Jeff Gill | Business reporter The Times, Gainesville, Georgia
770-718-3408 | jgill@gainesvilletimes.com Wednesday, December 26, 2018
Trump: Fed is economy’s ‘only problem’
BUSINESS
President blames plunge in stock market on Federal Reserve
BY MIKE DORNING
Bloomberg News
WASHINGTON — President
Donald Trump blasted the Federal
Reserve, blaming it for the plunge
in the stock market, following
reports he has considered firing
Fed chief Jerome Powell.
“The only problem our economy
has is the Fed. They don’t have a
feel for the Market, they don’t
understand necessary Trade Wars
or Strong Dollars or even Demo
crat Shutdowns over Borders,”
Trump said in a tweet Monday.
“The Fed is like a powerful golfer
who can’t score because he has no
touch — he can’t putt!”
Treasury Secretary Steven
Mnuchin sought to reassure finan
cial markets over the weekend that
Powell’s job is safe.
Mnuchin said in a pair of tweets
Saturday evening that he’d spoken
with the president about the mat
ter, and he quoted Trump saying he
didn’t believe he had the authority
to remove the central bank chief.
Mick Mulvaney, the incoming
White House chief of staff, said
Sunday he’d spoken to Mnuchin
and that Trump “now realizes he
does not have the ability” to fire
a Fed chairman. Prolific tweeter
Trump hasn’t directly addressed
the issue himself.
Trump’s latest attack on the Fed
follows a report by Bloomberg
News on Friday that Trump had
consulted advisers many times in
the prior few days over the pos
sibility of firing Powell, a move
some of those people warned could
badly backfire.
Top U.S. financial regulators
assured Mnuchin during a hastily
organized call Monday that they
are seeing nothing out of the ordi
nary in markets despite the recent
stock slump, according to a person
familiar with the discussion.
Mnuchin spoke with officials
from the Federal Reserve, the
Securities and Exchange Com
mission, the Commodity Futures
Trading Commission, the Federal
Deposit Insurance Corp. and the
Office of the Comptroller of the
Currency. The regulators briefed
Mnuchin on their plans for moni
toring markets during the govern
ment shutdown, and the state of
markets, said the person.
Trump’s dissatisfaction with
Powell and the Fed, which he’s
expressed many times in the past
few months on Twitter and in inter
views, appears to have boiled over
after Wednesday’s interest rate hike
and one of the worst single-week
U.S. stock market losses in a decade.
Ahead of the central bank’s
two-day meeting, Trump again
attempted to jawbone the inde
pendent policymakers in a tweet
that warned against “yet another
mistake.”
Is it recyclable? Recyclers offer help
sorting through that holiday waste
LEILA NAVIDII Tribune News Service
Jerry Schneider, left, and Pervis Harris sort through holiday lights at Tech Dump in St. Paul on Tuesday, December 18.
Reducing wishcycling’ a priority in keeping questionable items from landfills
BY ERIC ROPER
Star Tribune (Minneapolis)
Recycling bins will soon overflow with
discarded packaging, wrapping paper
and other detritus of the holiday season.
But not all of it belongs there, causing
extra work this year for the people who
sort through our waste.
Batteries and holiday lights wreak
havoc at local sorting centers, while
some toy packaging and disposable cups
must take a long and expensive trip to the
landfill or incinerator. Even some gift
wrap isn’t recyclable. Getting that stuff
out of recycling bins is a higher prior
ity this year, local recycling companies
say, since China no longer wants much of
America’s recycling.
That has flooded U.S. markets with
extra plastic, paper and other recycla-
bles. That means sorting centers have
to do a better job separating recyclable
materials from everything else so they
can sell a higher-quality product.
“Our chant is, ‘We need to get back
to basics,’ “ said Julie Ketchum, a Min
nesota-based spokeswoman for Waste
Management. “It is about collecting and
processing materials that have end-mar
kets and that have value. ”
The goal is to reduce “wishcycling,”
the practice of tossing questionable items
in the blue bin in hopes they can be recy
cled, which has grown more common
with the spread of single-sort recycling.
• Holiday lights
Holiday lights cause major headaches
at sorting centers. Along with hoses and
extension cords, they wrap around cylin
drical screens at the start of the sorting
process and must be frequently removed.
“We see a lot of Christmas lights being
thrown in the recycling and those are
bad,” said Bill Keegan, president of Dem-
Con Companies in Shakopee, Minn.
The lights can still be recycled, how
ever. Check with local authorities for
drop-off locations in your area.
• Gift wrap
Wrapping paper may be recyclable if
it is just paper. Generally paper with a
foil-like shine or peppered with glitter is
destined for the trash. The same goes for
any with ribbons and bows.
