United Technologies CEO announces his retirement

United Technologies Corp. (NASDAQ: UTX) will now be under new management after long-time CEO Louis Chenevert suddenly announced his retirement. Chenevert was the CEO of United Technologies Corp. for the past six years and his sudden departure was unexpected.

Chenevert will be replaced by Chief Financial Officer Gregory Hayes. Edward Kangas on the other hand will take over the chairmanship on the board after Chenevert likewise stepped down.

With the sudden shakeup, United Technologies went down by 1 percent at $109.19. The company is responsible for the manufacturing of Black Hawk military helicopters and is the maker of Pratt & Whitney jet engines and Otis elevators.

The company did not issue an official statement on Chenevert’s decision to retire although the company had been struggling for the past three quarters. Regardless, a company spokesman believes that UTC’s performance did not have any bearing on the six-year CEO’s decision to retire.

This development leaves a lot of things hanging for UTC, including a scheduled briefing to investors and media at the annual investor conference this coming December.

“This has come out of the blue, and as far as we know was not planned,” RBC Capital Markets analyst Robert Stallard wrote in a note.

Incoming CEO Gregory Hayes has served as company CFO for the past six years. Hayes is known for his intense focus on operational execution and cash flow generation, highly regarded as a straight shooter by the company’s investors.

Despite the shakeup, UTC believes that the company can get over this hump as well as the past quarter setbacks in what investors believe is a common setback in the engine development business.

Three central banks take drastic steps to boost economic growth rates

The People’s Bank of China took steps to reduce benchmark lending and deposit rates when it became evident that other previous measures failed woefully to address the country’s economic grown rates. The European Central Bank is also presently considering buying a considerable size of eurozone bonds in a renewed measure to boost inflation; while Japan had earlier ramped up the purchase of securities through its quantitative easing program as the country stared at recession in the face.

The economic steps taken by these major central banks would do a great deal to save them from certain economic recessions, but it is not without its own risks; and while the risks are not too visible now, they are still lurking around the corner. However, the actions taken by China and the ECB sent global stock prices sharply higher, and it even strengthened the US currency rates and boosted oil prices.

Analyzing the hidden risks of the economic measures adopted by the aforementioned central banks, experts believe the moves are beneficial to financial investors but contain dangers that could spiral off into other areas. For instance, the move could perpetuate or spark asset bubbles, and it could also cause too much inflation if care is not taken at the present. Meanwhile, the economic measures appear to be only for the short term because they do not address the structural problems that police makers are attempting to fix in each country’s economy.

Although the moves indicate a subtle endorsement of the Federal Reserve’s easy-money approach to post-crisis economics in Europe, it also suggests that major economies are getting very desperate to balance things in the face of weakening domestic prospects, most especially as global demand for products press down prices and make banks to take advantage of very low inflation rates.

“We cannot be complacent,” said Mr. Draghi in Frankfurt. “We have to be very watchful that low inflation does not start percolating through the economy in ways that further worsen the economic situation and inflation outlook.”

While the ECB may still buy large amounts of corporate debt or government bonds in the eurozone area, the effect of the action will hold done long-term interest rates and make investors to undertake riskier assets that would enhance borrowing, investments, and spending, central banks of countries in Europe are not allowed to really purchase its own country’s debts.

 

NY Fed president to be grilled over whistle-blower and leaked tape

The president of the New York Federal Reserve Bank, Bill Dudley, will be appearing before the Senate committee today over issues that border on revolving doors for bankers and their regulators. The summon of Dudley before the committee is coming on the heels of the sack of a NY Fed employee, Carmen Segarra, who leaked sensitive insider information to a staff of Goldman Sachs who had earlier worked for NY Fed.

Goldman Sachs would not necessarily approve of the manner the employee got information from the NY Fed’s Segarra, and therefore sacked its own employee alongside a supervisor who was supposed to know better. Meanwhile, Dudley had also worked at Goldman in the past before moving out to head the NY Fed, and this fact may inject a twist into the scenario when he appears before the Senate committee.

Segarra had leaked 46 hours of taped conversation to the media, and the content of the intel suggests that New York regulators sided with Goldman bankers in order to carry out a shady deal. But an internal inquest at the Federal Reserve aimed at reviewing things within the agency indicated that regulators are worried that other whistle-blowers like Segarra might still remain within the organization.

