Moynihan Grows Into Role as BofA Chief

Mr. Moynihan, 58 years old, got the top role after CEO Kenneth Lewis unexpectedly announced his retirement in fall 2009. During that period, Bank of America faced major financial problems following acquisitions of Countrywide Financial Corp. and Merrill Lynch & Co. To stay afloat, the bank had to take $45 billion from the government.

.. After Donald Trump’s surprise 2016 election, bank stocks broadly jumped. Bank of America shares surged 74% between then and the end of 2017.

.. For the full year of 2017, the bank posted a $21.1 billion profit, excluding an adjustment from the tax cut, roughly matching the bank’s all-time profit record from 2006.

.. The bank issued millions of new shares during the crisis, however, so its per-share earnings remain far below where they were precrisis. Likewise its shares, unlike those of competitors such as JPMorgan Chase & Co. and Wells Fargo & Co., remain below precrisis levels.

.. “Bank of America has done a sensational job under Brian Moynihan,” Mr. Buffett said

 

The Conference Call That Shook Investor Faith in Facebook

Chief Executive Mark Zuckerberg opened the call just after 5 p.m. Eastern time by saying the company had​“a solid quarter.” He crowed about Instagram, calling it an “amazing success” and said he believed that the unit grew twice as quickly under Facebook than it would have solo. About 12 minutes into the call, Chief Operating Officer Sheryl Sandberg chimed in, providing her usual litany of examples of how advertisers were adopting its various ad tools.

There were few signs that anything major was amiss.

And then around 5:20 p.m., Chief Financial Officer Dave Wehner addressed analysts and dropped one bombshell after another, rattling investors and raising red flags about whether Facebook’s powerful moneymaking machine is starting to sputter.

First he said the advertising revenue growth slowed down more in Europe than anywhere else in the world partly because of new privacy laws there. That was a bit jarring, as most investors had come to believe the new law that went into effect in May would have minimal, if any, impact.

Then, he noted that the overall revenue growth rate wasn’t just slowing in the second quarter, but would continue to do so in the third and fourth. He partly blamed “currency headwinds” and new privacy options for users but also revealed that new ad formats such as those within Instagram Stories weren’t pulling in the same amount of money as ads shown in the Facebook and Instagram feeds.

.. Ads shown in feeds are where Facebook generates the bulk of its revenue. Now, Facebook executives were saying that people were spending more time using a less-lucrative product.
Operating margins, Mr. Wehner added, would fall ​to the “mid-30s” from about 44% currently over the next few years, stemming in part from investments in security and safety

.. Mr. Wehner and Ms. Sandberg noted that Facebook had yet to feel the full effects of the new European privacy laws. Mr. Wehner pointed out that Facebook would see a hit to revenue growth owing to changes to its products that would boost privacy.

“The question is will this monetize at the same rate as News Feed?” Ms. Sandberg replied to one question about the moneymaking potential of Stories. “And we honestly don’t know, we’ll have to see what happens.”

.. Ms. Sandberg replied: “I mean, even at decreasing growth rates, we are still growing and predicting growth at very healthy rates.”

.. they must grapple with the question of whether Facebook, too, has limits.

.. “While the company is still growing at a fast clip, the days of 30%+ growth are numbered.”

 

‘Conflict Is More Profitable Than Peace’

In Central African Republic and other anarchic states, people suffer and perish under rule of the AK-47.

For thousands of years, humanity’s greatest challenge was poverty and disease, but increasingly it may be conflict.

.. The United Nations estimates that 80 percent of its humanitarian funding needs are now driven by conflict. The U.N. World Food Program says conflict causes 60 percent of life-threatening hunger.

.. That’s because we’re making huge strides in most places, with the share of the world’s population living in extreme poverty dropping from about 90 percent in the early 1800s to less than 10 percent today. Yet there are exceptions like CAR, South Sudan, Yemen and the Democratic Republic of Congo that are horribly off track — because they are ruled in parts not by governments but by gunmen.

.. So we must rethink the global war on poverty. These days the world should tackle conflict as aggressively as it fought AIDS. Donors need to focus not just on building wells or schools, but also on building peace. This may make liberal doves uncomfortable, but the blunt reality is that in some places the most important humanitarians are the peacekeepers carrying weapons.

