Photograph by Tim Boyle/Bloomberg

A taxi leaves the Hyatt Regency Chicago hotel.

Updated 3:20 p.m. EST

Hotel and restaurant union workers plan to protest President Barack Obama’s pick of billionaire Hyatt heiress Penny Pritzker to lead the U.S. Department of Commerce.

“Hyatt has singled itself out as the worst hotel employer in the United States, leading the industry in outsourcing practices that destroy good jobs and hurt housekeepers,” UNITE HERE said today in a statement. The labor group has about 250,000 members.

For years, working conditions have prompted labor strikes and boycotts of Hyatt Hotel Corp., based in Chicago — also Obama’s home before he was elected president in 2008.

UNITE is a member of the umbrella labor organization AFL-CIO, which has documented labor problems at the hotel chain in years past.  AFL-CIO spokesman  Jeff Hauser declined to comment on UNITE’s protest of Pritzker when reached this afternoon.

Hotel workers affiliated with UNITE plan to gather today from 4:30 p.m. to 6 p.m. Chicago time at the Hyatt McCormick Place. Organizers say they expect about 1,000 protesters. The New York Daily News first reported plans for the rally earlier today.

“Under Pritzker’s direction, Hyatt has led the hotel industry in a race to the bottom by aggressively subcontracting out career hotel jobs to minimum wage temps,” Cathy Youngblood, a Hyatt housekeeper and advocate for electing  a hotel worker to Hyatt’s board of directors, said in UNITE’s statement today. “This is not the model that will lead our country to a bright economic future.”

The rally comes as Senate confirmation hearings are scheduled to begin this week. Top Republicans told Bloomberg News they plan to ask tough questions of the billionaire heiress based on her disclosure of income from a trust in the Bahamas. Obama derided his 2012 Republican challenger Mitt Romney for having offshore accounts.

“It isn’t just about her or the offshore stuff, it’s about the fact that the president made a big deal out of Romney’s offshore accounts,” Senator Charles Grassley, an Iowa Republican, said in an interview with Bloomberg’s Laura Litvan.

Original post is Hotel Union Protests Obama Commerce Nominee by Political Capital.

Photograph by Chip Somodevilla/Getty Images

President Barack Obama walks across the South Lawn while departing the White House on May 13, 2013.

For all the talk about averting any default on U.S. debt, this is personal for the president.

President Barack Obama holds between $1 million and $5 million in Treasury notes, according to his personal financial disclosure released by the White House today.

He also has more than $250,000 in a JP Morgan Chase asset management checking account.

The kids have money socked away in Bright Directions College Savings Plans.

Obama was still collecting more than $100,000 in royalties last year from Crown Publishing for both his “Dreams From My Father” and “Of Thee I Sing:  A Letter to My Daughters.”

Yet the president hadn’t taken advantage of declining home mortgage interest rates, it appears — he was still carrying a home mortgage from 2005 with a 5.625 percent interest rate.

Original post is Obama’s U.S. Debt: $1 Million-Plus in Treasury Notes, Disclosure Shows by Political Capital.

Photograph by Simon Dawson/Bloomberg

Jacob “Jack” Lew, U.S. treasury secretary, arrives to attend the Group of Seven (G-7) finance ministers and central bank governors meeting at Hartwell House in Aylesbury, U.K., on May 10, 2013.

U.S. Treasury Secretary Jacob J. Lew took his plea for stronger global economic growth to a British country house hotel where Louis XVIII, the exiled king of France, stayed for five years.

Lew is urging Group of Seven finance ministers to emphasize growth over austerity and is facing some resistance. The U.S. position is fostering ambiguity just as the G-7 should be recommitting to debt reduction plans, Canadian Finance Minister Jim Flaherty said today.

Unlike Group of 20 meetings, which are larger and normally held in cities, this session is taking place at Hartwell House & Spa at Buckinghamshire near the town of Aylesbury, in an area of rolling green hills and grazing cows, about 45 miles northwest of London.

Lew and other top finance officials are staying at the Hartwell. The Hartwell’s website says the house dates back almost 1,000 years to the reign of Edward the Confessor and that Louis XVIII was there from 1809 to 1814.

Most U.S. Treasury officials are lodging at a Holiday Inn about five miles away. Mark Sobel, a deputy assistant secretary and negotiator for the Treasury, was spotted leaving the hotel this morning, wearing a suit and lugging his backpack over his shoulder. (Read Bloomberg’s profile of Sobel, Treasury’s “bad cop,” here.)

Journalists are covering the event mainly from a white tent on the Hartwell grounds. Most of the announcements for the press from the British organizers have to do with the schedule for a shuttle bus running between Hartwell and the Haddenham and Thame Parkway rail station about 10 minutes away.

Original post is Lew Urges G-7 to Focus on Growth by Political Capital.

