MNUCHIN TO CONGRESS: Raise the debt ceiling

• Jonathan Garber
 

• 23h
• 1,937

In a letter to House Speaker Paul Ryan sent on Wednesday, Treasury Secretary Steve Mnuchin said "the outstanding debt of the United States will be at the statutory limit" at midnight on March 16. At that point, Treasury will have to utilize "extraordinary measures" for the federal government to keep paying its bills. 

Mnuchin told Ryan at that point "Treasury will suspend the sale of State and Local Government Series (SLGS) securities" until "the debt limit is either raised or suspended" in order to prevent a default.

Here's a copy of the full note from Mnuchin to Ryan:

Department of the Treasury

South Korea's president, Park Geun-hye, has been removed from office

• Peter Farquhar, Business Insider Australia

• 15h
• 6,897

Park Geun-hye. Jeon Heon-Kyun-Pool/Getty Images

South Korea’s Constitutional Court has voted unanimously to remove the country's president, Park Geun-hye, from office, prompting protests for and against the decision that left two dead from clashes with the police, Reuters reports.

The decision is "final and unchallengable," according to The Korea Herald.

Park is the first South Korean president to be removed from office by the courts. Her successor must be elected within 60 days.

While many took to the streets to cheer the decision, two people died in confrontations between Park's supporters, many of them elderly, and the police during demonstrations opposing the ruling. Six others were injured, according to Reuters.

Park was suspended from official duties in December after being accused of colluding with a friend who is suspected of pressuring companies to donate money in return for government favors.

Both Park and her friend have denied the accusations.

Park faced 13 charges, and citizens of South Korea took part in massive rallies in recent weeks calling for her final impeachment. The political scandal unfolded at a time of increased tensions in South Korea, as North Korea continues to aggressively test missiles and China condemns South Korea's decision to accept US missile-defense batteries.

The Samsung Group's chief, Jay Y. Lee, arriving at the office of the independent counsel team in Seoul, South Korea. Thomson Reuters

By far the biggest corporate head on the block in the scandal is the Samsung chief and heir to its $316 billion empire, Jay Y. Lee.

Park was initially impeached in December following allegations she had her friend Choi Soon-sil pressure big businesses to donate to two foundations set up to back Park's policy initiatives.

Up to $50 million from Samsung was allegedly paid into entities overseen by Choi in return for help cementing Lee’s control of Samsung.

In a statement detailing the findings of its investigation, the special prosecutor’s office said the National Pension Service voted in favor of a merger of two Samsung Group affiliates in 2015, despite anticipating a $158 million loss.

Lee, with a net worth of $8.2 billion, has been in a jail cell since February 17, but just hours before Park's verdict was handed down, he appeared in court for a preliminary hearing.

Lee denied any wrongdoing.

Read the original article on Business Insider Australia. Copyright 2017. Follow Business Insider Australia on Twitter.

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The heir to the Samsung empire denies all charges against him as the 'trial of the century' begins

• Suyeong Lee, Reuters

• 13h
• 3,923

Jay Y. Lee, center, vice chairman of Samsung Electronics Co., arriving at the office of the independent counsel in Seoul, South Korea, on February 22. AP Photo/Ahn Young-joon

SEOUL, South Korea — The head of South Korea's Samsung Group, Jay Y. Lee, denies all charges against him, his lawyer said Thursday at the start of what the special prosecutor said could be the "trial of the century" amid a political scandal that has rocked the country.

Lee has been charged with bribery, embezzlement, and other offenses in a corruption scandal that has already led to the impeachment of President Park Geun-hye.

Lee, who is being detained at Seoul Detention Centre, did not attend court. A defendant does not have to turn up during a preparatory hearing, held to organize evidence and set dates for witness testimony.

Lee's defense denied all charges against him on his behalf, saying the special prosecution's indictment cites conversations, evidence, or witnesses the prosecution did not actually hear, investigate, or interview according to the rules — or states opinions that are not facts.

"It is unclear what kind of order Lee Jae-yong is supposed to have given," Song Wu-cheol, defending Lee, told the court, using his Korean name.

