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2016-30/0358/en_head.json.gz/10201 | When Bad Government Policy Leads to Bad Results, the Government Manipulates the Data … Instead of Changing Policy
By: Zero Hedge | Tuesday, July 30, 2013 at 03:47 pm EST
Manipulating Bad Financial Data
Bad government policy has created a years-long unemployment problem. But instead of fixing the problem, the government is trying to paper over it. We’ve known for a long time that the Bureau of Labor Statistics fudges the numbers to make unemployment look lower than it is really is. BLS itself has admitted that its “adjustments” skew unemployment data during recessions. Indeed, the former head of the BLS recently said BLS statistics are B.S. … and that unemployment is much higher than the government is letting on.
The Bureau of Economic Analysis is revising 84 years of economic history … which will make the economy magically look better.
The U.S. and British governments encouraged interest rate manipulation. And central banks have been directly manipulating interest rates for hundreds of years.
Government agencies have helped banks manipulate commodities prices for decades.
The government twisted statistics and intentionally lied when it pretended that the banks it was bailing out were solvent
The government has long ignored energy and food prices when reporting on inflation.
Fraud is Wall Street’s business model, which is – unfortunately – being supported by the government.
The government helped cover up the crimes of the big banks, used claims of national security to keep everything in the dark, and changed basic rules and definitions to allow the game to continue. See this, this, this and this.
It is not only a matter of covering up fraud that has already happened. The government also created an environment which greatly encouraged fraud.Here are just a few of many potential examples:
The SEC has shredded financial documents for decades, to help cover up financial shenanigans
The government-sponsored rating agencies committed massive fraud (and see this)
The Treasury department allowed banks to “cook their books”
Business Week wrote on May 23, 2006:
“President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations.”
Regulators knew of and allowed the use of debt-hiding accounting tricks by the big banks
Tim Geithner was complicit in Lehman’s accounting fraud, (and see this), and pushed to pay AIG’s CDS counterparties at full value, and then to keep the deal secret. And as Robert Reich notes, Geithner was “very much in the center of the action” regarding the secret bail out of Bear Stearns without Congressional approval. William Black points out: “Mr. Geithner, as President of the Federal Reserve Bank of New York since October 2003, was one of those senior regulators who failed to take any effective regulatory action to prevent the crisis, but instead covered up its depth”
The former chief accountant for the SEC says that Bernanke and Paulson broke the law and should be prosecuted
Freddie and Fannie helped to create the epidemic of mortgage fraud
The government knew about mortgage fraud a long time ago. For example, the FBI warned of an “epidemic” of mortgage fraud in 2004. However, the FBI, DOJ and other government agencies then stood down and did nothing. See this and this. For example, the Federal Reserve turned its cheek and allowed massive fraud, and the SEC has repeatedly ignored accounting fraud. Indeed, Alan Greenspan took the position that fraud could never happen
Bernanke might have broken the law by letting unemployment rise in order to keep inflation low
Paulson and Bernanke falsely stated that the big banks receiving Tarp money were healthy, when they were not
Arguably, both the Bush and Obama administrations broke the law by refusing to close insolvent banks
Congress may have covered up illegal tax breaks for the big banks
Of course, deregulation by Larry Summers, Robert Rubin, Phil Gramm and many other high-level politicians and regulators also helped to grease the skids for fraud
Economist James K. Galbraith wrote in the introduction to his father, John Kenneth Galbraith’s, definitive study of the Great Depression, The Great Crash, 1929:
The main relevance of The Great Crash, 1929 to the great crisis of 2008 is surely here. In both cases, the government knew what it should do. Both times, it declined to do it. In the summer of 1929 a few stern words from on high, a rise in the discount rate, a tough investigation into the pyramid schemes of the day, and the house of cards on Wall Street would have tumbled before its fall destroyed the whole economy. In 2004, the FBI warned publicly of “an epidemic of mortgage fraud.” But the government did nothing, and less than nothing, delivering instead low interest rates, deregulation and clear signals that laws would not be enforced. The signals were not subtle: on one occasion the director of the Office of Thrift Supervision came to a conference with copies of the Federal Register and a chainsaw. There followed every manner of scheme to fleece the unsuspecting ….
This was fraud, perpetrated in the first instance by the government on the population, and by the rich on the poor.
The government that permits this to happen is complicit in a vast crime.
Manipulating Bad Nuclear Facts
When the Fukushima nuclear plant melted down, the government didn’t announce that these antiquated nuclear designs which were common throughout the United States were dangerous and needed to be scrapped. Instead, American (and Canadian) authorities virtually stopped monitoring airborn radiation, and are not testing fish for radiation.
The U.S. government increased allowable radiation levels so that we could be exposed to radiation.
The U.S. government pressured the Japanese government to re-start its nuclear program, and is allowing Fukushima seafood to be sold in the U.S.
And U.S. nuclear regulators actually weakened safety standards for U.S. nuclear reactors after the Fukushima disaster.
And the U.S. government has been covering up nuclear meltdowns for 50 years.
Manipulating Oil Spill Info
When BP – through criminal negligence – blew out the Deepwater Horizon oil well, the government helped cover it up (and here).
As just one example, the government approved the massive use of a highly-toxic dispersant to temporarily hide the oil.
The government also changed the testing standards for seafood to pretend that higher levels of toxic PAHs in our food was business-as-usual.
Manipulating Data on Other Environmental Issues
The Bush administration covered up the health risks to New Orleans residents associated with polluted water from hurricane Katrina, and FEMA covered up the cancer risk from the toxic trailers which it provided to refugees of the hurricane.
The Centers for Disease Control – the lead agency tasked with addressing disease in America – covered up lead poisoning in children in the Washington, D.C. area.
The government also underplayed the huge Tennessee coal ash spill. As the New York Times noted in 2008:
A coal ash spill in eastern Tennessee that experts were already calling the largest environmental disaster of its kind in the United States is more than three times as large as initially estimated, according to an updated survey by the Tennessee Valley Authority.***
The amount now said to have been spilled is larger than the amount the authority initially said was in the pond, 2.6 million cubic yards.
(The former head of the National Mine Health and Safety Academy says that the government whitewashed the whole coal ash investigation.)
And the government allegedly ordered Manhattan Project scientists to whitewash the toxicity of flouride (flouride is a byproduct in the production of weapons-grade plutonium and uranium). As Project Censored noted in 1999:
Recently declassified government documents have shed new light on the decades-old debate over the fluoridation of drinking water, and have added to a growing body of scientific evidence concerning the health effects of fluoride. Much of the original evidence about fluoride, which suggested it was safe for human consumption in low doses, was actually generated by “Manhattan Project” scientists in the 1940s. As it turns out, these officials were ordered by government powers to provide information that would be “useful in litigation” and that would obfuscate its improper handling and disposal. The once top-secret documents, say the authors, reveal that vast quantities of fluoride, one of the most toxic substances known, were required for the production of weapons-grade plutonium and uranium. As a result, fluoride soon became the leading health hazard to bomb program workers and surrounding communities.
Studies commissioned after chemical mishaps by the medical division of the “Manhattan Project” document highly controversial findings. For instance, toxic accidents in the vicinity of fluoride-producing facilities like the one near Lower Penns Neck, New Jersey, left crops poisoned or blighted, and humans and livestock sick. Symptoms noted in the findings included extreme joint stiffness, uncontrollable vomiting and diarrhea, severe headaches, and death. These and other facts from the secret documents directly contradict the findings concurrently published in scientific journals which praised the positive effects of fluoride.
Regional environmental fluoride releases in the northeast United States also resulted in several legal suits against the government by farmers after the end of World War II, according to Griffiths and Bryson. Military and public health officials feared legal victories would snowball, opening the door to further suits which might have kept the bomb program from continuing to use fluoride. With the Cold War underway, the New Jersey lawsuits proved to be a roadblock to America’s already full-scale production of atomic weapons. Officials were subsequently ordered to protect the interests of the government.
