Hagan

LOS ANGELES, Jan. 25, 2016 /PRNewswire/ -- I am obviously disappointed by the judge's decision to confirm the debtors' reorganization plan and hand ownership of American Apparel to its bondholders. This outcome is one that I have been working tirelessly for nearly two years to avoid in an effort to protect value for the company's various stakeholders. Now all stockholders will have their shares and value extinguished. Many of the company's loyal vendors will recover only cents on the dollar of what the company owes them. And the company's workers, faced with current management's inability to generate profits, face a highly uncertain future. It is without question that the debtors, Standard General and the bondholders carefully orchestrated a strategy to pass the Company over to the bondholders without exposing it to fair market test or bidding. This outcome was the only logical and unfortunate conclusion of many months of pre-bankruptcy preparation on the part of the bondholders and the company's board. Here the bondholders and current management effectively used Chapter 11 as a defensive measure to thwart my efforts. This goal was pursued despite the many alternative pathways and opportunities to preserve value. As evidence of the lengths the Board went to in facilitating its scheme they filed a "lock - up" agreement, prohibiting secured creditors and bondholders from considering alternative offers. Chief Judge Shannon was clearly concerned about the Company's failure to undertake any marketing effort and on November 19 he ordered them to market the Company. Although the Debtors were uncooperative even after the Court's order, through intensive efforts with our financial partners, we submitted—a bid that was demonstrably superior to the Debtors' filed plan. Indeed, the Court said in its ruling that if American Apparel were for sale, the Court would not have hesitated to send the parties back to the auction table. The Debtors then increased the economics to match the offer, but refused to engage in further negotiations. They then embarked on a scorched earth campaign to block further bids, subjecting myself and my financial partners to days of depositions during the waning days of the already truncated marketing process. In short, they did everything possible to curtail all efforts to bring fair, reasonable value to creditors. Since relocating American Apparel to Los Angeles in the late 1990's from South Carolina I was bucking conventional wisdom by trying to preserve American manufacturing jobs and keep apparel manufacturing in the United States. Even though everyone else was moving jobs offshore, I was able to build and grow a profitable apparel business by manufacturing domestically. At every step along the way people challenged me and said I was crazy for trying. American Apparel was one of the only companies that shattered the sweatshop paradigm by paying fair wages, and did so at scale. By the time American Apparel went public in 2007, it was running the largest operating apparel manufacturing plant in the United States. For these endeavors I remain justifiably proud. There was logic to the company's unconventional business strategy as evidenced by the company's historic earnings. Until I was removed as CEO, the company had posted positive EBITDA (earnings before interest, taxes, depreciation and amortization) in nine of the last ten years. There were many other things that we did differently at American Apparel, besides manufacturing domestically, in which we were ahead of the times. Whether it was deploying RFID technology in our retail stores, fulfilling e-commerce orders direct from retail stores, or opening stores in emerging neighborhoods before they were recognized as attractive retail markets (just a few examples among many), we were often ahead of the curve. It was because our organization respected and celebrated creativity and unorthodox thinking that we were so successful, and I was committed to protecting this spirit of contrarian thinking. When the Company's board removed me as CEO in June 2014, I was midway through what was shaping up to be a successful recalibration of American Apparel's business. The process of my disenfranchisement ultimately resulted in a wealth transfer from the Company's shareholders, vendors, and employees to hedge funds, lawyers, and bankers. The company was rebounding from a catastrophic distribution center shift implemented by the former CFO and was on track to post a positive operating profit in the second quarter of 2014, and on track to hit its earnings guidance for the year of $40 million EBITDA. With the company's bonds trading down because of the uncertainty around the success of the turnaround, I believe I was pushed out as CEO because of pressure that the bondholders exerted on the company's then CFO and board of directors (As I have alleged in my litigation, I maintain the view that the then CFO, John Luttrell, conspired to sell the company behind my back and to that end disenfranchised me as a shareholder during the June 2014 annual meeting by way of a misleading and fraudulent proxy). The resolute goal of the bondholders was to sell the company so they could profit, but I had to be pushed out of the way since I was the company's largest shareholder. I was not willing to give up, and I attempted to regain control of the company because of my concerns that the company was still in a very vulnerable position with its turnaround not yet complete. I feared, with good reason, that the new management, not understanding what made American Apparel successful in the first place, would try to run the company in a more "conventional" manner. Because the board and new management did not appreciate that a vertically integrated domestic manufacturer had to approach business in a fundamentally different fashion, I felt that the company's future was in serious jeopardy if they ran it like a traditional retailer. For this reason, I entered into a partnership with the hedge fund, Standard General, to regain control of the company. I could have assembled a coalition of shareholders to force a change at the board level, but given the urgency of the situation, I decided to surrender part of my economic interest in the company to regain control quickly. When Standard General did not deliver on their promises to reinstall me as CEO by late summer 2014, even though they had appointed new directors constituting a majority of the board, Standard General said I could buy them out of their investment. When I showed up with investors to do precisely this, they said that they could only support a go-private transaction for the entire company. In December 2014, a private equity firm offered $1.30-$1.40 per share to take the company private. The board rebuffed this offer as well, as offering inadequate value to shareholders for a company they said was worth much more. Instead, the board pursued a path where only a year later the shareholders are receiving zero. The offer that I made in conjunction with Hagan Capital to purchase the company was just one in a long list of offers, and there was no reason to believe that this one would end any differently, given the powerful forces steering the company towards a reorganization where the bondholders end up owning the company. While many parties close to me feared that this would be the outcome of my partnership with Standard General, even they could not fathom such a reversal. While outside observers might not yet appreciate it, I believe the path being followed by the company's management is a road to ruin. The financial results of plummeting sales and EBITDA thus far support this. Management attempts to explain away their abysmal financial performance, as the result of inadequate liquidity, but the truth is that they misunderstand the unique business model that American Apparel must pursue as a vertically integrated domestic manufacturer. Their losses are self-inflicted, the result of poor decisions, made by executives who are learning as they go. Part of me can scarcely believe that a court could confirm their plan as feasible given the operating performance of the business under their management and 18 months into their turnaround plan. But while the bondholders are likely to be put in a position to throw good money after bad for consciously pursuing this path, I worry for the manufacturing workers and the business community who are the collateral damage to this corporate drama. I'm proud of the creativity and innovation that American Apparel fostered over the years. We made important strides in the areas of ethical manufacturing and art as they intersect with commerce. The sad reality is that American Apparel, the largest garment manufacturer in the United States, will not survive at this pace and I don't believe the current management has the talent to bring it back to health. At the end of this saga, I, like the many former stockholders, will most likely be left with nothing. Despite that, what gives me great optimism are the things I possess that can't be stolen by a predatory hedge fund - my ideas, values, drive, authenticity, integrity and my passion. To that end I ask that my supporters stay tuned.

