Gap Between Richest And The Rest Widened After The Recession: Fed

Sept 4 (Reuters) - The gap between the richest Americans and the rest of the nation widened after the Great Recession, a survey by the Federal Reserve showed on Thursday, suggesting deepening U.S. income inequality.

Though incomes of the highest-earners rose, none of the groups analyzed by the Fed had regained their 2007 income levels by 2013, underscoring deep scars from the financial crisis and its aftermath.

The data comes from a massive survey of consumer finances conducted by the Fed Board of Governors every three years. Many other studies have also shown the lasting effects of the recession and documented rising income disparity in the United States.

The Fed survey released suggests that wealth and income is concentrated not just within the top 1 percent, as some analyzes have suggested, but actually among a slighly broader slice of the ultra-rich: the top 3 percent.

From 2010 to 2013, average income for U.S. families rose about 4 percent after accounting for inflation, the survey showed. All of the income growth was concentrated among the top earners, the survey showed, with the top 3 percent accounting for 30.5 percent of all income.

The disparity was even greater by wealth, with the top 3-percent holding 54.4 percent of all net worth in 2013, up from 51.8 percent in 2007 and 44.8 percent in 1989.

Fed Chair Janet Yellen has called income inequality a disturbing trend, attributing some of it to the weak jobs market but also to underlying trends like technology and globalization.

Overall for U.S. families, wealth stabilized from 2010 to 2013, after falling sharply during the prior three years. Fed economists attributed that pattern to the declines in home and business ownership during the recession, which stripped many families of their biggest sources of wealth.

Families with income in the bottom half of those surveyed reduced their participation in retirement plans, continuing a trend seen from 2007 to 2010, but middle-income families increased their participation somewhat, the survey found. Still, overall participation rates were down from levels seen in 2007.

Although wealth did not change much overall, many measures of debt decreased, the survey found, driven largely by declines in home ownership. On average, debt fell 13 percent.

(Reporting by Ann Saphir; Editing by Tom Brown)

McDonald's Says Russian Officials Shut Down 12 Locations

MOSCOW, Aug 29 (Reuters) - McDonald's said on Friday that a total of 12 of its branches in Russia had been temporarily closed over the state food safety regulator's allegations of sanitary violations.

The U.S. fast-food chain, which has 440 restaurants in the country, also said that more than 100 inspections were underway at its restaurants in various regions of Russia.

"We are studying the essence of claims in order to determine the necessary actions for the swift re-opening of restaurants for visitors," it said in a statement. (Reporting by Maria Kiselyova; Editing by Pravin Char)

From Wednesday:

MOSCOW, Aug 27 (Reuters) - Russian courts on Wednesday backed the temporary closure of three McDonald's restaurants in Moscow for breaches of sanitary rules, amid a standoff with the West over Ukraine, while the state food safety watchdog suspended work at a fourth.

The three restaurants - on Moscow's Manezh square, under the walls of the Kremlin, at Pushkin Square and on Prospect Mira - have been closed since last week on the orders of the watchdog, Rospotrebnadzor. The court rulings confirmed that decision.

Rospotrebnadzor has introduced sweeping checks, including unscheduled inspections, at McDonald's restaurants across the country.

On Wednesday it ordered the temporary closure of a fourth branch in the capital - the sixth nationwide.

Russian businessmen have said the crackdown is linked to the crisis over Ukraine, which has soured U.S.-Russian relations and led to a round of sanctions and trade restrictions. Rospotrebnadzor has denied that its actions are politically motivated.

McDonald's said it would appeal the court rulings, which ordered the three Moscow branches to be closed for 90 days.

"We do not agree with the courts' decisions and will appeal them according to established procedures. We will continue to take care of our employees and do everything we can to continue successful operations in Russia," said a spokeswoman for the U.S. firm in Russia.

A lawyer representing McDonald's in the court, Maksim Titarenko, was also quoted as saying the courts' decisions to close the branches were unjustified.