Dudley admitted in a written statement that “We understand the risks of doing our job poorly and of becoming too close to the firms we supervise. Of course, we are not perfect,” he added. “We cannot catch or correct every error by a financial institution, and we sometimes make mistakes.”

But whatever today’s outcomes at the hearing is, the government and Wall Street will continue in good business upheld by stringent regulations. And a researcher at the Heritage Foundation, Norbert Michel, states that nobody should be surprised that there’s a revolving door, because it’s a natural symbiotic relationship.

State of Arizona files $3 billion lawsuit against GM for concealing car defects

Despite the slew of ligation’s thrown against General Motors this year for one problem or the other with its vehicles, the state of Arizona has filed a lawsuit worth $3 billion against the motor manufacturer for concealing safety defects, thereby putting people’s lives to risks.

Tom Horne, the Arizona Attorney General states that civil penalties could be as high as $10,000 per violation, and maintains that GM has put the lives of hundreds of thousands of unsuspecting car owners and lessees to risk by driving unsafe vehicles.

After announcing its plan to recall 2.6 million vehicles this year because of an ignition problem that causes a vehicle to slip out of position, thereby cutting power to air-bags, steering, and brakes, hundreds of customers headed to the law courts to file for one damage or the other. Over 300,000 faulty vehicles registered in Arizona were recalled, and thousand others registered in other states were also recalled – costing GM millions of dollars in warranty repairs.

Arizona Attorney General Horne says the state is pressing on with the charges because the mechanical faults extend to ignition switches, car parts, air-bags, wiring, brake lights, and seat belts among others; and more so, the motor company failed to recall the faulty vehicles in time and thereby suppressed knowledge of the defects.

It is on note that this is the first time a state within the United States would bring action against GM for knowingly marketing faulty vehicles, but GM argues that it went bankrupt in 2009 and the new management cannot bear responsibilities for defective vehicles made before the new GM management took over. But the government of Arizona countermands by saying that its former head of product development, Mary Barra, who is now the CEO, was aware of the electronic power steering defects in 2011 but only waited till 2014 to make the information known.

Halliburton and Baker Hughes end up failing merger talks

Following the breakdown of merger talks between the two Houston-based oil-services companies – Halliburton and Baker Hughes, Halliburton is said to have made direct moves to overthrow the board of Baker Hughes by nominating its own directors to take over its rival.

According to Martin Craighead, the CEO of Baker Hughes, “Baker Hughes is disappointed that Halliburton has chosen to seek to replace the entire Baker Hughes board rather than continue the private discussions between the parties,” and this came on the heels of the move made by Halliburton to nominate its own directors to take over the board of Baker Hughes, instead of agreeing for the latter’s directors to hold elections ahead of the annual meeting that comes up in April.

Halliburton and Baker Hughes share a combined market value of $70 billion, and they come second and third to the world’s largest oil-field servicers, Schlumberger. They all produce equipment and tools as well as related services that enable oil and energy gas companies locate and drill oil from the fields. According to Baker Hughes, Halliburton has nominated candidates to take over its full board of directors, even in the light of the “substantial antitrust issues” that would arise with the merger.

Halliburton is also alleged to attempt poaching Baker Hughes employees and staffs before the merger deal is closed, even despite the fact that Halliburton has “refused to increase its first and only value proposal.” Officials and spokespersons at Halliburton have refused to react to these issues.

In a letter dated November 12, the CEO of Baker Hughes had registered his displeasure to David Lesar, the CEO of Halliburton in a message that said, “My counter proposal to you yesterday was a very reasonable basis on which to reach agreement. Your intransigence is not a reasonable response and your demand that we accept your offer in the next four hours, and threat to conduct a proxy contest…are entirely inappropriate.”

Although the successful takeover of Baker Hughes by Halliburton would place the latter in a global position to compete with Schlumberger for vast overseas projects, Halliburton’s intense eagerness to absorb Baker Hughes would spark off a round of bids from other oil-field giants and industrial conglomerates eager to cut a size of the US oil market.