Yet President Trump has slashed assistance for U.N. peacekeeping, and his ambassador to the U.N., Nikki Haley, boasted in a tweet that the administration was “only getting started” cutting back on peacekeeping. Ambassador Haley, please understand that without peacekeeping, you’re sentencing civilians to be raped and shot — and boys like Frederick Pandowan to starve.

..  His mom, Tefole Raissa, explained that they had fled fighting and no longer have land. “I can’t farm now,” she explained. She doesn’t remember the last time she ate meat or eggs; the family gets by on one evening meal a day of cassava, a starchy tuber with negligible nutrition.

.. Central African Republic is preyed upon by some 14 militias. At times there has been Christian-Muslim fighting, but these days the militias are less ideological than entrepreneurial. They routinely set up checkpoints to “tax” every vehicle that passes — when they don’t simply steal trucks or goods.

“Conflict is more profitable than peace,” noted Neal Kringel, a senior U.S. diplomat for the region, highlighting what needs to change.

Insecurity means that the government operates few clinics, so women die in childbirth at one of the highest rates in the world. Aid becomes expensive and dangerous to provide: Gunmen killed 16 humanitarian workers here last year, and six more so far this year, making CAR one of the most perilous countries for aid workers.

.. We visited peace-building programs organized by Catholic Relief Services to reduce tensions between Muslims and Christians. In one project, 125 people were paid $3 a day each to dig drainage ditches — but on the condition that Christians and Muslims work together.

.. “It’s my first time to be mixed with Muslims,” Marlene Wabangue, a young Christian mother with her baby daughter on her back, told me during a break. “But I’m not scared of them. I’m fine with them.”

.. We must ensure that peace is more profitable than conflict. As the mayor of Boda, Boniface Katta, told us, “Without peace, nothing can be done.”

Will a Corporate Tax Cut Lift Worker Pay? A Union Wants It in Writing

Speaker Paul D. Ryan, for example, said in a recent speech that “fixing the business side of our tax code is really all about helping families and workers,” adding that “cutting the corporate tax rate means more jobs here in the United States. It will foster increased competition, which will directly drive up wages for our workers.”

Yet few American companies have offered specific plans that support those promises. While many chief executives broadly praise Republicans’ efforts to cut taxes, few have detailed how they would deploy the savings from a corporate tax cut or put more money back in workers’ pockets.

The lack of pledges to create jobs has not been lost on President Trump’s top economic adviser, Gary D. Cohn, who seemed perplexed last week about the lack of corporate enthusiasm for a tax cut.

Mr. Cohn asked his audience of chief executives how many of them would invest more if the tax cut were passed. When only a few attendees raised their hands, Mr. Cohn asked: “Why aren’t the other hands up?”

.. Communications Workers of America asked several companies that employ its members to promise to give workers a pay increase if the cut in the corporate tax rate goes through.

..  corporate profit rates have been historically high since 2007, while business investment has been historically low,”

We Are Not the World

From Brexit to Trump to the rise of nationalist parties across Europe, the old division between left and right is giving way to a battle between self-styled patriots and confounded globalists

 Supporters of these disparate movements are protesting not just globalization—the process whereby goods, capital and people move ever more freely across borders—but globalism, the mind-set that globalization is natural and good, that global governance should expand as national sovereignty contracts.

The new nationalist surge has startled establishment parties in part because they don’t see globalism as an ideology. How could it be, when it is shared across the traditional left-right spectrum by the likes of Hillary Clinton, Tony Blair, George W. Bush and David Cameron ?

.. In the 1930s, nationalists were also expansionists who coveted other countries’ territory. Today, Mr. Trump and his ideological allies mostly want to reassert control over their own countries. Their targets are such global structures as the EU, the World Trade Organization, NATO, the U.N. and the North American Free Trade Agreement.

.. Little unites the new nationalists other than their shared antipathy toward globalism. Mr. Trump’s economic program is as far to the right as Ms. Le Pen’s is to the left. Nor do they have credible plans for replacing the institutions of globalization that they want to tear dow

.. In 1957, six European countries signed the Treaty of Rome, creating what would become the EU, hoping that economic and political integration would make war unthinkable.

.. Between 1987 and 2008, total U.S. wages adjusted for inflation rose by 53%, while the profits that U.S. companies earned abroad soared by 347%.

.. President Bill Clinton signed Nafta in 1993 in part to embed a pro-American government in Mexico

.. The late political scientist Samuel Huntington applied the caustic label “Davos man” to those who see “national boundaries as obstacles that thankfully are vanishing.” For globalists, this was a badge of honor, symbolizing not just an outlook but a lifestyle of first-class departure lounges, smartphones and stock options.

