Economy & business

Trump Adviser From Wall St. Backs US Bank Breakup Law

White House economic adviser Gary Cohn said he backed bringing back the Glass-Steagall Act, a Depression-era law that would revamp Wall Street banks by splitting their consumer-lending businesses from their investment arms.

The National Economic Council director, also a former Goldman Sachs president, expressed support to lawmakers for a banking system where firms would focus primarily on trading and underwriting securities or issuing loans.

Big banks have strongly opposed such a move that would fundamentally overhaul their business. Reinstating the law, which was repealed in 1999, has not attracted significant attention in Congress, but advocates in the White House and both parties now argue it would provide critical safeguards to prevent another financial crisis.

Critics of that approach say it lacks nuance and would not have prevented the last financial meltdown.

The fact Cohn, widely viewed as one of Wall Street’s own, was willing to push that position spooked big banks’ representatives in Washington.

The White House confirmed Cohn’s remarks in a private meeting with lawmakers on Wednesday. A spokesperson said he was “simply discussing the President’s previously stated position” in favor of a “21st century Glass-Steagall.”

Cohn’s remarks were first reported by Bloomberg.

The Trump administration has indicated support for a return to Glass-Steagall. The White House has stuck by the idea since it was included in the Republican Party platform during the presidential campaign, and Treasury Secretary Steven Mnuchin expressed interest in a modernized version of the law.

When asked on Thursday when large financial institutions should begin to worry about Glass-Steagall becoming a reality, one industry representative said, “Right now.”

However, any legislation establishing such a firewall faces long odds in the current Congress. The heads of the House and Senate banking committees have indicated support for alternative approaches, and efforts to move Glass-Steagall legislation in prior years have garnered little support.

“A new Glass-Steagall would require legislation, and it simply isn’t a priority issue in Congress,” wrote Ian Katz, a financial policy analyst for the research firm Capital Alpha Partners, in a note to clients.

In the meeting which was arranged by Senate Banking Committee Chairman Mike Crapo, Cohn was asked by Senator Elizabeth Warren about Glass-Steagall. Cohn responded favorably, noting that the Republican Party platform supports the idea, according to sources familiar with the meeting. The meeting included lawmakers from both parties and their staff.

Bringing back Glass Steagall would likely have a significant impact on banks like JPMorgan Chase, Bank of America and Citigroup that have large highly intertwined commercial lending and investment banking operations, say analysts.

It would impact Goldman Sachs Group and Morgan Stanley to a lesser degree although, they would likely have to revert to being standalone investment banks and shed their deposit funding.

Here are some details about the law, called the Glass-Steagall Act:

What is Glass-Steagall: Originally passed as part of the U.S. Banking Act of 1933, Glass-Steagall established a firewall between commercial and investment banking activity. The law was whittled away over time as banks gained permission to engage in more trading activity, and was repealed altogether in 1999 with the Gramm-Leach-Bliley Act.

Who supports it?: Since the 2008 financial crisis, Glass-Steagall has become a calling card for politicians eager to crack down on Wall Street. Democratic Senator Elizabeth Warren frequently invokes it, and Senator Bernie Sanders made it a major part of his presidential campaign. President Donald

Trump also seized on the policy during his campaign.

What does the White House say?: The Trump administration has not backed away from his campaign stance, but there are questions about how aggressively the president will push for a new law. The issue only tends to come up when officials are asked about it. Treasury Secretary Steven Mnuchin said he supported a modern version of Glass-Steagall in response to a

question during his confirmation hearing. White House Press Secretary Sean Spicer said the White House supports the proposal when asked by reporters. Cohn responded favorably when asked by Warren at a private meeting with senators.

What would a new Glass-Steagall look like?: There are number

of ideas to create what some refer to as a “21st Century Glass-Steagall.” Warren has proposed splitting commercial and investment banking, and also barring depository institutions from using modern financial instruments like derivatives. Thomas Hoenig, the vice chair of the Federal Deposit Insurance

Corporation, has proposed a similar split, and would subject banks to a higher, 10 percent capital requirement. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, would force big banks to take on so much capital they would prefer to split into smaller institutions.

