Sprint and T-Mobile nearing merger agreement

T-Mobile and Sprint, respectively the third and fourth largest wireless carriers in the U.S., are nearing a merger agreement, undisclosed sources told Reuters Friday. A due diligence period would follow the finalization of the agreement’s terms, but the companies expect a deal by October, according to Reuters’ source.

In August, Reuters says, Sprint CEO Marcelo Claure said an announcement regarding merger talks would come in “the near future.”

The merger proposal would be the first one “with significant antitrust risk” to be submitted to the Federal Trade Commission since President Donald Trump took office, Reuters notes. The President was elected on a platform that included the deregulation of the business environment.

Mayoshi Son, the founder of Japanese venture capital firm SoftBank, which controls the Sprint Corporation, met with Trump in late December, just after the former tycoon won the election.

Son found Trump’s business policy potentially favorable for SoftBank, and promised to invest $50 billion in the U.S. economy and to create 50,000 jobs.

A merger proposal would evince Son’s confidence that the regulatory environment has become laxer since Sprint and T-Mobile abandoned a merger proposal in 2014 amidst pressure from the FTC.

Indeed, the FTC might be more receptive to a transformative merger in the telecom industry now than it was three years ago. Earlier this year, Reuters says, FTC Chairman Ajit Pai said “effective competition [exists] in the marketplace for mobile wireless services.” Thursday, the agency will vote on whether to submit Pai’s report on the state of competition in the wireless services market to the U.S. Congress, which requires such a report annually.

But, the terms of the new merger will likely be less advantageous for Son and Sprint than those reached in 2014. Under the previous deal, Sprint would have controlled the combined company, while T-Mobile’s parent company, Deutsche Telecom, would have become a minority shareholder.

Over the past three years, though, T-Mobile has outperformed Sprint. Accordingly, the terms of the new agreement will likely flip, Reuters’ source said. Deutsche Telecom and T-Mobile stockholders would own a majority of the combined enterprise, while SoftBank and the rest of Sprint’s shareholders would have a minority stake.

T-Mobile CEO John Legere, who took the reins in 2012 and has guided the company’s surge, will likely run the combined company.

The merged enterprise would have 130 million subscribers, Reuters notes, making it the United States’ third-largest wireless carrier, behind AT&T, which had 136.5 million subscribers as of July, and Verizon, which reported 147.2 million subscribers that same month.

Sprint’s market cap of approximately $34 billion, combined with T-Mobile’s $53 billion figure, would give the new company a value of around $87 billion. AT&T’s market cap is about $237 billion; Verizon’s exceeds $205 billion.

Sprint reported annual revenue of $33.3 billion for fiscal 2016, which ended March 31. T-Mobile posted $37.2 billion in annual revenue for calendar 2016. So, the combined company would likely generate over $70 billion annually.

Verizon posted consolidated revenues of $126 billion and wireless revenues of $89.2 billion in 2016. AT&T’s figure came in at $163 billion.

Analysts say the Sprint/T-Mobile merger provides ample opportunity to cut expenses as well.

In their bid for regulatory approval, the companies will likely emphasize that the combined company would create jobs by making investments in the development of 5G, the next generation of mobile internet connectivity.

But the merger will also precipitate layoffs as the new company consolidates its corporate structure, Roger Entner of Recon Analytics told Reuters.

According to Reuters, Sprint briefly pursued a merger with Charter Communications earlier this year.

The FTC continues to review another potential consolidation in the industry: AT&T’s proposed $85.4-billion acquisition of Time Warner.

Sprint shares jumped six percent Friday; T-Mobile stock rose 1.06 percent.

Boeing wins $600 million deal to design the next Air Force One

The U.S. Air Force announced Wednesday that on Tuesday it awarded Boeing a $600 million contract to design two new aircraft for the President’s Air Force One fleet. Both planes will be 747-8 models; they will replace a pair of aging VC-25A (747-200B) aircraft. President Obama ordered the replacement during his second term, according to LiveScience.com.

The Air Force expects the new planes to be operational by 2024.

The VC-25As have been in use since 1990, and have carried five different presidents.

The Air Force agreed to purchase the replacement planes from Boeing in early August. The la Times quotes a Boeing spokeswoman as saying at the time that the company sold the planes to the Air Force “at a substantial discount from the company’s existing inventory.”

“Following the award of the contract to purchase two commercial 747-8 aircraft, this [i.e. Tuesday’s] contract award is the next major step forward toward ensuring an overall affordable program,” said Maj. Gen. Duke Richardson, Presidential Airlift Recapitalization program executive officer.

Under the contract, Boeing will “complete the initial design of the future Air Force One,” according to the Air Force’s statement.” The design will need to meet “presidential airlift mission requirements,” and the cost of the contract cannot exceed a ceiling President Trump will define.

According to the Times, Trump said via Twitter in December that the then-$4-billion budget for the design and implementation of the new Air Force One aircraft was “out of control.” In January, Defense Secretary James Mattis ordered a review of the Air Force One budget.

The Air Force has asked Boeing to incorporate the following elements into the design: “a mission communication system, electrical power upgrades, a medical facility, an executive interior, a self-defense system and autonomous ground operations capabilities.”

The current contract covers only the design of the Presidential planes. The Air Force says it is working with Boeing on a follow-up contract, which will govern additional design efforts, as well as the modification, testing and delivery of the aircraft. The military expects to award that contract in Summer 2018.

The 747-8 models feature numerous upgrades over the 747-200Bs the President uses now, Boeing says. The new planes boast a range of 7730 nautical miles (8895.53 miles), meaning they can fly from Washington D.C. to Hong Kong without refueling. The 747-200Bs had a range of 6735 nautical miles (7750.5 miles)—roughly the distance from D.C. to Tokyo.

The new planes also emit 16 tons less CO2 than the current models.

The current planes cruise at a speed of .84 Mach (644.5 mph)—the new ones do so at .855 Mach (656 mph). Mach One, the speed of sound, is 767.269 mph.

The new planes are six yards longer than their predecessors from head-to-tail and almost 29 feet longer in terms of wingspan.

They can support 987,000 pounds at takeoff; 154,000 (18.5 percent) more than their predecessors.

That last attribute is important given that today’s Air Force One includes a conference/dining room, two offices (one of which converts into a medical facility), and two galleys (kitchens) that can accommodate 100 guests.

The new Air Force One will be the seventh Boeing has designed since 1942.

The company routinely partners with the U.S. military to develop weapons and other defense implements. In late August, the Air Force announced that it had awarded Boeing, as well as Northrop Grumman, contracts to design new, land-based, nuclear ICBMs. The Air Force will likely choose the better of the two designs, or take elements from both.