"The court has ordered the maximum penalty under this article of the administrative offenses code although there are no grounds for it," Interfax news agency quoted Titarenko as saying.

A court in the Urals region delivered a similar ruling on Wednesday when it ordered the closure of a McDonald's restaurant in the city of Yekaterinburg for 85 days, backing the food safety watchdog's decision the day before.

McDonald's operates 440 restaurants in Russia and considers the country one of its top seven markets outside the United States and Canada, according to its 2013 annual report. Almost 1 million people a day visit its restaurants in Russia. (Reporting by Maria Kiselyova; Additional reporting by Natalia Shurmina in Yekaterinburg; Editing by Louise Heavens and Pravin Char)

Abercrombie & Fitch's Downward Spiral Hits 10 Straight Quarters

Aug 28 (Reuters) - Teen apparel retailer Abercrombie & Fitch Co's same-store sales declined for the tenth straight quarter as it struggled to attract customers who held back discretionary spending amid wage cuts and fewer jobs.

The company's shares were down 6.5 percent before the bell.

Abercrombie and rivals Aeropostale Inc and American Apparel Inc have struggled to keep teen shoppers from moving to cheaper and trendier "fast fashion" chains such as Forever 21, Inditex's Zara and Sweden's H&M.

Abercrombie's same-store sales decreased 7 percent in the second quarter ended Aug. 2 - more than the 4.1 percent dip expected by analysts polled by research firm Consensus Metrix.

U.S. same-store sales fell 5 percent.

Net sales decreased 6 percent to $890.6 million.

Net income rose to $12.9 million, or 17 cents per share, from $11.4 million, or 14 cents per share, a year earlier.

Excluding items, the company earned 19 cents per share.

Analysts on average had expected a profit of 11 cents per share on sales of $909.2 million, according to Thomson Reuters I/B/E/S.

Abercrombie Shares, which have risen 34 percent this year closed at $44.83 on the New York Stock Exchange on Wednesday. (Reporting by Ramkumar Iyer in Bangalore; Editing by Saumyadeb Chakrabarty)

Goldman Sachs Nearing $1.1 Billion Settlement With U.S. Housing Regulator

Aug 22 (Reuters) - Goldman Sachs Group Inc could pay about $1.1 billion to settle claims from the U.S. housing finance regulator that it sold bad mortgage-backed securities (MBS), the Financial Times reported.

Negotiations between Goldman and the Federal Housing Finance Agency (FHFA) could be concluded as early as next week, the business daily reported, citing people familiar with the matter. (http://on.ft.com/1q2eaOS)

The proposed amount would be almost double of what the Wall Street bank paid to the Securities and Exchange Commission in 2010 over similar issues. (http://reut.rs/1t0fepd)

Goldman and FHFA were not immediately available for comment.

Goldman and Morgan Stanley are also in preliminary discussions with the U.S. Department of Justice about settling allegations that they mis-sold MBS, the British newspaper reported, citing three people with knowledge about the issue.

In its lawsuit, the FHFA said Fannie Mae and Freddie Mac bought $11.1 billion of mortgage-backed securities from Goldman, unaware that "significant percentages of the underlying mortgage loans... had materially poorer credit quality than was represented in the registration statements."

On Thursday, Bank of America Corp reached a $16.65 billion settlement with U.S. regulators to settle charges that it misled investors into buying troubled mortgage-backed securities. (Reporting By Sudarshan Varadhan; Editing by Saumyadeb Chakrabarty)

Meet The First Openly Gay CEO Of A Publicly Traded Bank

Trevor Burgess was upfront about his sexuality on the first resume he ever put together after college. And when it came time for his company to file documents to go public, he again made no secret about being gay.

Burgess, 41, just became the first openly gay CEO of a publicly traded bank, as first noted by the New York Times.

"I’ve been openly gay since I was 19 years old," Burgess, the CEO of C1 Bank, told The Huffington Post in an email Friday morning.

