European Union leaders approved a 120 billion-euro ($149 billion) plan to promote growth in the 27-nation bloc that includes a capital boost for the European Investment Bank.
The government chiefs agreed on a 10 billion-euro capital increase for the EIB today as a centerpiece of the long-term growth plan, which includes infrastructure financing, tax-policy pledges and more focused use of EU funding. It also calls for project bonds and support of small and medium-sized businesses.
Peter Madoff will plead guilty on Friday to conspiracy and falsifying records in connection with his older brother’s infamous Ponzi scheme, according to a court filing from Manhattan U.S. Attorney Preet Bharara.
Peter, the former chief compliance officer at Bernard L. Madoff Investment Securities LLC, "agrees not to seek a sentence other than 10 years’ imprisonment," Bharara said in a letter to Judge Laura Taylor Swain.
Peter Madoff, 66, has also agreed to forfeit all his assets and personal property, Bharara said.
Among other things, he is accused of lying to clients, falsifying investment records and obstructing the IRS. His lawyer didn’t immediately respond to a request for comment.
Ponzi schemer Allen Stanford gets 110 years
Bernard Madoff, now 74, received a 150-year sentence in 2009 for orchestrating the largest Ponzi scheme in U.S. history. He is believed to have stolen about $20 billion from thousands of investors to finance an opulent lifestyle in New York City, Palm Beach, Fla payday loans no teletrack., and France.
Peter, along with other Madoff family members, has been sued by Irving Picard, the trustee representing victims of the fraud. Picard alleges that Madoff’s firm "operated as if it were the family piggy bank."
A spokeswoman for Picard declined to comment on Peter Madoff’s anticipated guilty plea.
The Ponzi scheme was exposed in December 2008 when Bernard Madoff confessed to his sons, Andrew and Mark, who turned him in. Mark committed suicide in December 2010.
Earlier this week, hedge fund manager J. Ezra Merkin, who lost more than $1 billion of his investors’ money to Madoff’s firm, agreed to pay his clients more than $400 million in compensation.
European Central Bank President Mario Draghi is contemplating taking interest rates into a twilight zone shunned by the Federal Reserve.
While cutting ECB rates may boost confidence, stimulate lending and foster growth, it could also involve reducing the bank
Chancellor Angela Merkel
Starbucks will continue to grow beyond its coffee roots, announcing plans to open a tea-only store under the Tazo brand.
At the 1,700-square-foot store, set to open near the company’s headquarters in Seattle’s University Village in the fall, tea enthusiasts will be able to choose from over 80 varieties of loose-leaf tea priced by the ounce, something that regular Starbucks (, Fortune 500) locations don’t offer.
The shop’s tea bar will sell the standard iced teas and lattes that customers are accustomed to, but the hallmark of the new location will be its blending station. Employees, dubbed partners, will be on hand to help create personalized tea blends for customers to take home in pouches or brew in store.
"It’s very much about personalization and interaction and immersing yourself in all-things tea," said Holly Hart, a spokeswoman for Starbucks. "It’s not going to be the typical grab-and-go experience."
Hart said this interactivity should be a big enough draw that customers will seek out the specialty shop instead of heading to one of Starbucks’ other 17,000 locations worldwide.
"If you think about going to wine tastings where you’re standing up, sipping and talking about the flavor profile, that’s what this store will look like," she said. "You’re not going to walk in, get your tea and leave. It’s about the interaction, talking about the flavor and the blend of the tea."
The new store comes on the heels of several other deals aimed at expanding the brand beyond coffee. Earlier this month, Starbucks announced plans to buy Bay Bread for $100 million, and in November, it bought the Evolution Fresh juice brand for $30 million.
The company has also teamed up with Green Mountain Coffee Roasters () to market Starbucks-branded K-Cups and will begin selling the Verismo, its own single-serve machine, later this year.
Starbucks cools off
Tazo has been a successful expansion brand for the company because it’s multi-channel, Hart said, meaning that it’s sold in grocery stores, at Starbucks locations and soon in its own branded shop.
"We see this brand living on its own. It’s a brand that can live beyond the green dot," she said.
Starbucks purchased Tazo for $8.1 million in 1999, and Hart says it’s now a $1.4 billion brand.
The company has no plans to open other tea-centric locations, but it will continue to focus on growing the Tazo brand.
"The Tazo tea platform is uniquely set up for success and we’re putting emphasis on how to elevate it," Hart said. "The retail platform is the first place you’ll see that."