“Some of it can be recycled, but the
stuff that can is still a very low-value
product,” said Keegan, with Dem-Con.
“But a lot of it cannot.”
Advice about what to do with basic
wrapping paper varies, however. Many
counties say to throw it away. Minneapo
lis says to recycle it.
“It’s very difficult to know 100 percent
whether it’s all paper or not,” said Paul
Kroening, recycling program manager
for Hennepin County, Minn.
• Plastic packaging
If you needed a knife or a pair of scissors
to break open plastic packaging, chances
are it isn’t recyclable. The rigid packages
are typically called “blister packs.”
“To be safe, if an electronic or a toy
comes in plastic, that plastic is not recy
clable,” said Kate Davenport, co-presi
dent of Eureka.
Eureka, which processes recycling for
Minneapolis and St. Paul, generally wants
to see No. 1, No. 2 and No. 5 plastics.
Packing peanuts and Styrofoam are
made from polystyrene — No. 6 plas
tic — which generally is not recyclable.
Plastic film, such as bags covering a new
computer, is recyclable if taken to retail
drop-off locations.
• Batteries
A big concern lately for sorting
centers is fires caused by lithium bat
teries improperly tossed in the recy
cling bin. Keegan said the recycling
industry nationally is losing about one
facility a month to such fires, often
from rechargeable batteries inside
electronics.
Batteries should not be recycled in
the curbside bin. Some cities, like Min
neapolis, will pick up batteries if they
are left in a bag atop the recycling cart.
• Boxes
Boxes are becoming a more common
staple of the holidays as people shop
more online. The good news is they are
very recyclable through curbside bins.
Recyclers advise removing tape and
any additional material inside and
then flattening them. Otherwise, sort
ing machines sometimes mistake small
cardboard boxes for plastic containers
— which must be separated later.
• Plates, cups
Most paper cups are not recyclable,
since they are typically lined with plas
tic. Many red plastic Solo cups made
from No. 6 plastic are also not recycla
ble in many places.
Paper plates are also generally not
recyclable, but certified compostable
plates are accepted by organics collec
tion programs.
• Trees
Thousands of trees are disposed of
after the holidays, and most of them are
either composted or burned to generate
heat and power. Some areas pick them
up, while others have drop-off locations.
Stocks pushed
to brink of a
bear market on
Christmas Eve
BY ELENA P0PINA, SARAH P0NCZEK
AND VILDANA HAJRIC
Bloomberg News
NEW YORK — Battered and bruised for
three months, a bull market whose durability
has exceeded all others lurched within a few
points of its demise on Christmas Eve, extend
ing one of the roughest stretches for equities
since the financial crisis.
By the thinnest of margins, the S&P 500 was
spared its first 20 percent decline since 2009, a
period that spans two presidential administra
tions and three Federal Reserve chairs. Inves
tors hoping for a respite from volatility before
the break got yet another powerful dose, as the
equity sell-off that has defied every hope of end
ing showed itself no respecter of holiday cheer.
At the end of Monday’s mercifully abbrevi
ated session, the benchmark gauge for Ameri
can equities sat at 2,351.10, down 19.8 percent
from its Sept. 20 close and just seven points from
the bear market threshold. Compared with its
intraday high on Sept. 21, the gauge is down 20
percent. The Dow Jones Industrial Average fell
1.6 percent to end 1.2 percent above a bear.
“Even if 20 percent is just a psychological
number, it is psychologically very important,”
Chris Zaccarelli, chief investment officer at the
Independent Advisor Alliance, said by phone.
“We’ve been trading like we’re already in a bear
market for the past few weeks. I don’t know if it
would create panic, but if we break below the
2344.5 level, that would be very unsettling.”
With every big lurch — and there have been
a lot lately; the average one-day decline in the
S&P 500 this month is 1.6 percent — markets
move closer to becoming more than just a
problem for investors, but a drag on the econ
omy itself. In testimony last week, Fed Chair
man Jerome Powell indicated he didn’t see
the slump as meaning much for the economy,
though the Dow was about 1,500 points higher
than it is now when he was speaking.
“The markets going down will eventually
create an economic problem,” said Ernesto
Ramos, head of equities at BMO Asset Manage
ment. “We’re not there yet but getting pretty
close. People who spend money as consumers,
if they have stock exposure, they’re reconsid
ering if they’re going to buy a $1,000 present
they’ll buy a $200 one. ”
Newspapers are “headlining market drops,
the worst month since 2008, or worst week since
2008,” Ramos said. “All of these headlines are
in the front. They’re not buried in some back
page. They’re seeing the market is taking a hit,
and their 401k is tied to it.”