Uber yet to learn about privacy to grow up in Silicon Valley

Many media reporters have complained bitterly about Uber’s maturity at handling things that relate to business, most especially as it has to do with reporters covering their events and other things of interest to the general reading public. And to this end, Uber continues to make more enemies among reporters than it is good for business – not where the ride service threatens to dig up dirt on reporters that publish unsavory content about its activities and business.

It is true that that Uber appears to have slacked down on criticizing targeted critics in a thuggish campaign that is actually laughable, but then it has replaced this with an aggressive attitude against media outlets that cover its activities. Moreover, what’s more, the rider service is deficient at protecting customers’ travel information, then whatever they do with the information should come as no surprise.

The company has not been too professional with keeping customers’ data, and this is evident in the display of personal travel information of some unlucky users that were displayed at a wall during the last launch party. However, a few magazine writers have been warned that their rides are being monitored, and this has actually turned out to be the case. Most people believe the company should hold the privacy of journalists and everybody in high consciousness, and not just do things to smite others.

According to a writer for New York Times, “what all these incidents have in common is that they offer a portrait of a company without adults in charge. From the top executive ranks to individual operational units around the world, the mentality seems to be one in which sheer belief in the rightness of their cause overwhelms what to an outsider seems at best questionable and at worst immoral practices.”

Everybody out there believes that Uber as a foremost company can do better than it is doing, and while it is trying to woo investors and satisfy consumers and clients within and outside the country, it might as well try to befriend media reporters to gain some media leverage – not by influencing their coverage of events, but just by being civil as a matured Silicon Valley company should be.

Japan considers a $26 billion stimulus program to withstand recession

In a bid to withstand its present economic recession and come out unscathed in a struggling global economy, the government of Japan is considering a 3 trillion yen ($26 billion) stimulus program to shore up its ailing economy. The economic adviser to the prime minister, Etsuro Honda, states that the amount would help childcare programs and also enable family households to withstand the economic crunch.

Japan is the third largest world economy, and following its fourth recession slump since 2008, the government is acting fast to provide stimulus programs to arrest the country’s economic fall. Prime Minister Shinzo Abe, who had just arrived back home from the G20 summit that held in Brisbane, Australia, has pledged that his country would take appropriate steps to boost global economic growths – even though back home, his country’s GDP report showed a second shrink within July-September as consumers and commercial business try to sustain things in the light of the sales-tax rise.

According to Koichi Hamada, a former adviser to President Abe on economic matters and a retired Yale University professor, “the present situation is like a boxer who is hit and trying to rise. The reason why Abenomics doesn’t look as sound as before is that we added opposite power,” making his point known in reference to the tightening of fiscal policies.

Although information emerged that President Abe will be meeting with a long-time adviser and executive of the ruling party, Kozo Yamamoto, to discuss the possibility of injecting as much as 4.6 trillion yen as stimulus for the 2015 fiscal year. It is also thought that Abe might consider postponing the next sales-tax increase for another 18 months, even though it was scheduled for October 2015 – in order to add about 0.5 percentage to adjusted or actual economic growth indices.

Google and NASA Signing A Deal Worth $1.16 Billion

The two giants of its own fields, i.e., technology and science, Google and NASA are giving the media every that reason for which they are well-deserving to be highlighted in the headlines today. Well, it is the deal worth $1.16 billion that Google signed with NASA in order to use Moffett Airfield in Northern California for space exploration and robotics development. Hence, whether one names the purpose of the deal or the whopping signing amount, there are many things in this news to catch the attention of the world.

The deal, as is being done, to use one of the big airfield for the sake of space exploration and robotic development, Google has taken up to pay an amount as huge as $200 million for restoring Hangar One. It is this Hangar One which has long been tried to be preserved by the preservationists. However, it is worth a mention at this point that the tech giant will be under the deal and will be using the airfield on a lease for the next 60 years. With such a reasonable time period being taken by google, it is hoped that the results are sure to be of refined class and will bring a revolution in the world of science and technology.

The Verge states, “Google has a growing interest in robotics, drones, balloons, and anything that can beam Internet down from the sky—and this is a great location to test many of those things.”

The Moffett Airfield is located toward the south of the San Francisco Bay and there are total of three hangars, a field operations building, two runways and a private golf course in it that covers an area of about 1,000 acres.

