The $700 billion man just got hired by the Fed

By Patrick Gillespie   @CNNMoney

Neel Kashkari, who oversaw the U.S. government’s $700 billion bailout of big banks, was named president of the Minneapolis Federal Reserve on Tuesday.

Kashkari followed Hank Paulson from Goldman Sachs (GS) to the Treasury Department, where Kashkari would eventually become the brainchild behind the deeply unpopular bailout known as the Troubled Asset Relief Program, or TARP.

Kashkari, 42, was strongly criticized during the financial crisis as the face of TARP. His ties to Wall Street didn’t help either. Shortly after TARP was implemented, Kashkari left the government to work for asset-manager PIMCO.

Unexpectedly, he left PIMCO in 2013 to run for governor of California as a Republican.

During his the campaign, he spent a week living as a homeless person in an effort to debunk Democratic Governor Jerry Brown’s claim that there was a “California Comeback” for the state’s economy.

Kashkari admits in a video that while he was living as a homeless person he went to a shelter to ask for food after being unable to find a job. He lost that election.

But now Kashkari has a job with the Federal Reserve, working on the committee that has enormous power over global financial markets. Kashkari was selected by the board of the Minneapolis Fed. Unlike many other Fed committee members, Kashkari isn’t an economist.

Yet like several other high-ranking Fed officials, Kashkari is a former Goldman Sachs employee. In fact, all three regional Fed presidents named this year used to work at Goldman. The same is true of William Dudley, the New York Fed president who joined the central bank in 2007.

Kashkari comes to the Fed as Republican presidential candidates Ted Cruz and Rand Paul have lambasted the Fed for having a revolving door between the central bank and Wall Street.

Kashkari begins his term in 2016 so he will not have a vote at the Fed’s next meeting in December when it decides whether it will raise its key interest rate for the first time in almost a decade.

The Minneapolis Fed declined to allow Kashkari to speak to CNN Money about his views on monetary policy.

TELUS announces world’s fastest internet is coming to Vancouver

BY GILLIAN SHAW, VANCOUVER SUN

VANCOUVER — Telus announced today it is rolling out $1 billion in fibre optic infrastructure right across Vancouver, putting the city among the top connected cities in the world with the most advanced high speed Internet connectivity.

In making the announcement, Telus CEO Darren Entwistle said the fibre optic networks will transform “the way we live, the way we work, the way we socialize and the way we raise our families in a digital world and society.”

“Ours is an investment that will be felt for generations to come,” Entwistle told an audience that included BC Premier Christy Clark, Vancouver Mayor Gregor Robertson, BC’s technology minister Amrik Virk and other politicians.

While fibre optic is available in small areas and among some businesses and multifamily buildings, the Telus fibre optic build-out across Vancouver will cover the entire city, extending gigabit-enabled technology to residences, businesses, educational institutions, hospitals and other centres.

Entwistle said the investment “will future proof Vancouver’s digital demands for decades to come.”

Currently less than 10 per cent of North Americans have access to a fibre optic network. Entwistle cited the handful of American cities that have gigabit-enabled infrastructure, infrastructure he said has results in a 110 basis points improvement in GDP “and growing.

Vancouver currently is number 20 among top North American cities for technology and Entwistle predicted the fibre optic infrastructure boost will improve the city’s standing.

“With our Telus fibre investment, I believe Vancouver will soon be in the top 10 and thereafter, in the top five, such is the potential and competitive advantage our investment exudes for our city,” he said.

When the rollout, which is expected to take five or six years to complete, is started, Vancouver businesses and residences will be able to access Internet speeds of up to 150 megabits per second. Currently the fastest premium-priced speed offered by Telus for the home has download speeds of 100 mbps and upload speeds of 20 mbps.

While the improved capacity and speed will make a difference in homes, it will be most significant for businesses, hospitals and other community organizations and for the expansion of the Internet of Things, a world in which everything from ovens to advanced medical equipment can be connected to a network.

“I don’t have fibre optic to my home, I’m looking forward to it coming,” BC Premier Christy Clark told the crowd. However, she added, “for me that’s a small thing compared to the impact this is going to have for businesses all across the city.

“There are many big businesses in the city that already have good connectivity but many small businesses don’t,” she said.

Clark said the network infrastructure will also attract talent to the city.

Vancouver Mayor Gregor Robertson said he is “thrilled to see this in real time happening in Vancouver, at such a pivotal time for our city.”

He said the fibre optic build-out “is going to be another big boost for Vancouver’s economy.”

