There's a long list of reasons people might not like Trump's pick for Treasury secretary

• Matt Turner
 

• 2h
• 16,462

Steve Mnuchin at the 2009 Milken Institute Global Conference in Beverly Hills, California. Thomson Reuters

President-elect Donald Trump has made his pick.

After much back-and-forth over who would be appointed Treasury secretary, Trump has settled on Steve Mnuchin.

Mnuchin is likely to be a controversial pick, however, who is unlikely to sit well with voters who backed Trump's anti-Wall Street campaign rhetoric.

He is a former Goldman Sachs mortgage bond trader who has worked or entered into deals with hedge fund managers like George Soros, Eddie Lampert, and John Paulson.

He then led a deal to buy IndyMac, a failed bank, in the depths of the financial crisis, most likely making a huge amount of money in the years that followed. During his tenure at the top of the bank, it faced a consent order over its foreclosure process, and more recently the bank has been accused of discriminating against blacks, Hispanics, and Asians.

Here's some highlights from Mnuchin's career:

• Mnuchin spent 17 years with Goldman Sachs, and his father worked at the bank for 30 years in stock trading.
• He was the head of the mortgage department in the early days of collateralized debt obligations and credit default swaps, instruments that many have argued had a part to play in the financial crisis.
• In that role, he worked for Goldman Sachs' current CEO, Lloyd Blankfein, who at the time was head of fixed income. Blankfein said earlier this month that Mnuchin a "highflier," "a very nice guy," and a "smart, smart guy."
• He left Goldman to join Eddie Lampert's hedge fund ESL Investments. Lampert had been a roommate at Yale. Lampert is now the CEO of the retailer Sears. You can read about how that has played out here.
• He then set up an investment fund with George Soros.
• Blankfein and Soros were featured in a campaign ad for Trump that took aim at a "global power structure" that had "robbed our working class, stripped our country of its wealth, and put that money into the pockets of a handful of large corporations and political entities."
• During the depths of the financial crisis in 2009, a group led by Mnuchin bought the troubled housing lender IndyMac. The buyer group included Soros, hedge fund billionaire John Paulson, former Goldman Sachs executive Chris Flowers, and tech billionaire Michael Dell. After renaming the company OneWest, Mnuchin served as chairman until selling it to CIT Group in 2015.
• In 2011, the Office of Thrift Supervision issued a consent order against the bank after a review. Mnuchin was chairman at the time. "The review uncovered unsafe and unsound practices, violations of law and foreclosure processes geared toward speed and quantity, instead of quality and accuracy," a statement at the time said.
• Two California housing watchdogs have filed a federal complaint accusing OneWest of violating the Fair Housing Act by discriminating against blacks, Hispanics, and Asians. According to the complaint, market share and regulatory data shows that "since at least 2011, respondent made few loans to Asian American, African American, and Latino borrowers and communities in absolute terms, in relation to the demographics of the counties in respondent's CRA assessment area, and/or in relation to the industry as a whole."
• Mnuchin oversaw OneWest until it sold to CIT for $3.4 billion, more than double the $1.55 billion the buyer group paid. The owners also took out $1.9 billion in dividend payments from the bank, according to the Los Angeles Times. Mnuchin stayed on and took a seat on the board of CIT, which is valued at about $7.9 billion.
• He was one of the early backers of Donald Trump, much to the surprise of some of his former Wall Street colleagues. He told Max Abelson and Zachary Mider at Bloomberg in August that a top Washington job appealed to him. "Nobody's going to be like, 'Well, why did he do this?' if I end up in the administration," he said then.

Mnuchin, if he does get selected by Trump, will have to go through confirmation hearings with the Senate Finance Committee. It's likely to be an interesting process.

“Given Mr. Mnuchin’s history of profiting off the victims of predatory lending, I look forward to asking him how his Treasury Department would work for Americans who are still waiting for the economic recovery to show up in their communities," Senate Finance Committee Ranking Member Wyden (D-OR) said in a statement. 

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Hundreds of American Uber drivers are joining nationwide workers' protests for better pay

• Lisa Baertlein, Reuters

• Nov. 28, 2016, 5:54 A

Uber driver Sam Salem, 29, protests with other commercial drivers with the app-based, ride-sharing company Uber against working conditions outside the company's office in Santa Monica, California June 24, 2014. REUTERS/Lucy Nicholson

LOS ANGELES (Reuters) - Drivers for ride service companyUber will join planned nationwide protests on Tuesday, when activists and low-wage workers renew their call for better pay and the right to join a union in the wake of Donald Trump's U.S. presidential election win, organizers said.

Hundreds of Uber drivers in two dozen cities, including San Francisco, Miami and Boston, for the first time will add their voices to the union-backed "Fight for $15" campaign that has helped convince several cities and states to raise starting pay significantly above the U.S. minimum wage of $7.25.

Justin Berisie, 34, drives for Uber in Denver and is joining Tuesday's protests.

"Someone who lives in America and goes to work every day, that person deserves a decent living," said Berisie, who has a 5-year-old daughter and is struggling to make ends meet. He said he earns $500 or less, before expenses such as gasoline, during an average week where he is on duty for 50 to 60 hours.

