Category: Economy

Jeweler looted during Atlanta protests warns violence will alienate sympathizers

Rioters set fire to Minneapolis police station during George Floyd protests

The National Guard was called into Minneapolis after protests intensified overnight. FOX Business’ Maria Bartiromo with more.

The owner of an antique jewelry store in Atlanta that was ransacked early Saturday morning in what's believed to be part of the protests of George Floyd’s death, fears demonstrators have gone too far in their attempt to get their message across.

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Around 4:30 a.m., more than a dozen armed men broke into Estate Jeweler in Atlanta, according to general merchandise manager Leora Isakov.

The owners heard about the break-in from their alarm company, Isakov told FOX Business.

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Once employees arrived at the scene, Isakov said: “We walked into a huge mess, shattered glass everywhere … The showcases were all broken. A lot of merchandise was taken. [It was] very devastating.”

“We took a look at the footage, the camera footage and we watched them break the glass with a cinderblock,” she added. “There were 14 masked, armed men walking into the store, filling up their pockets with everything they could and then leaving.”

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Similar scenarios have unfolded across the country after Floyd's death, with violent protests that started in Minneapolis and spread as far as New York and Atlanta. A black man, Floyd died while being arrested earlier this week by a white officer who has since been charged with murder.

Many retailers, including Target and CVS have closed their stores to keep employees and customers safe. Isakov's small business, for its part, is at a loss as to what to do next. Isakov said the shop gave a report to police, but she knows officers are overwhelmed with calls around the city.

Protesters smash the window of a Chase bank in Oakland, Calif. (AP Photo/Philip Pacheco)

“We really don’t know what to do right now, just take every precaution we can, try to stay safe,” Isakov said. “Definitely heartbreaking and, you know, it’s upsetting.”

“We know everything that’s been going on right now with the George Floyd case and … our hearts go out to the family,” she added.

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That doesn’t mean, however, that burglary is the way for demonstrators to be heard, she said.

“This is absolutely not something that would create a space to have somebody sympathize for you,” she said. “I think it’s going to head in a completely different direction.”

Atlanta Mayor Keisha Lance Bottoms gave a similar warning in an emotional news conference the night before.

"This is not the legacy of civil rights in America," Bottoms said, urging rioters to go home and end the violence. "This is chaos, and we are buying into it. This won't change anything. We're no longer talking about the murder of an innocent man. We're talking about how you're burning police cars on the streets of Atlanta."

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Killer Mike, the rapper whose real name is Michael Render, spoke shortly after the mayor, telling protestors they could accomplish more good by showing up at polling places in November than causing havoc in the streets now.

"I am mad as hell" about Floyd's death, he said. But, "it is your duty not to burn your own house down for anger with an enemy. Now is the time to plot, plan, strategize, organize and mobilize. It is time to beat up prosecutors you don't like at the voting booth."

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Dow panics, then softens as China tensions ease

US stocks took a deep sigh of relief Friday after President Trump’s tough talk toward China did not include the announcement of any new tariffs.

The Dow Jones industrial average slid as much as 368.97 points, or 1.4 percent, to 25,031.67 ahead of Trump’s 2 p.m. news conference. That index closed down only 17.53 points, at 25383.11, a 0.07 tumble.

The S&P 500 was up 14.58 points, to 3044.31, a 0.48 percent bump, while the Nasdaq was the day’s biggest mover, jumping 120.88 points, or 1.29 percent, to close at 9489.87.

Trump’s announcement was expected to add heat to the simmering battle between the world’s two largest economies and throw some cold water on the stock market’s recent rally. Instead, Trump announced that the US will no longer fund the World Health Organization and would eliminate Hong Kong’s special relationship status after Beijing’s intensified incursion into that city.

Both of those moves were baked in as Trump has been threatening the WHO for months and Secretary of State Mike Pompeo determined earlier this week that Hong Kong was no longer sufficiently autonomous from China.

“The world needs answers from China on the virus. We must have transparency. Why is it that China shut off infected people from Wuhan to all other parts of China?” Trump said from the White House Rose Garden.

“There’s a fear that it leads to a mounting escalation of tensions between the US and China,” said Quincy Krosby, chief market strategist for Prudential Financial. “The concern is that this could lead to an abrupt shutdown of the phase-one trade agreement.”