Boeing’s defense operations represent a significant portion of its revenue. In 2016, the company generated over $12.5 billion through the sale of military aircraft. In 2015, the figure was $13.4 billion.

By comparison, Boeing generated over $65 billion through the sale of commercial planes in 2016 and more than $66 billion a year earlier.

So, in 2016, 16 percent of the revenue Boeing generated through the sale of commercial and military aircraft came from sales of the latter. In 2015, that figure was marginally higher.

At the market’s close Thursday, Boeing stock was up more than 3 percent since Wednesday morning.

Featured image via Wikimedia Commons

Harvey and Irma combined could prove more expensive than Katrina

Moody’s Analytics estimates that Irma will cost the U.S. economy between $64 billion and $92 billion, CNN reports. Insured losses resulting from the storm will range between $20 billion and $40 billion, the firm said.

Moody’s estimated Harvey-related costs between $86 billion and $108 billion, CNBC notes.

Harvey and Irma will likely cost a combined $150 billion to $200 billion, Moody’s chief economist Mark Zandi says, per CNN.

Hurricane Katrina cost the U.S. about $160 billion (adjusted for inflation) when that storm hit in 2005. It was the most expensive natural disaster in U.S. history. Irma’s and Harvey’s combined economic damage will likely exceed the Katrina figure.

Irma has crippled Florida’s tourism industry, turning much of the state into the kind of water park nobody wants to see. Miami and Tampa saw four feet of storm surge, and three to five feet of storm surge, along with a foot of rain, inundated Jacksonville. The extent of the damage to business operations remains largely unknown but is presumably considerable.

Meanwhile, oil refinery operations in Texas continue to reel in the wake of Harvey. About 13 percent of the United States’ refinery capacity remains offline in Texas, according to CNN.

Last Thursday, the federal government said joblessness claims rose by 62,000, to 298,000, in the days following Harvey, CNBC notes.

The two storms together could cost the U.S. between $20 billion and $30 billion in economic output, Moody’s said per CNBC. The firm has dropped its third-quarter forecast of the nation’s GDP growth by half a percentage point, to 2.5 percent.

Zandi notes that the recovery of the nation’s economy will depend on the speed with which Florida and Texas can revive their tourism and oil industries, respectively, but says he expects the rebuilding effort to provide an economic boost that will put the U.S. economy back on track by the year’s end.

“The longer-term economic impact of the storms should be nil,” said Zandi per CNN.

William Dudley, the president of the New York Federal Reserve, echoed Zandi’s analysis. While natural disasters such as Irma and Harvey disrupt industry, create scarcity and raise prices in the short-term, the rebuilding effort boosts the economy, he said per CNBC.

“The long-run effect of these disasters unfortunately is it actually lifts economic activity because you have to rebuild all the things that have been damaged by the storms,” Dudley said in a live interview with CNBC.

He added: “I would expect that by the time we get to the end of the year and early 2018, the transitory negative effects of this storm I think will be over and we actually will start to see some of the benefits of the rebuilding efforts in terms of boosting the economy.”

Recovery efforts following a natural disaster create jobs, compel the government to increase infrastructure spending, and bring other economic stimuli.

For instance, Congress and President Trump agreed last week to raise the debt limit for three months to facilitate relief efforts in the wake of the storms, and the House approved $7.85 billion aid package for Harvey relief last Tuesday, the New York Post reports.

According to Reuters, Vice President Mike Pence said Sunday that the government would use all of its resources to aid Irma victims.

While the storms’ long-term impact on the economy at large may be negligible or even positive, their financial impact on a small scale can, of course, be devastating. Irma and Harvey have destroyed homes, businesses, valuables and other crucial assets.

“Think of the wealth destruction created by these hurricanes,” said Dan North, chief economist for Euler Hermes, North America, per CNBC.

In discussing Irma relief, President Trump was quick to point out that human considerations outweigh economic ones. “Right now, we are worried about lives, not cost,” he said, per Reuters.

Irma’s death toll in the U.S. rose to 12 Monday, ABC News reports. The Associated Press reported last Thursday that Harvey has killed 70. The hardship the storms have brought is incalculable; as one small example, Irma left 2 million Floridians without power. They regained power Tuesday morning.

Featured image via Wikimedia Commons

Wisconsin State Assembly approves bill to incentivize proposed in-state Foxconn factory

Thursday, by a vote of 59-30, Wisconsin’s Republican-controlled State Assembly approved legislation that would provide $3 billion worth of incentives—mostly cash—to technology manufacturer Foxconn over 15 years, Reuters reports.

Foxconn, based in Taiwan, has proposed to build a 20 million square-foot liquid-crystal display (LCD) plant on a 1,000-acre plot in the southeastern sector of the state. The company’s initial investment in the plant, which would be operational by 2020 will be $10 billion.

The bill still awaits approval by the state senate and a joint finance committee, both of which Republicans control. Republicans generally support the bill, while Democrats oppose it, but the Assembly’s vote Thursday did not strictly follow party lines; two Republicans voted against, and three Democrats in favor, according to Reuters.

Proponents point out that the plant would bring tens of thousands of jobs to the area, and “transform Wisconsin’s economy,” as Foxconn said in a statement. The facility would create 10,000 construction jobs and 22,000 ancillary jobs, according to Reuters. Initially, it would employ 3,000, but could ultimately employ 13,000.

“We are ready to take advantage of this historic opportunity … and build a long-lasting relationship with Foxconn,” Wisconsin Governor Scott Walker, a Republican who was instrumental in the orchestration of the deal, said in a statement, per Reuters.

“We look forward to continuing to work with them [i.e. legislators] to transform Wisconsin’s economy and make it a center of worldwide high-tech manufacturing,” Foxconn said in a statement.

President Donald Trump, who made the domestication of jobs a primary platform of his campaign, has played a large part in negotiating with the company for the plant. Trump met with Foxconn’s founder and chairman, Terry Gou, three times to discuss the plan, according to Fortune.

“I would see Terry, and I would say, ‘Terry, you have to give us one of these massive places you do great work with,’” Trump said, per The Washington Post. The president says he also told Gou, “The American worker will not let you down.”

In a testament to the importance of the deal for the Trump Administration’s economic agenda, Gou, Trump, Walker and others announced the completion of the negotiations in the East Room of the White House, the Post reports,

“The construction of this facility,” said Trump late last month, “represents the return of LCD electronics—and electronic manufacturing—to the United States.”

The bill’s detractors point out that the incentives would put Wisconsin’s government in considerable debt. The government would not break even on the deal for almost 25 years, according to a legislative analysis released last week, Reuters says.

Critics have called the incentives a “corporate welfare” project (Reuters’ words), and believe policymakers are rushing the bill.

“I think we need more time,” Democratic Representative Jill Billings said. “I want a better deal and more guarantees for my taxpayers.”