After the war, … the dissemination of misinformation continued.
Manipulating Food Safety Data
The government’s response to the outbreak of mad cow disease was simple: it stopped testing for mad cow, and prevented cattle ranchers and meat processors from voluntarily testing their own cows (and see this and this).
The EPA just raised the allowable amount of a dangerous pesticide by 3,000% ... pretending that it won't have adverse health effects.
In response to new studies showing the substantial dangers of genetically modified foods, the government passed legislation more or less pushing it onto our plates.
Manipulating Health Safety Data
When one of the most respected radiologists in America – the former head of the radiology department at Yale University – attempted to blow the whistle on the fact that the FDA had approved a medical device manufactured by General Electric because it put out massive amounts of radiation, the FDA installed spyware to record his private emails and surfing activities (including installing cameras to snap pictures of his screen), and then used the information to smear him and other whistleblowers.
After drug companies were busted for using fraudulent data for drug approval, the FDA allowed the potentially dangerous drugs to stay on the market.
Manipulating Metrics for War
When the American government got caught assassinating innocent civilians, it changed its definition of “enemy combatants” to include all young men – between the ages of say 15 and 35 - who happen to be in battle zones.
When it got busted killing kids with drones, it changed the definition again to include kids as “enemy combatants”.
Al Qaeda was labeled as the main enemy in the War on Terror. But now Al Qaeda and other terrorist groups have somehow become our close allies. They have somehow become the “good terrorists” which we are using to fight our enemies.
Indeed, groups are listed as official “terrorist” organizations and then de-listed to suit the convenience and ambitions of particular U.S. political leaders.
Indeed, the U.S. literally labels others as terrorists when they do what we do (although no one does it to the extent we do).
The U.S. has also drastically underestimated the amount of innocent civilians killed by drone, and repeatedly announces that it has just killed some terrorist that it had previously reported killing.
The Core Problem
Corruption at the top leads to lawlessness by the people.
But – while conservatives blame the government for our problems, and liberals blame big corporations – the core problem is the malignant, synergistic intertwining between the two. | 金融 |
2016-30/0358/en_head.json.gz/10476 | WINNER'S CURSE?
New bank licenses up for grabs in India present enormous opportunity and huge hassles
Nandagopal J. Nair
Lined up and ready for their bank accounts. (Reuters)
Twenty-six companies have put their names in the hat for India’s first new banking licenses in a decade.
Some of the big competitors include Tata Sons, the holding company of India’s largest conglomerate, and companies owned by billionaires Anil Ambani and Kumar Mangalam Birla. They will battle a motley bunch of hopefuls, including the state-run postal department, two micro-finance firms, and an alliance led by former Citigroup CEO Vikram Pandit.
India hasn’t revealed how many licenses it will grant, but the opportunity is potentially enormous. Only 35% of Indian adults have formal bank accounts, leaving 600 million or so potential new customers. Even still, the number of applicants for bank permits is down sharply from previous decades. In 1993, the central bank received 113 applications; in 2003, there were 100 hopefuls. Tough regulations and an uncertain operating environment seem to have kept away many firms this time around.
The licenses are being issued with the stated goal of bringing more people into the fold of India’s financial system. One in four new branches must be in rural areas, where banking is less common (and less lucrative). Currently, only 6% of the country’s 600,000 villages have access to commercial banking services.
New banks will also be required to meet higher capital standards and reserve ratios. They will have to park 4% of the deposits they collect as cash with the Reserve Bank, and invest another 23% in government bonds.
The holding companies of the new banks will also face many restrictions, which Fitch Ratings believes will make it difficult to attract to capital in the short term:
The new banks are required to list publicly within three years of operation. This timing may coincide—if new banks commence operations within the next two years—with the bulk of the additional Basel III core capital requirements, which are largely back-loaded for the Indian banking system. Over three-quarters of the transitional capital needs arise in 2016-2018, and many of the banks will need to access the capital markets for equity to comply with the rules. Capital challenges and stiff competition mean that only the serious new entrants are likely to survive.
Just how many licenses will be issued is anybody’s guess. The RBI issued 10 licenses in 1993, and just 2 in 2003. So it is likely that most of the applicants this time around will face rejection. Those who miss out may just be the lucky ones. | 金融 |
2016-30/0358/en_head.json.gz/10487 | Oh, Yeah, the Economy
Larry Elder Print this article
The recent Obama administration scandals shift the spotlight from the economy. Yet the recovery remains depressingly sluggish, with the labor force participation rate at a 34-year low as millions of able-bodied, able-minded Americans simply stopped looking for work.
With President Obama in the fifth year of his presidency, let us examine the effect of the stimulus program, tax hikes, Obamacare and additional regulation on the economy. It isn’t pretty.
For the richest Americans, their net worth has fully recovered. For the non-rich, the recovery tells a very different story. At the start of “recovery” in 2009, the mean net worth of the lower 93 percent of households was $139,896. By the close of 2011 — the latest year available — it had fallen 4 percent, to $133,817. Food stamp usage sets new records. So far this fiscal year, over 22 million households have received food stamps, up from less than 15 million in 2009. While the stock market has recovered, most Americans have not. The biggest investment for most Americans is their home and the equity in average home remains 28 percent below its 2006 peak.
How does this recovery compared to other post-World War II recoveries?
An Associated Press article said: “Since World War II, 10 U.S. recessions have been followed by a recovery that lasted at least three years. An Associated Press analysis shows that by just about any measure, the one that began in June 2009 is the weakest. … Economic growth has never been weaker in a postwar recovery. Consumer spending has never been so slack. Only once has job growth been slower. More than in any other post-World War II recovery, people who have jobs are hurting: Their paychecks have fallen behind inflation.” According to Wall Street Journal economist Stephen Moore, “We’ve had the worst, by far — not by a little bit, by far — the worst recovery from a recession since the Great Depression.”
Before President Obama entered office, the national debt stood at about $9.9 trillion. It is now estimated at $17.4 for 2013. Obama added more debt in his first term than President George W. Bush did in two terms. And to what end?
What about Obamacare, marketed as way to provide the uninsured with health care coverage — all while “bending the cost curve” down?
During last year’s presidential campaign, House Minority Leader Nancy Pelosi, D-Calif., said, “Everybody will have lower rates.” But according to independent analysts, those purchasing insurance through an individual plan — the way about 10 percent of Americans currently get their insurance — will likely see substantial rate hikes. The state of California recently released estimates showing increases from 64 to 146 percent.
Economist Jonathan Gruber designed the Massachusetts plan known as Romneycare. Obama hired Gruber to design Obamacare. In November 2009, Gruber told The Washington Post’s Ezra Klein: “What we know for sure the bill will do, is that it will lower the cost of buying non-group health insurance.” After Obamacare passed, Minnesota, Colorado and Wisconsin hired Gruber as a consultant to estimate the impact of ObamaCare on their states. For Colorado, Gruber found that individual policy buyers would pay 19 percent more. For Minnesota, he estimates an increase of 29 percent. For Wisconsin, he expects a 30 percent increase.
Obamacare also applies to full-time workers and defines them as working 30 hours or more. So many employers are simply reducing hours of employees to get under than threshold. Reuters found that half of the Walmarts they recently surveyed have hired: only: temporary employees. One Walmart manager in Alaska says: “Everybody who comes through the door I hire as a temporary associate. It’s a company direction at the present time.”
What about the Obama tax hike on the “rich”?
The Federal Reserve Bank of San Francisco just released a report that called Obama’s tax hikes a “drag” on the economy: “Surprisingly, despite all the attention federal spending cuts and sequestration have received, our calculations suggest they are not the main contributors to this projected drag. The excess fiscal drag on the horizon comes almost entirely from rising taxes.”