Could it happen?: Although many Wall Street critics have seized on Glass-Steagall, efforts to change the law have garnered very little support. Warren’s proposal received just a handful of legislative co-sponsors. And because Congress and the White House are still consumed with complex fights over health care and tax reform, there seems to be little appetite for a

broad, controversial overhaul of the financial system.

Are there risks for banks?: Big U.S. lenders including JPMorgan Chase, Bank of America and Citigroup would be most impacted, because their commercial lending and investment banking operations are closely

intertwined, say analysts. Goldman Sachs and  Morgan Stanley might be less impacted, although they would likely have to revert to being standalone investment banks and shed their deposit funding. But even if Glass-Steagall does not become law, the industry may have to spend money, time and

energy lobbying against the idea, when they would rather focus on rolling back existing rules.

Economy & business

Tensions Rise as General Strike Paralyzes Argentina

Protesters in Argentina clashed with police during marches over government austerity measures on Thursday as labor unions challenged President Mauricio Macri in the first general strike since he took office 16 months ago.

Security forces used high-powered water cannon and tear gas to control picketers who had blocked the Pan-American Highway, the main road leading from the north to capital city Buenos Aires, where normally bustling streets were half-empty and businesses were closed.

Truck and bus drivers, teachers, factory workers, airport employees and the government customs agents who run Argentina’s all-important grains export sector walked off the job at midnight for 24 hours.

“No customs officials are here, so there will be no exports or imports today,” said Guillermo Wade, manager of the maritime chamber at Argentina’s main grain hub of Rosario. The country is the world’s top exporter of soymeal livestock feed and the third-largest supplier of soybeans.

Macri took office in December 2015. He eliminated currency and trade controls and cut government spending, including gas subsidies, a move that steeply pushed up home-heating bills.

The strike came as Macri welcomed hundreds of potential investors and foreign officials to a meeting of the World Economic Forum in Buenos Aires. Blocks away from the hotel where the meeting was held, protesters clamored for wage increases in line with inflation, which was 40 percent last year and expected to be about 20 percent in 2017.

“The situation is dramatic,” Julio Piumato, a spokesman for labor umbrella group CGT, said in a telephone interview.

“Wealth is being concentrated in the hands of a few at the same rate that poverty is growing,” he said. “Urgent measures are needed to create employment. One out of every three Argentines is poor.”

The one-day work stoppage came ahead of an October congressional election that will gauge Macri’s strength going into his 2019 re-election bid. The market is concerned about a political comeback by previous President Cristina Fernandez, who boosted the government’s role in the economy during her eight years in power.

Macri took office promising a wave of foreign investment that has been slow to manifest itself. Investors want to see that his Cambiemos coalition remains the biggest vote-getter in heavily populated areas like Buenos Aires, which will be key to the 2019 election.

He was elected after Fernandez left Argentina with rampant inflation, dwindling central bank reserves and a wide fiscal deficit.

Arts & Entertainment

Comic Don Rickles Dead at Age 90

Don Rickles, the master insult comic who created laughs with ridicule and sarcasm in a decades-long career that earned him the facetious nickname “Mr. Warmth,” died on Thursday at his Los Angeles home from kidney failure, his publicist said. He was 90.

Rickles, who said he developed his brand of mockery humor because he was no good at telling traditional jokes, had recently postponed some performances, including a show set for May in Tulsa, Oklahoma, that was pushed back to November just this week.

His death was confirmed by his spokesman, Paul Shefrin, who said Rickles is survived by his wife of 52 years, Barbara, as well as their daughter, Mindy Mann, and two grandchildren. He would have turned 91 on May 8.

The New York-born Rickles had an intense, often-ad libbed, rapid-fire delivery and a wide, impish grin. He delighted nightclub audiences, Hollywood royalty and politicians by hurling invective at them, all in good fun.

Encountering Frank Sinatra for the first time during a stand-up act in 1957, Rickles greeted the mercurial singer as Sinatra walked in with a retinue of tough guys by saying, “Make yourself at home, Frank – hit somebody.”

Luckily for Rickles, the line amused Sinatra, who became one of his biggest boosters and took to calling the short, bald Rickles “Bullethead.”