Early in the debate, Reuters says, the legislative body nixed a motion by Democrats to allow the finance committee to review the bill prior to the vote. The Assembly also shot down three amendments proposed by Democrats.

Many worry about the impact the making of LCDs has on the environment. According to a 2008 CNET article, the “chemical vapor deposition” process that produces LCDs, semi-conductors and synthetic diamond relies on a “missing greenhouse gas” known as nitrogen trifluoride, the globe-warming effect of which could be as much as 17,000 times stronger than that of CO2, according to an independent report cited by CNET.

Foxconn builds electronics for Apple, Google, Amazon, and a host of other tech giants.

The Washington Post points out that the move to build a factory on American soil is unprecedented for Foxconn, which stations most of its production operations in underdeveloped countries, where the cost of labor is cheaper.

The Post further notes that the company has a reputation for overworking employees and for dangerous work environments. In 2011, an explosion at a Foxconn factory in China killed three workers and injured 16. Some Foxconn workers report working seven days a week, living in cramped dorms, and standing so long that their legs would swell.

Featured image via Wikimedia Commons

US Commerce Department Releases US Economic Data for Q2 2017

Friday, the US Commerce Department published national economic data for the second quarter of 2017. After a sluggish 2016, the economy appears to be modulating toward a strong growth rate. Last year saw the slowest economic growth rates since the recession of the late 2000s, so analysts say the economy is not booming, just regaining equilibrium.

“The economy is moving along at a pace that’s unexciting but not worrisome. I wouldn’t want to emphasize that growth is accelerating based on the second quarter. The economy is plodding along at a slow and steady pace,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York (once again, per Bloomberg).

Real Gross Domestic Product grew 2.6% in quarter two, after rising just 1.4% in the first quarter, according to CNBC. Final sales to domestic purchasers increased 2.4%, as it did in quarter one.

Consumer spending, which accounts for 70% of the economy, jumped 2.8%, spurred by low prices and stock and home equity gains, according to Bloomberg. Real disposable income rose 3.2 percent; in the first quarter, it rose 2.8%. According to survey data collected by the University of Michigan, 51% of consumers have seen recent improvements in their finances—that’s the largest percentage since November 2000. Business investment in equipment jumped 8.2%, more than it has in almost two years. Bloomberg attributes that spike to business owners’ anticipation of increases in demand.

However, gross personal income increased just 118.9 billion this period, after it saw $217.6 billion worth of growth in quarter one. The Commerce Department’s report says the slow-down comes as a result of “decelerations in wages and salaries, in government social benefits, in nonfarm proprietors’ income, and in rental income,” and due to “downturns in personal interest income and in farm proprietors’ income. Moreover, the aforementioned survey from U of M revealed that 34% of Americans expect to advance financially in the coming year.”

Employment cost index rose by 0.5% after a 0.8% rise in the January-March quarter. Residential investment saw its largest drop since 2010, as builders struggle to “find available labor and lots,” Bloomberg says.

The Trump administration still has some work to do to meet its goal of 3% growth, and the economy will need to grow by 2.5% in the second half of the year if it is to achieve 2.2% median projection the Federal Reserve has put forth.

Continued economic growth could hinge upon the success or failure the president’s tax reform efforts. Bloomberg reports that “White House officials and congressional leaders have been meeting weekly to agree on a framework to rewrite the tax code.” Trump has said the revisions will benefit the middle class, theoretically freeing-up income to be recirculated in the economy.

“If a well-constructed tax reform deal is enacted this year or next, the economy may fire on all cylinders and accelerate closer to President Trump’s 3 percent goal, but for now, we are firmly entrenched at around 2 1/4 percent,” Stephen Stanley, chief economist at Amherst Pierpont Securities LLC, said in a note, per Bloomberg.

The White House, for its part, is pleased with the progress. “From day 1 [President] Trump has been fighting to restore jobs, opportunity & prosperity to the U.S, & is already making a remarkable difference,” VP Mike Pence said in a tweet Friday.

“…our economy is growing, 850,000 jobs have been created & businesses are more optimistic than they’ve been in 20 years,” Pence added in a subsequent tweet, presumably referencing the increase in business investment in equipment.

The economy is rebounding, but not soaring ahead.

With Trump’s tax reform on the horizon, the coming months may reveal the effect the changing political climate will have on the economy long term.

US Stock Market Reacts to Political Gridlock, Quarter Two Earnings Reports

As earnings reports for the second quarter of 2017 continue to roll in, the stock market remains strong despite “political gridlock,” disappointing quarterly statistics from a number of financial institutions, and uncertainty in the healthcare sector, Reuters’ Kimberly Chin reports.

The S&P financial sector is trending downward as shares of banks like JP Morgan, Wells Fargo, and Citigroup take hits following the release of disappointing earnings reports and underwhelming quarter 3 projections. Bank of America has fallen 1.3% on its own tepid earnings report since the market opened Monday.

Nonetheless, the S&P 500 rose 1.47 points (0.06%) Tuesday and set a record closing high of 6,344.31 due to a boom its technology sector.

The DOW was also burdened by sluggishness in the financial sphere. Goldman Sachs’ shares fell 2.3% after that bank announced a “40% [drop] in bond trading revenue” this quarter, according to Reuters’ Chin. The DOW fell 54.99 points (0.39%) Tuesday, closing at 21,574.73.

But the Nasdaq composite rose 29.87 points (0.47%) and closed at a record high of 6344.31, largely due to a 13.36% spike in Netflix stock in the wake of the company’s quarter two earnings reports, which it published Monday

Revenue and operating income were right on forecast,” the company said in a letter to shareholders regarding its second quarter. Perhaps more important to investors are the 5 million subscribers the iconic internet streaming company added.

“Wall Street typically either rewards or punishes Netflix stock based on the company’s quarterly subscriber movement…That was also the case Monday,” writes Tom Huddleston, Jr. of Fortune Magazine.

Netflix has reported subscriber growth in each of its last 14 earnings releases. Over the last three quarters, Netflix’s user base has grown by an average of over 5 million users per quarter. Still, the company’s quarter two growth in that category shattered analysts’ projections.

The failure of the Trump administration’s healthcare bill in the Senate caused the US dollar dropped to a 10-month low as investors begin to question the efficacy of the President, who has yet to pass any significant legislation.

“The healthcare bill not coming through raises some continued concerns about the ability of Washington to push through favorable fiscal policies,” said Lisa Kopp, head of traditional investments at U.S. Bank Wealth Management.

Naeem Aslam, chief market analyst at Think Markets UK, adds that the flatlining of healthcare legislation “means that the tax reforms or the so called infrastructure spending plan are in jeopardy.”