Obama has also imposed billions of dollars in new regulations. According to the Heritage Foundation, regulatory costs increased by almost $70 billion during the first term of the Obama administration.
Bottom line: The policies of this tax, spend and regulate administration have produced an anemic recovery. Head-in-the-sand partisans try to explain it away by blaming Bush, the “unpaid for wars,” recalcitrant House Republicans or the luck of the draw. Compared to five years ago, 8 million more people are no longer in the workforce today. Twenty-three million are underemployed, meaning people are working fewer hours than they would like or have accepted a job for which they are over-qualified.
The one silver lining is this: Obama’s left-wing collectivism is getting a full airing — and it is not working. Obama has inadvertently taught — or in some cases re-taught — one of the most important laws of economics: There ain’t no such thing as a free lunch. Not even in a rock-star administration.
Larry Elder is a best-selling author and radio talk-show host. To find out more about Larry Elder, or become an “Elderado,” visit: www.LarryElder.com.
Also see,
Obama Demonstrates the Evil of Big Government
More articles by Larry Elder | 金融 |
2016-30/0358/en_head.json.gz/10512 | Krista Bessinger - Investor Relations
Eric E. Schmidt - Chairman of the Executive Committee, Chief Executive Officer, George Reyes - Chief Financial Officer, Senior Vice President
Lawrence Page - President, Products
Sergey Brin - President, Technology
Jonathan Rosenberg - Senior Vice President, Product Management
Omid Kordestani - Senior Vice President, Global Sales & Business Development
Imran Khan - J.P. Morgan
Douglas Anmuth - Lehman Brothers
Jennifer Watson - Goldman Sachs
Mark Mahaney - Citigroup
Christa Sober Quarles - Thomas Weisel Partners
Robert Peck - Bear Stearns
Benjamin Schachter - UBS
Mary Meeker - Morgan Stanley
Sandeep Aggarwal - Oppenheimer & Co.
Brian Pitz - Bank of America
Marianne Wolk - Susquehanna Justin Post - Merrill Lynch
Heath Terry - Credit Suisse
Jeffrey Lindsay - Sanford Bernstein
Good day and welcome, everyone, to the Google Inc. Conference call. Today’s call is being recorded. At this time, I would like to turn the call over to Ms. Krista Bessinger. Please go ahead, Madam.
Krista Bessinger
Good afternoon, everyone and welcome to today’s third quarter 2007 earnings conference call. With us are: Eric Schmidt, Chief Executive Officer; George Reyes, Chief Financial Officer; Larry Page, Founder and President of Products; Sergey Brin, Founder and President of Technology; Jonathan Rosenberg, Senior Vice President of Product Management; and Omid Kordestani, Senior Vice President of Global Sales and Operations.
Eric, George, Larry, and Sergey will provide their thoughts on the quarter and then Jonathan and Omid will join us for Q&A.
Please note that this call is being webcast from our investor relations website. Our press release, issued a few minutes ago, is also posted on the website, along with the slides that accompany today’s prepared remarks.
A replay of this call will also be available on our investor relations website in a few hours.
Now, let me quickly cover the Safe Harbor statement. Some of the statements we make today may be considered forward-looking, including statements regarding our investments, seasonality, traffic acquisition costs, increase in the cost of sales, international growth, operating margins, growth in headcount, and our expected level of capital expenditures.
These statements involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this presentation and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.
Please refer to our SEC filings, including our quarterly report on Form 10-Q, for the quarter ended September 30, 2007, as well as our earnings press release posted a few minutes ago for a more detailed description of the risk factors that may affect our results. Copies can be obtained from the SEC or by visiting the investor relations section of our website.
Also, please note that certain financial measures we use on this call, such as EPS, net income, operating margin, and operating income, are expressed on a non-GAAP basis and have been adjusted to exclude charges relating to stock-based compensation. We’ve also adjusted our net cash provided by operating activities to remove capital expenditures, which we refer to as free cash flow.
Our GAAP results and GAAP to non-GAAP reconciliation can be found in our earnings press release on our website.
With that, it is my pleasure to turn the call over to Eric.
Eric E. Schmidt
Thank you very much, Krista and in looking at 2007, we are very, very pleased with our year and also with the quarter that’s just ended. If you look at 2007, a strong financial performance across the board, reflecting a performance and a focus here at Google on both growth and profitability, with of course very strong revenue, operating income, and earnings. I want to call out strong international growth. More than half of our search traffic is now outside the United States, more than 150 domains and still growing. The international market is still very nascent with tremendous potential for what we could do over time. And of course, the model at Google about product improvements and innovation continues. Hundreds of search quality launches, greater advertiser control and transparency, obviously higher ROI as a result, lots of new ads formats, YouTube video ads, from example, contests, branded channels. We’re working hard, by the way, to promote open mobile and developer platforms and we’re completing an application suite, [inaudible] integration, presentations, et cetera, and in concert with both product and international focus, we have a global team. We now have offices in more than 20 countries. We are working on having a local presence across global markets and this global local focus is reflected both in our organization and our products and in the way we run the company. Of course in Q4, a solid quarter without a question, pleased with traffic growth across the board even in the relatively mature markets which is always exciting. And obviously we are very happy with gross revenue on both google.com and on our AdSense partners. I think we are going to have Larry and Sergey take you through product highlights. My emphasis area is search, infrastructure investments, things we don’t talk that much about, leading to improved quality as seen by end users that we can measure, and of course giving advertisers more control as the product matures and obviously, as a result, improving their return on investment. The APP strategy, which we announced earlier in the year, now fully visible -- more innovation, data portability, all the apps now either in place or coming and mobile, which we are very excited with Android, the My Location service as part of Maps and many other new features that are both out and coming. So we are optimistic about 2008. We have growing revenue streams across a broad range of verticals and markets. As I mentioned, this international market which is central to our global rule, still relatively nascent with a tremendous potential. Ad dollars continuing to move from offline to online, a trend which is not going to reverse, and of course our ability to use our strong position in markets in order to essentially offer more services to end users and get people even more to see the new benefits of the new Internet world. So with that, rather than me talking about more of the details, why don’t we hear from George and then Larry and Sergey on some of the amazing things that have been happening. George. George Reyes
Thanks, Eric and good afternoon, everyone. At a high level, we had another strong quarter, with gross revenue increasing 51% over Q4 of 2006 to $4.8 billion. Our google.com properties increased 58% year over year, reflecting strong traffic growth during the holiday retail season and, to a lesser extent, monetization growth. AdSense revenue grew 37% over Q4 of 2006, driven by particularly solid performance among our AdSense research partners, including e-commerce and search partners. Offsetting this growth was the impact of a quality improvement to AdSense for content. This changed the clickable area around the text-based ads to only the title and URL, reducing the number of accidental clicks and increasing advertiser ROI. Now let’s look at aggregate paid clicks growth. Aggregate paid clicks includes clicks related to ads served on Google properties, as well as ads served on partner sits. Aggregate paid clicks grew approximately 30% over Q4 of 2006 and approximately 9% over Q3. Let me now discuss our international performance. International revenue increased to $2.3 billion, or 48% of revenue in Q4. Revenue in the U.K. grew 5% this quarter to $692 million, reflecting the usual Q4 seasonal slowdown in the finance and travel verticals. Revenue growth in EMEA was primarily driven by a strong performance in France and Germany, where gains were made in the retail, technology, and finance verticals. We also saw solid gains in relatively smaller markets, such as Canada, Ireland, Spain, and the Nordics. Asia and Latin America continue to show impressive growth rates as well, with Brazil, Mexico, Argentina, and China being notable performers in the quarter. Now turning to expenses, traffic acquisition costs were $1.4 billion, or roughly 30.3% of total advertising revenue, down 40 basis points year over year but up from 29.1% in Q3. The increase in overall TAC rate was primarily related to the performance of a few AdSense partner sites, for which we are required to make guaranteed payments. We have found that social networking inventory is not monetizing as well as expected. AdSense TAC was $1.3 billion, while TAC related to distribution partners and others who direct traffic to our websites totaled $125 million in the quarter. Turning to other costs of revenue, which includes $6 million in stock-based compensation, increased $75 million over Q3 to $516 million. The largest driver of the increase was the increase in costs related