Khamenei calls for security cooperation with China, says U.S. not to be trusted

RTRS 23-JAN-2016 11:46:48 AM DUBAI, Jan 23 (Reuters) - Iran's Supreme Leader Ayatollah Ali Khamenei called on Saturday for closer economic and security ties with China, saying both countries could be reliable partners, especially in energy. "Iran is the most reliable country in the region for energy since its energy policies will never be affected by foreigners," Khamenei was quoted as saying by his official website at a meeting with Chinese President Xi Jinping. Khamenei said the United States was "not honest" in the fight against terrorism in the region, and asked for more cooperation between Iran and China.

American Apparel rejects takeover bid - source - RTRS

14-JAN-2016 11:59:16 PM 

By Aurindom Mukherjee Jan 14 (Reuters) - Bankrupt teen apparel retailer American Apparel Inc's APPCQ.PK board has rejected the latest takeover offer involving the company's controversial founder, Dov Charney, a source told Reuters. Earlier this week, the Los Angeles-based company received a $300 million bid from a group of investors who are backing the return of Dov Charney.
Hagan Capital Group and Silver Creek Capital Partners said their proposal included $90 million of new equity and a $40 million term loan, and backs a business plan from Charney, who was fired as chief executive in December 2014. American Apparel is open to a revised offer from the funds, the source said. (http://bloom.bg/1lbRGeX) Bloomberg reported the news first on Thursday.

Chad Hagan from the Hagan Capital Group said they are confident that American Apparel will accept their "superior business model that centers on long term value, ethical management and preserving American manufacturing jobs"

Silver Creek Capital Partners were not immediately available for comment. Representatives of Dov Charney declined to comment. American Apparel, which has not been profitable since 2009, filed for bankruptcy in October, joining a list other teen-focused retailers including Wet Seal and Body Central Corp that have struggled with changing tastes. Charney founded American Apparel in 1989, but was fired in December for allegedly misusing company funds and failing to stop a subordinate from defaming former employees. He has denied the allegations. 

Remarks upon certain aspects of the theory of costs
by LIONEL ROBBINS
A lecture delivered before the Nationalökonomischen Gesellschaft, Vienna, 7 April 1933. First published in the Economic Journal (March 1934).