But, Art Hogan, chief market strategist at Wunderlich Securities in New York, does not expect political news to carry a great deal of sway in the market. at least in the short term. “Earnings and guidance will move the market more than news out of D.C.,” he said. “Goldman is more important to the market today, as is Netflix, and that will be the case for the next couple of weeks.”

Chin acknowledges that the stall of the healthcare bill had but a “muted effect” on the domestic market.

Market valuations have swelled following a first quarter in which “US companies posted the fasted rate of growth in earnings since 2011,” according to Chin. Still, considering the current political climate and the struggles of the financial sphere, positive corporate results will be necessary if investors are to maintain their confidence.

“With valuations where they are, it is really important for earnings to come through for the market to retain their momentum and push upwards,” said Kopp.

So far, so good: analysts estimate an 8.2% increase in the earnings of S&P 500 companies as compared to the second quarter of 2016.

Nonetheless, declining issues outnumbered advancing ones by a 1.10 to 1 ratio on the NYSE, and by a 1.24 to 1 ratio on Nasdaq, Chin says.

Corporate performance is carrying the market despite troubling political indicators. “Investors are looking for an investment that doesn’t need the economy to do a lot better, and [that] doesn’t need Washington,” said Matthew Peterson, chief wealth strategist for LPL Financial.

For now, such opportunities are available.

Trump Hotels Customers’ Sensitive Information Breached

Trump Hotels announced Tuesday that data had been breached at 14 of its locations, including those in Las Vegas and Chicago, CNBC reports. Customers’ payment card numbers and security codes were seized by hackers who entered the systems of Sabre, a third party that manages reservations for Trump Hotels.

Lee Matthews of Forbes says hackers accessed Sabre’s SynXis Central Reservations system, which contains data pertaining to just 35,000 of Sabre’s 100,000 plus clients. A Sabre spokesperson told Matthews that “less than 15 percent of the average daily bookings on the Sabre Hospitality Solutions reservation system[…]were viewed””

Sabre learned of the attack in June, and disclosed it to Trump Hotels, whose systems the perpetrators accessed from August 10, 2016 to March 9, 2017, on June 5.

In Tuesday’s statement, Trump Hotels “recommends that affected individuals remain vigilant for incidents of fraud and identity theft by regularly reviewing account statements and monitoring free credit reports for any unauthorized activity.” If customers do detect unusual activity, the statement advises them to contact their financial institutions, law enforcement agencies, or the Federal Trade Commission.

Cybersecurity at Trump Hotels has been compromised at least three times in just over two years. According to a report by Jose Pagliery of CNN, Trump Hotels management acknowledged in September 2015 that computer systems at the hotel were infiltrated by a virus, which evidently monitored keystrokes and seized payment information, including credit card numbers, expiration dates, security codes, and cardholders’ names, as employees typed it into the computer. Trump Hotels was unsure whether that virus was able to access data stored on the computers, or merely intercept it as it was inputted.

The sensitive information of anyone who stayed at a Trump Hotels location between May 19, 2014 and June 2, 2015 may have been vulnerable, the company said, although “an independent forensic investigation has not conclusively determined [as of September 2015] that any particular customer’s payment card information was taken.”

A legal investigation spearheaded by New York Attorney General Eric Schneiderman found that Trump Hotels was aware of the 2015 breach as early as June of that year, when, Schneiderman’s report says, “a preliminary forensic investigation confirmed the existence of credit card targeting malware at multiple THC locations, including in the computer networks associated with New York, Las Vegas and Chicago hotels.” But the company failed to notify the public until September.

On April 4, 2016, the hotel chain said its computer systems had been compromised again, Pagliery reported on April 5 of that yearPagliery quoted Eric Trump as saying that Trump Hotels, “like virtually every other company these days, [is] routinely targeted by cyber terrorists whose only focus is to inflict harm on great American businesses.”

But apparently, Trump Hotels had taken no steps to reduce the size of the target on its own back: the company “never implemented the cybersecurity plan they were given to prevent a second attack,” The Huffington Post’s Christina Wilkie reported in September 2016.

Following Schneiderman’s investigation, Trump Hotels was ordered to pay $50,000 in a legal settlement due to the hotel chain’s failure to promptly notify the public of the 2015 hack and to shore up its cybersecurity in that attack’s aftermath

This most recent incident, of course, is not a direct breach of Trump Hotels security, but a result of vulnerabilities in the computer systems of a contractor with which Trump Hotels works closely. Still, Trump Hotels will no doubt be held responsible by customers whose information was stolen.

The hotel chain has indicated no intention of cutting ties with Sabre, but wary potential customers would presumably feel more confident about staying in Trump hotels if the company took some action to bolster its cybersecurity.

Government’s Antitrust Review of Time Warner-AT&T Merger Could Be Used as Leverage in Trump/CNN Feud

AT&T’s $85 billion proposal to acquire  Time Warner, the media and entertainment conglomerate that owns CNN, HBO, and others, has been submitted to the government for antitrust review. Given the tension between CNN and US President Donald Trump, many fear that the White House will use the review process as political leverage against the news network.

However, Makan Delrahim, whom Trump appointed as head of the antitrust division of the Department of Justice, has said he does not see any significant dangers in the bill. If the bill does not violate any antitrust regulations, the Trump administration will have no legal avenue by which to impede it.

Economist Hal Singer, who specializes in antitrust and media issues, says he does not believe the Trump administration can make any “[legally] credible threat” to block the deal.

“I think the most you could do is extract some sort of concessions as to the merged entity’s dealings with independent networks and rival distributors,” he said.

AT&T, along with many economists, has argued that the deal would be a “vertical merger” because AT&T and Time Warner occupy different sectors of the industry, and are not direct rivals. Therefore, the merger would not pose a threat to market competition.

Some disagree. Oregon Senator Ron Wyden told POLITICO he has “serious concerns about the…merger because it stands to reduce consumers’ choices while increasing their costs.”

During a campaign in which he repeatedly bashed CNN, Trump pledged to block the AT&T-Time Warner merger, calling it “an example of the power structure I’m fighting.”  Whether the “power structure” Trump refers to is corporate consolidation or the news media is up for debate.

Trump has taken a number of steps to reduce government intervention in the free market. The administration has eased regulations in the financial sphere, for instance, that checked the growth of banks.

So the president’s stance on the Time Warner deal is something of an aberration, and some wonder whether Trump’s opposition to the merger is motivated less by a desire to protect market competition than by an agenda to silence unwelcome voices in the media.

On Sunday, Trump posted a video on Twitter which shows him repeatedly punching a CNN logo superimposed upon a man’s head. The president did not include text with the video, but appended the hashtags “#FraudNewsCNN and #FFN” to his tweet.

When asked about the video at a news conference in Poland Thursday, Trump said that CNN has covered his presidency in a “very dishonest way,” “has been fake news for a long time,” and has “serious problems.”