Those fears were not realized Friday.

“That was partially a relief rally,” said Lindsey Bell, chief investment strategist for Ally Invest. “The market was expecting something much worse related to the trade deal but there wasn’t a lot to chew on by the end. Just a big dip for people to buy into.”

Wall Street has staged a comeback from its coronavirus-fueled crash over the past two months as states started to ease lockdowns aimed at getting the pandemic under control. The S&P closed Thursday just 10.7 percent below its all-time high reached in February.

Now that markets have shrugged off the possibility of a trade war being reignited with China as the country reopens from the pandemic, analysts expect more days of green ahead.

“Investors’ optimism returned after a week where some of the economic data has gotten less terrible,” said Bell.

With Post wires

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Private jet company tapped coronavirus relief funds, shared subsidy benefits with wealthy clients: Report

First of the coronavirus PPP loans have been made forgivable

The first of the Payroll Protection Program loans are now being made forgivable. FOX Business’ Edward Lawrence with more.

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A private jet company reportedly tapped a coronavirus relief fund intended for small businesses  — and shared the benefits of the taxpayer-funded loan with its wealthy clients.

According to NBC News, Clay Lacy Aviation, a California aviation management company, received a government-backed loan through the Paycheck Protection Program, an integral part of the $2.2 trillion coronavirus relief package signed at the end of the March.

Congress created the $610 billion program to keep small businesses afloat during the coronavirus pandemic. Companies with fewer than 500 workers can receive loans of up to $10 million; if at least 75 percent of the money goes toward maintaining payroll, the federal government will forgive it.

But CLA's use of the PPP loan highlights how the wealthy have managed to take advantage of the small business rescue program. During the program's first round of funding – which was exhausted in 13 days — a slew of large, public companies received loans, igniting a firestorm of criticism.

The Small Business Administration and the Treasury Department subsequently tried to close the loophole that allowed the big companies to access the fund, including pledging to audit any loan over $2 million before forgiving it. At least 428 public companies received forgivable loans totaling more than $1.36 billion from the program, according to Washington D.C.-based data analytics firm FactSquared. Of those companies, 68 have returned the money, roughly $435 million.

PPP RECIPIENTS COULD FACE LOAN CHALLENGES

In addition to using the money to keep pilots and flight attendants on the payroll, Clay Lacy will extend some peripheral benefits from the loan to its clients who own the jets it manages.

Jet owners who opt-in will receive a portion of credits through a calculation based on the amount of the loan and the cost each owner incurs to employ crew members, according to NBC, which obtained a copy of a letter sent to clients by a top company executive.

"CLA was approved for a loan and recently received funding," Bradford W. Wright, the company’s chief financial officer, wrote in a letter dated April 29. "CLA is prospectively offering aircraft owners a credit for a portion of full-time payroll and employee benefit costs paid through CLA to their respective flight, cabin and maintenance crew members during the covered period.”

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Clay Lacy and The Treasury Department did not respond to a FOX Business request for comment.

Essentially, crew members keep their jobs, which is required if Clay Lacy wants the loan to be forgiven, and jet owners keep a bigger share of their money that they typically spend on payroll. Although the crew members are legally employed by CLA, it’s viewed as a “pass through” company; jet owners are the ones who hire, fire and set salaries for the employees.

CLA’s client list includes founding Eagle Don Henley, Sexy Brand CEO Mark Bonfigli and private equity firm Blackstone Group, according to a list of aircraft registration numbers provided to NBC by an unnamed source.

Bonfigli told NBC he plans to take advantage of the credit. Blackstone Group declined the offer, a spokesperson said.

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It’s unclear how much money the company received; loans are capped at $10 million per business. The SBA and Treasury have not made the information publicly available. As of Saturday, more than 4.42 million loans worth close to $511 billion had been distributed through the program. Congress allocated about $610 billion to the PPP, leaving roughly $100 billion left over in the fund.

Clay Lacy also received $26.9 million in funding under a separate program run by the Treasury Department, according to Treasury data. The CARES Act carved out $46 billion to help airlines, air cargo companies and businesses “critical to national security.”

Clay received one of the biggest grants — which does not have to be paid back — among private jet companies listed in the data.