Photograph by Jonathan Alcorn/Bloomberg

Charles Evans, president and chief executive officer of the Federal Reserve Bank of Chicago.

With characteristic vigor, Federal Reserve Bank of Chicago President Charles Evans had a message today for skeptics of the central bank’s unprecedented stimulus measures known as quantitative easing.

From auto loans to mortgages and employment, all signs are pointing to the fact that the Fed’s bond buying is working, he said.

“I find it very comforting that the programs we’ve put in place have been showing the more standard transmission mechanism,” Evans told Michael McKee in a Bloomberg Television interview today. “I don’t think it would be appropriate to say: `We haven’t done exactly this before, maybe we shouldn’t do it.”’

The Chicago official, who dissented twice in 2011 in favor of more stimulus, was cautioning against the restraint that some of his colleagues have urged. Even with uncertainties, Fed officials need to “try as hard as we can” to bring unemployment down, he said.

“Is it unusual?” he said. “Yes, but we’re not in a business-as-usual monetary policy situation. The unemployment rate is extremely high still and inflation is low.”

Original post is Evans to Fed Skeptics: QE Working by Political Capital.

Photograph by Spencer Platt/Getty Images

A trader on the floor of the New York Stock Exchange at the end of the trading day on May 7, 2013.

Original post is Bloomberg by the Numbers: 15,056.2 by Political Capital.

Photograph by Joe Raedle/Getty Images

People looking for work stand in line during a job fair at the Miami Dolphins Sun Life stadium on May 2, 2013 in Florida.

The Federal Reserve will hold its benchmark interest rate near zero, where it has been since December 2008, until early 2016 even as the jobless rate falls.

That’s the conclusion of economists at Goldman Sachs Group Inc. in New York. While their interest rate forecast isn’t new, they now project the unemployment rate will fall faster than they previously thought, reaching 6 percent by the time central bankers begin to raise borrowing costs.

That may seem at odds with policy makers’ announcements that 6.5 percent unemployment will trigger action. The so-called threshold will prove mutable, according to Goldman Sach’s Jan Hatzius and David Mericle.

Hatzius, Goldman’s chief economist, and Mericle say the unemployment rate will be a less meaningful gauge of the labor market’s progress because part of the decline results from disaffected workers leaving the labor force. If a person isn’t actively looking for work, the government doesn’t consider them unemployed.

Building on work by Fed economists Christopher Erceg and Andrew Levin described in a previous post on Political Capital, Hatzius and Mericle project the so-called labor force participation rate will be slow to recover due, in part, to the severity of the last recession. In fact, they predict it will stay roughly where it is now, a three-decade low, through this year and next.

That means the jobless rate may reach the Fed’s trigger faster because it will take smaller gains in employment to push it down. The Goldman economists predict central bankers will acknowledge the conundrum, leaving them with three options.

Members of the Federal Open Market Committee, who determine when the central bank will act, will put less emphasis on the 6.5 percent threshold, turning it into a necessary but not sufficient condition for action, Hatzius and Mericle said in a May 3 report. Alternatively, they may lower the rate at which they say they’ll act, or broaden the labor-market measures they’ll consider to include such things as the share of the population working.

“As we approach 6.5 percent, a reduction in the threshold or maybe even a new measure may well be necessary,” said Hatzius and Mericle.

Original post is Fed Holding Benchmark Rate Near Zero Until 2016: Analysts by Political Capital.

Photograph by Nicholas Roberts/AFP via Getty Images

This September 15, 2008 file photo shows the sign for Lehman Brothers headquarters in New York.

Many critics of the Dodd-Frank financial regulatory overhaul will say that the bill’s biggest shortcoming is its failure to reduce the size of the largest banks — the ones that are “Too Big To Fail.”

Federal Reserve Governor Daniel Tarullo, who is running the Fed’s efforts to implement those regulations, says the biggest gap lies elsewhere: In the short-term wholesale funding markets where banks borrow overnight.

“We would do the American public a fundamental disservice were we to declare victory without tackling the structural weaknesses of short-term wholesale funding markets,” Tarullo said today in Washington at the Peterson Institute for International Economics.

After all, the financial system still remains vulnerable to the risk that short-term funding could be withdrawn and financial institutions would face the type of liquidity crisis that led to the collapse of Bear Stearns Group Cos. and Lehman Brothers Holdings Inc. in 2008.

Tarullo outlined how, using authority granted to the Fed under Dodd-Frank, the central bank could crack down further on the largest financial institutions, requiring them to hold more capital and liquidity to buffer against risks in short-term markets.

His speech comes as top U.S. bank regulators and lawmakers are pushing for further action to limit the risk that the government again winds up bailing out one or more of the nation’s biggest financial institutions.

Sen. Sherrod Brown, an Ohio Democrat, and Republican Sen. David Vitter of Louisiana unveiled legislation last month that would mandate a 15 percent capital cushion for banks with more than $500 billion in assets. An analysis of that proposal by Standard & Poor’s said the largest banks may split themselves up rather than face such a requirement.