“We’re on a roll and innovation is at the core of that success,” he said.

How to cut your monthly grocery bill in half, from a woman who lived on $14,000 a year

Associated Press

Kathleen Elkins, Business Insider

A simple way to trim your grocery bill is to buy less meat. “Try substituting beans and wheat berries for meat in your favorite recipes,” Wagasky suggests. “Enchiladas, spaghetti, and casseroles taste just as good with the meat omitted.”

If you have a harder time parting ways with your meat, start by establishing one meatless day a week. Eliminating meat just once or twice a week can make a significant difference in your grocery bill.

Go generic

Go generic whenever possible. It will save you money.

“There are some things my husband and I have learned truly taste the same as the name brand, while others can’t compare,” Wagasky writes. “The only way to know if you’ll like a product is to try it.”

Her pro-tip when shopping for generics: “Make sure to look up and down the shelves of food. Most grocery stores put the name brand items at eye level. They want that to be what the consumer focuses on. Generic brands are usually on the bottom shelf or the top shelf, so keep those eyes open.”

Stock up seasonally

Sometimes, when you buy is more important than where you buy.

“Buying seasonally is a great way to save and build up a stockpile,” Wagasky writes. “Each month grocery stores offer certain sales on items.”

For example, in the summer, barbecue items will be at rock-bottom prices, making it the perfect time to stock up on chips, crackers, ketchup, relish, mayo, and mustard.

Along the same lines, seasonal fruits and vegetables are cheaper, and they also taste better.

Eat produce in order

Flickr / Jamie McCaffrey/Business Insider

Produce can be tricky to shop for, as their expiration dates are not very forgiving. To make fruits and veggies last significantly longer, eat them in order, starting with the things that will go bad the soonest.

Here’s Wagasky’s guide:

First: bananas, berries, cherries, kiwis, avocado, spinach, lettuce, and grapes

Second: tomatoes, mango, peaches, pears, melon, apricots, and zucchini

Third: cucumbers, pineapple, and pomegranates

Last: carrots, potatoes, celery, apples, grapefruit, and oranges

Go homemade

Thinkstock

“Over the years, I have learned that the more we can make at home, the better off our grocery budget will be,” Wagasky writes. “In our home, we try to make as much from scratch as possible.”

One item she’s saved significantly on by going homemade is bread, a staple in her household: “If I were to buy bread from the store, I would be paying over three dollars per loaf. Thirty-six dollars a month is a hefty fee to pay for something I can make in minutes for one-third the cost.”

Wagasky also chooses to make homemade granola bars and trail mix rather than spending on prepackaged snacks, which tend to be pricey and unhealthy.

Stephen Harper pledges higher RRSP withdrawal limit for 1st time homebuyers

Stephen Harper says a Conservative government would raise the amount that first-time homebuyers can draw out of their RRSPs to buy a house — from $25,000 to $35,000 — if elected.

At a campaign stop in Vancouver, Harper said a Conservative government would increase the upper limit of what’s known as the Home Buyer’s Plan. Under current rules, a would-be homebuyer can withdraw up to $25,000 from his or her RRSP without paying a penalty, as long as the money will be used to help pay for a first home.

The homebuyer must also pay back the funds within 15 years, and doesn’t get the benefit of the tax credit while replenishing the money.

Under the new Conservative proposal, that limit would be increased to $35,000.

“For most Canadians, the family home is their biggest asset and their most significant investment in their future financial security. It’s also the centre of their lives,” Harper said.

Since the plan started in 1992, more than 2.8 million Canadians have used the plan to help pay for a first home, the Canadian Real Estate Association, which represents realtors across the country, said in a release following the policy pledge.

The plan would cost the government $30 million a year in lost tax revenue starting in the 2017-18 fiscal year, Harper said.

Foreign buyer scrutiny

Harper also promised to take a closer look at how foreign money may be influencing the housing market in Toronto and Vancouver, two cities that have seen outsized gains in home prices for several years now.

“We need to ensure we have the necessary information to assess the situation and take action,” an announcement on the website for the Conservative Party of Canada said.

“We’re announcing that our government will commit to collecting data on foreign buyer activity in Canada’s housing market. We will take action in co-ordination with provinces, as necessary, to ensure foreign investment in Canada’s housing sector increases the availability and affordability of homes for Canadians.”

Campaign material provided by the Conservatives to The Canadian Press pointed to rules in other countries that force foreign investors to only purchase homes under construction, or to limit home ownership for foreign nationals to just the time that they live in the country.

