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Tel Aviv: The tempestuous fortunes of the world’s largest generic drugmaker, Teva Pharmaceutical Industries Ltd., nosedived further as Erez Vigodman announced his decision to step down as the chief executive officer of the company. The company said that it will “conduct a thorough review of the business”.

The resignation of the company’s top executive comes barely two months after the resignation of Sigurdur Olafsson, the former head of its generic drugs division. Olafsson and Vigodman had engineered Teva’s $40.5-billion acquisition of Actavis Generics in July last year. The investors said that the price was too high. However, that wasn’t the only bad news for Israel’s largest company.

The Israeli behemoth has had to scale down its profit forecast twice since the Actavis deal, sending its stock values on a tailspin to touch a 12-year low. The matters haven’t been helped by the lost court cases meant to prevent Teva’s competitors from selling a cheaper version of the company’s flagship product Copaxone. The multiple sclerosis injection accounted for a fifth of the company’s sales last year.

The fiasco sent Teva’s shares to a 10-year low of $32.20 on the New York Stock Exchange last week. That, along with the fact that Teva’s debt level is now hovering over its market value, sums up the challenge faced by the interim CEO Yitzhak Peterburg, who is Teva’s current chairman, of bringing about a change in the company’s fortunes. Former Celgene Corp CEO Sol Barer will be appointed as the company’s new chairman.

Vigodman’s resignation, which sent the shares down by 2 percent in extended trading, will come into effect immediately, with the board of directors all set to embark on their search for a full-time CEO.

Erez Vigodman had joined Teva in 2014 after turning the tables at an ailing Israeli agrochemical firm. His reputation of a turnaround specialist and dealmaker, however, was hit hard by a series of deals that left Teva in a fix, which eventually led to the investors clamoring for a shakeup.

Prior to the embarrassment of the Actavis deal, Vigodman had also anchored the company’s negotiations with Mexican drugmaker Rimsa, which saw both the sides dragging each other to the court.

The company also paid $144 million to get a migraine patch called Zecuity, which it had to pull out of the market last year after it was reported that some patients had been scarred or burned.

The matters were aggravated when the company admitted before US authorities that it paid bribes in some countries to gain business for its medicines, for which it was slapped with a $519 million fine.

All in all, the company’s shares fell by 11% during Vigodman’s three-year reign.

“It’s certainly not good news at this point in time,” said Elizabeth Krutoholow, an analyst at Bloomberg Intelligence. “It doesn’t send a good signal about the future of the company, though a new CEO may be just what the company needs to turn things around. Vigodman hasn’t been the best dealmaker.”

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Alphabet Inc., the parent company of Google, reported total revenue of $26.1 billion which was a 22% year on year (YoY) increase and 3% more than the consensus projected estimate of $25.2 billion. The increase in revenue is attributed to mobile and YouTube performances.

Mobile search is Alphabet’s biggest growth driver and this quarter makes it the sixth consecutive quarter when this segment of the business has taken the lead for the company’s growth.

The revenue of Alphabet has two main segments: Google and Other Bets. The revenue of Google Inc. was $25.8 billion, a YoY increase of 22%. This revenue comes from Android, Maps, Chrome, Google Play, YouTube, Google Cloud, the company’s range of hardware products, and advertising.

Other Bets’ revenue comes from Fiber, Nest, and Verily and for Q4 2016, the revenue totaled to $262 million, a 75% increase over last year’s $150 million.

The primary drivers of growth for Alphabet were YouTube and mobile search. Ruth Porat, the CFO of Alphabet Inc., said that the revenue from YouTube is growing significantly driven primarily by video advertising. The company’s revenue from tablet and desktop advertising is also witnessing significant growth.

Robust performances at AdMob and programmatic also contributed to the revenue increase at the company’s 3rd party network sites. Revenues from other businesses of Google such as the hardware business, Google Play, and Google Cloud also witnessed growth.