.@C1Bank CEO Trevor Burgess banks on the #NYSE for #IPO day! #NYSEIPO $BNK pic.twitter.com/9NWzrz2qJZ

— NYSEcam (@NYSEcam) August 14, 2014

While corporate America on the whole has evolved to be pretty gay-friendly in recent years, with more and more companies offering health benefits to same-sex couples and protection against discrimination, there are still no openly gay CEOs at any of the 1,000 biggest companies in the U.S. (though the term "openly" has been the subject of some controversy.)

Burgess made history on Thursday morning when he rang the bell at the New York Stock Exchange to kick off the public offering of shares in C1 Financial, the parent company of a small regional bank that has 29 locations in Florida, a state that doesn't recognize same-sex marriages. Burgess indicated his husband, Gary Hess, owns shares in the company in its IPO filing with the SEC.

"I rose through the ranks because I was really good at what I did and that’s the real lesson," Burgess told HuffPost. He worked for 10 years as an investment banker at Morgan Stanley where he was one of the first openly gay managing directors.

Part of what's stopping LGBT people from rising in the ranks is the lack of gay people at the top, experts say.

"When people see that 90 percent of companies have nondiscrimination policies in place, that's great. But to me, a better indicator, is, how many senior leaders are there who are gay and who are out?" Todd Sears, a former banker who founded the LGBT leadership organization Out Leadership told HuffPost in June. "If LGBT people look around and they don't see other LGBT people who are out, if they don't hear inclusive messages, they're not going to feel valued."

But Burgess thinks the tides are turning.

"It’s only a matter of time before openly gay people, people like me who have been authentic their entire adult lives, rise through the ranks to the C-suite," he told HuffPost. "We have great examples in basketball, soccer, football and many other walks of life and now the [New York Stock Exchange]!"

Other banks were quick to congratulate Burgess.

"Leaders who feel comfortable being open about their sexual orientation are more productive and engaged, which directly impacts the success of their organizations," Irene Dorner, the president and CEO of HSBC, said in a statement released by Out Leadership. "HSBC offers sincere congratulations to Trevor on leading the way with this IPO, and our best wishes for continued success."

(Hat tip: New York Times)

How Your Health Insurance Company Can Still Screw You, Despite Obamacare

No law has done more to reform health insurance and protect consumers against the industry's most heinous practices than the Affordable Care Act. But Obamacare didn't magically transform insurers into benevolent entities solely devoted to taking care of sick people.

Health insurance companies, even those that are not-for-profit, have to collect more money in premiums than they shell out in claims for medical care. That means they have a financial incentive not to pay for things.

And since health insurance companies can no longer shun the sick to maximize profits -- either by denying coverage to people based on their medical histories or by rescinding the policies of paying customers who fall ill and rack up bills -- insurers are employing other tactics to shift costs to sick people and make it harder to get health care, consumer advocates say.

"One of the things that occurred to me, even as the bill was working its way through Congress, was that once it was passed, insurers would do all they could to try to preserve profit margins," said Wendell Potter, a former Cigna executive turned industry critic.

Here are a few of the tactics that consumers and advocates have complained about:

Refusing to pay for medical care that should be covered

Nothing in Obamacare says insurance companies have to pay any bill that comes their way. That's fine, because doctors and patients want things all the time that are wasteful and unnecessary, and everyone shares the cost for that.

But it means the law doesn't prevent stuff like this from happening:

"Coverage denied...doesn't meet criteria for medical necessity". I WOULD CALL SAVING MY HUSBAND'S LIFE A MEDICAL NECESSITY YOU FUCKERS

— Zoe Keating (@zoecello) May 28, 2014

Zoë Keating is a musician with more than 1 million followers on Twitter. Her husband, Jeffrey Rusch, had been diagnosed with cancer at the emergency room, hospitalized and given chemotherapy. The insurance company refused to cover it -- until Keating told her story to a San Francisco television station, according to reports on KPIX.