to our data centers, including depreciation, equipment, and operations. We continue to anticipate that other cost of sales could increase going forward. Other than cost of revenues, operating expenses in Q4 totaled $1.4 billion, including approximately $239 million stock-based compensation. Expenses related to payroll and facilities increased $97 million to $756 million. At the end of the quarter, we had a full-time employee base of 16,805 employees. We added 889 employees in Q4, with over half the new hires being in engineering, followed by sales and marketing. We have implemented and continue to follow a disciplined hiring process in all areas of our organization. Hiring in Q4 tends to be slower due to the holidays but as we’ve indicated in the past, we will continue to invest in our core business, both in the U.S. and internationally. Turning to non-GAAP operating income, which excludes stock-based compensation, increased to $1.7 billion in Q4, with non-GAAP operating margins of 35%, compared to 36% in Q3. The sequential decrease in margins was driven primarily by the increase in overall TAC, as discussed earlier. As we have said before, margins may decline in the future as we continue to make ongoing investments in our business. Turning to tax, our effective tax rate for Q4 was 25%. Our Q4 rate was more favorably impacted by an R&D tax credit in Q4 compared to Q3 as a result of stock option activity. This was the primary driver of the difference in tax rates between Q3 and Q4. And finally, turning to cash, operating cash flow remained strong at $1.7 billion, with CapEx for the quarter of $678 million. As in previous quarters, the majority of our CapEx was related to IT infrastructure investments, including data center construction, production of servers, and networking equipment. We expect to continue to make these significant investments in CapEx in future quarters. Free cash flow, a non-GAAP measure which we define as cash flow from operations less CapEx, was also strong at $1 billion. So in summary, we believe our results reflect the strength of our core business across our three primary initiatives -- search, ads, and apps, with disciplined investments that position us very well to capitalize on the long-term opportunities we see for Google. With that, I would like to turn the conversation over to Larry. Lawrence Page
Thank you, George. I’m really excited to tell you about some key new things that we did in both search and advertising. So to begin with in search, we had over 100 launches in Q4 with focus on our internationalization and investing in our quality. One of those was universal search, which is now available in 15 languages, up six in Q4. We also launched the universal navigation bar in all languages, which gives our users easier access to all of our Google properties. And book results are now blended in all domains. We also made some behind the scenes infrastructure improvements to improve our quality, and the biggest of those was increased index size, which really improved relevancy, especially for non-English results. We also had substantial improvements in latency and freshness, particularly in Europe, Middle East, and Asia-Pacific. Now, we also made it easier for webmasters to make their site searchable. There’s two things there. The first was webmaster tools. We have several million sites now using and actually doubled our user base over last year, and that basically lets webmasters easily tell what’s being crawled from their site and what’s being indexed and so forth. And we added a bunch of new features to that in Q4. We also have our site maps product, which is another tool to let webmasters make their sites easier to crawl and we added Florida, District of Columbia, and U.K. National Archives, among many other sites, and added many, many thousands of pages there. Now in ads, that’s obviously where we get a large portion of our revenue. We launched some key features there that really drove performance for advertisers and really helped us gain traction. First of those in AdWords was call the AdWords Conversion Optimizer, which we launched in early January and that lets customers big by specifying a cost per acquisition rather than a cost per click. So for example, you could pay only when someone actually buys something rather than just when someone clicks on your ads. AdWords actually, the system actually optimizes their click-based bids to approximate that cost per acquisition for each auction, and that’s really gotten strong adoption, particularly among our larger clients and we’re really excited about that. That really improves the advertiser return on investment. That gives them more conversions which is really what they care about when they actually make money at a lower cost per conversion. In AdSense, we also launched cost-per-click on placement targeted campaigns, such as campaigns that are on a particular website. And this got really strong adoption and it really helped drive better performance and increased spend for our [directory] advertisers, so we are really excited about that too. Now I’m going to turn it over to Sergey. Sergey Brin
Thanks, Larry. I want to talk to you about some of our relatively newer initiatives. I want to start with Google Apps and related products. G-mail -- G-mail launched an important new infrastructure in Q4 and this has really increased performance. For those of you who are G-mail users, you may have noticed how it loads a little bit snappier, you can switch between conversations a little bit faster. It’s really improved my productivity and I hope you see that as well.
In addition to that, this new infrastructure has really made development easier and in fact, we were able after that to launch eight new features within a span of eight weeks. A couple of new features that also makes G-mail more open, we’ve added IMAP support, so you can use all of your favorite e-mail clients, including, of course, devices like the iPhone and you don’t have to use POP3 anymore, you can now use IMAP, which is the better way to go, if you have the choice. You can also now chat with AOL instant messaging users, so this is great now in the Google chat little screen in G-mail. You can connect not just to other Google Talk users but also AIM users, which is a really large population. I want to jump now from G-mail to YouTube. YouTube has continued to have a really strong user growth. In fact, we had a few special events that just demonstrate this. We hosted the CNN Republican debate together with CNN and in fact, almost as many people saw it on YouTube as did on CNN. We consider this a great milestone and we hope to continue to do great partnerships with CNN and others to jointly grow audience for events. We also, I should mention that YouTube is now available in 17 languages, eight more than last quarter, and so we are seeing a lot of international growth. We are really excited about that. In enterprise, we’ve gotten a lot of increased interest, trial, and adoption of Google Apps in larger companies. First of all, we’ve signed an agreement with Taylor Woodrow, which is the construction services division of Taylor Wimpey, a FTSE 100 company in the U.K. We are also finalizing an agreement to deploy Google Apps at Genentech, and those are just a couple of the really big ones we have. We are talking to many, many companies and many are adopting it all the time. In addition, the universities that have deployed this quarter includes the University of Southern California, the North Carolina Greensboro, Florida International, and Clemson. Now jumping a little bit aside in mobile, we’ve really been revving the Google Maps for mobile, among other applications, and Google Maps is just really useful on your cell-phone now. Some of you might have seen our launch of the My Location, which allows you to see where you are on your cell-phone even if you do not have a GPS-enabled phone, and that’s really amazing. In fact, even if you have a GPS in your phone, the My Location can give you a first cut much faster than you can usually get a GPS signal, and it will work indoors. I was just using this, I was at a conference in Switzerland, I was able to find a really small hotel and then even switch over to the satellite view on my phone to figure out that I needed to take a vernicular to get up there. It was just a really amazing experience and we continue to add features and reliability to it all the time. I should mention My Location is available now in 21 countries and it works on four different platforms altogether. We also launched a new rev of apps for the iPhone. We call it Grand Prix internally, but basically you get access that’s really fast and integrated to the major Google products, including search, G-mail, calendar reader, and others. And it’s really had great uptake. I use it personally myself. Many people have really been enjoying this product. It’s growing very rapidly. Last but not least, I’m going to do a shout out to Android, which is the operating system that we are developing for mobile phones, and it’s completely open, of course. It’s going to really solve a lot of the challenges the company’s in the mobile industry have. We’ve released the SDK for it. We formed the Open Handset Alliance, which has now 34 industry leaders in it, and we really think that this is going to make Internet on mobile hopefully as frictionless as it is on your desktop normal Internet experience. This is going to spawn lots more activity and what we love, it’s to see lots of great, open access to the Internet wherever and whenever you are. Anyway, that’s what we’ve been doing on those fronts and now, back to you, Eric. Eric E. Schmidt
Well, thank you very much, George, Larry, Sergey. As you can see, not only did we have a very good 2007 but we are quite optimistic about ’08 and our model continues to work very well. Why don’t we go ahead and move to your questions and I would also like to bring in Omid and Jonathan, previously introduced, to help us answer your questions on this or anything else. So could we go ahead and get our first question?