So there is question as to whether Trump’s administration will impartially consider the merger request.

Minnesota Senator Al Franken, a Democrat who has reservations about the merger, recommends that an “independent antitrust division” evaluate AT&T’s proposal so that Trump’s “war against the media [does] not influence the transaction.”

Wyden encourages the reviewers of the proposal to consider the effect the deal would have on the business market, not the president’s personal agenda. To allow Trump’s attitude toward the media to influence the decision “would be illegal, and flies in the face of the First Amendment [proteting freedom of speech and of press],” he says.

According to The Financial Times, Trump’s transition team “reassured AT&T” in December that the merger request would be “scrutinized without prejudice.”

Time Warner subsidiaries like CNN would remain autonomous under the merger: AT&T CEO Randall Stephenson says his company is “committed to continuing the editorial independence of CNN.”

Hopefully, Mr. Trump and his administration share that commitment. Even if they do not, they may find it difficult to find substantial legal grounds to justify blocking the merger.

Featured image via Flickr/Gage Skidmore

Can Trump Change First Quarter Economic Slump?

Among hopes that the Trump administration would improve economic activity, the U.S. economy in the first quarter grew more slowly than it has in three years. It is too soon to tell how effective Trump’s promise to improve economics, however, recent levels of activity do not paint a positive picture.

In the worst performance since 2014’s first quarter GDP raised only 0.7 percent. The Commerce Department stated Friday that this is due to a decrease in spending on defense.

This comes as a major change after the fourth quarter’s 2.1 percent growth pace. Many economists altered their first-quarter growth estimates on Thursday when the March goods trade deficit and inventory data was released.

Businesses invested less this quarter and consumer spending saw very little increase. Investment in inventory strengthened in the two-quarters previous but has now fallen from $49.6 billion in October through December to $10.3 billion. Likewise, the addition of 1.0 percent from inventory accumulation to national GDP growth has dropped to a 0.93 percent deduction.

Consumer spending experienced a hit from several factors. Heating and utilities were in lower demand because of mild temperatures this winter and the late issue of income tax refunds discouraged many consumers from pulling out their wallets for big spending. Likewise, higher inflation contributed to the decrease.

Consumer spending only grew 0.3 percent, hitting the economy hard as it contributes to over two-thirds of economic activity. After the fourth quarter’s rate of 3.5 percent this slow pace which hasn’t been reached since the fourth quarter of 2009 is a disappointment.

View of the Future

Nevertheless, spending is likely to increase in the future as savings have risen from $778.9 billion to $814.2 billion. Consumer confidence is at an unusually high and the labor market is experiencing greater levels of employment. Also, private domestic demand is 2.2 percent higher than at the beginning of last quarter.

Federal Reserve officials meet next week and are predicted to not raise interest rates. This is because they likely view the consumer spending and GDP decreases as temporary.

Growth rates in the first quarter are only a small portion of the information needed to judge the strength of the economy. The first quarter is often reported as less positive because of data calculation problems which the government hopes to solve. Furthermore, the Trump administration plans to take actions to improve the situation.

Efforts including less economic regulation, tax cuts, and infrastructure spending will soon go into effect. Also, a new tax plan to cut corporate income taxes from 35 percent to 15 percent was proposed Wednesday.

These actions may improve the situation but many economists agree that raising the annual GDP to 4 percent, Trump’s stated goal, will not be easy. A large increase in productivity is necessary.

National, state and local governments decreased investment rates. On a national level, the change in investment is as dramatic as the decrease in the fourth quarter of 2014.

Government spending on defense went down at a 4.0 pace while overall spending decreased at a rate of 1.7 percent.

Economic Hope

In some ways, things are looking up for the U.S. economy. Oil prices improved after a period of decline causing oil well drilling to rise. Along with the rise of gas, this led to a 9.1 percent growth rate for business spending on equipment.

Additionally, investment in home building went up by a 13.7 percent rate. Nonresidential structure spending changed from a 1.9 percent rate to a 22.1 percent rate after this quarter.

These increases in investment were likely caused by the 449 percent rate of growth of mining. This is after only a 23.7 percent raise in the fourth quarter.

Lastly, the 4.1 percent rate of increase in imports fell below the increase of exports at 5.8 percent. The small trade deficit had little to no effect on GDP growth.

Will Congress Overhaul Financial Regulations?

This week has pitted Democrats and Republicans in the U.S. House and Senate against each other over a Republican bill to dismantle the Dodd-Frank Act. The legislation is a major part of enacting Republicans’ plans to overhaul the financial rules put in place during the recent economic crisis.

Jeb Hensarling, the House Financial Services Committee Chairman, drafted the bill to lessen the regulations on banks and money lenders. These efforts include a decrease in the exams which decide whether or not a bank can pay a shareholder’s dividends as well as an elimination of the Volcker Rule. The latter would repeal the rule that lenders must only use client’s money to make speculative bets.

Democrats, on the other hand, are attempting to use discussion surrounding Hensarling’s bill to bring up controversial issues. They are hoping to work towards breaking up the megabanks of Wall Street, to GOP lawmakers’ dismay.

Glass-Steagall

Democrats’ efforts include an attempt to reinstitute the Glass-Steagall Act which was instituted during the Great Depression and repealed in 1999. The law separated consumer lending and investment banking and many partially blame the 2008 recession on the repeal of the law. Some Democrats including Massachusetts Representative Mike Capuano consider proposing a Glass-Steagall amendment to Hensarling’s bill.

A bill to implement dramatic change in the way that banks currently run their businesses is unlikely to pass in Congress’ extremely polarized state. However, the discussions raised hold risk for the legislatures who receive support from the finance industry. Any support for the legislature which could weaken large lenders could harshly affect certain politicians’ careers.

However, a Glass-Steagall reinstatement was approved for the Republican platform during their July national convention. The act was not a focus point until these recent discussions brought it to light.

Comments by members of the Trump administration have only fueled the push to bring back Glass-Steagall. Gary Cohn, the White House economic advisor, recently stated that he would be in favor of a renewal of the act in some way.

According to anonymous sources, Cohn stated his support in a private meeting made up of senators. Cohn said that his opinion that investment and commercial banking should be separated is not new. He explained that cultural differences between the two sections of the finance industry make separation logical.

Banks Raise Concerns

The spread of the comments led to a flood of calls to the White House and congressional offices. Bankers and their lobbyists were desperately trying to get more details on Cohn’s stance.

Financial firms including JP Morgan Chase & Co., Bank of America Corp., and Citigroup Inc. hope to avoid being drawn into the debate but are concerned by its possible effects. Their fear is partially an effect of the lack of clarity over what a separation between investment and commercial banking means.