Starbucks shares closed down 2.7% to end at $54.12 on Thursday.
China, now the world’s largest buyer of Iranian oil, is also the only nation still threatened with U.S. sanctions because of its purchases of Iranian crude.
If the United States doesn’t grant China a waiver, any Chinese entity that still buys oil from Iran could be banned from doing business in the United States.
But analysts say the Obama administration will likely grant the country a waiver rather than risk a trade war.
"We’re unlikely to sanction China," said Robert McNally, head of the Rapidan Group, an energy consultancy. "We’re not going to pick a trade war."
The United States and China have arguably the world’s most important economic relationship. The United States imports vast amounts of cheap consumer good from China, and China relies on the U.S. market to sell those exports. A trade war would put that at risk.
Little headway in Iranian nuclear talks
Currently China’s energy demands continue to increase along with its oil imports. But it’s Iranian oil purchases are declining.
China currently imports about 400,000 barrels of oil a day from Iran, according to the Rhodium Group, which charts Iran’s oil exports.
That’s down from about 650,000 barrels a day just a few months ago. It’s thought that the drop is due to a disagreement over prices between the two countries — not any desire to comply with U.S. sanctions.
The Chinese have publicly called the U.S. sanctions illegal — as they lack United Nations backing — and have declared they have no intention of complying with them.
So far, 18 countries have sufficiently reduced their imports of oil from Iran to be exempted from U.S. sanctions, set to kick in June 28.
The U.S. sanctions would prohibit any bank, government, corporation or other entity that buys or helps finance a transaction involving Iranian crude oil from doing businesses in the United States.
Oil sanctions on Iran loom despite talks
What’s really going on behind closed doors between the U.S. and China is a bit of a mystery.
Some say the Chinese are publicly defying the sanctions as a matter of principle, but will eventually reduce their imports to a level that puts them in compliance with U.S. demands.
Others say the United States has been planning on exempting the Chinese all along — based on the big reductions the Chinese have made so far — but didn’t want to issue the exemption until after the latest round of talks with Iran, currently under way in Moscow.
"If they are helpful on the [Moscow talks], I don’t see why they won’t get a waiver," said Frank Verrastro, director of the Energy and National Security program at the Center for Strategic and International Studies.
But not everyone is convinced that China can avoid being sanctioned. Trevor Houser, an analyst at the Rhodium Group, said China sanctions are within the realm of possibility.
Houser said if China were to flout U.S. demands and not reduce their imports from Iran, they would finance the purchases through a small bank that didn’t do much business with the Untied States to begin with — thereby limiting any impact sanctions might have.
Worldwide, Iran’s oil exports have gone from about 2.2 million barrels a day to about 1.7 million barrels a day, as U.S. and EU-imposed sanctions over Tehran’s nuclear program begin to bite. It’s thought the sanctions might ultimately take a million barrels a day of Iran’s oil off world markets by the end of the summer.
Western nations fear Iran’s nuclear program is intended to produce a bomb. They have implemented the sanctions as a way to force Iran to curtail its uranium enrichment program.
Iran says its nuclear program is only intended to produce electricity.
Millions of young adults have turned to their parents’ health insurance plans since the Affordable Care Act went into effect. For Liz Wilson, and many others her age, it was the only option.
Wilson, 25, gets health care for a chronic stomach and pancreas problems through a provision in the law that lets young adults stay on their parents’ insurance plans until age 26.
After graduating from college in 2010, she took a temp job in Cincinnati that doesn’t offer benefits. A key piece of the Affordable Care Act went into place the following September, allowing her to get coverage for her mounting medical bills under her parents’ plan.
"I have to keep a close eye on things, which requires a lot of doctors’ visits and maintenance medicines," Wilson said. "Without health reform, I’d really have to ask myself what I’d do."
That’s a question Wilson may have to answer, since the Affordable Care Act is currently under review by the U.S. Supreme Court and could be struck down. (Read: Justice suggests ’sharp disagreement’ over tough cases)
The legal dispute is centered around the individual mandate provision, which requires most Americans to buy health insurance or face financial penalty. While the mandate is separate from the provision that protects young adults, the court could strike down the entire legislation.
Without health reform, 20-somethings out of luck
This could leave millions of young adults uninsured. About 2.5 million 19-to-26-year-olds obtained health coverage as a result of the provision, the U.S. Department of Health and Human Services estimated in December. Most have had a hard time getting employer-sponsored coverage in a down economy.