About 15 per cent of the condos in Vancouver are empty year-round by some estimates, with the owners sitting on the properties hoping to make a profit as the prices of homes rise. Other estimates, including one calculation by the Canada Mortgage and Housing Corporation, puts the number at 2.4 per cent of the condo market.

There is also speculation that investors are driving up the cost of housing in Vancouver, raising concerns of a housing bubble in Canada’s hot housing market.

CBC News

Azim Premji, Shiv Nadar Among World’s 20 Richest People in Tech: Forbes

New York: Wipro Chairman Azim Premji and HCL founder Shiv Nadar are the only two Indian tycoons in the top 20 richest people in the world of technology, according to an inaugural list by Forbes that has been topped by Microsoft co-founder Bill Gates.

Mr Premji is ranked 13th on Forbes’ first ever list of ‘100 Richest People In Tech’, followed by Mr Nadar on the 14th spot.

Two Indian-origin technology czars Romesh Wadhwani and Bharat Desai are also in the list.

Forbes said Premji, 70, who has a net worth of $17.4 billion, is among Asia’s most generous tycoons, having given away more than $4 billion of his fortune.

Mr Nadar has a net worth of $14.4 billion and gets bulk of his wealth from software services outfit HCL Technologies.

Mr Wadhwani is ranked 73rd on the list with a $2.8 billion net worth. The 67-year-old IIT-alumnus is CEO and Chairman of Symphony Technology Group, a collection of 20 companies spanning big data, analytics and software with combined annual revenue of three billion dollars.

In July 2015, he announced plans to commit up to $1 billion to the Wadhwani Foundations to fund entrepreneurship in India; he did not provide a timetable for the funding. Desai and family have been ranked 82nd with a net worth of $2.5 billion. The 62-year-old and his wife Neerja founded IT consulting and outsourcing company Syntel in 1980 out of their apartment in Michigan.

American billionaires dominate the list occupying 51 slots. Tech barons from Asia made a strong showing as well, with 33 people hailing from that region.

Eight people from Europe made the cut – a minimum net worth $2 billion – as did two from the Middle East and one from Latin America. Forty of the 100 live in California.

Mr Gates, who’s the world’s richest man, ranks number one among tech tycoons, with a net worth of $79.6 billion. Number two on the list is Ellison with a net worth estimated at $50 billion.

Ellison ceded the CEO spot at Oracle last year to two co-CEOs, Safra Catz and Mark Hurd, but still serves as Oracle’s chairman and chief technology officer.

Oracle is finding it harder to grow as a company; revenues for the year that ended in May were down slightly from the previous year to $38.2 billion, Forbes said.

The third richest on the list is Jeff Bezos, whose net worth shot up dramatically in July after Amazon.com surprised analysts and reported a rare profit for its second quarter.

The list includes Facebook co-founder Mark Zuckerberg at rank 4, followed by Google co-founder Larry Page at 5, Alibabachief Jack Ma (7), Google’s Executive Chairman Eric Schmidt (20), Uber CEO Travis Kalanick (35) and Square CEO Jack Dorsey (92). In total, the world’s 100 richest tech billionaires are worth $842.9 billion.

The list has only seven women, the wealthiest of whom is Laurene Powell Jobs, the widow of Apple’s late chief Steve Jobs, with an estimated net worth of 21.4 billion dollars.

The average age of the group is 53, which is a decade younger than the average age of all billionaires; 15 of the 100 are under age 40.

NDTV

Desperate move by China a worrying sign: Don Pittis

By Don Pittis

CBC News

Instead of boosting economy there is danger China’s sudden move will hurt confidence

The father of Western medicine, Hippocrates, had some advice in 400 BC that has been passed down to today: “Extreme remedies are very appropriate for extreme diseases.”

As the world responds to this week’s extreme and unexpected devaluation by the Chinese central bank, it sounds as if Beijing was taking the good doctor’s advice. And while the obvious intent was to snap the Chinese economy back to health, the frightening thing is that Beijing’s move smacks of desperation.

The modern equivalent of that Hippocratic maxim is: “Desperate times call for desperate measures.” As the Chinese currency and world markets took a dive, investors and trade partners around the world were asking themselves: “What does Beijing know that we don’t?”

Falling off a cliff. Chinese currency saw biggest one day decline in decades. (CBC news)

It’s not the first time this year that China has used strong government action to try to counteract inimical market forces. This spring, Beijing intervened, once to encourage stock markets to inflate, and then repeatedly in an attempt to stop the irresistible plunge when savvy traders realized stocks had become unrealistically high.