(Operator Instructions) We’ll take our first question from Imran Khan from J.P. Morgan.
Two questions; first of all, paid click growth rate declined 15 percentage points sequentially year over year, growth rate, so I’m trying to understand how much of that growth rate decline was due to the changes you made and if you see any improvement in the price-per-click because of increased customers return on investment, because your year-over-year revenue growth rate decelerated 10 points as well on your website, so to better understand the relationship between price-per-click and paid clicks growth rate. And secondly, social network monetization is difficult. You talked about that and I believe it’s with News Corp that you signed a long-term contract, so how should we think about that contract and what does that mean for your TAC rate going forward? Thank you. Eric E. Schmidt
Why don’t we start with Jonathan? Why don’t you take the first part of Imran’s question?
Jonathan Rosenberg
Sure, Imran. Basically paid click growth, which you referred to, tracks the traffic growth rate and the traffic growth rate did decelerate. The number of search ads basically grew faster than the number of content ads, so I think one of the things that you have to look at there is what is the mix issue. And then I think there were probably some secondary factors there. Some factors would include things like the focus that we’ve had on weeding out the low CPC, high click-thru rate low quality advertiser, so that’s probably a component. The other thing that we did was there was probably some impact from the non-clickable backgrounds which we launched on AdSense for content, so those were probably the biggest things. I think there was also a little bit of an issue with the timing of the holiday. Monday and Tuesday were Christmas and Christmas Eve, which are conventionally our biggest days, so that was probably a component.
On the CPC side, generally CPCs have been going up, click-thru rates have been going up, and coverage has been going down. I’m not sure I could add much more there. Sergey Brin
I just wanted to follow-up on the social networking question. We don’t talk about individual partners’ performance or anything like that. Now I do want to highlight though, we have had a challenge in Q4 with social networking inventory as a whole and some of the monetization work we were doing there didn’t pan out as well as we had hoped. But we are continuing the efforts and we are still optimistic about future quarters. Operator
We’ll take our next question from Douglas Anmuth from Lehman Brothers.
Thank you. My question is regarding the U.K. it looks like your growth Q2 was about 5% in the U.K. and that compares to about 11% in the fourth quarter of last year. Could you talk about what you are seeing there beyond the usual categories that you may see weakness in typically during 4Q and what you are seeing there from a macro perspective as well? Thank you. Eric E. Schmidt
Omid, do you want to go ahead and handle that?
In general, we are very pleased with our performance in Europe. And actually, I know you asked about the U.K., but very quickly we are seeing great results in France and Germany as well in the retail category. I think in the U.K., we saw the typical seasonal patterns but we were -- there are certain categories that we believe the auction is in effect fully sold out and we are working on clever ideas and conversion analysis for our partners to really improve their understanding of how they should spend and how they should price their bids. But overall, we are very satisfied with the penetration we have with the major accounts. We are at CEOCM tables. I was there throughout Q4 and overall, we’ve seen a lot of strength in the market. Douglas Anmuth - Lehman Brothers
And are those two categories, travel and financial, that are typically seasonally weak? I mean, do you feel like there is an additional macro impact there?
No, those two were the primary ones. Eric E. Schmidt
Jonathan, do you want to add anything to that?
I was just going to add that it was finance and travel. Maybe the only other point to look at there is if you look at the total percentage of advertising spend in the U.K., some of the public data says that it’s roughly 15%, 16%, 17% on search, whereas in the United States it’s more like 6%. So one of the things that you see there is that the seasonality, particularly in those two verticals, is much more marked because they are spending a disproportionately greater amount of money in total on search engine efforts. Eric E. Schmidt
Let’s go to our next question. Operator
We’ll go next to Jennifer Watson with Goldman Sachs.
Thank you. Can you give us a little bit more detail on the feedback that you are getting from both advertisers and consumers on the YouTube advertisements that you guys rolled out?
Omid. Omid Kordestani
We were doing what I can best characterize as just a lot of touch points with our -- both publisher partners as well as advertisers. We are trying different formats. The in-video ads have been very successful. We’ve had a number of campaigns and the way we are also approaching this which I think is unique for Google is really from an integrated and scalable fashion. In the case of -- for example, if I may name some clients, General Motors, for example, Chevrolet Europe, we did what I think is a really truly possible with the advantage that Google has, you know, running the campaigns across multiple countries, delivering large numbers of impressions from YouTube to the content network to the search campaigns. Adobe, for example, ran one of the biggest homepage campaigns we’ve had in the history of YouTube. So all in all, we are doing a lot of experimentation. We are starting to do it globally and we are doing it in every integrated fashion and by adding the other key assets that we have. Eric E. Schmidt
Let me add a couple of other things. YouTube is doing extremely well, growing very, very quickly and doing so internationally as well as in the United States. There’s been an issue around standardizing ad formats for advertisers who would like to be able to do industry buys and so forth. So as these new ad formats are being developed, we are also looking to make sure they get standardized into a common buying pool and pattern so that people feel comfortable that they can get real value. The next generation of projects are actually very, very sophisticated ad products and it looks like they are going to do extremely well. Next question. Operator
We’ll go next -- Krista Bessinger
Operator?
We’ll go next to Mark Mahaney from Citigroup.
Thank you. I wanted to ask a question about mobile, particularly for you, Eric. You’ve got a very interesting perspective from two companies on what’s happening with mobile Internet usage, particularly off the iPhones. How much of a ramp are you seeing? Is there any way you could quantify it and is there a way you think about how mobile search as a percentage of overall search could be in two to three years? Thank you. Eric E. Schmidt
It’s very difficult to estimate the percentage in a few years. We have already said in a number of public statements that it is growing significantly faster on a percentage basis than other categories, and as you mentioned, iPhone is the first of a whole generation of products that will be much more search intensive, and so there’s much more likely to be many more search opportunities and with those search opportunities comes ad monetization. We have done a number of deals for mobile devices already, KTTI and DoCoMo, for example. DoCoMo just announced by Omid in Japan, which are very, very strategic for us. It’s difficult to estimate what percentage it could ultimately be long term, and when I say long term, I mean perhaps 10 or 20 years. It’s reasonable to assume that a majority of searches would be on mobile or personal devices, simply because over a long enough period of time, they will take on the tremendous power that’s represented in the PC and Mac platform. And the wireless networks are getting to the point where they can offer performance similar to the wireline. Jonathan, do you want to add anything?
We’ve been tracking the data very carefully. We are particularly interested in looking at the iPhone, particularly because the experience on web browsing is so good and because of the optimization efforts which we did. We saw a very significant spike in December with the optimization that we did on both the iPhone and it was well over double I think within about a month in terms of increased usage. Mark Mahaney - Citigroup
If I can do a quick follow-up on macro trends -- to the extent that you would see weakness related to a softening consumer, do you think you would see it more on the supply or the demand side -- i.e. ad budgets being trimmed or less consumer commercially oriented searches? Thank you. Eric E. Schmidt
Sergey. Sergey Brin
We’ve been really studying these questions really in depth and near as we can tell, we just offer such a great ROI for advertisers that they can directly see and measures that advertisers in maybe even difficult markets and what not just have great incentive to get as much profitable inventory as they can from Google and the other different kinds of ROI advertising that we offer. So we have not been able to detect any such effects from macroeconomic trends. Eric E. Schmidt
Jonathan. Jonathan Rosenberg
I think some of you have observed that direct marketing tends to be less affected by economic downturns than brand marketing, given a time measurability. I think that’s been true in past recessions. I think we’ll probably see that again. I think one thing we may see is consumers comparison shopping more and that would certainly create more clicks. It might create modestly lower conversion rates but we think overall, if people are doing more comparison shopping and looking for bargains, that’s probably positive. Clearly if there’s less overall commerce in the economy in general, then that could adversely impact overall demand, but we really think that relative to most organizations, we are pretty much tracking the diversity of the overall economy and search-based efforts will fare pretty well. Eric E. Schmidt
Let’s move to our next question. Operator
We’ll go next to Christa Quarles from Thomas Weisel Partners.