"The indictment cannot have statements that can create prejudices in the court about the case," Song told reporters as he left court.

The Samsung Group has repeatedly denied wrongdoing.

Among the charges against Lee, 48, are pledging bribes to a company and organizations linked to a friend of Park, Choi Soon-sil, the woman at the center of the scandal, to cement his control of the smartphones-to-biopharmaceuticals business empire.

Lawyers for defendants being tried with Lee — Samsung Group's former vice chairman Choi Gee-sung and former president Chang Choong-ki, and Samsung Electronics' former president Park Sang-jin — also denied all charges.

The courtroom, seating more than 150, was packed with press and spectators, with some who had waited in line since morning to get a seat.

At one point during the hearing, which lasted about an hour, an elderly woman in the audience began yelling and was dragged out by court officers. It was unclear what she was saying.

Legislation appointing the special prosecutor says the current lower-court trial should be finished within three months of the indictment on February 28.

Park, the daughter of a former military strongman, has had her powers suspended since her impeachment by parliament in December.

Should the Constitutional Court uphold the impeachment, she would become the country's first democratically elected president to be thrown out of office.

A decision is due Friday.

(Reporting by Suyeong Lee; Writing by Joyce Lee; Editing by Nick Macfie)

Read the original article on Reuters. Copyright 2017. Follow Reuters on Twitter.

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More: Reuters Samsung South Korea Jay Y. Lee

Traders are certain that the Fed is going to hike rates at next week's meeting

• Akin Oyedele
 

• Mar. 8, 2017, 9:07 AM
• 4,504
 

Lucas Jackson/Reuters

Futures traders are fully convinced that the Federal Reserve will raise interest rates at its March 14-15 meeting. 

On Wednesday, Bloomberg's World Interest Rate Probability reflected a 100% probability of a hike next week. The Federal Open Market Committee is expected to increase its benchmark fed funds rate by 25 basis points to a range of 0.75%-1%. 

Traders hiked their bets after a report from the ADP Research Institute showed that the US economy added 298,000 private payrolls in February, the highest monthly gain since January 2006.

"Just two weeks ago I thought it was highly improbable that March was a possibility," said Greg Peters, a senior investment officer with PGIM Fixed Income.

However, expectations began to rise as several Fed officials, including Chair Janet Yellen, spoke out in support of raising interest rates sooner rather than later. 

"At our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate," Yellen said in a speech in Chicago on March 3.

After leaving rates near zero to heal the post-recession economy, the Fed has raised rates only twice in this economic cycle. 

The Fed is expected to raise rates again even though its preferred measure of inflation — personal consumption expenditures — trails its 2% target.

The unemployment rate recently fell to a historic low of 4.8%, convincing Fed officials that the economy is near full employment. Friday's jobs report is not expected to deter the Fed from raising rates next week.

"What the Fed has to worry about is that if they hike in March, they also have to communicate to the market that this is not just a hike-every-quarter type of thing, kind of a hike cycle like we saw during the Greenspan era," Peters told Business Insider in a recent interview.   

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More: Interest Rates Federal Reserve Fed Funds Rate

Republicans have released their long-awaited plan to repeal Obamacare

• Bob Bryan
 

• 18h
• 42,205
 

Donald Trump with House Speaker Paul Ryan. Zach Gibson/Getty Images

House Republicans on Monday evening unveiled long-awaited legislation to repeal and replace the Affordable Care Act, the healthcare law better known as Obamacare.

The basic structure of the plan appears similar to previous Republican efforts to dismantle the law including the draft of the bill that was leaked late last month.

The bill, called the American Health Care Act, would do away with Obamacare's individual mandate that compels all American to buy insurance or face a fine. Instead, it features penalties such as increased premiums for failing to maintain continuous coverage.

The AHCA also would shift funding for people accessing healthcare without help from an employer or the Medicare or Medicaid programs and adjust funding for the expansion of Medicaid.