Tarullo’s proposal is more incremental, focused on dialing up the existing approach. And he made clear that, if regulators are to go further, it will have to be Congress that makes the call.

“Proposals to impose across-the-board size caps or structural limitations on banks–whatever their merits and demerits–embody basic policy decisions that are properly the province of Congress,” he said.

Original post is Dodd-Frank’s Missing Link by Political Capital.

Photograph by Jin Lee/Bloomberg

Ron Johnson, chief executive officer of J.C. Penney Co., arrives at State Supreme court in New York, on March 1, 2013.

Ron Johnson, the former chief executive officer of J.C. Penney Co., received a compensation package 1,795 times higher than the average wage and benefits of a U.S. department store worker, according to data compiled by Bloomberg.

Such disparities are why the Dodd-Frank financial regulation law requires public companies to report their CEO-to-employee salary ratios, a provision being challenged by corporations trying to keep that data secret.

Original post is Bloomberg By the Numbers: 1,795 by Political Capital.

Photograph by Ken Cedeno/Bloomberg

Retired Army General David Petraeus, pictured as the top U.S. commander in Iraq, in 2007. Photo by Ken Cedeno / Bloomberg

KKR & Co.  the private-equity firm run by Henry Kravis and George Roberts, is in discussions with former Central Intelligence Agency Director David Petraeus about a role at the company, according to a person with knowledge of the talks.

It hasn’t been decided yet what role he would have at KKR, said the person, who requested anonymity because the discussions are private. Petraeus and Kravis are friends and talk often, according to the person.

Petraeus, 60, resigned from the CIA on Nov. 9 after a probe by the Federal Bureau of Investigation uncovered evidence of an extramarital affair with Paula Broadwell, the author of a biography about the former commander of U.S. military forces in Afghanistan and Iraq entitled “All In.” Last week, City University of New York named Petraeus a visiting professor starting Aug. 1.

Kristi Huller, a spokeswoman for New York-based KKR, declined to comment on the possible hiring. Robert Barnett, a lawyer for Petraeus, didn’t respond to an e-mail requesting comment.

KKR has more than 25 senior advisers, who help the firm find and evaluate investment opportunities, according to its website. Some of them advise KKR-owned companies or serve on their boards.

The firm last year named former Morgan Stanley Chief Executive Officer John Mack as a senior adviser to help make KKR “smarter investors,” Kravis said at the time. Other KKR advisers include Honeywell International Inc. (HON) CEO David Cote, former Caterpillar Inc. CEO James Owens and Qantas Airways Ltd. Chairman Leigh Clifford.

Private-equity firms pool money from investors including pension plans and endowments with a mandate to buy companies within about five to six years, then sell them and return the funds with a profit after about 10 years. The firms, which use debt to finance the deals and amplify returns, typically charge an annual management fee equal to 1.5 percent to 2 percent of committed funds and keep 20 percent of profit from investments.

Kravis, Roberts and their partner Jerome Kohlberg Jr. started KKR in 1976, joining a small group of firms doing leveraged buyouts. Kohlberg left the firm in 1987. Today the industry manages about $3 trillion of assets, according to research firm Preqin Ltd. KKR oversees $78 billion, investing in buyouts, energy, real estate and hedge funds.

See the full report on Petraeus and KKR at Bloomberg.com.

Original post is Petraeus ‘All In’ for Private Equity? by Political Capital.

Photograph by Ty Wright/Bloomberg

Home sales at the River Valley Highlands neighborhood in Lancaster, Ohio.

If you want to own a house, it may pay to be less educated.

Homeownership rates among 30-year-olds with student debt plunged in 2012 more than for those without, according to an analysis published today by researchers at the New York Federal Reserve. The report shows the recession has actually hampered purchasing activity more for those with higher education, reversing the trend in place since at least 2002.

Home-secured debt for both categories of young adults sank during the recession that ended in June 2009, the New York Fed research shows. While those without student debt saw homeownership decline by 5 percentage points, those with it saw a 10 percentage-point drop. By last year, the rate for student debtors was almost 2 percentage points lower than for those without it.

Between 2003 and 2009, student debt holders had “significantly higher” rates of homeownership, owing to the stronger incomes associated with the higher education.

Two recession-induced factors could be to blame for the diploma’s prospective drop in value: tightened access to credit in the wake of the subprime mortgage collapse that triggered the economic slowdown, and depressed expectations of future earnings. If the pattern holds, it could restrain recovery in the housing and auto industries, as well as consumer spending more broadly, the researchers note.

“While highly skilled young workers have traditionally provided a vital influx of new, affluent consumers to U.S. housing and auto markets, unprecedented student debt may dampen their influence in today’s marketplace,” according to the commentary.

Original post is Home-buying? Forgo College by Political Capital.