The main question I guess is on the C-block I guess passed the reserve price today. Obviously you can’t mention whether or not you are bidding, but can you just talk about what those open access measures ultimately mean for you, and especially with Verizon moving toward open access toward the end of 2008? And also, if you can kind of highlight your WiMax stance. And then a total separate quick question -- I was just wondering if you could give the impact on checkout to COGS in Q4. Thanks. Eric E. Schmidt
On the first part of the question, we’ve concluded we cannot answer any questions in that category because of legislative rules with respect to how the auction is working, so I’m afraid we’re going to only be able to answer the second question, so could you repeat it again?
Well, can you make any comment on WiMax at all, with a separate -- Eric E. Schmidt
As I indicated, I think it’s best practice for us just to move to the second question. Christa Sober Quarles - Thomas Weisel Partners
The second question was just on Checkout and whether it had a big impact on the COGS in Q4. Eric E. Schmidt
I think it’s the same answer that we’ve given in the previous calls -- the impact was immaterial. I think one of the strongest observations that I could give you there is that the organic growth in terms of Checkout overtook the promotion efforts this quarter, so I think that’s a good sign in terms of the general traction that we are getting. The other things that we are seeing there, that the click-thru rates on the [badge] are up as much as 10%, so I think that’s going pretty well. Sergey Brin
If I may, also in addition to the click-thru rates, I think we are starting to get some anecdotal and some actual real studies that demonstrate that the conversions are also up, very substantially and hopefully we’ll be able to share more of that with you in the coming weeks. But there is really good evidence now that Checkout is able to get consumers through the process more quickly and more reliably. Christa Sober Quarles - Thomas Weisel Partners
Okay. Thanks. Eric E. Schmidt
Why don’t we go ahead to our next question?
We’ll go next to Robert Peck from Bear Stearns.
As we think about the margin levels this quarter, should analysts be thinking that based on what you are seeing as far as the social networking side, is this more of a new run-rate level, or do you think the margins were somewhat suppressed by the MySpace relationship in Q4?
And then number two, could you also talk to us about timing of a DoubleClick closing and any sort of impact you can see to the numbers for 2008?
Let me do the DoubleClick question. So everybody knows, we had FTC clearance in the United States in December, which is great, and we are working with the European Commission. We are obviously very hopeful that they will clear as well and that’s probably all we can really say about DoubleClick at this time, but we are certainly hopeful that it will get cleared. We are working with them pretty closely. George, did you want to answer the first question?
George Reyes
Bob, could you repeat the question again?
It’s really more of was the impact of social a one-time impact for 4Q or should we think about this as being more of a normalized EBITDA margin run-rate going forward, particularly as other projects continue to build -- George Reyes
We’re still in the learning stages of how we monetize social networking and this is going to evolve over a period of months, so this is sort of early stage at this point. Robert Peck - Bear Stearns
Any idea on a replacement for CFO?
Maybe. Eric E. Schmidt
We’ve got a number of very good candidates and we are very happy to have George is still doing the job here and has agreed to continue to do this until we find the right replacement and it’s a hard position to replace, given George’s incredible performance. Let’s go to our next question. Operator
We’ll go next to Benjamin Schachter from UBS.
A few questions; I was wondering if you could go into a little more detail on the social networking issues and specifically maybe talk about differences you are seeing with your non-text-based ads versus your text-based ads on social networking. And then another question on TAC associated with Google.com revenue. It continues to move higher, it’s about 4% now. I was wondering if you could talk about the key drivers and if there is a target rate internally for where that may go. And then finally, on healthcare, in the past, Sergey, I think you’ve specifically said that you don’t really think about Google's efforts in healthcare as really a driver for P&L and Eric, I know you are speaking at a healthcare conference in February. Any updates to that? Any change in how you are thinking about healthcare, how it might be a business opportunity? Thanks. Eric E. Schmidt
On the healthcare side, we don’t have any products to announce at this time, so why don’t we answer the first part of your question, Jonathan and Sergey -- social networking and TAC. Sergey Brin
I’m afraid I’m not sure off the bat what the stats were on the image versus text ads. We did have some changes relating to allowing certain kinds of CPC ads, which were only allowed to be bid on a CPM previously, which may have contributed to some cannibalization, or at least for now. But as I said, on the whole I’m not sure what the data is for image versus text. Jonathan Rosenberg
I don’t have too much to add. We’ve certainly seen adoption of both the text and the image ads on social. I think the thing we have to figure out there is how to optimize the look and feel of the ads against the inventory that we have, how to slice the inventory up in alternative ways to try to figure out how to make it work and we’ve got some demos that we’ve just developed that are going to change the way we are doing some of the targeting, so I think we are basically going to have to look at that and try to figure out how do you find people of particular demographics that are comparable to what you might find in the New York Times or in a particular publication that you might have been previously familiar with. Sergey Brin
If I may summarize on the whole, we have a huge amount of social networking inventory, including the MySpace relationship, including of course Orkut, our own network, which is very, very successful and probably like 20 others, or something like that. I don’t know the exact number. But we have an incredible amount of this inventory and in fact, it varies quite a bit in how it all monetizes, based on a number of factors, some of which we understand, some of which we don’t. I don’t think we have the killer best way to advertise and monetize the social networks yet. We’re running lots of experiments. We had some significant improvements but as I said, some of the things we were working on in Q4 didn’t really pan out and there were some disappointments there. I hope to be able to report more progress in the future but it’s a big opportunity because it’s so much inventory. Eric E. Schmidt
Why don’t we move to our next question?
We’ll go next to Mary Meeker from Morgan Stanley.
Thanks. Dave and I wanted to revisit Imran’s question from the beginning of the call. Our worry going into the fourth quarter about Google was related to monetization levels, or cost-per-click growth, given what was going on in financial services, retail, and travel. We weren’t worried about query growth. Now you’ve reported your numbers and by our math, the cost-per-click growth was about 16%, so very robust, the highest we’ve seen in a long time, but by your math, the paid click growth was only about 9% sequentially in what is typically a seasonally strong quarter. And as we were thinking about it, just as we read in the press release before the call started, we thought issues might relate to the fact that it’s tougher to gain share, given how high your share already is, given there might be some share loss, issues about a recession, something geographic, or much slower market growth. And George mentioned then changes in the algorithm impacted, reduced accidental clicks. So our question, and it may be for George, is 9% sequential growth the kind of growth to potentially think about in the December quarter, or did the algorithm have a really material effect on the sequential query growth, or was it something else?
Again, we have to be very careful here not to project any guidance here with all the math, so Sergey, do you want to try to describe what you thought the components of all of this were?