Key parts of the bill include:

• Allowing people with preexisting conditions to access coverage but penalizing lapses in coverage: Under the new law, insurers still could not deny coverage based on a preexisting condition, but anyone who does not have coverage for a period of 63 days or more in the previous year is subject to a 30% increase in premiums as a penalty. The idea would be to discourage people from waiting until they are sick to access coverage.
• Introducing block tax credits for individuals to access health insurance: Instead of the ACA's tax credits, which adjusted the amount distributed based on income and the beneficiary's residence, the AHCA would give lump tax credits to Americans. The credits would be based on age, and an individual making over $75,000 or a household making over $150,000 a year would see a decrease in the credit depending on how much he or she made over that limit. Here's the breakdown of how much each age group would get:
• • Under 30: $2,000 a year
  • Age 30 to 39: $2,500 a year
  • Age 40 to 49: $3,000 a year
  • Age 50 to 59: $3,500 a year
  • Age 60 and above: $4,000 a year
• Providing grants to establish high-risk pools and encourage enrollment: Much as with the leaked draft, the AHCA would include a fund for states to institute numerous programs to stabilize the insurance market, most notably "the provision of financial assistance, high-risk individuals who do not have access to health insurance coverage offered through an employer." This would allow states to establish high-risk pools for people with preexisting conditions, a plan often floated by Republicans. The plan would give states $15 billion in both 2018 and 2019 and $10 billion every year after that through 2026.
• Changing the limit that insurers can charge older customers compared with younger customers: Under the ACA, insurers can charge older customers (generally sicker and more expensive to cover) no more than three times what they charge their youngest customers (generally healthier). The Republican bill would shift that to five times the amount.
• Effectively defunding Planned Parenthood: The bill prohibits "direct spending" of federal dollars on any "prohibited entity" including those that provide abortions for anything other than the life of the mother, incest, or rape. This would seem to include Planned Parenthood.
• Kick lottery winners off of Medicaid: The bill spends six pages detailing instances in which a person who receives a lump sum or large payments from winning the lottery would be kicked off of Medicaid.

President Donald Trump was quick to dive in with a tweet from the @POTUS account.

"House just introduced the bill to #RepealAndReplace #Obamacare. Time to end this nightmare," the tweet said.

House Speaker Paul Ryan said in a statement that the plan would help reform the American healthcare system.

"The American Health Care Act is a plan to drive down costs, encourage competition, and give every American access to quality, affordable health insurance," Ryan said. "It protects young adults, patients with preexisting conditions, and provides a stable transition so that no one has the rug pulled out from under them."

On the other end, Democrats were quick to criticize the proposal. Reps. Frank Pallone and Richard Neal, the top Democrats on the House Energy and Commerce Committee and the Ways and Means Committee, respectively, said in a joint statement that the bill would be detrimental to average Americans.

"The Republican repeal bill would rip healthcare away from millions of Americans, ration care for working families and seniors, and put insurance companies back in charge of healthcare decisions — contrary to everything President Trump has said he would do with his healthcare plan," the statement from Pallone and Neal said.

The bill faces a long path toward becoming law: It would have to be marked up by the Energy and Commerce Committee, passed by the House, debated by the Senate, and passed by the Senate, at least, before it could go to Trump's desk.

This path is also complicated by the fact that conservative members of the House and the Senate have come out against the tax-credits aspects of the House bill and criticized the leaked draft. Moderate Republicans have also criticized the lack of clarity over the future of Medicaid expansion, which is popular in states that have undertaken expansion.

Thus, the bill released the House GOP may face significant opposition from the Republican Party itself, to say nothing of the Democrats.

Here's the full bill:

American Healthcare Act 2 by Brett LoGiurato on Scribd

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More: Paul Ryan Donald Trump Obamacare

China's FX reserves just recorded a shock increase

DAVID SCUTT 

MAR 7, 2017, 9:41 PM 

Photo: iStock

Chinese FX reserves did something that hasn’t been seen in eight months in February.

They increased.

According to the People’s Bank of China (PBoC), reserves lifted by $US6.92 billion to $US3.005 trillion during the month.

