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STORIES:
Prepping
for Obamacare, Chain Cuts Workers' Hours - (www.cnbc.com)
The owner of Olive Garden and Red Lobster
restaurants is putting more workers on part-time status in a test aimed at
limiting the impact of looming health coverage requirements. Darden Restaurants declined to give
details but said the test is only in restaurants in four markets across the
country. The test entails increasing the number of workers on part-time status,
meaning they work less than 30 hours a week. Under the new health care act,
companies will be required to provide health care to full-time employees by
2014. That would significantly boost labor costs for businesses.
Private
equity paying up for Mervyn's bankruptcy - (www.money.cnn.com). In what could be a
game-changing settlement for the private equity industry, three PE firms and
several banks agreed to pay Mervyn's department store creditors $166 million to
settle allegations that the firms took fraudulent profits and drove the retailer
into bankruptcy four years ago. The creditors, which include vendors like
clothing companies Li & Fung, Levi Strauss, and VF Corporation (VFC),
accused Sun Capital, Cerberus Capital Management and Lubert-Adler of paying
themselves rich rewards, while setting Mervyn's up for failure. After buying
out the retailer from Target in 2004 for $1.25 billion, the PE firms added
roughly $800 million in debt, while paying themselves $200 million in fees and
dividends between 2004 and 2006, according to bankruptcy court filings. More
egregious perhaps is how the firms profited from splitting Mervyn's into two
businesses: a real estate firm and a retail chain that now had to pay rent at
each of its location. That allowed the PE firms to quickly hike rents and
pocket a nice profit.
Langone
Sides With Welch: Jobs Numbers 'Don't Square' - (www.cnbc.com) Government numbers showing the unemployment
rate has fallen under 8 percent for the first time in nearly four years don't reflect
actual business conditions, venture capitalist Ken Langone said on CNBC. Joining a heated debate over the state of the U.S. jobs
picture, the Home Depot founder and Geeknet CEO
said the most recent U.S. Bureau of Labor Statistics report was
probably inaccurate. Langone defended former General Electric CEO Jack
Welch, who caused a stir Friday morning when he charged on Twitter:
"Unbelievable jobs numbers ... these Chicago guys will do anything ...
can't debate so change numbers." "I give Jack a lot of credit for
being there and standing out. It makes it easier for me because he and I share
the same point of view," Langone told CNBC’s “Squawk Box.” "But I give him a lot of credit
for saying publicly, 'Damn it, these numbers don't make sense.'"
IMF Sees ‘Alarmingly High’ Risk of Deeper Global Slump - (www.bloomberg.com) The International Monetary Fund cut its
global growth forecasts as the euro area’s debt crisis intensifies and warned
of even slower expansion unless officials in the U.S. and Europe address
threats to their economies. The world economy will grow 3.3 percent this year,
the slowest since the 2009 recession, and 3.6 percent next year, the IMF said
today, compared with July predictions of 3.5 percent in 2012 and 3.9 percent in
2013. The Washington-based lender now sees “alarmingly high” risks of a steeper
slowdown, with a one-in-six chance of growth slipping below 2 percent. “A key
issue is whether the global economy is just hitting another bout of turbulence
in what was always expected to be a slow and bumpy recovery or whether the
current slowdown has a more lasting component,” the IMF said in its World
Economic Outlook report. “The answer depends on whether European and U.S.
policy makers deal proactively with their major short-term economic
challenges.”
Merkel Urges Greece to Maintain Austerity as Way to Stay in
Euro - (www.bloomberg.com) German Chancellor Angela
Merkel used her first visit to Athens in
five years to maintain pressure on Greek Prime Minister Antonis Samaras to meet
austerity pledges, proclaiming her desire to keep the country in the euro. The
two leaders stood side by side at a press conference as protesters massed
outside the Parliament building in a capital on virtual lockdown. Merkel has
become the face of austerity in a country suffering a fifth year of recession,
which many Greeks blame on German-led conditions attached to emergency loans. “I
want Greece to remain in the euro,” Merkel told reporters today halfway through
her six-hour visit. “A lot has been done, much remains to be done.”
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