Monthly Archives: March 2017

Toshiba’s Nuclear Arm, Westinghouse, Filing Bankruptcy

Computer-controlled Westinghouse sign atop the Wesco Building in Pittsburgh, Pennsylvania. The sign was demolished in 1998. Photo by Richard Huppertz

Due to huge cost overruns in two projects in Georgia and South Carolina, Westinghouse, the US nuclear division of Toshiba, has filed for bankruptcy protection. The losses have negatively affected the Japanese parent company, Toshiba putting the future of the conglomerate at risk.

Toshiba announced that the bankruptcy will not harm Westinghouse, UK, which has over 1,000 employees on its payroll.

The financial loss of its US nuclear business could impact Toshiba itself in a catastrophic way, with the years losses surpassing even $1 trillion yen ($9 billion), which is close to three times the previous estimate.

The Japanese government has been informed by Toshiba about its move to declare Westinghouse bankrupt.

In December 2016 Toshiba informed its investors that there were large losses connected with a deal made by Westinghouse. Assets that the company took on are expected to be worth less than initially thought, plus there is a dispute about payments that are due. As a result, Toshiba at first hoped to simply sell its majority stake in Westinghouse. Toshiba also received permission to delay reporting earnings twice, and now is expected to declare earnings on April 11. The company’s nuclear arm is the source of about 33 percent of the company’s revenue.

Saffron Coming to the USA?

Saffron threads. Photo by Hubertl.

Researchers at the University of Vermont have been working to encourage the cultivation of the world’s most expensive spice, saffron. The exotic spice comes from a fall-flowering crocus, which is now grown mostly in Iran. U of V scientists have already been raising the flower and extracting the valuable spice, and now would like to see others get involved.

Interest is growing as potential cultivators discover that the spice is harvested in late fall, when most other crops have already died. It is also tolerant of extreme climates and the short growing season of the Northeast. It is also lucrative, selling for $19 per gram.

One woman who attended a U of V sold-out workshop, asked if “this is the red gold we’ve been looking for?” Potential growers of saffron attended the workshop from New England, Indiana, and even California.

U of V researchers said that yields can deliver about $4.03 a square foot, comparing favorably with tomatoes at $3.51 a square foot and $1.81 a square foot for winter leafy greens. Saffron grown in high tunnels, a greenhouse-like structure without heat, on an acre of land could bring in as much as $100,000 each season.

The crocus produces stigmas in the plants purple flowers, which are removed and dried into small red threads. The spice can be added to a large variety of foods like paella, bouillabaisse, and rice. It is also valued as a natural dye, used as a medicine, and even put in the warm baths of Cleopatra.

Recent Nominations to the Trump Administration

In recent news, there have been a number of nominations for positions in the President Trump government that were just announced.

Elaine McCusker has been nominated as Principal Deputy Under Secretary of Defense, comptroller. She is the Director of Resources and Analysis at U.S. Central Command. Before this, she was a staff member on the Armed Services Committee, the Department of Navy Headquarters and the Office of the Under Secretary of Defense (Comptroller).

Another nominee, James Donovan, has been with Goldman Sachs since 1993 and has now been nominated to be Deputy Treasury Secretary. In this position, he will be the assistant to Steven Mnuchin and will work to carry out the administration’s economic policies. Jim Donovan became a partner at Goldman Sachs in 2000 and he is also an adjunct professor at the University of Virginia School of Law.

Another nominee is David Norquist for Under Secretary of Defense, Comptroller. He is currently a partner at Kearney and Company and he has been a staffer on the House Appropriations Defense Subcommittee and Chief Financial Officer for the Department of Homeland Security. Norquist previously had this job from 2006 to 2008.

New Travel Ban Expected to Curtail Flow of Refugees Once Again

Since President Trump issued his first executive order banning refugees from certain countries from entering the United States, there has continued to be a flow of people into the country, since the ban was cancelled a federal judge.

Nearly 2,500 refugees have entered the United States from banned countries since the day of the executive order. During Trump’s first seven weeks in office almost 8,000 refugees entered the US. The division among different religions of those refugees was 3,410 Muslims, 3,292 Christians, 821 other and 71 unaffiliated.

The executive order attempted to prevent refugees from entering from seven specific countries: Iran, Libya, Somalia, Sudan, Syria, and Yemen, but 2,466 people from these very countries did enter the US.

On inauguration day this year refugees were entering on a regular basis. During Trump’s first week in office 687 refugees entered the US. The following week, after the ban was announced, there was virtually no refugees entering the US. When the federal courts suspended the ban, refugees began to enter the US once again.

During the Obama administration 84,995 refugees entered the US in 2016, an eight-year high. Donald Trump’s new ban goes into effect on March 16. We can expect a similar curtailment of refugees entering the US as a result of the new ban for at least 120 days, unless this ban is also defeated in the courts.

Data Points to Strengthening Economy

The Commerce Department reported factory goods orders up by 1.2 percent in January. That increase followed a similar increase of 1.3 percent in December. The two data points signal that the recovery in the manufacturing sector is accelerating due to the rise in prices for commodities fuel a greater demand for machinery.

Factory orders are up by 5.5 percent compared to a year ago, while total shipments of manufactured items rose by 0.2 percent after a strong showing of 2.5 percent in December.

Manufacturing is an important factor when assessing overall economic strength in the US, as it accounts for about 12 percent of the overall economy. The data suggests that the economy is recovering from the pounding it took due to rock-bottom oil prices, a strong dollar, and an inventory lag.

The early stages of this recovery were highlighted by a poll conducted last week which showed that the country’s factory activity climbed to a 2.5 year high in February. In addition, there are hopes that promises made by the Trump administration for tax reform, including corporate tax cuts, could add to the economic upturn. Confidence is up although the prospect of future tax cuts has not yet translated into a stronger investment in capital goods.