.. In 2000, Mr. Clinton blessed China’s entry into the WTO. Echoing Truman, he predicted China’s membership was “likely to have a profound impact on human rights and political liberty.”

It didn’t. China adhered to the letter of its WTO obligations while systematically violating their spirit with discrimination against foreign investors and products and an artificially cheap currency.

.. Economists warned that Italy, Spain and Greece couldn’t compete with Germany without the safety valve of letting national currencies periodically devalue to offset their faster-rising costs. Sure enough, their trade deficits ballooned, but low-cost euro loans at first made them easy to finance. The loans proved unsustainable, and the resulting crisis has still not run its course.

.. Chinese and German trade surpluses could wreak havoc thanks to expanding cross-border finance. To globalists, its growth was as inexorable as that of trade. In early 2008, President George W. Bush’s treasury secretary, Henry Paulson, put out a report arguing that globalization had made much of U.S. financial regulation obsolete. The priority was to maintain “American preeminence in the global capital markets.

.. Globalists were blind to the nationalist backlash in part because their world—entrepreneurial, university-educated, ethnically diverse, urban and coastal—has thrived as whiter, less-educated hinterlands have stagnated.

.. Many globalists now assume that the discontent is largely driven by stagnant wages and inequality. If people are upset about immigration, they reason, it is largely because they fear competition with low-wage workers.

In fact, much of the backlash against immigration (and globalism) is not economic but cultural

.. in the 1980s, economic issues such as taxes and welfare became less important than noneconomic issues such as immigration, terrorism, abortion and gay rights.

..  voters were bothered less by competition from immigrants than by their perceived effect on the country’s linguistic, religious and cultural norms.

.. Europeans’ opposition to immigration was driven less by pocketbook concerns than by worries about how changes to “the composition of the local population” would affect “their neighborhoods, schools and workplaces.”

.. Yet the new nationalism often thrives on xenophobia. Mr. Trump has been criticizing free trade since the 1980s, but his candidacy took off when he started attacking Mexican immigrants and Muslims. American Jewish groups heard unsettling echoes of anti-Semitic conspiracy theories when Mr. Trump accused Mrs. Clinton of meeting “in secret with international banks to plot the destruction of U.S. sovereignty.”

.. In short, there is ample reason for skepticism about whether the new nationalists can prove themselves a genuinely secular, democratic alternative to globalism.

.. That globalization’s winners can compensate its losers makes impeccable economic logic, but it rings hollow among those too old to retrain or move.

.. globalists should not equate concern for cultural norms and national borders with xenophobia. Large majorities of Americans, for example, welcome immigrants so long as they

  • adopt American values,
  • learn English,
  • bring useful skills and
  • wait their turn.

 

Nearly Half the Pentagon Budget Goes To Contractors

In fiscal year 2016, the Pentagon issued $304 billion in contract awards to corporations—nearly half of the department’s $600 billion-plus budget for that year.

the biggest beneficiaries by a country mile were

  1. Lockheed Martin ($36.2 billion),
  2. Boeing ($24.3 billion),
  3. Raytheon ($12.8 billion),
  4. General Dynamics ($12.7 billion), and
  5. Northrop Grumman ($10.7 billion).

Together, these five firms gobbled up nearly $100 billion of your tax dollars, about one-third of all the Pentagon’s contract awards in 2016.

Health care companies like

  1. Humana ($3.6 billion),
  2. UnitedHealth Group ($2.9 billion), and
  3. Health Net ($2.6 billion) cash in as well,

and they’re joined by, among others, pharmaceutical companies like

  • McKesson ($2.7 billion) and

universities deeply involved in military-industrial complex research like

  • MIT ($1 billion) and
  • Johns Hopkins ($902 million).

.. The heads of the top five Pentagon contractors—Lockheed Martin, Boeing, Raytheon, General Dynamics, and Northrop Grumman—made a cumulative $96 million last year.

These are companies that are significantly or, in the cases of Lockheed Martin and Northrop Grumman, almost entirely dependent on government dollars.

.. Donald Trump initially spent a fair amount of tweeting energy bragging about how he was going to bring such contractors to heel on their pricing practices for weapons systems. In fact, he’s already turned out to be good news indeed for major contractors, most of whom have seen sharp upturns in revenues and profits

.. Trump has proven eager to lift restrictions on U.S. weapons sales abroad (and enlist State Department and Pentagon officials to spend more of their time shilling such weaponry).