Google’s real estate subsidiary Planetary Ventures settled the deal between Google and NASA and the process was on the verge of success back in February only. It took so long for the two parties to finally announce their association and the signing of the deal just because both the parties were working on the terms and conditions to be finally agreeable by both.

A 5.8% hike recorded by Whole Food Markets, buyers also get delighted

A 5.8% hike in quarterly gains was reported by Whole Food Market, who said its attempts to allure more buyers with reduced rates and nifty automation are getting great success.

The organic and natural-goaled grocery chain has battled for the last few years as dominant bodegas such as Kroger Co. and Wal-Mart Stores Inc. are trading more natural and organic products and other top-class supermarkets show up across nation. The firm was compelled to cut its perspective four times over the year for financial 2014, which wrapped up in the month of September.

The company’s shares have chopped down by 37% through Wednesday’s close. However, in midnight selling they were up by 7% after the firm informed its sales in the present quarter were off with a powerful beginning. Tantamount-stock sales or sales at factory open during the last year, were increased by 4.6% from the year-earlier cycle.

Walter Robb, the Co-chief Executive informed reduced prices and attempts to stress value are functioning, as are technology moves such as grocery delivery via Instacart and the firm’s agreement of Apple Pay.

He said on a call with business dignitaries, “All of these things are driving an increase”. He further added, “This is a legitimate—a real—increase, and we’re really pleased to see it happening.”

Whole Foods also lately launched its number one national TV advertisement and declared a loyalty agenda.

Whole Foods has been operating to take off its image as a pretty penny grocer by providing better deals for about more than two years. However, reducing its rates has pierced sales and profits.
For the cycle wrapped up on September 28, Whole Foods’ tantamount-store sales hiked by 3.1%, in line with its outlooks, however designating its lowest growth ratio in over four years.

John Mackey, the co-Chief Executive, said, “It was a challenging year on many fronts. We faced a dynamic competitive landscape, a lukewarm economy, and headwinds from our own growth and value initiatives”.

Dollar legs up soon after US Elections while Euro records a mark down

The dollar legged up to a seven-year high in opposition to Japanese Yen on Wednesday as soon as Republicans in the United States’ midterm poll results were out in which they scored a victory. The polls boosted expectations for an improving of political bottleneck in Washington, raising feelings for perilous assets.

The euro’s battles progressed, though, a day in advance of a European Central Bank Meeting, and it blew a two-year base against the Swiss franc. The euro slashed to a level of 1.2033 francs, not away from the Swiss central bank’s stage of 1.20 francs levied on Sept. 2011.

Swiss hike data depicted an increasing threat of collapse, and that is anticipated to put strain on the SNB to interfere in the currency fair to dwindle the franc.

With a poll on Nov. 30 that is targeted at avoiding the Swiss National Bank from emptying its gold goods and compelling it to hold somewhat 20% of its property in gold, theorists are anticipated to aim the cap levied by the SNB to avoid the Swiss franc from increasing.

The SNB disagrees the “Save our Swiss gold” action as it would considerably rein its competency to shape fiscal policy. So far, elections signify that the action in unlikely to get bulk support.

The present currency strategist at Commerzbank, Mr. Esther Reichelt said in a statement, “The currency pair is rapidly approaching levels at which SNB interventions might become necessary again”. He also added, “In the immediate run-up to the referendum on stricter rules for SNB gold reserves, that is likely to be a most unwelcome development for the SNB.”

As opposed to dollar, the euro came down by 0.2 % at $1.2520 after a small-housing assembly seen on Tuesday petered out. The assembly was prompted by a Reuters report that cited European Central Bank sources as mentioning associates of ECB president Mario Draghi were depressed with his management approach.

The ECB musters on Thursday and is anticipated to repress on the new policy action. However, with the Bank of JAPAN amazingly simplifying policy last week and bringing down the yen quite lower, the pressure is on the ECB to take further easing measures in an offer to demean the euro and induce growth and hike.

Home Depot Second Quarter Sales are higher than expected

Home building confidence of people will increase more than before now with a satisfactory hike in the second quarter sales of the Home Depot. It is the giant in homemaking finances and the news of improvement in the sales results that what was being expected by the analysts is positive and pleasant for all.