While the Affordable Care Act beefed up patients' right to appeal denials by insurance companies, people still have to fight, which is to the insurer's advantage. "A lot of people just simply don't understand their appeals rights and don't appeal, or think that they just don't have a chance of getting something overturned," Potter said. "The insurance companies know that." Most people don't have a million Twitter followers, either.

Making patients pick up a bigger share of the bill

To keep premiums as low as possible, insurance companies are pushing more of the cost of actual care on to their customers in the form of things like high deductibles and "coinsurance," which requires patients to pay a percentage of the cost of their care, instead of making a flat copayment.

"Okay, Ashley, you've got diabetes, so you have to pay half the tab. Oh, and Brittany had a second glass of wine."

And it's virtually impossible to learn in advance how much medical care will actually cost, meaning patients are left in the dark.

"What this means for someone with cancer is that they may end up being directed away from a plan because they can't find out whether their doctor is in the network, or whether the plan covers their drugs, on what tier and how much they have to pay out of pocket," said Kirsten Sloan, senior director policy at the American Cancer Society Cancer Action Network. Sending a cancer patient to a competitor would count as a win in the insurance industry.

Designing benefits to make the sickest patients pay more for drugs

Advocates for patients with serious medical conditions have been incensed by the practice of "tiered" drug lists, which have become a popular way for insurers to limit their expenses. Under this mechanism, the amount patients pay at the pharmacy is generally lower for cheap generic medicines and "preferred" brand-name drugs, higher for other brand-name drugs and higher still for the most expensive specialty medications.

The good stuff is always on a high shelf. Almost got it!

High cost-sharing and top-tier status for drugs that treat ailments like HIV and multiple sclerosis are common in insurance policies bought via the Obamacare exchanges, the consulting firm Avalere Health reported last month. That looks an awful lot like insurers discriminating against sick people, the AIDS Institute claimed in a complaint filed against four Florida insurers with the federal government in May.

"Where we've seen the problems is putting every single HIV drug, including generics, on the highest tier, and that with very high coinsurance, like 40 or 50 percent," said Carl Schmid, deputy executive director of the AIDS Institute. "There's plenty of plans in Florida that don't do this, and charge $10, $20 a copay for the same drugs."

Limiting access to doctors and hospitals

Health insurance plans sold via Obamacare exchanges often have "narrow networks," or shorter lists of medical providers that accept those plans than people with job-based insurance or Medicare might expect. Insurers need to keep costs down, and tough negotiating with high-priced doctors and hospitals can do that. This ends up saving the whole health care system money, including insurance customers.

The trouble is, when those networks don't include enough of the specialty care providers that take care of the sickest, most expensive patients -- like, say, cancer centers -- it has the effect of denying care to those very sick people because they can't get appointments.

"Sorry, bro. Not on the list."

"Insurers might try to avoid people with HIV or cancer or expensive conditions by avoiding the doctors that tend to treat those people, but otherwise their network looks robust," said Karen Pollitz, a senior fellow at the Henry J. Kaiser Family Foundation. "Whether it's happening -- no way to know yet." The Obama administration and state regulators are poised to take action to compel insurers to beef up their networks, The New York Times reported.

Rolling out the red tape

To save money, insurance companies will be stricter about approving and paying for medical treatments, said Carmen Balber, executive director of the nonprofit organization Consumer Watchdog. "I have no doubt that claims denials or delays will be the new discriminatory tactic of the industry," she said.

In Seattle, one doctor said she has to work harder to get treatments approved this year. "There are more hoops that the provider has to jump through," said Grace Wang, the medical director of the International Community Health Services Holly Park Medical and Dental Clinic.

"We'll gladly pay your claim -- after you perform a death-defying escape, Houdini."

Wang returned to the clinic after Memorial Day weekend and attempted to follow up on a request she'd made to refer a patient to a specialist. The insurance company said her request already had been rejected because she hadn't called back quickly enough.

"Their clock started ticking on Sunday. Monday was a national holiday, and so when 48 hours went by, they denied," said Wang. "A conspiracy theorist would wonder."