I should mention that we were reluctant to even start reporting that particular metric and it’s because unfortunately, there’s just a lot of complexity in our business and as we try to get the best possible, most useful ads to our end users, and hence get the most promising customers to our advertisers, we trade off a lot of things. So one example is the one that George mentioned, the one that you just talked about -- for example, getting rid of the clickable backgrounds. But there are also factors like we might want to reduce the number of low cost clicks, or perhaps low likelihood to convert clicks, in favor of a smaller number of higher quality clicks. There are many, many trade-offs that we make. So I just -- I would hesitate in inferring too much from just that one metric alone. Mary Meeker - Morgan Stanley
But was some of the -- was the change or some of the unusual things that happened that related to what you just mentioned and what George mentioned, were they global and did they take place through most of the quarter, or were they U.S. based? And then I’m done. Thanks. Eric E. Schmidt
I’m not sure to what degree I can separate out the international component. It certainly is true that prices rise as advertisers get higher conversion rates, particularly over the holidays, and Hal Varian posted a blog that sort of takes you through some of that. The other thing which I think you said which I’m pretty clear is not the case, we’re generally doing very well from a market share perspective domestically and internationally, so the trend there is almost uniformly a gain in market share. Mary Meeker - Morgan Stanley
I guess the one last observation is given that the changes probably had impact throughout most of the quarter and were perhaps global, that potential slowdown could be -- it could be a blip. Eric E. Schmidt
Again, you’re using the term potential slowdown, which is not a term we have used on this call, so again that’s your view, not necessarily ours. Jonathan Rosenberg
Mary, the click growth in the quarter beat our internal forecast. Mary Meeker - Morgan Stanley
Yeah, and it was certainly strong. Eric E. Schmidt
Why don’t we move on? Thank you very much. Next question. Operator
We’ll go next to Sandeep Aggarwal from Oppenheimer.
Thanks. Two questions; one is can you talk about how you are viewing the partnerships you have with some of the big AdSense partners? And basically, it’s clear that you did see some impact in that -- acquisition cost because of the minimum guarantees. I just wanted to know how would you hedge that kind of situation going forward?
And secondly, George mentioned about investments which may drive down the margins. I just wanted to hear from you or get some sense of where these investments will be made -- will this be more of enhancing your existing products and infrastructure, or some new initiatives? Thank you. Eric E. Schmidt
I’ll take the first part of the question. I think in relation to partnerships, we enter all of these with a view to having very successful [inaudible] before going to the partner, as well as ourselves. We would like to have very profitable deals. I think in certain areas, as we’ve been talking about social networking, we make bigger bets to be able to understand that space. We think that’s an important category. We have our own products in that space and we want to understand the monetization, which is again more challenging area for us to figure out, but we are confident given the innovation model that we have and the roadmap that we have that we’ll be able to perform better there. So our goal in all of these deals is to again make the proper levels of investment, proper levels of guarantees and over time, in areas that are newer to us, to understand them better and have better products. Lawrence Page
I was going to add we’ve had I think in many of these areas with great partners, we’ve had very significant improvements in monetization and social networking in different areas. And like Sergey mentioned, I think there’s large opportunities still there. There’s tremendous amounts of inventory and the monetization levels are relatively low compared to other things. And we’ve seen the ability to make significant gains, so we are very optimistic about those areas still. Sandeep Aggarwal - Oppenheimer & Co.
I’m sorry, what about the investments, future investments?
You might want to repeat your question, because I’m not sure I agreed with the premise of your question. Go ahead. Sandeep Aggarwal - Oppenheimer & Co.
I just wanted to hear basically in terms of I -- basically if you can provide some color in terms of future investments. Are they going to be more focused in terms of the enhancements to the existing product portfolio and improving your infrastructure versus some of the new initiatives?
Well, the general answer is that’s where we see big opportunities and our primary focus on investments is in fact in our core business, and you see the success we had in 2007 and in Q4, the vast majority of that was actually not in all the things that generates all the exciting new announcements that we are happy to talk about, but in investments in core search and core advertising globally, which I’m incredibly proud of. George, do you want to add anything on this?
So in terms of your comments around margins going forward, as you know we don’t give guidance. We are going to continue to higher the talented people that we always have. We are going to continue our investments in CapEx and we are going to be very careful around how we proceed with making investments. Sandeep Aggarwal - Oppenheimer & Co.
Thank you. Operator
We’ll take our next question from Brian Pitz from Bank of America.
Can you provide some additional color on why we observed more of a deceleration in Google AdWords versus AdSense? And maybe this is a point of clarification but I think we heard you say that quality changes were made to AdSense and in addition, our assumption is that it was the social networking revenue also falls in the AdSense bucket. And then just a quick second question to Larry on licensing revenue -- should we assume most of the increase is due to the Postini acquisition? And that’s it. Thanks. Eric E. Schmidt
Jonathan, AdSense and -- Jonathan Rosenberg
I think we’ve pretty much answered that with the discussion that we had earlier on the mix issues. I’m not sure I can offer you anymore color. We said that the Google.com traffic was stronger than our own internal expectations. We also -- if you look back at Q3, which I think we talked about on the call then, Q3 was a very, very good quarter, so if you are looking at the sequential growth rate, you are comparing it to a quarter in which we did disproportionately well, relative to what we’ve done in the past but I’m not sure how much color I can really give you there. Lawrence Page
Perhaps it is worth mentioning, I do believe that we include the social networking revenue within the AdSense for content bucket, which is within AdSense as a whole. And perhaps it’s worth [also a note on the side], it’s not necessarily a financial metric, but we have had great partnerships with these social networks now. We’ve now launched Open Social and we have now at least 20 partners on that. We have applications being developed so we have networks who are participating, so we are really excited about all the progress innovation there and even though Q4 for us was a little bit of a disappointment in terms of the kinds of improvements in monetization we were able to generate, that’s -- Q3 was fine for us in that light, as was Q2 and we are optimistic about the future. Eric E. Schmidt
And remember that the Google model is one of experimentation. We keep trying and we keep trying new ideas until we find the ones that really generate phenomenal ROI and not only do we go with them but they grow very quickly. Jonathan Rosenberg
I didn’t want to miss your second question, it was about enterprise growth and Postini?
Yes. Jonathan Rosenberg
And what specifically were you looking for?
Well, should we assume that most of the growth in licensing was due to the Postini acquisition in the quarter?
I think we’ve had a lot of success to date with small businesses. We added a lot of ISPs, which tend to drive a lot of the traffic. We also pushed a lot of the education efforts, which I think had a pretty significant component. Beyond that, it’s hard to -- Eric E. Schmidt
The answer to your question is yes. It’s easier that way. Why don’t we go to our next question?
We’ll go next to Marianne Wolk from Susquehanna.
Marianne Wolk - Susquehanna Thanks. I wanted to focus back on the economy. Can I confirm that when you called the weakness in the U.K. related to travel and finance seasonal, that you have already seen the normal seasonal rebound here in January?
And then as a follow-up, a few retailers we actually spoke to in Q4 said that they increased their spending in online advertising as a way to bolster the slower offline sales. Have you noticed any counter-cyclicality in the business? Could a weaker economy actually accelerate the shift in ad dollars online?
Again, you have a thesis here which we don’t necessarily agree with and in any case, we are not going to talk about the current quarter. We are talking about the quarter that ended in December. I’m happy to say that we have not yet seen any negative impact from the rumors of future recessions. We’ll see what happens. Sergey Brin
But if I may add, I do think that certainly like you’ve seen from several of your contacts, it makes a lot of sense for advertisers if they want to be careful about their spending and they want to make sure they are getting a good ROI, to use the exact kind of advertising that we are offering. I think that makes a lot of sense and I think lots of advertisers recognize that. Operator
We’ll go next to Justin Post from Merrill Lynch.
Justin Post - Merrill Lynch
Thank you. Most of my questions have been asked, but one about your future -- when you think about revenue sources beyond search, what do you think your biggest opportunity is among software as a service -- video or display? Do you prioritize those? And do you think any of them could be material within the next two years?
Lawrence Page
I think it’s hard to prioritize the exact ones. I think we are making tremendous strides in apps, as we talked about. There’s tremendous -- those are of tremendous importance to people and we are also getting revenue from multiple sources there from advertising and from people paying for the service itself. And we’ve obviously seen tremendous growth in YouTube, which we already mentioned, which is great. I think we’ll be -- there’s going to be significant amounts of advertising there also. I’m pretty optimistic about all the new areas we are pursuing and the opportunities there will take -- you tend to underestimate the long term and overestimate the short term for any new thing and I think you want to be careful about that, but I’m very optimistic long-term. Eric E. Schmidt
There’s reasons to be optimistic about all the categories that you described. The display business is literally right in front of us and the DoubleClick acquisition is an essential part of that strategy, so we’ll see. But of course, we have a sales force that is perfectly capable of selling those, customers are purchasing those already, and it’s a market that would benefit from the kind of technology that Google can bring to market. In the case of YouTube, you have a huge forward opportunity just because of the scale of the audience, globalization and so forth, so to the degree that we can develop the ad formats that we describe, it again should become very significant -- exactly when is very difficult to predict. Some more questions?