The Trump administration’s mixed signals on economic matters are partially to blame for the current disagreement in Congress. Trump himself has stated that financial regulations are harming economic growth and should be cut back on. However, his anti-Wall Street Populist statements while running for office contributed to his election success.

Trump and his administration have adopted the term “21st century Glass-Steagall” which was first coined by the liberal Senator Elizabeth Warren. Steven Mnuchin, Treasury Secretary, states that this term could apply to a policy less focused on breaking up banks and more focused on walling them off.

Keefe, Bruyette, and Woods financial policy analyst Brian Gardner say that the real trouble for banks is what Glass-Steagall may later lead to. An overhaul of financial rules by the Senate is what banks fear.

A hearing on Hensarling’s bill, now called the Financial Choice Act, was held Wednesday by the House Financial Services Committee. However, is time to propose amendments as the panel vote is planned for next week.

Trump Butts Heads With Canada Over Dairy Tax

Some might be worried about the fights being started overseas but what about the one right in our own back yard? On Tuesday, President Trump attacked Canada about their tax on ultra-filtered milk. It wasn’t long until Trump took to Twitter.

It was just last week that Trump made comments on the dairy issue. He called it a “disgrace” and even went as far as to blame the North American Free Trade Agreement (NAFTA). Trump stood up for dairy farmers saying, “What they’ve done to our dairy farm workers is a disgrace. It’s a disgrace.”

Yet this issue about milk tax is just one of many issues that Trump has with the free trade agreement. He made his feelings about the free trade agreement known when he rallied against it during his campaign.

So, what is his plan? The president said on Monday that Canada can expect new tariffs. Trump and his administration say that they plan on placing new tariffs on softwood lumber that goes from the United States into Canada.

Which his reaction isn’t really all that surprising. Yet how much is this tariff going to be? Well, the Department of Commerce says that a “countervailing duty” of 3 to 24 percent would be imposed on Canadian lumber exporters.

Wilbur Ross is the Commerce Secretary and says that there could be at least $1 billion duties on softwood lumber. He says that with that large of an amount it would be a “bad week for U.S.-Canada trade relations.” Of course, Canada’s dairy tax is to blame for this harsh move.

What does Canada think about all this? Well, the country made a statement on the issue Monday, and it doesn’t seem like they are going to take things lying down. The spokesperson said that Canada will “vigorously defend the interests of the Canadian softwood lumber industry, including through litigation.”

Trump Might Surpass Obama’s 8 Years of Travel in Just one Year

Some believe that Donald Trump is well on his way to surpassing former President Barack Obama’s eight-year travel spending amount. It’s only been 80 days since Trump took office and his trip to his private club in Florida cost an estimated $20 million.

So why are so many slightly raising their eyebrows at this lucrative spending? Well if you recall, back during the Obama presidency, Trump openly criticized President Obama for the money he cost American taxpayers for every trip he took.

Yet when a president decides to go on a trip, he can’t just book a flight and be on his way. There’s the cost of secret service and other security measures that, in their entirety, can’t be completely estimated. A 2016 Government Accountability Office report on a four-day Florida trip President Obama took back in 2013 estimated that the cost of security was about $3.6 million.

It would seem that President Trump has spent a total of 21 days, including six weekends, at his private Palm Beach club, Mar-A-Lago. It’s been estimated that the total amount for all these trips rounds off to about $21.6 million.

However, when it comes to presidential trips, President Obama spent slightly under $97 million throughout his 8 years in the White House. His trips included personal vacations to Aspen for skiing and the Obama family vacation to Martha’s Vineyard. But there were also work trips like when he visited the Everglades National Park for Earth Day.

Before taking office, Trump was quite the critic of President Obama’s vacations. He often took to Twitter to express his disapproval for the vacation trips Obama took to his home state Hawaii.

One of his Tweets featured an inaccurate unemployment figure when Trump said, “The habitual vacationer, @BarackObama, is now in Hawaii. This vacation is costing taxpayers $4 million +++ while there is 20% unemployment.”

He also later Tweeted, “President @BarackObama’s vacation is costing taxpayers millions of dollars—Unbelievable!”

It’s believed that if Trump’s spending habits continue on their current pace, the new president will surpass President Obama’s within the next few months. Which is in question since Trump has recently said that the federal government should cut down their own spending by $54 billion. This cut deals out low blows to the State Department, the Department of Housing and Urban Development, Environmental Protection as well as lot of other departments that will receive big cuts.

However, as the weather in that region begins to escalate in the upcoming month, it’s expected that President Trump will stop his Palm Beach vacations. Although it will be too hot to vacation in Florida, many others think that the president’s next move will be to Trump Tower in New York City. In his penthouse apartment there his wife and first lady Melania Trump has been residing since the beginning of 2017 with their son. The other vacation destination that is suspected for the president is Bedminster Township, New Jersey where his private Trump National Golf Club is.

Yet despite his criticism of President Obama’s vacations, the Trump family is proving to be a bit costly when it comes to security protection. Not only does he frequent travels rack up cash but it costs an estimated $127,000 to $146,000 per day to protect the first lady as she resides in New York without the president.

The secret service is in a bit of a strain as well when it comes to extending their protection to the first family. Many have been pulled from their investigations across the country in order to put on two-week rotations to protect Trump and the entire first family.

John Kelly who is the Homeland Security Secretary says that Homeland Security plans to ask Trump for more funding for his protection. Kelly said, “We need a larger Secret Service because we need to get some of these people a little bit of time at home with their families.”

New Data Estimates Student Debt Total Over $1.3 Trillion

A quarterly report on household debt and credit by the Federal Reserve Bank of New York revealed that student loan debt now totals over $1.3 trillion as of December 2016. The report, released in February of 2017, notes the $31 billion increase in outstanding student loan balances.

MarketWatch’s live tracker shows student debt increasing by $2,667.2 per second, based on data stretching back to 2006. According to the Federal Reserve Bank’s data, 10% of the national debt balance comes from student loans, second only to mortgage debt, which is 67% of the pool. Auto loans come in third at 9% of the national debt pool.

In addition to this increase, students are falling behind in debt repayment. At a rate of 11.2%,  student loan debt far surpassed the delinquency and default rates of credit card loans (7%) and auto loans (4%). Student loans initially surpassed credit card loans in 2013, in terms of delinquency and default rates, remaining at 11% while credit card rates steadily declined.

According to Make Lemonade, the average student loan debt of a graduate of the class of 2016 in $37,172. The average payment for borrows in the 20 to 30 year old demographic is $351. Between 2005 and 2015, the number of borrowers over the age of 60 with student loan debt rose from 700,000 to 2.8 million.

During his presidential campaign, Donald Trump proposed a plan that put a cap on total repayment for federal student loan holders to about 12.5% of the borrower’s income up to 15 years after graduation. After that, Trump proposed in October 2016, the loan would be forgiven.