Performing decades later at the second inaugural gala of U.S. President Ronald Reagan in 1985, Rickles did not hesitate to zing the commander-in-chief, asking, “Is this too fast for you, Ronnie?”

But the most frequent targets of the “Merchant of Venom” were the fans who packed his performances for a chance to be belittled as a “dummy,” a “hockey puck” or worse. Celebrities often showed up just for the honor of being mocked by Rickles, and no minority or ethnic group was immune to a Rickles tongue-lashing.

“He was called ‘The Merchant of Venom’ but in truth, he was one of the kindest, caring and most sensitive human beings we have ever known,” actor-comedian Bob Newhart and his wife, Ginnie, said in a statement.

Comic actor Jim Carrey tweeted: “Don once begged me for a couple of bucks, then told me to twist myself into a pretzel.

Ego slayer! Comic Everest!” Oscar winner Tom Hanks also tweeted a tribute to his “Toy Story” co-star, saying, “A God died today. Don Rickles, we did not want to ever lose you. Never.”

Rickles also mocked himself and shied away from describing himself as an “insult comic,” insisting that his humor was not intended to be mean-spirited but was built on making wild exaggerations for the sake of laughs.

Much of Rickles’ material played on racial and ethnic stereotypes that did not always keep up with cultural evolution.

He came under fire in 2012 for a joke that characterized President Barack Obama as a janitor. His spokesman defended the line as just “a joke, as were the other comments Don made that night.”

“Anyone who knows him knows he’s not a racist,” the spokesman told Politico then.

Heckling the Hecklers

Rickles, a graduate of the American Academy of Dramatic Arts in New York, proved especially adept in early nightclub engagements at handling hecklers, which led him to make poking fun at audience members a major part of his act.

In an interview with Reuters to promote his 2007 memoir “Rickles’ Book,” he said his flair for impromptu insults grew out of his shortcomings as a conventional comic.

“I just can’t tell jokes,” he said. “As a young man I had a personality that I could rib somebody and get away with it.”

Rickles, who served in the U.S. Navy during World War II, also built a resume as an actor, making his film debut as a junior officer alongside Clark Cable and Burt Lancaster in the 1958 submarine drama “Run Silent, Run Deep.”

He went on to appear in a series of 1960s “beach party” movies with Annette Funicello and Frankie Avalon and in 1970 played Army hustler Sergeant Crapgame in the wartime caper “Kelly’s Heroes,” with Clint Eastwood, Telly Savalas and Donald Sutherland.

He endeared himself to an entirely new generation by providing the voice of Mr. Potato Head in the computer-animated “Toy Story” movie and its two sequels in the 1990s. In 1995 he had a dramatic role in Martin Scorsese’s Las Vegas crime film “Casino.”

But Rickles’ biggest exposure came on television, both as a frequent sitcom guest star and late-night and variety show regular, especially on NBC’s “The Tonight Show with Johnny Carson” and “The Dean Martin Show.”

On Carson, Rickles was typically introduced by Spanish matador music, signifying that someone was about to be gored.

He took a long break from live shows and a Los Angeles performance in January 2015 was his first in 17 years.

Several Rickles TV series were short-lived, the most popular of which was the NBC comedy “C.P.O. Sharkey,” in which he starred as a U.S. Navy chief petty officer in charge of new recruits. The series lasted just two seasons.

A TV documentary, “Mr. Warmth: The Don Rickles Project,” directed by John Landis, aired on HBO in 2007.

Six Facts About Don Rickles

* Rickles was not always an insult-slinging comedian. He graduated from the American Academy of Dramatic Arts in New York, where his classmates included Jason Robards, Grace Kelly and Anne Bancroft. He had an early undistinguished stage career before gravitating toward comedy work, starting out in strip joints and working his way up to nightclubs, casinos, records, television and movies.

* Rickles did not think of himself as an “insult comic.” He said his act was all in fun and that his barbs were exaggerations delivered with good humor. “I’m the guy that makes fun of the boss at the Christmas party on Friday night and Monday still has his job,” he once said.