The theory of costs is not one of those parts of economic analysis which can properly be said to have been unduly neglected. It has always occupied a more or less central position, and in recent years it has been the subject of a quite formidable body of new work. There is, indeed, no part of his subject about which the contemporary economist may legitimately feel more gratified, either as regards the quality of the work which has been done or as regards the temper in which it has been undertaken. Yet, in spite of this, the present state of affairs in this field is not altogether satisfactory. The various problems involved have been tackled by different sets of people; and the conclusions which have been reached in one part of the field have sometimes a rather disquieting appearance of incompatibility with conclusions which have been reached elsewhere. No doubt some of this apparent incompatibility is real. It is not to be expected that here—any more than elsewhere—economists should have reached finality. But some of it is probably illusory; and if in discussing these matters we were to state more decisively the problems which we are attempting to solve, and the assumptions on which we proceed, it seems likely that not only should we be able to clear up our outstanding real points of difference more quickly, but that, in the course of doing so, we should also discover that many of them depended essentially upon subtle differences of object and assumption, hitherto insufficiently stated. At any rate, it is in the belief that this would be so that these very tentative remarks are put forward.

http://www.econlib.org/library/NPDBooks/Thirlby/bcthLS2.html

The investor backing Dov Charney's American Apparel bid tells @BettyWLiu why https://t.co/PuimJReN0v pic.twitter.com/wbN37B3qXA

— Bloomberg TV (@BloombergTV) January 12, 2016

(AP) — An investor group wants to buy American Apparel for about $300 million and bring back the clothing chain’s founder and former CEO Dov Charney. Charney was fired from American Apparel in 2014 following allegations that he had violated the company’s sexual harassment policy. Charney denied those charges. The investors, Hagan Capital Group and Silver Creek Capital Partners, said Monday that they have submitted a bid. American Apparel said in a statement Monday that it evaluates all bids and that it is focusing on emerging from bankruptcy protection. The Los Angeles company filed for Chapter 11 bankruptcy protection in October. Most Read Stories Seahawks Game Center promoSeahawks Game Center: Complete postgame playoff coverage after Seattle Seahawks edge Minnesota Vikings in wild-card showdown nullListen: Two very different radio calls of Vikings kicker Blair Walsh's missed field goal against Seahawks (Rich Boudet / The Seattle Times)The sports world reacts to Seahawks' wild win over Minnesota Vikings Marshawn Lynch’s stunning decision not to play Sunday raises more questions about his future with Seahawks Seahawks 10, Vikings 9: What the national media are saying about Seattle's close call, chances vs. Cam Newton, Panthers Unlimited Digital Access. $1 for 4 weeks. Hagan Capital Group and Silver Creek Capital Partners said Charney has a business plan that would improve American Apparel, which has faltered since he left. American Apparel, which Charney founded in 1998, sells its clothing in 218 stores around the world.

"American Apparel is a proven viable business model that needs to be scaled from a sales point of view and should not be in bankruptcy. If the Company is not turned around it will be a pointless loss of American manufacturing jobs. We strongly urge the creditors to evaluate and accept our offer," stated Chad Hagan, Managing Partner of Hagan Capital Group.

1e5-85cd-5ad59bc19432-20160111-story.html

https://amers2.apps.cp.thomsonreuters.com/web/pdfReuters/htmlnews/8knews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:2016-01-11:MKW_20020408:1238177

http://www.bloomberg.com/news/articles/2016-01-11/charney-backers-manage-more-than-2-billion-feel-he-was-wronged

Seemingly moments after Xi made a visit... From Reuters China claims most of the South China Sea and on Oct. 9 its Foreign Ministry warned that Beijing would "never allow any country to violate China's territorial waters and airspace in the Spratly Islands, in the name of protecting freedom of navigation and overflight." The United States argues that under international law, building up artificial islands on previously submerged reefs does not entitle a country to claim a territorial limit and that it is vital to maintain freedom of navigation in a sea through which more than $5 trillion of world trade passes every year.

By Simon Jessop and Sinead Cruise

LONDON, Oct 16 (Reuters) - U.S. asset manager Principal Global Investors is to shut London-based hedge fund investment firm Liongate Capital Management after fee-conscious investors withdrew too much money from its funds.

While the hedge fund industry has hit $3 trillion on demand for alternative bets in a low-return world, investors are keen to pay less to make those bets, hitting funds that charge an extra fee for selecting which hedge funds to invest in.