The four-year-old "Fight for $15" movement includes fast-food workers, home care aides, airport baggage handlers and other low-wage employees. Organizers from "Fight for $15," which is backed by the Service Employees International Union, say the campaign's Nov. 29 demonstrations will take place in 340 cities and nearly 20 of the nation's busiest airports.

U.S. policy is expected to become less worker friendly following the election of Trump, a international businessman who will be president as fellow Republicans control both chambers of Congress as well as federal agencies that govern the formation of unions, overtime rules and more.

Uber drivers have sued the company in several states, accusing it of depriving drivers of various employment protections by misclassifying them as independent contractors.

The lawsuits are a test for companies such as Uber Technologies Inc, a high-profile player in the so-called "sharing economy," which say that their contractor model allows for flexibility that many see as important to their success. A legal finding that drivers are employees could raise Uber's costs and force it to pay Social Security, workers' compensation, and unemployment insurance.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Cynthia Osterman)

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

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Theranos and its founder just got hit with another lawsuit

• Mohammed Hadi and Lydia Ramsey

• 17h
• 15,536

Elizabeth Holmes, the founder and CEO of Theranos, at the Wall Street Journal Digital Live conference at the Montage hotel in Laguna Beach, California, in 2015. REUTERS/Mike Blake

Theranos and its CEO, Elizabeth Holmes, are being sued by investors who claim Holmes lied about the company's technology as the startup raised funds.

The lawsuit, filed in California, names two shareholders who are seeking class-action status. They include Robert Colman, a co-founder of Robertson Stephens, the San Francisco investment bank.

The lawsuit claims that Holmes knew the company's technology — advertised as being able to use a finger prick's worth of blood to test for diseases — didn't work when she pitched it.

Theranos declined to comment on the suit. The company is also facing a lawsuit from one of its major investors, lawsuits filed by patients, and a breach-of-contract lawsuit by Walgreens.

Walgreens is looking for $140 million in damages, claiming that Theranos misled it about how far along its blood-testing technology was when they struck a partnership. Walgreens, which had operated Theranos Wellness Centers where people could have their blood tested in some of its stores, terminated its relationship with the company in June.

In the past year, the company has faced questions about the accuracy of its finger-prick blood tests, been told by a government agency that one of its labs posed "immediate jeopardy" to patients, had Holmes get barred from the lab-testing industry for two years, and seen partnerships like the one with Walgreens fall through.

In October, Theranos shut down all of its lab operations, pivoting to focus solely on the company's miniLab technology. The pivot cut 340 positions and closed its Wellness Centers where blood tests were performed.

"The once-vaunted company is in disarray and the value of its securities are in a freefall," the newest suit claims, though it doesn't provide a current valuation on the shares.

The shareholders named in the lawsuit are Colman and Hilary Taubman-Dye.

Colman bought his stake through an investment in a Lucas Venture Group fund, a venture-capital fund. Taubman-Dye acquired her shares for $19 apiece on SharesPost, a market for private-company shares. She tried to back out of the purchase after The Wall Street Journal first raised questions about the validity of the technology in October of 2015.

The filing includes a table noting Theranos' share price through October 2015:The Theranos share price.Lawsuit filing

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China forex regulator tightens controls to stem capital outflows: sources

Chinese 100 yuan banknotes are seen in this picture illustration taken in Beijing July 11, 2013. REUTERS/Jason Lee/File Photo

China is stepping up measures to stem capital outflows after its yuan currency skidded to more than eight-year lows, sources said on Tuesday, taking aim at outbound investments that have soared to a record high.

The State Administration of Foreign Exchange (SAFE) has begun vetting transfers abroad worth $5 million or more and is increasing scrutiny of major outbound deals, even those with prior approval, sources with knowledge of the new rules told Reuters.

Capital outflows, both legal and illegal, have pressured the yuan CNY=CFXS. The Chinese currency has depreciated nearly 6 percent against a strong dollar this year and many traders are betting on further losses, raising the specter of more capital flight.

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The new rules would govern transfers abroad under the capital account for transactions such as portfolio or foreign direct investment, and could knock some momentum from China's overseas asset shopping spree, analysts say.

Chinese outbound investment deals totaled $530.9 billion in the first nine months of 2016, surpassing 2015's record volume and helping China outstrip the United States as the top acquirer for foreign companies, Thomson Reuters data show.

"The new rules will have a very big impact on outbound deals," said Luke Zhang, a partner at Zhong Lun Law Firm, who expects the number of deals to go down "quite a lot".

SAFE always supports legitimate and compliant overseas direct investments, the regulator said on its microblog late on Tuesday.

"Previously, only forex transfers worth $50 million or more needed to be reported to SAFE. Now, the threshold has been drastically lowered to $5 million, and covers both foreign currency and yuan," said one of the sources with direct knowledge of the rules.

"All we can do is to ask clients to be patient, and tell them that the transaction is being vetted by SAFE for authenticity and may not be approved."

One of the sources said that even if an outbound investment had already obtained approval to buy foreign exchange, but the money had not been fully transferred, the remainder of the quota was now subject to further approval if it exceeds $50 million, which is regarded as a "large sum".