* Rickles inspired lots of nicknames. Singer Frank Sinatra called the short, bald comedian “Bullethead” while late-night television host Johnny Carson gave him the facetious title “Mr. Warmth” and Milton Berle dubbed him “The Merchant of Venom.”

* One of Rickles’ most notorious put-downs was to call someone a “hockey puck” but he once told an interviewer he was unsure how he came up with the barb.

* A lifelong Democrat, Rickles performed as part of Ronald Reagan’s second presidential inauguration. He joked that he took the job because he wanted to hang out with Sinatra.

* Rickles was a devoted son but in his act referred to his mother, Etta Rickles, as “the Jewish Patton.”

Economy & business

Brazil’s Temer to Revise Pension Reform Proposal to Secure Approval

Brazilian President Michel Temer plans to water down its landmark pension reform proposal to ease lawmakers’ resistance to the controversial bill key to rebalance the government’s depleted finances.

Temer said in a radio interview on Thursday he has authorized the lawmaker sponsoring the plan to alter its terms as long as he maintains the bill’s minimum retirement age. He did not specify what changes could take place.

The reform plan, submitted last year to Congress, sets a minimum retirement age at 65 for both men and women and requires more years on the job for workers to gain full pension benefits.

Those points and others to limit benefits have drawn criticism from public servants and labor unions alike, irking lawmakers who face elections next year.

A newspaper survey of lawmakers on Wednesday showed support for the proposal fell well below the 308 votes necessary to pass the lower house of Congress, with only 92 in favor and 242 against.

Arthur Maia, the lawmaker sponsoring the legislation, told reporters later on Thursday that he will change the proposal to protect the poorest without hurting the “backbone” of the amendment. He is considering altering the transition rules for those nearing the retirement age, easing pension requirements for farmers and agricultural workers while keeping some special benefits to teachers and police.

Maia said he will unveil his proposed changes on April 18.

A revamp of Brazil’s costly pension system is the centerpiece of Temer’s crusade to balance the government budget and reverse the rise in public debt as he seeks to lift Latin America’s largest economy from its deepest recession on record.

Still, some investors fear he could face a rocky road ahead due to a bickering Congress and corruption probes ensnaring senior figures of his administration.

Temer could even be unseated if Brazil’s top electoral court rules that he and former President Dilma Rousseff, under whom he was vice president, used illegal money to fund their 2014 campaign. Rousseff was impeached in 2016.

The Supreme Electoral Tribunal (TSE) on Tuesday delayed any verdict in the trial until at least May, playing into what Temer’s aides have outlined as a defense strategy centered on dragging the case out through 2018.

Still, Temer said in the radio interview he wishes that the issue will be solved “as soon as possible” in order to reduce uncertainty.

Arts & Entertainment

Britney Spears Show Causes Israeli Election Change

Pop star Britney Spears may not be topping the charts these days, but she’s still big enough to influence elections in another country.

Because of a July 3 Spears concert in Tel Aviv, a first for the singer, Israel’s Labor Party decided to push back primary voting by a day.

“We delayed the vote one day, to July 4. We couldn’t hire enough security for the election because of the Britney Spears concert on July 3. There would also be a lot of traffic and roadblocks that would make it hard for the vote to go ahead,” Labor Party spokesman Liron Zach said, according to CNN.

The primary was set to decide the leader of the party and future challenger for the prime minister spot.

“We aren’t concerned about voters favoring Spears over the party. The two main concerns are security and traffic,” Zach said.

Spears’ stop in Israel is part of a world tour, her first since 2011.

Science & Health

Astronaut John Glenn Laid to Rest at Arlington National Cemetery

John Glenn, the first American to orbit the earth who later became the world’s oldest astronaut and a longtime U.S. senator, was laid to rest on Thursday at Arlington National Cemetery in Virginia.

Glenn, who author Tom Wolfe once called “the last true national hero America has ever had,” died four months ago in his home state of Ohio at the age of 95.

After a private service at a chapel on the cemetery grounds, a horse-drawn carriage pulled Glenn’s flag-draped casket to his burial site. There was a short graveside ceremony broadcast online by NASA Television. Then, Gen. Robert Neller, Commandant of the Marine Corps, handed the flag that had draped the casket to Glenn’s 97-year-old widow, Annie Glenn. She kissed him.

