Flint Water System Repair Receives Grant Of $100 Million

Michigan received serious backlash when the Flint water system became contaminated due to lead and several other toxins. The contamination happened as the city switched its water sources to cut down the cost. The effort was taken by Barack Obama in the May of 2016 when he wanted Congress to grant emergency funds for the city. The Flint water system had an estimated repair cost of $100 million. In December, the water infrastructure legislation was passed by the Congress, and it cleared the road for the grant.

The lead contamination has affected the water supply in deeper ways. The residents of Flint have been trying hard to get the water system to function properly. The mishap happened when the water supply was changed to Flint River from Lake Huron in 2015. The authorities applied wrong standards for purification of drinking water which ended up corroding the pipes. It is the responsibility of the EPA to ensure that the crisis is addressed properly by the local and state agencies. The citizens, distraught by the incompetence of the EPA sued the agency for $722 million.

With the new grant, Flint will work on replacing lead service lines and repairing several infrastructure components to eliminate and prevent water contamination in the future. The Environmental Protection Agency (EPA) has now provided grants for the water system repair. Scott Pruitt, the administrator of EPA, welcomed this decision as he emphasized that improving water structure all throughout America is important. To match the funds provided by EPA, the Michigan state has also contributed $20 million, making the total to $120 million.

Rick Snyder, the governor of Michigan, welcomed the fund allotment. The federal government has already allocated $250 million, and the additional funds will keep the project afloat. Karen Weaver, Mayor of Flint also expressed gratitude for the efforts taken by the government to help the city during its needy times.

The federal aid will be provided to the state regarding Drinking Water revolving fund. $51.5 million will be released in the first phase, and Flint will use it for replacing lead service lines. The funding will also be used to study corrosion control and implement main distribution improvements. The remaining $68.5 million of the $120 million will be held back by the EPA until the state performs needed technical reviews and obtain comments. About $10 million will be used to replace water meters and upgrade water treatment plan. The citizens of Flint will finally be able to repair the water system infrastructure.

This announcement was made just a day after the Trump administration released its budget proposal cutting the EPA funds by 31%. The new budget proposal will stop the funding for Great Lakes cleanup which is one of the important efforts of environmentalists. Experts worry that it will affect some states because the pollution sites like the St. Louis River has contaminated sediments from the early 1900s. Essentially, the increased cleanup cost will increase the water treatment costs, and the public has to face the brunt.

Wall Street Tumbles Due to Lack of Progress with Trump’s Policies

Wall Street took a nosedive on Tuesday due to concerns that President Donald Trump will be unable to achieve his campaign promise of tax cuts. The DJIA lost 1.14% to fall at 20,668.01 points while the S&P index lost 1.24% to fall to 2344.02.

The stock market went to record highs after his victory because of his planned expansionary economic policies. The S&P 500 surged by 10% ever since Trump became president because of expectations of tax cuts under the Trump administration. According to Thomson Reuters, the last time S&P fell by more than 1% in one session was October 11 which was 110 trading sessions ago.

The last time the S&P 500 lost 1 percent or more in a day was 110 trading sessions ago on Oct. 11. In contrast, over the past two years, the S&P 500 has suffered losses of 1 percent or more about once every 11 sessions, according to Thomson Reuters data.

Both the Dow Jones and S&P 500 lost more than 1% which is their worst performance since Donald Trump got elected last November. The Russell 2000 index of small cap stocks dropped by 2.71%. Also, Wall’s Street fear meter, the CBOE Volatility Index, went up by 10%.

There is also an upcoming vote on healthcare that got investors jittery as there is significant opposition to it. RJ Grant, head trader at Keefe, Bruyette & Woods said, “The market is starting to get a little fed up with the lack of progress in healthcare because everything else is being put on the back burner.”

With such difficulty with the healthcare act, Trump is likely to face challenges in pushing for his expansionary tax reforms. Goldman Sachs in one of its note to clients said, “We expect the health care bill to pass the House this week, but we believe Senate passage next week will be much more difficult, and that a bill will not reach the President’s desk before May, delaying the start of the tax reform process somewhat.”

SPSY, S&P’s financial index, dropped by 2.87% which was mainly due to the less hawkish stance of the Fed. The Fed only raised interest rates by 25 basis points last week. It has also indicated the pace of the hikes will be gradual. As such, banks which benefit from higher interest rates went crashing. Bank of America dropped 5.77% while Goldman Sachs dragged the Dow by going down by 3.72%.

Mark Kepner, managing director at Themis Trading said, “There was a feeling the Fed was going to possibly be more hawkish last week. That didn’t happen. That takes a little out of the higher rates that the banks want. The Banking sector has surged 18% ever since Trump’s election as he promised to lessen bank regulations and provide tax cuts.

Investors are also concerned with the valuations of Wall Street. According to Thomson Reuters, the S&P index is trading 18x its forward earnings estimates. The average long-term average of the S&P index is 15.