.. The arms industry’s investment in lobbying is even more impressive. The defense sector has spent a total of more than $1 billion on that productive activity since 2009, employing anywhere from 700 to 1,000 lobbyists in any given year.

.. you’re talking about significantly more than one lobbyist per member of Congress, the majority of whom zipped through Washington’s famed “revolving door”; they moved, that is, from positions in Congress or the Pentagon to posts at weapons companies from which they could proselytize their former colleagues.

.. Two analysts from U.S. war colleges have estimated that about 300 deliverable nuclear warheads would be enough to dissuade any nation from attacking the United States with a nuclear weapon.

.. And note that the current trillion-dollar “modernization” program for the nuclear arsenal was initiated under President Barack Obama, a man who won the Nobel Prize for his urge to abolish all such weaponry.

.. In 2011, a study by economists from the University of Massachusetts made this blindingly clear.  What they showed was that military spending is the worst way to create jobs. Putting the same money into any other area—from infrastructure to transportation to alternative energy to healthcare or education—creates up to twice as many jobs as military spending does.

.. Contractors aid and abet the process of investing in the Pentagon by routinely exaggerating the number of jobs their programs create.

.. the best jobs generated by Pentagon spending are the ones for well-heeled lobbyists and overpaid corporate executives.

.. So the next time someone suggests that the Pentagon needs yet more money for the troops, just remember that what they’re actually talking about are troops of overpaid defense contractors, not members of the armed forces.

Defunding Planned Parenthood Isn’t Enough

oth Congress and our country are mired in an inexhaustible debate over whether to remove Planned Parenthood’s federal funding as a result of its provision of abortion. The question we ought to debate is whether the group’s executives deserve to be prosecuted as criminals.

.. The details of their wrongdoing began to emerge exactly two years ago, when the Center for Medical Progress released its grisly undercover videos showing Planned Parenthood directors haggling with prospective buyers over line-item prices for the fetal tissue of aborted babies.

.. Dozens of abortionists and technicians admitted on camera to altering abortion procedures to obtain more-profitable organs. Such alteration, along with accepting payments for fetal organs that are greater than reimbursement for their expenses, is strictly illegal under federal law.

.. Abortion defenders argue that the videos were deceptively edited to reflect Planned Parenthood in an unfavorable light. However, CMP released the full footage of its work in addition to the shorter highlight reels

.. biotech firms such as StemExpress frequently partner with Planned Parenthood affiliates and place employees within their clinics to perform all fetal-tissue-related work: organ harvesting, packaging, and shipping. In these cases, any money Planned Parenthood accepted from the firms must have been profit, not reimbursement for expenses, because the firm was incurring all the related costs itself. Firms explicitly advertise such partnerships as a way for clinics to boost profits.

.. violating the federal Health Insurance Portability and Accountability Act (HIPAA), which guarantees the right to privacy and informed consent. Clinic leaders disclosed details about specific patients and their pregnancies to biotech employees so they could persuade certain women to donate their fetuses if those fetuses could be sold for a higher profit.

.. The national organization has also instituted abortion quotas, offering rewards to clinics that meet or exceed their abortion targets.

.. A new CMP video this spring depicted Planned Parenthood employees describing having performed illegal intact partial-birth abortions and reporting their profitable partnerships to sell fetal organs. And this week, an undercover video showed a Planned Parenthood executive in Florida describing the protocol the group uses to cover up late-term dismemberment and partial-birth abortions, allowing for more-effective fetal-tissue harvesting.

.. It has been two years since the CMP first broke this story, causing an initial uproar as the public was disgusted by what it saw. But that outrage was swiftly swept under the rug by a combination of efficient Planned Parenthood PR and the complicit mainstream media.

.. Today, Congress has yet to even remove this diabolical group’s federal funding.

.. The public disagreement is due in large part to the group’s insistence that it provides essential health care and almost never performs abortions. This is a blatant lie. Not only does Planned Parenthood perform over 328,000 abortions annually

.. Defunding this group can no longer be our endgame. As if its decades of annihilating children weren’t ghastly enough, Planned Parenthood has graduated to a new level of horror. And now we have evidence enough to ensure that its executives are prosecuted to the fullest extent of the law.