While a dozen things have been blamed for the
plunge — slowing growth, trade tariffs, stretched
valuations, Brexit — its latest segment has come
amid increasingly frantic emanations from the
Donald Trump White House. Over the weekend,
Treasury Secretary Steven Mnuchin had to reas
sure markets that the president has no plans to
fire Powell after Bloomberg reported Trump
had discussed the step repeatedly in recent days.
Mnuchin took to Twitter again on Sunday
to say he’d spoken to heads of the biggest U.S.
banks about liquidity and lending infrastruc
ture, and reconvened a presidential working
group established to sort out the Crash of 1987.
While equities have never needed an obvious
reason to fall over three months of tumult, it’s
safe to say that neither gesture steadied the
decline.
After booming for years, controversial home improvement loan declining
BY ANDREW KH0URI
Los Angeles Times
A controversial form of financ
ing for environmentally friendly
home improvements in California
has plunged after reform legisla
tion kicked in.
So-called PACE loans grew in
recent years as a way to pay for
solar panels and energy-efficient
air conditioners. Homeowners
in the state took out more than
$1 billion worth of them in 2017.
However, critics say unscrupulous
contractors frequently signed up
borrowers with loans they neither
understood nor could afford. That
helped lead to state legislation that
sharply tightened underwriting
standards.
In the first half of 2018 — the lat
est data available — PACE lend
ing plunged by 32 percent from a
year earlier, according to the state
treasurer’s office, which tracks the
vast majority of the loans.
Lenders blame much of the
recent drop-off on a new under
writing law they say blocks too
many qualified applicants. Con
sumer groups say it’s too early to
know the exact effect. But they
don’t deny regulation is having an
effect. It was, they note, designed
to have one.
“It’s a positive development that
people don’t get trapped in financ
ing that they can’t afford,” said
Nicholas Levenhagen, an attorney
with pro-bono law firm Bet Tzedek.
“To the extent there has been a
reduction following recent legisla
tion,” he said in a later email, “it
is telling that this has occurred fol
lowing the implementation of basic
consumer protections.”
Property Assessed Clean Energy
programs, first started in 2008,
are typically established by local
governments to reduce green
house gases. Loans are financed
through private lenders such as
Renovate America, Renew Finan
cial and Ygrene that use contrac
tors to market their products and
sign up consumers. Local govern
ments, which collect fees for their
services, then secure the loans to
the home through a lien, allowing
them to be repaid as line items on
property tax bills.
If the loans go unpaid, a home-
owner can be foreclosed upon.
The unique product got off to a
slow start. But by 2015, the market
was exploding. In the second half of
2014, lenders issued $148.7 million
worth of new loans in California,
according to state data; during the
same period a year later, volume
jumped nearly fourfold, to $553.9
million, as more counties added the
program. A year later, loan volume
rose nearly 50 percent.
Helping drive growth was an
approval process built for speed.
Approval was largely based on
home equity — with income not
a factor. Contractors could get
people approved on the spot by
handing over a tablet computer
and asking for signatures. Lenders
sent the financing contracts to bor
rowers via email, making it possi
ble for borrowers to sign up within
hours and in some cases after they
spoke only with the contractor.
Some lenders even used online
systems that enabled contractors
to type in an address and know the
maximum a homeowner could be
eligible for, allowing them to target
those with lots of equity and upsell
until a homeowner had signed up for
the maximum possible borrowing.
As PACE grew, consumer groups
said, homeowners who couldn’t
afford payments inundated them
with phone calls. Many of them
were seniors who found the online
approval process confusing. A
common complaint was that con
tractors misrepresented how the
loans worked.
“I was out-talked and sweet-
talked,” said Lawrence Linthicum,
a 90-year-old Inglewood resident
who said it wasn’t until after he
took out two PACE loans that he
discovered the cost: nearly $8,300
annually.
PACE companies say the vast
majority of their customers come
away happy and foreclosures on
homes with PACE are extremely
rare. But as stories of distressed
borrowers increased, companies
took steps to add more protections,
including calling all homeowners
to confirm loan terms _ something
not all did at first.
The state Legislature also passed
a series of reforms. The most sig
nificant came in October 2017
when Gov. Jerry Brown signed
into law a requirement that lend
ers check income and other debt
obligations to ensure people could
repay their loans. Another law
barred kickbacks to contractors
and prohibited lenders from telling
contractors the amount of financ
ing homeowners were eligible for.
Lenders were also now required,
by law, to call homeowners to con
firm terms, and the state Depart
ment of Business Oversight was
given authority to regulate the
industry.