Verizon Is Gearing Up For Merger With Charter

Verizon, the TV provider and broadband giant is reportedly in talks with Charter Communications for a merger. Charter Communications has already acquired Time Warner Cable about a year ago. Charter is the second largest cable company in the country and according to Wall Street Journal, Verizon is exploring the possible combination. Both Charter and Verizon are extremely popular and their merger can result in a huge company. The amalgamation could result in a corporation that controls all kinds of communications such as home broadband, mobile data and voice, and cable TV. Many analysts expressed their concern on this ‘mad scramble’.

Currently, Verizon has 4.6 million TV subscribers, 114 million mobile phone subscribers and 7 million broadband internet subscribers. Charter, on the other hand, controls 21 million internet subscribers and 17 million TV subscribers. When these two companies come together, their overall subscribers will be much greater than the 21.6 million customers of Comcast. However, there is no formal announcement about the impending collaboration from either Charter or Verizon.

Verizon is facing extreme competition from AT&T and T-Mobile as they dominate the communications industry. Verizon has already expanded its presence by purchasing Yahoo and AOL which are both predominantly popular for internet content. Charter is also facing pressure as more consumers want to use online services instead of paying hefty cable bills every month.

Analysts predict that Verizon has to fight hard to keep its hold in the wireless communication industry. It is natural for the company to look for a bigger deal that would help the company to spread its roots. Experts predict that Verizon will be having talks with other giants apart from Charter.

Huge mergers are not uncommon as AT&T proposed a merger with Time Warner and Comcast has acquired NBCUniversal in 2009. President Donald Trump commented that he is skeptical about these huge mergers involving corporate giants. However, the industry hopes that the president won’t be taking measures to block the deal. While Trump’s campaign statements were filled with numerous claims, many experts anonymously suggested that he won’t be following up with most of those promises.

The upcoming Verizon-Charter deal would be overseen by Ajit Pai, chairman of Federal Communications Commission. He is well known as a supporter of promoting deals and so, he won’t be delaying the giant merger. Even though the opinion of Jeff Sessions, the would-be attorney general is not known, experts predict that he won’t be against the collaboration either. The regulatory laws will be relaxed according to Donald Trump and this will favor the enterprises. The merger announcements are expected to pour in the upcoming months as the rules are relaxed.

The industry is buzzing with activity now as the analysts predict that several deals will be allowed in a short window. As a result, companies willing to expand their business will be holding talks with enterprises resulting in the formation of new corporate giants. Gene Kimmelman, president of Public Knowledge expresses his concerns that the communication giants will take extreme control of internet transmissions.

No Change In GM’s Plan To Continue With Mexian Production

The President-elect Donald Trump has clearly shown his bitterness towards the Mexican trade agreement. Recently, he tweeted about this and it has resulted in Ford pulling back from Mexico. Donald Trump had also called out General Motors in his tweet warning that the company has to face a big border tax for importing Mexican produced cars to the USA. Currently, the General Motors imports Chevrolet Cruze Hatchback, produced in Mexico to the USA.

Mary Barra talked to the reporters after revealing the 2018 GMC Terrian. She said that the company has some plans for the vehicle for quite some time. Barra commented that the GM is a huge business with numerous capital intensive investments. The decisions about these investments were taken a few years ago. In the Cruze Sedan market, the Cruze Sedan made for the USA market is built in the USA. The Cruze Sedans are manufactured in the Lordstown Assembly plant in Ohio. The newer hatchback versions of this Cruze Sedan are made in Mexico. About 4,500 Cruze Sedans were sold in the previous year.

It was rumored that Barry spoke with Donald Trump after his tweet on Tuesday. Trump had expressed his unhappiness about the General Motors sending its Mexican made cars to US dealers using the tax-free option. During his presidential campaign, Trump boldly said that he has plans to impose a 35% tax vehicles that are made in Mexico and imported. He criticized Toyota Motor Corp in the past week when the auto company planned the building of Corollas in the Mexico for the USA market. Trump also appreciated the decision of Ford to pull back from its automobile manufacturing plant scheduled for construction in Mexico.

Barra commented that there is a lot going on in the market and it is now too early to discuss tariffs and the effect on GM. She added that she believes that the company has many policies aligned with the Trump administration. She was not interested in talking about a possible discussion with Trump. Barra said that the staff of GM are always in continuous talks with the government administration considering the magnitude of the organization and the number of jobs it produces.

Barra concluded saying that the new terrain SUV of GM will be manufactured and built in Mexico according to the plan. Currently, it is being manufactured in Canada and the decision had been taken long back. It is also expected that Barra will be a part of the group advising Trump on his economic policies. The group is scheduled to meet in February after Donald Trump assumes office in the White House.

Mexico’s economy is heavily reliant on the automobile sector and several top brands had planned to invest in the country. Due to the aggressive political nature of Donald Trump, automobile sector may be affected heavily when Trump implements his border tax policy. The entire world is waiting to watch the economic changes that will be catapulted by Trump’s administrative policies.

Belleville City Councillor Wants to Clamp Down on Payday Loan Stores

You can name Belleville as the next Ontario municipality that wants to rein in the payday loan industry.