The YoY growth rate for the fourth quarter of 2016 saw a huge jump of 62% as against the third quarter’s YoY growth rate of 39%. Google attributed this big increase to robust growth across the various businesses. Another important element to keep in mind with regard to the Q4 revenue figure is that it includes sales from Google Home and Pixel phones.

Additionally, Google ads are becoming more efficient cost-wise which added to the revenue growth. For example, paid clicks or the amount that gets paid when people click these ads showed a YoY increase of 36% and QoQ (quarter on quarter) increase of 20% whereas cost-per-click (the amount that the company charges for ads) showed a YoY decrease of 15% and a QoQ decrease of 9%. Paid clicks are bulk drivers of Google’s revenue.

As consumers spend more time consuming digital media, advertisers are going to increase their advertising budgets towards digital channels and this scenario is not expected to change anywhere in the near future.

The digital advertising segment in the US is projected to grow considerably through 2021 when it is expected to reach annual revenue of almost $100 billion. This projected revenue is expected to be driven primarily by the migration of ad budgets from the conventional TV ads to digital video ads and, of course, increased social spending by consumers.

Through this growth phase, mobile ads are expected to be the leading destination for digital ads. This trend is expected to increase ad budgets significantly towards mobile media thereby reducing the mobile opportunity gap, the term that is given by advertisers to the huge disconnect that presently exists between the budgetary share for mobile ads and the time spent by people on mobile devices.

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The top national insurance companies have a hard time in making profits after Obamacare came into existence. Recently, Anthem Inc proposed a merger with Cigna Corp and the deal was worth $54 billion. However, the US court came forward to block this merger citing that consolidated health insurance industry will result in increased insurance costs for the citizens. The US Justice Department filed a case against the merger of Anthem and Cigna in July. With the merger, a large corporation with the highest number of health insurance members would have been formed.

Previously, the proposed merger of Aetna and Humana which was worth $33 billion was also stopped by the court. The insurance market is highly concentrated with only 5 top national players. If both the mergers were allowed, the top companies would have been shrunk to 3.

As a result, the lack of competition will drive the prices of insurance. Judge Amy Berman ruled against the merger so that the insurance market remains competitive. Just last month, another US judge stopped the merger of Aetna and Humana.

The hearing for the case against Anthem and Cigna were divided into two trials. The Justice Department said that the merger will prevent national employers from finding competitive healthcare coverage for their workers. Also, there will be overlap between the merging companies in selling health insurance benefits, especially Medicare to the elderly population.

The corporations argued that the competition in the market is alive as the large insurance companies often use small players in the market. The judge disagreed this argument stating that the smaller players don’t have a national network and they can't cater to the national accounts. The presence of smaller companies doesn’t overrule the anti-competitive impact of the merger.

Anthem is keen on filing an appeal to reverse the decision of the court to go ahead with the merger. Cigna wants to evaluate other options and understand the opinion before taking any action. Top legal experts suggest that the appeal won't be as successful as the corporations want it to be. The highly concentrated market prevents the entry of large competitors and the merger is between leading rival companies.

Anthem and Cigna announced the deal during the presidency of Barack Obama. The national healthcare reforms made it difficult for the insurance providers to enjoy huge profits even though growth was not hindered. The insurance companies supported the deal claiming that Obamacare products became expensive for the companies and they had to scale. Now, the healthcare market has changed dramatically. Republicans and President Donald Trump are keen on repealing and replacing Obamacare and new changes will be introduced in the insurance sector.

The shares of both Anthem and Cigna are not likely to change because the ruling was very much expected. The merger agreement dictates that Anthem pays $1.85 billion to Cigna as a break-up fee if Cigna tries its best to go ahead with the merger. In court, Anthem and Cigna had disagreements regarding the deal as Cigna was not willing to accept Anthem’s proposal to garner savings.

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Recently, the President Donald Trump has ordered financial regulations overhaul to change the laws governing the banks. These laws were introduced after the global financial crisis. Several banks and financial experts were worried about how the new regulations will affect the banking sector. The Democrats expressed their concern that the banks may blow up the economy once again. Tougher restrictions were enforced to ensure consumer protection and financial stability. However, the restrictions failed to include the cost of forgone growth. As a result, banks have a tough time in increasing their profits which affected their stock prices.