As a new business owner, Meredith Fineman, 25, would have to buy her own plan if the law gets struck down. She started her own public relations firm in Washington, D.C., in October, and stayed on her mom’s plan has allowed her to invest her savings into her new venture.
"It would be a huge expense for me as a small business owner, in my first year of business," Fineman said. "It’s the final piece of my financial independence puzzle, but it’s a big one. I’m lucky that I’ve been able to have it thus far because I know how much money it will be."
Fineman may be in luck even if the Supreme Court overturns the law.
"Given the popularity of the provision and the relatively low risk and low expenditures associated with it, I believe that many health plans, even if the law is overturned, will continue to allow dependents to stay on the parents’ plan," said Dr. Mark Fendrick, director of the University of Michigan Center for Value-Based Insurance Design.
Some of the nation’s largest insurers, including UnitedHealth (, Fortune 500) and Humana (, Fortune 500), have already promised to continue to cover young adults regardless of what the Supreme Court decides.
For insurance companies, it’s good business. Insuring young adults brings in a new demographic, said Rachel Garfield, associate director of Kaiser Commission on Medicaid and the Uninsured, since most in the age group would forgo coverage altogether if it weren’t for the law.
If the provision is struck down, "It’s likely [young adults] will go back to them being uninsured," she said, "because buying insurance on their own can be expensive."
The nationwide average premium for individuals in 2010 was $215 per month, the Kaiser Family Foundation reported.
Young adults skip health care as medical debts rise
That’s too much for many 20-somethings. Maya Orchin, a 24-year-old professional dancer living in New York City, says the cost of buying insurance isn’t worth it for her if the court rules that she can’t stay on her parents’ plan.
"It would be really scary, especially because I depend on my body for my job," she said. "But … I’m relatively healthy and thankfully don’t have any injuries that I need to get checked for, so it’s not where I’d put my money."
The choice to go without insurance would be a bigger burden for young adults who do need regular medical attention. For Liz Wilson, going without insurance would mean racking up tens of thousands of dollars in bills. Her family hit its annual out of pocket maximum of $9,000 by mid-February of this year, she said.
"I couldn’t pay for those bills, but I’d need a very high-risk plan, which would be more expensive than I can afford," she said. "That’s why I’m not going back to graduate school, because I need to find a full time job with benefits."
Medical bills are holding many young adults back, forcing them to choose between investing in their health and investing in their future.
A Commonwealth Fund survey found that 31% of young adults with medical debt said they delayed education or career plans because of their bills.
"That’s why I’m relying on the provision," Wilson said. "That’s why I really hope it doesn’t get overturned."
MADRID
Low-wage, unskilled labor was once its competitive edge, but now China is quickly rising as the world’s largest supplier of college-educated workers.
By 2030, China alone will account for 30% of the world’s new college-educated workers, predicts a study by the McKinsey Global Institute.
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10 largest economies
In comparison, the United States will account for only 5%, and collectively, advanced countries including the U.S., Japan and much of Europe will account for only 14% of new highly educated workers.
"Investments in education that China made much earlier are now paying off," said Anu Madgavkar, a senior fellow for the McKinsey Global Institute. "China invested in opening a lot of schools and they ramped up college enrollment."
China is also churning out far more science, technology, engineering and mathematics grads, giving it a leg up in some of the world’s fastest growing sectors.
In 2008, only 14% of U.S. grads earned degrees in those specialties, whereas 42% of China’s college grads did so.
Overall, the results of the study point to a global need for more college grads. It predicts employers around the world will be faced with a shortage of 38 million college-educated workers and a surplus of 90 million unskilled workers in 2030.
"An unprecedented level of response is required to raise education rates and then on the other hand, we also need a concerted effort to create more jobs for low-skilled workers," Madgavkar said.
In advanced countries, the imbalance is worrisome because it could lead to more income inequality and long-term joblessness, the report said.
"The polarization of incomes between high and low-skill workers could become even more pronounced, slowing the advance in national living standards, and increasing public-sector burdens and social tensions," it said.
And in developing countries, the shortage of high-skilled workers could stunt innovation and growth.
Madgavkar’s calculations predict that Chinese employers will need 140 million college-educated workers in 2020, about 23 million more than the country will be able to supply.
With roughly 1.4 billion people, China is the world’s most populous nation and the second largest economy. Its workforce of 475 million people accounts for roughly two thirds of the entire global labor force.
Pacific Investment Management Co.
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