"The headwinds in the hedge fund of funds industry -- fees on fees, declining assets, which I think is an industry phenomenon -- in spite of decent performance, had got us to the point where it was better, on scale grounds, to return cash to investors," said Principal Chief Executive Jim McCaughan.

Liongate, which ran $1.4 billion at the time Principal took a majority stake in 2013, had less than $500 million in assets under management, a spokesman for Principal said, after suffering "significant pressure".

Managing director Jeff Holland left the firm in July, nearly 13 years after helping found the business.

And the lawsuits start piling up...

Attorneys at Keller Rohrback L.L.P. have filed a request for a temporary restraining order against Volkswagen Group of America, Inc., and related entities to prevent the auto maker from sending misleading communications to drivers of certain Volkswagen and Audi diesel vehicles.

Complaints of US employers slamming the breaks on hiring, in addition to global woes, have placed the fed on hold.  Forecasts call for rates action to take place in March 2016.

However, launch the IPOs. Let us not forget that corporates hit the skids at alarming rates. New blood in the system is mandatory.

Parting words...emissions. Set to explode right? The VW scandal is about to uncover a history (since the 1970's) of VW going face-to-face with the EPA. Just wait., Carbon finance is the new darling once again.
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NEW YORK, Oct 2 (Reuters) - The global market volatility of the past month that sent U.S. stocks to their worst quarter in four years shows no signs of letting up just because the calendar turned to October.

Investors say they are bracing for another leg down in the S&P 500 stock index despite its positive showing last week by increasing cash and other defensive positions in their portfolios.

"Do I think we go into a bear market? No. Can we inch toward it? Absolutely," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

With the backdrop of slowing jobs growth in the U.S. and the collapse of global commodity prices, third quarter corporate results will take on a heightened significance when companies begin reporting them next week, analysts said. Alcoa Inc, traditionally the first company to report its results, is scheduled to announce its third quarter earnings after the market closes on Oct. 8.

Overall, corporate earnings are expected to fall by 4.1 percent, according to Thomson Reuters data. That figure is skewed, however, by an expected 65 percent fall in energy sector results.

"The single most determinant variable is going to be earnings at this point," said Mark Freeman, chief investment officer at Dallas-based Westwood Holdings Group. He has been raising his cash levels, and at the same moving more of his portfolio into healthcare and technology companies that show signs of growth.

"The market continues to narrow and narrow. We're not about to fall into a bear market, but I'm starting to think the raging bull market is over," he said.

A weaker than expected U.S. employment report for September on Friday diminished inflation expectations, and the prospects for a dim U.S. corporate earnings season, are all factors fanning worries that the economic recovery could be derailed. (Full Story)

Concerns about the global economy has fueled a series of deep declines and snap-back rallies over the last month, as investors look for surer footing. The S&P index had fallen more than 10 percent from the record high it reached May 20, and after starting with a selloff on Friday, closed up 1.42 percent, still down 8.6 percent from its recent high.

Investors pulled $22 billion out of U.S. equity funds in the third quarter, while putting a record $17 billion into U.S. Treasury funds, according to Bank of America Merrill Lynch.

Those investors have had few places to hide. Of the 21 major financial asset benchmarks tracked by Reuters, only two - the U.S. dollar and 10-year U.S. Treasury bonds - have posted positive returns so far this year, leaving investors with the worst financial market returns since the financial crisis in
2008.


The yield of the benchmark 10-year Treasury fell below 2.0 percent on Friday for the first time since late August on concerns about growth in the U.S. economy.

"There are some wicked winds swirling around from a macro perspective and you can't afford to be complacent," said Alan Gayle, head of asset allocation at Atlanta-based RidgeWorth Investments, who said he has been raising the cash levels in his portfolios until the market stabilizes. (Full Story)

The Federal Reserve's decision in September to delay raising interest rates from financial crisis-era levels is exacerbating the uncertainty behind the market's large swings, said Jonathan Golub, chief U.S. market strategist at RBC Capital Markets.

"The market wants to see the economic conditions normalize. It's starting to think that something is broken here and it makes them uncomfortable," he said.

Fedwatchers suggest Friday's lackluster jobs report would cause the Fed to further delay raising interest rates until 2016, prolonging market volatility into next year. (Full Story)

To be sure, some investors say that heightened volatility is welcome.

"This can create wonderful opportunities, and we're actively looking to take advantage of egregious pricing," said Connor Browne, managing director of equities at fund manager Thornburg Investment Management.
By David Randall, Reuters