Glenn was a Marine Corps test pilot when he was chosen to be one of the seven original U.S. astronauts. He was the third American in space, the first to orbit the earth.

His three laps around the world on Feb. 20, 1962, in a space capsule called Friendship 7, forged a powerful link between the former fighter pilot and the Kennedy-era quest to explore outer space as a “New Frontier.” After his mission, he received a hero’s welcome including a tickertape parade near Wall Street, in New York City’s “Canyon of Heroes.”

Wolfe chronicled the experiences of the original seven U.S. astronauts in his book, “The Right Stuff,” which later became a popular movie.

Glenn’s widespread popularity helped him get elected as a Democratic candidate to the U.S. Senator from his home state of Ohio, which he represented from 1974 to 1999.

Just before the end of his Senate career, in October 1998, the 77-year-old Glenn became the oldest astronaut, serving as a mission specialist on the seven-member crew of the space shuttle Discovery.

The NASA launch announcer at the time said, “Liftoff of Discovery with six astronaut heroes and one American legend.”


Science & Health

UN: Latin America’s Poor Need More Help to Tackle Zika

The ripple effects of the Zika virus are hitting the poor hard in Latin America and the Caribbean, and could knock back development unless states involve communities in a stronger push to tackle the disease, a U.N.-led study said Thursday.

The mosquito-borne Zika virus will cost the region between $7 billion and $18 billion from 2015 to 2017, said the report by the United Nations Development Programme (UNDP) and the International Federation of Red Cross and Red Crescent Societies (IFRC).

Large economies like Brazil will shoulder the biggest share of the cost, but poorer countries such as Belize and Haiti will suffer the severest impacts, it added.

Jessica Faieta, UNDP director for the region, said the virus — linked to birth defects in some cases where it infects pregnant women — is not only causing direct economic losses and putting health systems under stress.

“The long-term consequences of the Zika virus can undermine decades of social development, hard-earned health gains and slow progress towards the Sustainable Development Goals,” she said in a statement.

Focusing on Brazil, Colombia and Suriname, the report calculated that the economic impact of the virus was five times higher for the Caribbean than South America, and could cost the Caribbean as much as $9 billion in lost revenues over the three-year period as tourists stay away.

Labelling Zika a “disease of poverty,” the study said support was not reaching the region’s most vulnerable who often lack access to health and social services.

Countries are struggling to coordinate and finance programs to control, monitor and diagnose the virus, it added.

Walter Cotte, IFRC’s director for the Americas, said funds should be used to involve communities in responding to the disease, so as to build their resilience and reduce stigma.

Carried by the Aedes aegypti mosquito, which also hosts dengue, chikungunya and yellow fever, Zika has spread to more than 60 countries and territories since the outbreak was identified in 2015 in Brazil.

Here the alarm was raised over Zika’s ability to cause microcephaly — a birth defect marked by small head size and underdeveloped brains — and Guillain-Barre syndrome, a rare neurological disorder.

Social inequities

Spending more money on tackling Zika now would have long-term benefits and curb the spread of other diseases carried by the same mosquito, said the report.

With women on the fringes of fast-growing cities among those most at risk, it called for states to step up help for poor communities where many lack access to sanitation, health care and jobs.

“While a swift and timely emergency response is a necessary step in controlling the Zika epidemic, there is a growing need to address the quieter effects of the outbreak — the social impacts, economic loss and hardship — which are exacerbated by pre-existing inequities,” the report said.

Families looking after children born with related birth defects will need greater assistance, partly to help with long-term care, which could cost up to $5 billion in lost income as parents stay out of the work force, said the report.

It estimated the cost of microcephaly to be $8 billion, largely because people born with the disorder are unlikely to be able to work, while costs linked to Guillain-Barre could reach $3 billion.

The World Health Organization projected some 3 to 4 million people would be infected with Zika in Latin America by early 2017, saying in February the region was recording lower numbers of infections than last year, but countries must stay vigilant.