Subway Worker Claims She Was Forced To Work While Vomiting

A Subway worker in Freeport, Texas, claims she was forced to continue working her shift while suffering from a stomach bug, then was fired the same day.

Elizabeth Taff, 24, says she was so sick she could barely stand up straight and vomited several times during her shift on July 11, but her manager refused to let her leave unless she found someone to cover her shift.

"About 40 minutes into my shift I felt nauseous. My mouth started watering, and I knew I was about to vomit. I ran into the restroom and vomited repeatedly," Taff told The Huffington Post. "I went and let my manager know, [but] she told me to find my own replacement after lunch rush."

Taff says she then summoned enough strength to get through the lunch rush, hoping to track down another employee to fill in for her. But no one else was available, she said.

She noticed vomit on her work clothes and, rather than take a pay cut for a new work shirt, phoned home for someone to bring her a clean outfit, she said. She also maintains she didn't leave work for fear of getting fired and losing her paycheck.

This is a common dilemma facing many hourly wage workers. Because paid sick leave largely doesn't exist in the food service industry, workers may risk their health and the health of customers by coming in to work when they should be staying home. A 2011 survey conducted in part by the Centers for Disease Control and Prevention revealed almost 12 percent of 500 food workers had come in to work while suffering vomiting or diarrhea on two or more shifts in the previous year.

Speaking to local news outlet KPRC, Taff expressed concern for the impact her sickness could have had on customers.

"I was touching everybody’s sandwiches," she said. "I’m like, ‘This ain’t right.’ I had gloves on but that doesn’t matter."

Ultimately, though, she was fired that day. Subway asserts the decision was due to her "poor performance and insubordination," reports KPRC.

Taff remembers it differently.

"I was on my knees [on the grass outside the restaurant], while [the manager] berated me with remarks such as 'you're so stupid, if you cant handle working while feeling ill you don't need to work here, all you had to do was switch shirts and finish your shift,'" Taff told HuffPost. "She told me I was fired since I was unable to talk, due to vomiting all over the place."

Employees from a nearby business rushed to Taff's aid when they saw her reeling on the ground behind the fast-food restaurant. Taff said she eventually passed out, and one of the employees who came to her side called an ambulance.

(Story continues below.)

Employees from a nearby business came to Taff's side.

"When the [ambulance] arrived, they [the emergency medical technicians] were livid and wanted to know why [my boss] had kept me there for so long," Taff told HuffPost.

Later, one of the employees who had attended to her took to Facebook to post a photo of Taff lying on her side in the grass behind the restaurant. The photo's caption reads:

If you planned on eatin Freeport Subway today i'd advice you not to. I witnessed an employee vomiting and her manager tellin her just to switch shirts..after calling ems it was discovered she had been breathing and serving food with a stomach bug that is contagious!!!!! Then they had the nerve to fire her for calling the ambulance after shaking and passing out!! Sad part she didn't call them, we did [all sic].

According to the Food and Drug Administration's Food Code, the person in charge of a food establishment shall "exclude or restrict a food employee from a food establishment" if they exhibit symptoms including vomiting or diarrhea. Taff's story highlights a kink in the fast-food chain's enforcement of proper food handling safety and adds to a growing list of labor violations against the company. Between 2000 and 2013, the franchise was found to have committed 17,000 Fair Labor Standards Act violations, resulting in a $3.8 million payout to workers, CNN Money reports.

Taff says she hopes her story will fuel change in workplace standards.

"I'm hoping what comes of this whole situation is a new law or better training on workplace etiquette," she told HuffPost.

UPDATE: 4:30 p.m. -- Subway forwarded The Huffington Post a statement from the Freeport franchisee, Dinesh Agrawa, who said that Taff's "allegations are not true."

A rep for Subway also commented on the situation:

The Freeport franchisee, who owns and operates his locations independently, as do all franchisees in our system, worked with his store management team to review all of the circumstances surrounding staffing matters and ensured us that all employee relations protocols were followed.