The increasing sales already evident in the first half of 2014 are signaling a rise in the full-year earnings. The latest report of sales as announced by Home Depot is a 5.7% increase over the year-ago quarter and that makes it to earn $23.8 billion revenue in the second quarter. The store sales worldwide has increased 5.8% and within the US, it has grown to 6.4%. The rate of customer transactions has gone up to 4.2% and the average ticket size grew 1.8% and became $58.43.

The Home Depot chairman and CEO, Frank Blake, said in a statement, “In the second quarter, our spring seasonal business rebounded, and we saw strong performance in the core of the store and across all of our geographies.” Furthermore, he has not forget to extend his gratitude to the employees of the company who has contributed a lot to reach this “increased demand.”

On the contrary, to the analysts’ consensus by 8 cents per share, Home Depot marked a tremendous improvement to show 22.6% more earnings per share. Eventually, this results in a net income of $2.1 billion. Now, basing on the bright results of the second quarter, it is expecting to raise the full-year profit forecast to $4.52 per share and this is a 20.2% increase over the full-year earnings of 2013.

Energy drink purchase makes two owners billionaires

Following a 17% stake purchase by Coca-Cola in Monster Beverage, the two men behind the energy drink are now billionaires. Rodney Sacks and Hilton Schlosberg sold a 17% share of their energy drink, Monster, to Coca-Cola for $2.15 billion, and the deal has increased the shares sales of Monster energy drink in New York trading to a high $97.48. And the result? The two owners are now billionaires, and other shareholders in the energy drink are now wealthy investors.

Although Coca-Cola owns the Full Throttle and Burn and Mother energy drinks, it has never really broken into the energy markets with these beverages.

But with the acquisition of significant shares in Monster Beverage, Coca-Cola now owns it own major energy drink even though it has also participated in its distribution across the US and Canada since 2008. Coca-Cola is now set to establish its own footing in major energy drinks markets with Monster Beverage.

Rodney Sacks and Hilton Schlosberg bought a soda drink in 1992 for $13.7 million after leaving their banking jobs, and grew it into the Monster Beverage that people know today.

According to the editor of BevNet, Jeffrey Klineman, “if you look across mature beverage categories, it’s impossible to find someone with a growth rate that does not let up like Monster Beverage.” Not only Klineman had this to say, many other industry watchers believe the tenacity of the founders of the Monster energy drink has worked out right for them.

Sprint switches CEOs, zeroes in on company development

Sprint Chief Executive Dan Hesse was replaced by billionaire entrepreneur Marcelo Claure.

It was reported that its focus will be on building the business. This is an anticipated move of the newly appointed CEO since Sprint showed big losses in its first quarter.

Due to the failure of a potential rival from Sprint, Francis Iliad must boost its $15 billion bid for control of T-Mobile. Earlier, former Sprint CEO Dan Hesse warned the consumers that the next focal point of the wireless companies will be to retain the customers while encouraging them to spend more.

In spite of objections from the company, Sprint has decided to push through with its surprise bid to buy almost 57 percent of T-Mobile. There were complaints from the company saying that the offer was too low.

“While we continue to believe industry consolidation will enhance competitiveness and benefit customers, our focus moving forward will be on making Sprint the most successful carrier,” said Sprint Chairman Masayoshi Son.

Users of the foursquare app will automatically lap the company tracker GPS anytime their phone is on. In the previous version of the foursquare app, users first need to give the app permission to turn on location tracking. Now, a change in the setting is the only one needed to opt out.

After the huge losses of Sprint during the first quarter, there will higher expectations from Claure.

LinkedIn agrees to pay $6 million unpaid workers wages

Following allegations that LinkedIn had not paid its past and current workers their due wages after putting in regular work hours that were not clocked, the social media giant for professionals has agreed to make a $6 million payout to offset the work hours. LinkedIn was accused of withholding workers wages because the company could not properly track work hours, and this revelation came to light after regulators found out it could not answer for the work hours put in by its workers.

This payout covers $3.3 million for unpaid wages and $2.5 million damages for 359 past and present workers. LinkedIn has promised to take proactive measures to prevent future violations of workers work hours, and it also agreed to provide compliance training and publish its policy on overtime work to all relevant staff – and to this end, the US Department of Labor has expressed its delight.

According to Susana Blanco, a US Department of Labor official, “off the clock hours are all too common for the American worker. This practice harms workers, denies them the wages they have rightfully earned, and takes away time with families.”