The trouble is that markets do not like wild swings. And an economy that requires repeated radical intervention is one, like Russia, where no one knows what the government might do next.

Until recently, the fact that China was willing to back its own economy made it seem like an giant island of stability in a volatile world. In the darkest days of the great recession after 2007, China pumped money into its economy by encouraging borrowing and keeping the renminbi undervalued. (The renminbi is the official name of the Chinese currency, meaning “the people’s currency.” Yuan is the name of a unit of the renminbi.)

The worldwide demand for commodities soared as it seemed China’s building boom would never get enough copper or iron. Its thirst for oil seemed unquenchable. The Chinese currency began to strengthen.

But now all that has changed. China has become worried that its companies and citizens may have borrowed too much, pushing property prices into the stratosphere. Now it says its currency is too high.

With this latest intervention, rather than making markets cheer, commodities slumped even further. Oil, which for a while this week seemed to be recovering again, hit fresh lows for the year. World markets fell, with the Dow and TSX facing triple- or double-digit declines on Tuesday. Canada’s loonie fell.

Part of the trouble this time is that consciously resetting your currency is a zero sum game. A cheaper Chinese yuan makes the country’s exports cheaper. But it hurts all of China’s trade partners and competitors. And there are ways for partners and competitors to retaliate, raising fears of a new currency war.

After years of growth, China’s economy is bigger than all other countries except for the U.S. No wonder its action comes as a shock to the entire world economy. There are serious concerns the sudden move could spark a new global round of deflation.

As its stature grew and Beijing adopted the institutions of a market economy, the world assumed China would try to become a stabilizing global force. The latest move may mean China is not ready for that role.

Sophisticated advice

And the effect is not just on governments. In the world of trade, where profit margins are narrow and deals are made months in advance, a two per cent shift in currency is enough to take a company from profit to loss.

Beijing justified the currency shift by saying that it wants the free market to have greater influence in setting the price of the renminbi. Since China’s central bank sets a limit of a two per cent change in the value of the currency on any trading day, if Beijing is serious about letting the market set currency prices, the plunge may not be over yet.

Most worrying is that China’s leaders have access to some very sophisticated advice. Swarming with internationally trained economists, the central bank and finance ministry certainly realized the impact of this move. They went ahead anyway.

China’s leaders have repeatedly said the economy remains healthy, if “sluggish.” But now this may show they’re worried something worse is happening.

Economic worries have become commonplace in China, a country that had seemed like a giant island of stability in a volatile world. (STR/AFP/Getty Images)

That is important because economists and political analysts have repeatedly said that while Chinese people may be dissatisfied with many things in the country, high growth rates have kept dissent under control.

This week, even before China’s currency move, the San Francisco branch of the U.S. central bank issued a report titled Is China’s Growth Miracle Over?, warning the Asian giant may follow the path of the smaller Asian Tigers — economies like those in South Korea or Taiwan — into lower growth.

“With an aging population, slowing productivity growth and the policy adjustments required to implement structural reforms, growth is projected to slow further,” says the report’s author Zheng Liu.

And while it would be wonderful if China can indeed follow the path of Japan and South Korea into middle class stability, it is not clear the way will be easy. Expect more remedies.

 

Sony to close all its stores in Canada

Sony Corp. will close all 14 of its Sony Stores across Canada as the company continues to struggle to reshape its business.

The company made the announcement on Thursday in a memo to the employees of its stores — including its Ottawa location in the Bayshore Shopping Centre — telling them that the stores will cease operations within the next two months.

The company confirmed the news in a statement released to The Citizen.

“Over the next 6 to 8 weeks we are closing our Sony Stores in Canada and will redirect all of this business through our national network of Sony retailers, our online store … as well as through our Sony-trained Telesales team,” read the statement. “Our network of Sony authorized retailers offer a full range of Sony products and will be supported by our in-store Merchandisers and Product Trainers on an ongoing basis in order to ensure that our past customers have continued access to knowledgeable Sales consultants who can support their ongoing Sony electronics needs.

Ottawa Cnyitizen

Canada Post set to turn profit amid dramatic cuts

By: Vanessa Lu Business reporter

After making dramatic changes that include starting a phase-out of door-to-door home delivery and hiking the price of stamps, Canada Post says it expects to end the year in the black.

The crown corporation reported third-quarter earnings on Wednesday that showed the post office segment recorded a before-tax profit of $13 million, compared to a $129 million loss in the same period a year earlier. Continue reading Canada Post set to turn profit amid dramatic cuts