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Kudlow says White House wants a back-to-work bonus for unemployed Americans

Larry Kudlow: ‘US probably hasn’t peaked in unemployment, pandemics not over’

White House economic adviser Larry Kudlow White House tells ‘Fox and Friends’ America will continue to face hardships amid the coronavirus crisis but the virus is ‘flattening’ and there are ‘glimmers of hope and growth.’

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A showdown is looming between Democrats and Republicans over the next coronavirus relief package.

White House economic adviser Larry Kudlow on Friday endorsed a back-to-work bonus for unemployed Americans returning to their jobs — an alternative to the extra $600-a-week in unemployment benefits supported by most Democrats

"We've got to reward individuals for coming back to work," Kudlow said during a "Fox & Friends" interview. "There will be some kind of re-employment bonus. We're not going to go to the $600, that's a disincentive to work."

One such proposal from Sen. Rob Portman, R-Ohio, would provide $450 weekly to laid-off Americans returning to work, in addition to their wages. The money would last through July 31, the same date on which the extra $600-a-week unemployment benefit expires.

Another proposal from Rep. Kevin Brady, the top Republican on the House Ways and Means Committee, would allow workers to receive up to $1,200 if they find a job, according to The Washington Post, citing three people familiar with White House discussions.

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House Democrats, meanwhile, passed a $3 trillion economic-relief package in May that would expand the boosted unemployment benefits through the end of January. But Republicans have declared the bill dead on arrival, and Senate Majority Leader Mitch McConnell has said additional jobless benefits will not be included in the next package.

Republicans have voiced concern that the sweetened benefits are actually discouraging some workers from returning to their jobs. Roughly two-thirds of workers on unemployment are earning more from the government aid than they did at their old job, according to a paper written by economists at the University of Chicago's Becker Friedman Institute.

Once the $600-per-week expires at the end of July, the typical unemployment check — which varies by state — will return to below $400 per week.

The Federal Reserve's region-by-region roundup of anecdotal information known as the Beige Book, released on Wednesday, found that business owners struggled to bring workers back as a result of the boosted benefits. A separate Fed study found that about 40 percent of Americans earning less than $40,000 per year lost their job in March.

CONGRESS HAS FUNNELED TRILLIONS TO CORONAVIRUS RELIEF. WHERE IS THAT MONEY GOING?

"Contacts cited challenges in bringing employees back to work, including workers' health concerns, limited access to childcare, and generous unemployment insurance benefits," the report said

The U.S. unemployment rate surged to 14.7 percent in April, the highest level since the Great Depression, and economists are warning of an even grimmer situation in May. More than 40 million workers have lost their jobs since the lockdown began in mid-March.

"We probably haven't peaked in unemployment," Kudlow said.

So far, Congress has passed four rounds of aid totaling nearly $3 trillion, including the $2.2 trillion CARES Act signed into law at the end of March.

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Federal student loans will be at cheapest level ever this school year

Tips for paying back private student loans

Financial expert Chris Hogan and ‘The Dave Ramsey Show’ host Dave Ramsey on helping students with private student loans.

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College students who plan to take out a student loan to pay for school next year will be the beneficiaries of the cheapest borrowing costs in history.

For the 2020-2021 academic year, undergraduate loans will be 2.75 percent, a drop from 4.53 percent last year. Loans for parents of undergraduate students, meanwhile, will fall to 5.3 percent from 7.08 percent. The lower rates will only apply to new loans for the upcoming academic year.

Rates on federal student loans taken out during the 2020-21 academic year will be 1.78 percentage points lower than last year, which could save borrowers more than $9 billion in interest charges over the next decade.

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The new interest rates are effective July 1, 2020 through June 30, 2021.

The reprieve comes as the outbreak of the novel coronavirus, which prompted an unprecedented shutdown of the U.S. economy, has hammered Americans' finances. More than 40 million workers have lost their jobs since restaurants, bars, entertainment venues, clothing stores and universities were forced to close, or dramatically change the way they operate.

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American families are carrying a staggering $1.6 trillion in student loan debt, a share that’s roughly doubled since the mid-2000s.

Each May, Congress sets federal student loan interest rates for the impending school year based on an auction of 10-year Treasury notes (which hit 0.70 percent on at the beginning of the month).