Trump has ordered the Treasury Secretary to provide a complete report on the growth, competitiveness, and efficiency according to the current regulations. This report must be presented in 120 days. Trump’s White House is focused on improving economic and lending growth of the banks to improve the profits. The new regulations will help the banks to enjoy a balanced supply of credit.

In 2010, Dodd-Frank Act was imposed by Barack Obama with new rules on derivatives and mortgage underwriting. Consumer Financial Protection Bureau was set up to enhance consumer protection while the financial institutions had limits on speculative trading. Credit cards too didn’t escape from the regulations. The CARD act increased the minimal requirements for capital and liquid assets that must be maintained by the banks. International money transfers, auto loans, and mortgage loans were scrutinized heavily. The Department of Labor also discouraged charging commissions by investment advisers for using retirement accounts.

Even though new regulations were imposed, there was no clarification on the extent of the usefulness regarding risks and associated costs. Banks were safer, but the limitations on trading were not contributing to their profit. Credit growth of banks is difficult to measure even though tighter regulations will increase the credit cost. Goldman Sachs in 2015 has reported that the heightened regulations favor huge enterprises and impose a burden on small and medium-sized businesses and startups. The market gained by 50%, but the banks struggled to reach their pre-crisis peak due to the burden of the regulations.

The executive order by Trump will result in an assessment of regulatory impact analysis to create new rules. These will help the investors to make better investment decisions. Retirement savers were not charged for the investment advice as Obama Administration claimed that investors could save $17 billion a year without the fees. However, the Security Industry and Financial Markets Association argued that the fees would be utilized for providing other services.

The current capital requirements will not be raised by the Trump administration. Experts also feel that it won't be rolled back to the previous levels as well. The financial stocks have gained 17% ever since the executive order was signed as the new regulations relief will help the banks to earn more profits. As banks generate more profit, the cost of credit will decrease and it will benefit households and businesses with poor creditworthiness.


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What are you stressing about? If it's about money, then you are not alone.

For Canadians, from British Columbia to Nova Scotia, money is the biggest source of stress, says a new poll. With historically low-interest rates, a rising cost of living, shrinking paychecks and a weak economy, numerous households are struggling to stay afloat, and this is keeping families awake at nights and worried.

According to a new Leger online survey, conducted for Quickcheck Canada, 66 percent of Canadians cite money as the largest source of stress; and nearly half (44 percent) concede it's their biggest worry.

The numbers surge when you include respondents who had recently taken out a so called cheap payday advances online to make ends meet. The survey found that 83 percent of those who have borrowed money from a payday lender say money is a major source of stress. Also, 61 percent of borrowers note that money is their biggest worry.

Moreover, the same poll discovered that 14 percent of Canadians have taken out a payday loan. And many Canadian consumers have taken out multiple payday loans from multiple lenders to hold their heads above water.

Sedef Karansu, the CEO of Quickcheck Canada, a software solutions provider to the payday loan industry, is blaming the conventional financial industry for allowing this to happen.

"Many low-income Canadians aren't able to borrow money from traditional banks and have to use payday loans to get by. Unfortunately, some of them take out multiple loans from different lenders, and that gets them into financial trouble," said Karansu.

One consumer debt expert, Mark Silver throws, is placing the blame on the lack of enforcement of laws.

“Unfortunately, the current government legislation that prevents people from taking out concurrent loans is rarely enforced and there is no mechanism for money lenders to know if their customers are doing so," said Thornton.

Across the country, jurisdictions at both the municipal and provincial level have taken action to rein in the payday loan industry. The likes of British Columbia and Alberta have installed changes to interest rates and a number of fees charged on payday loans. At the municipal level, in cities like Hamilton, governments are working to restrict payday loan stores from opening up in certain parts, particularly those areas that have a large population of those most vulnerable to short-term, high-interest loans.