“Student should not be asked to pay more on the debt than they can afford,” Trump said at a rally in Columbus, Ohio, “And the debt should not be an albatross around their necks for the rest of their lives.”

The Trump administration could also see the dismantling of the system that makes college graduates eligible for loan forgiveness should they enter into public service fields.

Ivanka Trump’s Perfume is an Amazon Bestseller

Ivanka Trump’s perfume jumped to the top Amazon’s bestseller list in the “Perfumes & Fragrances” category last week, weeks after Nordstrom announced it was dropping Ivanka Trump-branded items from its store.

The Ivanka Trump Eau de Parfum spray also received a vast number of reviews on its product page. Some comments remained apolitical, while other reviewers mentioned President Trump or his daughter Ivanka specifically.

A user named “DeeJay” wrote in a five-star review of the perfume, “Amazing! Smells great. Get many compliments and questions on what it is and where I got it! Plus I am supporting President Trump and his family! Make America Great again!”

Other reviews had less to do with the actual product and more to do with making a political statement in support of Trump and against those opposed to him.

Another five-star review from a user named “Ronald” says, “Very excellent scent. it also helps keep the RATS (SJW, PC, SNOWFLAKE) whining cry babies away, almost as if you’re throwing holy water at mindless DEMONS while they pull their hair and eye balls out when they smell such a refreshing scent.”

Out of 942 total reviews, 43% are rated 5 stars, while 51% are 1 star. The critical review voted most helpful by user “Santa CruZin” reminds shoppers and readers to “Remember to look for the “verified purchase” tag next to the names of reviewers when considering their opinions.” There are currently no 1 star reviews with verified purchases.

The jump in sales appears to be, in part, a reaction to a boycott of Trump-branded merchandise. The Grab Your Wallet campaign has encouraged consumers since last fall to boycott retailers carrying items with the Trump name on it. Neiman Marcus, Kmart, and Sears have said they would drop such items from their stores.

Nordstrom recently dropped Ivanka Trump’s collection from their stores, although they stated dwindling sales as the cause rather than political affiliation.

U.S. Yields Rise, Banks Lift Stocks to Record

U.S. Treasury yields climbed on Wednesday as the economic outlook strengthen and commentary by Federal reserve officials increased expectations of a hike in interest rates in March. A gauge of major world markets also rose to a record.

January saw U.S. retail sales exceed expectations, and other data showed records of the biggest increase in consumer prices in nearly four years, as well as a rise in manufacturing output.

These reports come on the heels of Janet Yellen’s Tuesday comments, repeated on Wednesday to the House of Representatives. The U.S. Fed Chair said that the central bank would most likely have to raise rates of one of the upcoming meetings.

The data, coupled with Yellen’s comments, heightened expectations of an interest rate hike in March. Additionally, U.S. short-term interest rate futures imply a 31% chance of base point rise of 25 at its March meeting, compared to an 18% chance in the prior session.

Brad McMillan, chief investment officer at Commonwealth Financial Network said, “A year ago, if Janet Yellen had come out with the statement she made, the market would have freaked out, because the fundamentals were very soft. Now, if the Fed raises rates, it’s not going to shake the world, because people are confident enough about the fundamentals.”

Boston Fed President Eric Rosengren said the central bank may have to raise interest rates more aggressively than the pace of three times per year policymakers have forecasted.

The anticipation of higher rates pushed U.S. financial stocks SPSY up 0.7 percent on Wall Street for the fifth straight day, lifting the benchmarks S&P 500 index SPX to another record high.

The S&P 500 secured its seventh advance in a  row, establishing its longest winning streak in almost four years.

The U.S. dollar dipped down after touching a one-month high. It was last down 0.19% against a basket of other major currencies.

Trump’s Trade Policies Present a Business Risk, According to Amazon

While big business, for the most part, has welcomed President Trump’s promised tax cuts and lax regulations, Amazon withholds its enthusiasm. The recent stock market rally suggests traders believe U.S. companies will prosper due to Trump’s trade policies, but Amazon’s regulatory filing on Friday implies the opposite.

In its annual report with the Securities and Exchange Commission, Amazon said that its business faces a new set of risks, that of “trade and protectionist measures.” The filing does not explicitly state that these risky measures are a part of President Trump’s proposed policies, although they clearly reference the possible changes that could come to global commerce under the new administration.

The risk of “trade and protectionist measures” identified in the report is the only significant change compared to last year’s filing in the section devoted to potentially “unfavorable changes” in government regulation. The addition, although subtle, clearly represents Amazon’s concern about Trump’s protectionist approach to trade. Already, the “America First” policy has led to the nation’s departure from the 12-nation Trans-Pacific Partnership.

Jeff Bezos, Amazon’s CEO, is not the only business leader worried about Trump’s economic and trade policies. Seth Klarman, a successful hedge fund manager, recently wrote a private letter to warn his investors of risks. The letter, later circulated widely, cautions that “Exuberant investors have focused on the potential benefits of stimulative tax cuts, while mostly ignoring the risks from America-first protectionism and the erection of new trade barriers.” Klarman also wrote that Trump’s pro-growth policies could result in inflation, larger deficits, and higher interest rates.

The first three weeks of Trump’s administration has been a uniquely tumultuous period for Amazon. In that time, Amazon announced mixed financial results, faced employee protests over its ad ties with Breitbart.com, and supported the Washington Attorney General oppose the travel ban.

Germany Repatriates Gold In Response To Populist Pressure

The German central bank completed the transfer of $13 billion in gold reserves on Thursday. Germany’s gold had remained in New York for decades, spanning back to the Cold War.

The Bundesbank announced this transfer on Thursday was part of an effort to build public “trust and confidence”. Officials explained that the transfer of its gold bullion is not a response to concerns about President Trump’s monetary policy. Rather, it is an acknowledgment of the shift in political and economic climate on a broader scale, like the rising populist pressure within Germany and throughout Europe.

Carl-Ludwig Thiele, a Bundesbank board member, said at a news conference, “Trump has not triggered a discussion about the storage facility in New York,” even though the bank frequently discusses the potential effects of President Trump’s proposed policies.

Germany’s central bank began its plan to repatriate half the gold it keeps abroad in 2013. The project is slated to be finished three years ahead of schedule, with the final transfer expected from Paris later this year.

Germany’s gold reserves are the second-largest stockpile of precious metal in the world. Valued at 120 billion-euro ($127 billion), the reserve has been the subject of recent conspiracy theories. Around 2012, theories began to surface that cast doubt on whether or not Germany still had the reserves it claimed. The “Bring Our Gold Back Home” campaign lead by German tabloid Bild-Zeitung also surfaced at the same time, fueling the anxiety that the euro crisis could result in the loss of German gold reserves.