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The yield on the benchmark note has plummeted since the Federal Reserve, during two emergency meetings earlier this year, slashed interest rates to near-zero to blunt the economic pain caused by the virus.

The rates do not apply to private student loans, which are set by individual lenders. Still, rates on private student loans — which are calculated differently – are historically very low, too.

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Coronavirus, police shut down US Marine’s business in North Carolina

Claims for unemployment continue to pile up; air travel slump hits American Airlines

Fox Business Briefs: 2.1 million people filed for unemployment benefits for the first time last week; American Airlines is cutting 30 percent of its administrative staff and management, about 5,000 employees.

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One U.S. Marine veteran has been making a stand for small business owners in the state of North Carolina for nearly a month now as local authorities try to figure out what the appropriate procedures are for the coronavirus.

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Nicholas Koumalatsos, the owner of Snap Fitness training facility in Holly Ridge made a decision to reopen his business on May 1 under CDC-recommended guidelines despite executive orders from Gov. Roy Cooper that extended the state’s lockdown to May 8, he explained in a 21-minute YouTube video – which has garnered well over 722,500 views as of Friday. These orders resulted in what Koumalatsos alleges to be harassment from local law enforcement.

The 12-year Special Operations Marine Corps veteran described the orders to be unconstitutional in his eyes and said that he had watched three businesses shut down in one month over the restrictions. By May 7, Koumalatsos said Holly Ridge police officers entered his training facility without a warrant and cited him for violating the orders with an attached class two misdemeanor.

FOX Business reached out to the Holly Ridge Police Department about the matter but a spokesperson said the organization would not offer a statement at this time. Nor did FOX Business hear back from Koumalatsos after multiple attempts to make contact.

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“There has been a lot of attention on the Holly Ridge Police Department warning and shutting down a local 24-hour gym, Snap Fitness. The police department was enforcing Governor Cooper's Executive order after receiving advice from the Onslow County District Attorney, Ernie Lee,” a press release issued on behalf of Holly Ridge said, which was issued on May 20 –a day after Koumalatsos YouTube video was posted. “The Executive Order states that gyms are not to be open during Phase 1. The officers are employed by the Town of Holly Ridge, and routinely reach out to the DA for guidance. Police officers are officers of the state and the DA represents the state at the local level.”

“They gave me a class two misdemeanor… I received a class two misdemeanor and we closed the gym and went on about our way,” Koumalatsos said in his video. “A couple of hours later, I was – I came home trying to cool off. Wrap my head around everything that’s been happening and the chief of police shows up. While I’m here at my home speaking to the chief of police of this town, the captain goes back to the gym and looks for me.”

To illustrate his point, Koumalatsos inserted a brief clip of Police Captain Ewan Richards re-visiting his business.

Ultimately, Police Chief Keith Whatley voided the citation.

“The way it was supposed to go down was each business gets three warnings and then a citation, and so he took the citation back,” Koumalatsos explained in his video.

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Snap Fitness reopened on May 8 under the governor’s phase one plan, which opened up commercial activity for more businesses and 50 percent capacity in retail spaces, though it does not list gyms specifically. Koumalatsos said he received a call from the police chief the next day for allegedly violating orders and was given a formal first warning.

By May 18, Koumalatsos received a visit from Captain Richards – who recently began serving as the department’s acting chief after the former’s alleged “temporary relieve” – informed Koumalatsos that he was in violation of the governor’s orders by having his training facility open.

Koumalatsos continues to describe Richards’s subsequent return at 3 p.m. that day along with security camera footage that shows the captain-turned-acting-chief entered Snap Fitness with a key card. The veteran goes as far as to say that the entry was done without a warrant and that he considers it illegal trespassing.

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The Town of Holly Ridge refuted Koumalatsos accusation of its officers using an old personal key card to gain access to the facility.

“This accusation is not true. Snap Fitness had previously given the Holly Ridge Police a key card. Since the Police Department had been given a key by the gym and was using it for police purposes, the DA states this is not trespassing. It should be noted that neither the owner of the gym or any patron received a citation,” the Holly Ridge’s press release stated. “The Town Council has and will continue to support the Holly Ridge Police Department in their discretion in following the advice of the district attorney.”

Inside and outside the facility, Koumalatsos said officers were attempting to photograph the faces and license plates of gym-goers for ticketing purposes. He added brief video clips of his interactions with Richards, but there is no recorded evidence of the said actions in these provided clips.