Two other sources confirmed the new rules.

The sources said the forex regulator told banks about the new rules on Monday, the same day the government said it would stick to its "going out" strategy of encouraging outbound investment.

DEFENDING THE YUAN

China has been using its foreign currency reserves to keep the yuan from falling too rapidly against the dollar, managing market expectations, and restricting outflows into overseas securities.

Wang Zhenying, a senior Chinese central bank researcher, said in a recent interview that Beijing needed to stem outflows that risk putting the yuan into a potentially destructive feedback loop.

"At the moment, the fall in the yuan's exchange rate is shaping market expectations. Depreciation triggers capital flight, and capital flight exerts even bigger pressure on the yuan," Wang said.

"Therefore, it's necessary to break this feedback loop... for example, by slowing capital outflows," he said.

Chinese state-owned banks were seen selling dollars in the onshore foreign exchange market for a second straight day on Tuesday, in what traders called a bid to support the yuan.

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The yuan has rebounded around 0.5 percent in the past few sessions. [CNY/]

While still the largest in the world, China's foreign currency reserves CNFXM=ECI have fallen to $3.17 trillion at the end of September from a $3.99 trillion peak in June 2014, indicating that authorities sold dollars to prop up the yuan's value.

Selling of the yuan and other emerging market currencies has intensified since Donald Trump's upset presidential victory on Nov. 8. Expectations of higher fiscal spending and interest rates under a Trump administration have boosted U.S. bond yields and the lure of the dollar.

The new curbs, if adopted, are likely to have an impact on deals, said Greg Burch, who works on mid-market China outbound M&A deals as a Hong Kong-based partner at the Locke Lord law firm.

Stronger capital controls could also affect China's push to internationalize the yuan and would raise questions about where capital will flow internally, as property prices are already high, Burch added.

"If you pinch a balloon in one place, it just bulges in another."

(Reporting by Samuel Shen and John Ruwitch in SHANGHAI and Carol Zhong at Basis Point in HONG KONG and Elias Glenn in BEIJING; Editing by Ryan Woo and Clarence Fernandez)

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The World Chess Championship is tied as Magnus Carlsen and Sergey Karjakin prepare for final game

• Matthew DeBord
 
•   

• 24h
• 15,091

All tied, with one game to play. Maria Emelianova

NEW YORK — The 2016 World Chess Championship between title-holder Magnus Carlsen of Norway and Sergey Karjakin of Russia was shaping up to be a tense festival of long games that ended up as draws — until last week, when in Game 8 Carlsen overpressed with the white pieces and went down to defeat.

In Game 9, Carlsen needed a draw with black to stop the bleeding, but Karjakin conjured his best game, with a bishop sacrifice after a 20-minute deep think that recalled Bobby Fischer at his peak and sent a shock wave through the elite chess world. 

Would Carlsen, the two-time defending World Champion, the "Mozart of chess," go down two full points to the Russian challenger — a nearly insurmountable deficit in a 12-game match?

As it turned out, Karjakin's bold play looked more impressive than it actually was, once the lines were crunched by computer analysis. Carlsen, whose accuracy during this match has been questioned, found the right defensive combinations under serious time pressure and was able to draw the game. It was an epic save.

In Game 9, Karjakin thought for 20 minutes about the move Bxf7, a piece sacrifice that opens an attack on the black king. Some thought that Qb3 was better. Agon

The final Game 9 position — and epic save from Carlsen. Agon

That set the stage for Game 10, with Carlsen wielding the white pieces. Needing the full point to tie, he used the Ruy Lopez opening, and Karjakin countered with the infamously drawish Berlin Defense. 

But a draw wasn't in the offing. Karjakin finally showed some cracks, missing a few crucial, subtle calculations that enabled Carlsen to achieve a modest advantage, converting it to a win by the 75th move.

On Saturday, Game 11 also ended in a draw, but there were some tense moments for Karjakin. Carlsen, by contrast, appeared newly relaxed and seemed comfortable to push past an obvious draw to put some stress on Karjakin in the Russian's final game with white.

The match is now tied 5.5-5.5, with a single games remaining. Game 12 takes place on Monday in lower Manhattan, at 2PM ET. Carlsen will have white, and the obvious question is: "Will he take a chance and try to defend his title? Or will he play it safe?"

If the score is deadlocked after the 12 classical games are all in the books, the players will go to tiebreaks: four "rapid" games, with each player having 25 minutes on his clock, with a ten-second time increment added for each move. If this match is still after that, 5-minute "blitz" games will decide the outcome.

Thus far, Karjakin's bishop sac has been the most exciting moment in a WCC match that hasn't been much of a spectacle for opening theory or bold, attacking play. Fischer himself would have appreciated the bishop blowing open the defense of the back king on the f7 square — a weakness that the last American World Champion often targeted.

Endgame enthusiasts have enjoyed a treat, however, as the players have ground out numerous exhausting games that went beyond 40 moves. Will Game 12 be another equal result? We have only one more day to wait to find out.

SEE ALSO: Lightning strikes at the World Chess Championship as Magnus Carlsen loses Game 8

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