Payday loan critics regularly aver that these alternative financial products send the poor and middle-class households into perpetual debt cycles that are nearly impossible to get out of. On the other hand, payday loan proponents say that these services are available because they do not have access to traditional forms of banking and credit.

In the Great White North, the average debt load per household is near $22,000, which excludes mortgages. As of May 2016, Canadians now owe $1.65 for every dollar of disposable income they have.

The online survey of 1,536 adult Canadians was conducted between September 12 and 15. The poll maintains a margin of error of +/- 2.5 percentage points.

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Oilfield services company Halliburton Co. reported unexpected profit in the third quarter on the back of improved oil exploration activities and cost cutting measures.

In a statement released on Wednesday, the world's second-largest oilfield services provider reported its first improvement in sales in about two years in North America, which makes up more than 40 percent of its business. Sales in the market rose 9 percent from the level in the second quarter to $1.66 billion.

Halliburton posted a net income of $6 million, or 1 cent per share, during the third quarter. This was a significant improvement on the $54 million, or 6 cents per share, loss reported a year earlier.

Some analysts polled by Bloomberg had predicted average loss of 6 cents per share.

"I am pleased with our third-quarter results given the devastation our industry has faced over the last two years," Chief Executive Dave Lesar said. "In the near term, we remain cautious around fourth quarter customer activity due to holiday and seasonal weather-related down times. However, it does not change our view that things are getting better for us and our customers."

Operating results from North America rose by $58 million, representing incremental margins of 41 percent.

Crude oil prices have gone ahead to increase by almost double since hitting the bottom in February. More shale oil companies have began putting their rigs back to work, months after the number of U.S. land rigs reached its lowest.

The count of active rigs in the U.S. increased for the seventh week in a row through Oct. 14, according to a report from Baker Hughes Inc. The oil services company said the number of onshore rigs in the country jumped by 25 percent (100) in the third quarter.

The improvement noticed caused executives at both Halliburton and its larger rival Schlumberger to state at the end of July that the toughest period may already be over.

Lesar attributed the unexpected profit record by Halliburton during the quarter to the cost-cutting efforts of the company.

"North America results improved as we took advantage of the rig count growth by increasing utilization, working our surface efficiency model and relentlessly managing costs," he said.

Like Schlumberger, the Houston-based oil services company has had to embark on cost-cutting to boost profitability amid falling oil revenues. It set a target in July to cut down on "structural costs" by $1 billion – roughly 25 percent – on an annual run-rate by the end of this year, as reported by Reuters.

A large number of companies in the oil services sector have been incurring losses in the North American market. Some experts expect things to remain this way, at least for the remaining part of 2016, as a result of very low prices.

Bloomberg reported that Halliburton shares edged up to $47.89 – representing an increase of around 1.7 percent – during premarket trading in New York.

Market leader Schlumberger is expected to release its results for the third quarter on Thursday. Baker Hughes, the world's third-biggest oilfield services provider, is scheduled to report next Tuesday.

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Social Security Benefits

The Social Security Administration has put individuals in the U.S. who earn high incomes on notice that they will need to pay more in social security taxes next year.

The U.S. government agency said on Tuesday that the maximum amount of earnings on which payroll tax is paid in support of Social Security will jump by 7.3 percent in 2017. The wage base on which the tax is levied will increased to $127,200 next year, up from the current $118,500.

Employees and their employers each pay 6.2 percent of eligible wages in Social Security tax, even though the latter could easily pass on the payment in form of lower wages. Self-employed individuals pay both the employer's and worker's shares of the tax.

With this increase, a person making an annual income of at least $127,200 will have $7886.40 deducted as Social Security tax in 2017. That would be about $539 higher than the amount paid this year.

This is the biggest jump in the maximum amount of earnings that attract payroll taxes for Social Security since 1993, according to the Wall Street Journal. The SSA said the change will affect roughly 12 million of 173 million U.S. workers who pay the taxes.