“That’s where I started to have the issue,” Koumalatsos said. “If you want to harass me, if you want to come at me, I’ve been in a fight, I know how to protect myself. I can take a beating. I can take all of it, you can ruin my life. I will rebuilt it again. What I cannot allow is for a law enforcement officer who’s also a marine have you – that swore an oath to protect its people, to protect the constitution, harass citizens of my town.”

Snap Fitness has been closed since the incident and Koumalatsos shared he is unsure of when his company will be allowed to reopen. It is not immediately clear if the training facility can reopen under phase two, which currently doesn’t have a start date at this time.

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Though, the Town Council of Holly Ridge adopted a resolution on May 20 that has requested the governor’s office to allow business owners the ability to decide their own reopening under CDC guidelines.

Koumalatsos explained in his video that he feels it is unfair that big-box retailers can be open during the pandemic while small businesses have been asked to remain closed, and he equated current order to the criminalization of business owners.

“Currently ABC Stores, Tobacco Shops, and many other big businesses are allowed to operate under the essential clause however, small businesses are deemed non-essential,” he echoed in the written description that accompanies his YouTube video and all the other social media platforms where he has shared the vlog. “This is a clear picture of favoritism to businesses that have high sales tax rate for the state of North Carolina.”

This is a developing story.

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Unemployment numbers show 'heartening' improvement as states reopen: labor secretary

Labor secretary on coronavirus recovery: US has opportunity to return ‘millions’ of jobs in next few weeks

Labor Secretary Eugene Scalia on jobless claims numbers, extending the Payroll Protection Program and reopening the US amid coronavirus.

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Labor Secretary Eugene Scalia said Thursday that the decline in the number of continuing jobless claims in the federal government's weekly unemployment report is a "heartening" sign that the U.S. economy is improving amid the coronavirus pandemic.

"That continuing claims number is heartening, lower than expected," Scalia told "Mornings with Maria." "There's some anomalies in those numbers. A couple states accounting for the drop by and large, but you take those out, any way you look at it, continuing claims have dropped. It's what we want. It's what we'd expect as we reopen."

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Continuing claims totaled 21.05 million, down 3.86 million from the previous week, according to the Labor Department. The data represents people who have received unemployment benefits for at least two weeks.

In this May 13, 2020, photo, Monique Kursar, left, completes a purchase with Amy Witt, owner of the Velvet Window, in Dallas. (AP Photo/LM Otero)

Since mid-March, when health officials deemed the virus a pandemic and economic lockdowns began, more than 40 million Americans have filed for unemployment.

"I had the opportunity to be down in Florida, Georgia, with the vice president last week," Scalia said. "Those are states that opened up earlier than many, and part of the good news is that we are not seeing as of now the spikes in return of the virus in the states that have reopened, so we will learn a lot in weeks ahead."

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Andrew Yang calls for US to ‘seriously consider’ four-day workweek

Andrew Yang thinks every weekend should be a long one.

The former Democratic presidential candidate urged the US to “seriously consider” adopting a four-day workweek, arguing it would benefit the economy and public health.

“3-Day weekends are better than 2-Day weekends,” Yang said on Twitter Monday at the end of the long Memorial Day weekend. “Studies show that we would be just as productive. It would create jobs at the margins and improve mental health.”

The coronavirus pandemic could spur a faster shift to a shorter workweek, according to a Washington Post article Yang included in his tweet. One UK study cited in the story found that almost two-thirds of businesses with four-day weeks saw staff productivity increase and more than three quarters of workers associated the change with a better quality of life.

“It used to be that flexible work arrangements were a bit stigmatized,” organizational behavior researcher Karen Jansen told the Washington Post. “Those negatives I think are going away. Covid has had a leveling effect.”

New Zealand prime minister Jacinda Ardern recently urged companies to consider shifting to a four-day week, saying it could help revitalize the country’s economy and boost domestic tourism.

New Zealand is also home to Perpetual Guardian, an estate-planning company that shortened its workweek in 2018. Yang shared another tweet noting that researchers studying the firm found productivity increased 20 percent and employee stress levels fell during an eight-week trial of the policy.