That came as a surprise to economists who were expecting a further decline of $US25 billion, and a reversal on the $US12.3 billion decrease reported in January.

Source: CBA

Over the course of 2016, China’s total FX reserves fell by $US320 billion, the largest annual drop since 1994.

That was partially driven by a rampant US dollar which gained 6.5% against the Chinese yuan, leading to a sharp increase in capital outflows as investors looked to protect against further yuan weakness.

Despite the recent reversal, Wei Li, China and Asia economist at the Commonwealth Bank, said that outflows likely totalled $US40 billion in February.

“According to our estimation, valuation effects, that is changes caused by exchange rate fluctuations and investment returns, resulted in a gain of $US45 billion in China’s FX reserves in February,” says Li.

“On the other hand, the PBoC is expected to have sold $US38 billion in the FX market to prop up the CNY… leading to a net increase of $US7 billion in China’s FX reserves in February.

Source: CBA

Li says that outflows have slowed in recent months, helped in part by a 0.8% increase in the yuan against the US dollar this year, tighter capital account controls introduced by China’s State Administration of Foreign Exchange (SAFE) and an improvement in the broader Chinese economy.

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Costco's same-store sales, profit miss estimates

FILE PHOTO: Shopping carts at Costco in Fairfax, Virginia, January 7, 2010. REUTERS/Larry Downing

Warehouse club retailer Costco Wholesale Corp (COST.O) reported lower-than-expected quarterly comparable-store sales and profit as big grocery chains competed fiercely to attract customers with lower prices.

The company's shares fell about 4 percent to $170.80 in extended trading on Thursday.

Price war in the industry has intensified, with Wal-Mart Stores Inc (WMT.N) reportedly running a new price-comparison test to knock out competition from grocery chains and big-box retailers.

The cut-throat competition has already hit supermarket operator Kroger Co (KR.N), which reported its first decline in quarterly comparable sales in 13 years on Thursday.

Costco's total same-store sales rose 3 percent in the second quarter ended Feb. 12, excluding the impact of changes in gasoline prices and foreign exchange.

Analysts on average were expecting 3.2 percent growth, according to research firm Consensus Metrix.

Costco said it would raise annual fees by $5 to $60 for Goldstar and business members and by $10 to $120 for executive memberships from June 1.

The fee increases will impact around 35 million members, roughly half of them executive members, the company said.

Membership fees accounted for about 72 percent of the Costco's operating income in 2016, according to the company's latest annual filing.

Net income attributable to Costco fell to $515 million, or $1.17 per share, in the latest quarter from $546 million, or $1.24 per share, a year earlier.

Excluding items, Costco earned $1.17 per share, while total revenue rose 5.7 percent to $29.77 billion.

Analysts on average had estimated adjusted earnings of $1.36 per share and revenue of $29.86 billion in the quarter, according to Thomson Reuters I/B/E/S.

Costco performed well in the last two quarters, despite a tough environment for retailers, as it partly benefited from paying lower fees to credit card partner Visa Inc (V.N).

The company completed the switch to Visa from American Express Co (AXP.N) during the fourth quarter last year.

SEE ALSO

• Price war triggers Kroger's first same-store sales drop in 13 years
• LSE CEO Rolet staying put if Boerse tie-up fails

(Reporting by Gayathree Ganesan and Sruthi Ramakrishnan in Bengaluru; Editing by Anil D'Silva)

Bitcoin climbs above gold for the first time

• Elena Holodny
 

• Mar. 2, 2017, 10:45 AM
• 35,218

 More Charts

 
•  
 

The price of one Bitcoin climbed above the price of one ounce of gold for the first time ever on Thursday.

The cryptocurrency climbed to $1,241.30 around 10:20 a.m. ET. Meanwhile, gold was around $1,241.25 at the time. Bitcoin dipped below the yellow metal minutes later, but then bounced back again.

As of 10:41 a.m. ET, Bitcoin is up by 1.8% at $1,248.10, while gold is down 0.6% at $1,242.15.

Business Insider/Andy Kiersz, data from Bloomberg

Get the latest Bitcoin price here.

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