LinkedIn has cooperated with investigators and owned up to withholding staffs’ wages due to technical issues, and according to its Vice President for Corporate Communications, Shannon Stubo, “this was a function of not having the right tools in place for a small subset of our sales force to track hours properly.” The company further said that its workers are its number one concern and that it would rectify the situation in no time.

Gold rates fall over 200,000 jobs additions

Gold falls 0.2% according to the Bloomberg generic pricing index despite the fact that many employers are reportedly creating more than 200,000 job openings for six months on end. Gold prices actually rose following the reports of the new job additions, but its rise could not be sustained because the dollar fell against 10 major currencies, and equities dropped to help its fall.

The Federal Reserve has reported recently that although the economy was gaining momentum, the drop in job levels was still everywhere, and this has necessitated the need to keep interest rates minimal till well after asset purchases. The current crises in Ukraine and the Middle East have also had negative effects on gold rates, and this has caused a significant 28% loss in recent times.

According to David Govett, a precious metals executive at Marex Spectron Group, “the US employment situation is perhaps not as rosy as hoped for and that the Fed may well be right with their statement the other day stating that they still had concerns about the job market. However, one slightly negative figure does not a bull market make for gold, and I doubt we will see this as the start of another rally for the yellow metal.”

Bank of America gets slammed $1.3 billion for bad housing loans

The Bank of America has been slammed with a litigation where it will be doling out $1.3 billion fine as compensation to Fannie Mae and Freddie Mac over a mortgage fraud case. The Bank of America has been found guilty of selling bad housing loans to investors over a period of years after an informant blew open the can of worms that attracted the said penalty.

The whistleblower has confessed to the law courts that the bank had ordered its staff to wipe off bad loans from its books by transferring them to government-backed investors, and Fannie Mae and Freddie had borne the brunt of this fraud. They had been tricked into buy faulty mortgage loans that had bounced back on their business and customers, and they have lashed out at Bank of America through a celebrated court case.

Bank of America has threatened to appeal the decision, and according to its spokesman, Lawrence Grayson, “we are reviewing the ruling and will assess our appellate options…we believe that this figure simply bears no relation to a limited Countryside program that lasted several months and ended before Bank of America’s acquisition of the company.” But in addition to this case, a previous Countryside administrator, Rebecca Mairone, was penalized $1 million for her complicity in the crime.

Bank of America is shifting the blame on Countryside and trying to negotiate the mortgage fines with the US Department of Justice, but the given fine is said to be a reflection of drop in profits that the bank has been experiencing in recent times. Several finance analysts are still debating where this fine leaves the bank and its investors, and they see a way out if the bank could successfully appeal the fine and reach an agreement with Fannie or Freddie with some settlement.

World Cup tournament gives Twitter huge patronage boost

Twitter has announced that users sent over 672 million tweets during the recent World Cup tournament in Brazil, and this figure is above any other usage figure recorded during any worldwide event in the history of the social media firm. Soccer fans from across the world took to Twitter to tweet messages and opinions during the tournament, and the huge use of tweets has spiked huge profits for the company and its investors – leading to 29% rise in shares in Wall Street.

The CEO of Twitter, Dick Costolo, in a conference call with reporters and analysts expressed satisfaction with the successes recorded by his firm during the 2014 World Cup tournament, and according to him, “we delivered the kind of events experience that I’ve wanted to see from us for some time.” According to Costolo, Twitter’s service was tailored to each game and each country’s fans in order to provide a more personalized experience.

The company’s revenue spiked 124% at the just concluded games, and the number of people that used the microblogging service increased by 6% during the entire period. This has given the company the leverage to earn more from advertising during this period, and in fact they posted a revenue of about $312 million against $139 that was generated last year in the June quarter. And in total, business analysts had actually though Twitter would make $283 million revenue, but that surpassed that expectation and earned $312.

But this has raised a pertinent issue: Twitter’s growth and revenue spike during worldwide events or through public interest events. For instance, when something of interest happens to anyone in the society, the first place they go to announce it is on Twitter and other users take it up and retweet the news if it affects them or gets their interest in any way. This is the strength and weakness of Twitter: its traffic relies on public interest events in any part of the part.