The four-day week is “not just having a day off a week — it’s about delivering productivity, and meeting customer service standards, meeting personal and team business goals and objectives,” Perpetual Guardian founder Andrew Barnes said on the company’s website.

Yang — an entrepreneur who has also advocated for a universal basic income  — made the push as the coronavirus pandemic upends workplaces around the world by forcing many people to do their jobs at home. Big tech companies Facebook and Twitter plan to make the switch permanent in some capacity.

But it’s uncertain how quickly the US will move to a four-day week. Just 17 percent of companies in North America offered a “compressed” workweek even though about two thirds of workers wanted one, according to a 2018 survey by human-resources consulting firm Robert Half.

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Apple may soon ditch charging ports in iPhones: report

Forget the headphone jack — Apple is looking to get rid of all the ports in its future iPhones.

That’s the prediction from a known Apple leaker, who says that after this fall’s iPhone 12, the Cupertino, California, tech giant is going to make the shift to completely wireless phones.

At least one iPhone model in 2021 will have a smart connector in place of the device’s traditional lightning port, rendering any accessories that make use of the port effectively obsolete. The smart connector would snap onto the device like a magnet rather than having to slot into it.

The prediction is in line with a previous report from highly-regarded Apple analyst Ming-Chi Kuo, who previously said that he expects the high-end iPhone 13 model to be a completely wireless device.

Apple’s forthcoming 2020 iPhone, meanwhile, will keep the lightning port despite the company experimenting with prototypes of the phone with the more widely-used USB-C data and charging port.

The next iPhones are rumored to have 5G hardware, which will allow them to access a network that promises faster internet and quicker response times than LTE.

Last month, reports emerged that Apple was delaying the production ramp-up for the new phones as the coronavirus pandemic weakened global consumer demand and threw a wrench into its manufacturing operations across Asia.

Apple traditionally needs to send engineers back and forth from its offices to its factories in China to finalize designs in the lead-up to the product’s release. But the coronavirus has led Apple to restrict employee travel to hotbeds of the disease, including China.

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India’s GDP growth seen at 1.2% for Q4 FY20: SBI report

The fourth quarter GDP growth will be announced on May 29.

The country’s GDP is estimated to have grown at 1.2% in the last quarter of the previous fiscal as economic activity came to a standstill in the last week of March due to the nationwide lockdown to contain spread of COVID-19, a report said.

According to the SBI’s research report — Ecowrap – the gross domestic product (GDP) growth is likely to be 4.2% for FY20 and (-) 6.8% for FY21.

The fourth quarter GDP growth number for FY20 will be announced by the National Statistical Office (NSO) on May 29.

In the third quarter of FY20, GDP growth slipped to a nearly seven-year low of 4.7%. In Q1 and Q2 of FY20, GDP growth was 5.1% and 5.6%, respectively.

We believe that Q4 (FY20) GDP growth would be around 1.2% as the economic activity in the last seven days of March month was completely suspended due to the nationwide lockdown, the research report said.

The report sees a loss of at least Rs 1.4 lakh crore during those seven days of lockdown.

Subsequently, the annual FY20 GDP growth would be around 4.2% as compared to 5% as it was projected earlier, the report said.

It estimates FY21 GDP growth to be around (-) 6.8% and gross value added (GVA) growth would be nearly (-) 3.1%.

The loss is maximum (around 50%) in red zones and where almost all the big districts of the country are located. The combined loss of orange and red zones is around 90% of total loss.

State-wise analysis indicates that top 10 states accounted for 75% of total GDP loss with Maharashtra contributing 15.6% of total loss followed by Tamil Nadu (9.4%) and Gujarat (8.6%).

These three states also have the largest number of confirmed COVID-19 cases in the country.

The report further said COVID-19 cases in the country could peak anytime in the last week of June.

Based on the current 7-day moving average of new cases witnessed in the country, we believe that new cases are likely to peak somewhere in the last week of June, beginning June 20, the report said.

Following that, the new cases are expected to witness steep fall till the beginning of August after which it is expected to gradually reduce to flatten by mid-September.

The report, however, said the estimates are purely based on an assessment of current trends that can quickly change given the cyclonic disaster in West Bengal and the continued return of migrant labourers.

The number of COVID-19 cases in the country stood at 1,45,380, as per health ministry data.

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