The German government initially cultivated the gold reserves after World War II in order to protect economic prosperity. However, up to 98% of the reserves were stored abroad during the Cold War to keep them safe in the event of an invasion by the Soviet Union. They were kept near foreign exchange points in London, New York, and Paris–in case of an emergency requiring foreign currency.

Now, however, the Soviet Union no longer poses a threat, and the need for French currency is obsolete since France and Germany are both part of the eurozone. In light of candidates like France’s Marine Le Pen and movements like Italy’s 5-Star, which openly advocate withdrawing from the eurozone, some suggest that the gold flowing back to Germany will be needed to back a new German currency if the euro collapses.

For the time being, however, Germany is following through with its plan to keep half of its gold reserves in London and New York with no plans for removal, according to Mr. Thiele.

New York Times Offers Spotify Bundle

In an attempt to boost subscribers, New York Times Co. is working with Spotify Ltd. to give new digital subscribers to the paper complimentary access to the world’s largest music-streaming service.

The companies announced on Wednesday that readers who buy one-year online subscriptions to the New York Times will also get free unlimited access to Spotify’s premium service, which costs $120 a year.

Meredith Kopit Levien, the Time’s chief revenue officer, said that the unconventional partnership between the 165-year-old print publishers and the disruptive music company is a natural fit. The companies will promote the subscription package on their respective platforms, in addition to teaming up on digital advertising.

“If you think about the places where people spend their time in media, they spend a lot on music and a lot on news,” said Levien, “So it made for a very positive association.”

The deal with Spotify is the latest in the Times’ attempt to continue growing after the November 8 election. The newspaper’s goal of reaching 10 million digital subscribers focuses in part on getting through to younger readers via partnerships with other online services. Following this plan, the Times recently decided to join Snapchat’s Discover platform.

According to ComScore, the Times topped BuzzFeed and Vice Media in November in terms of U.S. millennial readers with 48 million unique visitors. “We’re beginning to focus much more seriously on how many young people we have engaging with us and how we deepen those relationships,” Levien said.

Last quarter the Times signed up a record breaking 276,000 new digital news subscribers, thanks to what some call the “Trump Bump.” President Trump often publicly derides the newspapers, accusing it of unfair coverage of him. But these derisive comments, often in the 140-character-or-less tweet format, have amounted to free advertisements for the paper.

Most recently, Trump accused the Times of being “fake news” for reporting that before their Feb. 9 phone call, Trump had not spoken to President Xi Jinping since Nov. 14, the week after he was elected.

 

Expedia CEO Hopes To Survive The Year

Expedia CEO Dara Khosrowshahi ended a conference call about the company’s fourth quarter earnings with an ominous message. “Just a big thank you to our global employee base for an improved 2016 and certainly an improved end to the year,” he said, adding, “And hopefully we will all be alive to see the end of next year.”

Though not explicitly stated, the CEO’s outspoken opposition to Trump from within the tech industry informs these unusual remarks. Early on in the call, Khosrowshahi voiced concern over the recently overturned travel ban, “We were frankly worried about the chaos and volatility and the uncertainty and the effect it would have on general business trends and especially travel.”

Expedia was among the first of a number of tech companies to file charges against Trump’s executive order on immigration, citing the harm it could potentially do to its employees and customers. Amazon also filed suit.

Khosrowshahi himself is an immigrant from Iran, one of the seven countries with a Muslim majority included in the travel ban. Last Sunday, he sent an email to Expedia employees, condemning the executive order.

The CEO has expressed discontentment with Trump even before the travel ban. The night Trump won the election, Khosrowshahi tweeted, “As tech leaders we have to admit that we are hugely disconnected with our nation. I don’t like it but have to recognize this issue.”

Expedia’s declaration as part of Washington State’s lawsuit against President Trump outlines the damaging potential of the ban. According to the document, “Expedia believes that the executive order jeopardizes its corporate mission and could have a detrimental impact on its business and employees, as well as the broader U.S. and global travel and tourism industry.”

The declaration requested a temporary restraining order against the ban. The original executive order was halted a week ago by a Seattle judge, and overturned completely on Thursday in a San Fransisco appeals court.

Ivanka Trump’s Clothing Brand Suffers Due to Boycott

After many consumers decided to boycott over thirty retailers that carry Ivanka Trump’s clothing line, Ivanka’s line suffered a bit during the week. In fact, Nordstrom said on the 2nd that it wouldn’t be carrying the line anymore. That’s not the only major retailer to ditch the Ivanka’s clothing line. Nieman Marcus announced just a day later that it too would be dropping the line.

The list of companies that have been targeted by consumers who are boycotting nearly all products that have anything to do with the U.S. president’s family include Amazon, Bloomingdales, and even Dillards. Those are just three of the retailers out of the thirty that made the list of retailers carrying Trump merchandise.

Shannon Coulter recently started a spreadsheet she titled #GrabYouWallet no too long after the tape of the president lewdly speaking about woman was leaked to the public. The hashtag spreadsheet was used to fuel the fire of those who clearly dislike Trump and his offensive language. It helped aid in the boycott of retailer who carry or do business with the Trump family.

However, retailers weren’t the only ones that made Coulter’s list. Many of Trump’s hotels and organizations made the part of the list that was titled “consider boycotting”.

Aside from stores refusing to sell her products, Ivanka Trump suffers from another problem. All of the products that are associated with her line, like shoes, bags, and clothes, are shipped from Hong Kong and China. This definitely goes against what her father has been continuously demanding of automakers and other companies; buy American.

When it comes to importing clothing from Asia and overseas, it’s common practice. In fact, back in 2015 around 97 percent of clothes and shoes that were sold to consumers in the United States had been imported from overseas.

Yet as of late, Trump has expressed that importing goods from overseas isn’t a practice he will support. In fact, he’s gone as far as to threaten a few companies with 45 percent taxes on Chinese exports to the United States. Trump even said that if companies didn’t move their businesses back to the U.S. he would impose a border tax on all the good that would be shipped here to the U.S. These threats seek to force not only other clothing brands but Ivanka’s to switch up their practices.

According to sources, Ivanka Trump’s company brought in an estimated 193 shipments in 2016, 202 the year before, and 233 the year before that. Almost all of those shipments were sent over from China and Hong Kong. There was no supporting evidence to show that any of the shipments were made in the USA or that any of the shipments arrived by truck or plane.

If president Trump goes with his initial idea to heavily tax companies for doing business in other countries, the fate of Ivanka’s company will rely on whether or not it can move its production to the United States.

Ivanka Trump’s marketing directory Rosemary Young commented on the situation saying, “We believe that the strength of a brand is measured not only by the profits it generates, but the integrity it maintains.”