During the municipality’s planning advisory meeting, City Councillor Paul Carr made it clear that he wants to crack down on payday loan businesses in Belleville. Carr asked city officials on Monday if there were any tools at the city’s disposal that could help restrict or limit the reach of payday loans.

Speaking during the meeting, Carr noted that he is unaware if there are any zoning bylaws or rules within the planning act that can prevent the “proliferation” of payday loan businesses in Belleville.

“I don’t know if they’re are any tools available but I would like to at least have a staff report to see what’s out there,” said Carr. “I think it’s something we need to be aware of. Obviously we can’t eliminate them, but I think we need to do our part.”

Carr alluded to one important target area for lenders to open up payday loan stores: North Front Street.

He pointed to North Front Street as a key target area for payday locations.

“If you go down North Front Street, there are three within, probably, a 10-block radius of each other,” he said. “To me that seems a bit excessive and predatory in nature. I’m exploring if we can restrict them at our level.”

Rod Bovay, the city’s director of engineering, conceded that there isn’t a whole lot that city hall can do, even if you comb over the rule books. The reason why, Bovay averred, is that payday loan businesses are similar to any other kind of commercial enterprise. Ultimately, according to Bovay, it’s up to Ontario. We may not like the service they provide or that they offer personal loans for bad credit but it’s their right to do so.

Nevertheless, Bovay confirmed that city staff will take a look at planning legislation to determine if there is any way that Belleville can regulate payday loan enterprises and the number of locations they can open in the city. The city staff will report back to the committee in the next couple of months.

This comes one month after a Thunder Bay official proposed regulating the payday loan industry.

Shelby Ch’ng, Northwood city councillor, announced that she plans to submit a resolution that would require payday loan businesses to apply signage that highlights the equivalent annual interest rate for the fees they charge borrowers for the loans.

Ch’ng argues that the paucity of financial literacy is the primary reason why many of her constituents get into pecuniary trouble. She likened it to the concerns she regularly hears about property tax hikes.

Moreover, the Thunder Bay official also wants to restrict or limit where payday loan businesses can open stores. She says that she doesn’t want payday loan stores located in places where the most vulnerable people visit, such as neighborhoods that have casinos, homeless shelters and schools.

Ostensibly, this is part of a province-wide crackdown of the short-term, high-interest loan niche.

Gawker Agrees $31 Million Settlement with Hulk Hogan

Gawker has reached an agreement to pay Hulk Hogan $31 million in settlement of the lawsuit brought against it in connection with the release of a sex tape showing the former professional wrestler.

Court documents showed Wednesday that Gawker has agreed to pay the said amount to end a legal battle that has dragged on for years and also made it to file for bankruptcy.

Hogan, who is formally known as Terry G. Bollea, will also be getting a part of Gawker’s media proceeds, including a portion of the $135 million received when the company sold itself to Univision in August. These proceeds will be shared between his case and another two defamation lawsuits brought against the controversial website.

The wrestler had filed the lawsuit on allegation of privacy invasion after Gawker released a video showing him having sex with the wife of a friend. He got a $140 million judgment in June, forcing the company to fill for bankruptcy.

Following the acquisition by Univision, other contentious pieces of published content that were subjects of litigation were all removed. Gawker.com was shut down, while founder and erstwhile chief executive Nick Denton left.

The Hogan case and the other two defamation suits were later found out to have been sponsored by billionaire investor Peter Thiel, who several years before had been identified as gay by the site.

“After four years of litigation funded by a billionaire with a grudge going back even further, a settlement has been reached,” Denton said in a blog post announcing the Hogan settlement on Wednesday.

He said a possible lasting legacy from the entire litigation experience “should be a new awareness of the danger of dark money in litigation finance.” On Thiel, the Gawker founder said “he is now for a wider group of people to contemplate.”

Denton, who expressed belief that the multimillion-dollar settlement would be cut by an appeals court, noted that it would have been impossible to embark on a prolonged legal battle with the tech entrepreneur, partly because of cost implication.

On his part, Thiel previously explained to CNBC that his backing of lawsuits against Gawker were was not so much about revenge, but more as deterrence.

“I saw Gawker pioneer a unique and incredibly damaging way of getting attention by bullying people even when there was no connection with the public interest,” he said.

The PayPal co-founder released a statement Wednesday saying it was “a great day” for Hogan and people’s right to privacy.

Hogan’s lawyers added Denton and former Gawker.com editor in chief Albert J. Daulerio, the author of the sex tape story, as defendants in the suit. This led the former to file for personal bankruptcy in August.

One of the two other lawsuits also settled by Gawker was filed by Shiva Ayyadurai in connection to an article published in 2012 regarding a claim that email was invented by him, according to the New York Times. The other originated from journalist Ashley Terrill over an article in 2015 that discussed her attempts to uncover information on an ex-Tinder executive.

Court documents showed Ayyadurai will get $750,000, while Terrill will be given $500,000 in settlement.