However, the over 65 million Americans who get Social Security and Supplement Security Income payments will only see a marginal increase of just 0.3 percent in their benefits next year. The negligible cost-of-living adjustment (COLA) follows lack of adjustment in 2016 and is the result of subdued inflation seen in the economy since the 2007-09 recession.

The Social Security COLA has, since 1975, been associated to the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. The COLA is determined every October using the CPI-W for the previous 12 months. The measure gained 0.3 percent over the level recorded same period in 2014.

The cost-of-living increase expected next year means a Social Security beneficiary who currently receives $1,296 a month will only see a $4 increase in that amount. The increment will likely be consumed by higher premiums to be paid by seniors with Medicare Part B coverage, which takes care of doctor visits and a variety of outpatient care.

The Journal reports the slight bump in the COLA will likely lead to higher premiums for roughly 30 percent of Medicare beneficiaries. These people include those with higher incomes and those who have deferred or are not qualified for Social Security benefits.

The hold-harmless provision of the Social Security Act prevents any increase in premiums by an amount higher than the dollar rise in Social Security payments from being passed along to about 70 percent of beneficiaries. The upper 30 percent will therefore bear much of the burden of expected rise in Medicare costs.

On the bright side, the amount Social Security beneficiaries who are not up to 66 years can earn without getting their benefits deducted will rise next year, according to Forbes. For every $2 earned in excess of $1,410 in a month by those aged 62-65, $1 will be docked in their benefits. The earnings threshold for benefits cut was previously set at $1,310 per month for these recipients.

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China GDP Infographic

The economy of China grew by 6.7 percent in the third quarter on the back of increased government spending, a booming property market and increased bank lending to allay fears of a slowdown in the concluding part of this year.

Data released by the National Bureau of Statistics on Wednesday showed that China's gross domestic product (GDP) has now grown at the same rate of 6.7 percent over the past three quarters, indicating some level of stability is being witnessed in the economy. It also shows the government is well on its way to achieving its official growth target of 6.5 to 7 percent for the year.

"The national economic performance has been generally steady, making progress and improving in quality, resulting in growth that's better than expected," NBS spokesman Sheng Laiyun said.

The year-on-year growth see in Chinese GDP in the third quarter was in line with expectations of analysts polled by Reuters. The quarterly growth of 1.8 percent posted was also as expected by analysts.

The steady growth recorded over the last three quarters was driven by increased spending by government on infrastructure projects and a booming property market. These have raised demand for construction materials, ranging from cement to steel.

Record growth in the number of loans granted by banks has also contributed.

In the first three quarters of 2016, consumption accounted for about 71 percent of growth in the GDP, up from 66.4 percent in the year before. This indicates contracting net exports and some level of success in the government's efforts to cut back on over-dependence on investment-led growth.

While the government may be on the way to achieving its target of 6.5 to 7 percent annual growth, economists have cautioned that its seeming readiness to do anything to meet hard targets may end up hurting the economy. They say stimulus measures, which may help in the short term, can cause long-term problems by diverting attention from the count growing corporate debt and industrial challenges.

The International Monetary Fund (IMF) estimates corporate debt in China at roughly 145 percent of its GDP. In a recent working paper it released, the organization urged the government to take decisive measures to urgently tackle the problem before it "becomes systemic."

The real estate market is considered the biggest near-term risk to China's economy for now. Home sales and real estate investment has quickened in recent months. In the first three quarters of the year, housing sales jumped 43.2 percent from a year ago. Mortgages, which make up a large part of record loans being made in the country, contributed significantly to the performance.

But authorities in over 20 Chinese cities have introduced restrictions on buyers to guard against speculation. On Tuesday, Shanghai said it had penalized some property agencies for contract falsification and was investigating developers thought to have inflated prices.

Increasing restrictions are believed to have contributed to a sudden decline in sales in recent weeks. Economists fear these restrictions may lead to undesirable effects on the market.

Strong growth in the economy is expected to continue through the end of 2016. Economists expect a slowdown in 2017 as the property market cools and coal and steel industries' production capacity is further cut back.