We’ll take our next question from Heath Terry from Credit Suisse. Heath Terry - Credit Suisse
I was wondering if first you could update us on the local business and exactly where you are in continuing to try and attract advertisers to monetize the tremendous traffic that you’ve built within Google Maps, particularly what kind of progress that you’ve seen out of the local business referral model?
I guess the biggest thing that happened this last quarter was the Local Plus Box, which we launched I think in late November. Basically that was an improvement to the local ads on Google.com. I think it’s only available for the top ads but basically what happens is we show a plus box for the local ads and it expands and basically gives you the advertiser’s address, the phone number, a map, and this is the kind of thing that you’ll see us moving more towards as we try to make our efforts there and our ads more consistent with what is going on with universal search, convey as much information as we possibly can in the ad related to what happens if you click through to it and try to figure out how to capture the local opportunity. Heath Terry - Credit Suisse
Great, and on the local business referral program?
We’re not breaking any of those components out now. We are right now really focused on getting the right content, as Jonathan mentioned. A lot of the success of these areas will depend on having the most comprehensive listings and the right format and we are experimenting with all that, building the right relationships, and it’s still kind of early for us to break it out and really talk about the revenue performance. Jonathan Rosenberg
The one other thing that you could look at is I also believe that we have pretty much completely revamped the regional targeting system and how that works for the advertisers, and I would expect that there will be significant improvement from that as well. Krista Bessinger
We have time for just one more question.
We’ll go next to Jeffrey Lindsay from Sanford Bernstein.
We’d like to ask two things. First of all, could you give us any breakdown of the 889 new staff, geographically and/or by function?
And then second, it looks like the TAC rate increased in the fourth quarter to 88%. Why did the TAC rate go up? What were the drivers behind this and were they one-off factors or were they factors that you expect would continue? Thank you. Eric E. Schmidt
On the hiring question, the first part of your question, you’ll remember that we hired a little ahead of ourselves maybe six months ago, so we’ve returned to our normal hiring process -- more international over time, a balance -- maybe 50-50, or close to it, technical and non-technical. We are a very difficult place to get a job at and so we continue to look to the very, very top talent in each and every position, and we do that worldwide and it’s working very well. And I don’t think any of that is going to change. I think that model for hiring and building the organization has worked for us for many years and I think it will continue. George Reyes
Our TAC rate is not 88%. We are looking at TAC as if it were a percentage of advertising revenue, which is roughly 30%. So as we’ve said, primarily this is all related to our AdSense partner sites and that’s -- which is where we are required to make the guaranteed payments and social networking is also something that is coming online pretty strongly. Eric E. Schmidt
So with that, I want to thank everybody. Thank you, Krista, thank the Operator and thank all of you for spending so much time once again on your afternoon/evening covering Google and we look forward to talking to you in our next quarterly earnings call. Thank you very much. Operator
This concludes today’s conference. We thank you for your participation. You may now disconnect.
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2016-30/0358/en_head.json.gz/10593 | Range looks to sell Texas drilling assets By Timothy Puko
| Thursday, Dec. 5, 2013, 12:01 a.m.
Pennsylvania most likely would be the biggest beneficiary from Range Resources Corp.'s attempt to sell West Texas drilling land, according to analysts who follow the company. The Texas company told federal regulators this week it has hired Bank of America Merrill Lynch to market 90,000 acres it leases in the oil-rich Permian basin. That fits in with a long-standing trend at Range to sell assets around the country as it concentrates on drilling in the Marcellus and other gas-rich Appalachian formations. “Their returns in the Marcellus are higher than anything else they've got out there,” said Raymond Deacon, Brean Capital LLC's lead analyst for oil and gas production companies. A spokesman at Range's Cecil office could not be reached for comment. The company's filing with the Securities and Exchange Commission did not say how much it is seeking or why it is selling its property in the Permian, one of the country's hottest oil and gas areas. It effectively takes the company out of the Permian, investment firm Tudor, Pickering, Holt & Co. said in a note to energy investors. The company has sold holdings several times before. In 2011, it sold out of the Barnett shale in the Forth Worth basin near its headquarters to raise $900 million for Marcellus shale drilling. It put a smaller chunk of land on the market in Oklahoma last summer and in February sold another small piece of Permian land in southeast New Mexico and West Texas for $275 million, all to fund Appalachian development. The new transaction could bring in about $400 million to $600 million, Deacon said. Tudor, Pickering, Holt & Co. estimated the value of wells that Range is selling at about $200 million, with the undeveloped land adding another $300 million to $350 million to the package. Range is growing in Pennsylvania, and its debt is too high for proceeds from a sale to lead to an even bigger surge for now, Deacon said. The company plans to spend about $1.3 billion in capital expenditures this year but brought in only about $690 million in cash through September, according to its most recent quarterly earnings statement. At that rate, it will outspend its cash flow by more than $300 million, according to Deacon and data gathered by Bloomberg. The Permian sale will help close some of that gap and keep the company growing without taking on more debt, Deacon said. Range executives recently announced plans to drill their first Utica shale well — deeper than the Marcellus — in Washington County, and the Permian sale could help down the line if that experiment works out, Deacon said. “If that works, I think they'd like to have their balance sheet be in as good a shape as possible to be able to ramp up there,” he said. Timothy Puko is a staff writer for Trib Total Media. He can be reached at 412-320-7991 or [email protected]. More Business
$30M in federal funding to help clean up Pennsylvania coal mines
Owners rush to refinance at lower rates
Lawsuits blamed on patent office
Heartfelt letters give homebuyers edge | 金融 |
2016-30/0358/en_head.json.gz/10631 | SIA: Agreement with Orange Business Services for Mobile Point of Sale Payment Solution in Europe
SIA and Orange Business Services have signed a collaboration agreement that will enable European and extra-EU banks and merchants to manage payments via mobile point of sale (POS) terminals.
More specifically, Orange Business Services will provide a managed M2M solution with global roaming services enabling remote terminals to automatically transmit data to the SIA technology infrastructure.
The agreement will allow SIA to take a significant step forward in the creation of a single operating network at the European level which will collect payments traffic generated by wireless POS terminals and other channels of merchants and then deliver it securely and reliably to the authorization systems of banks, terminal operators and other acquirers.
At present, SIA has enabled almost 5,000 mobile POS terminals and plans to reach around 60,000 terminals by the end of the year. These devices can manage transactions coming mainly from European countries (including France, Germany, Hungary, Ireland, Italy, Luxemburg, Poland, Portugal, Romania, Slovakia, Spain, Switzerland, and United Kingdom) and extra-EU countries, such as South Africa.
“Thanks to the Orange Business Services solution, from today we are able to simplify further the communications between merchants and banks by offering payments also via mobile POS terminals at continental level. This reconfirms SIA’s role as a single partner in Europe, managing the last mile of payments regardless of the type of connectivity employed and the country where the transaction is originated,” said Andrea Galeazzi, Network Services Division Director, SIA.
“With our solid track record in the financial services market, Orange Business Services combines a deep vertical knowledge, mobile managed services and machine-to-machine expertise with its unmatched global network reach,” said Helmut Reisinger, senior vice president, Orange Business Services Europe, Russia & CIS. “This unique services skillset makes Orange Business Services a perfect match for a company like SIA that is deploying a global, seamless M2M solution customized for the finance sector.”
About Orange Business Services
CIO, CTO & Developer Resources Orange Business Services, the Orange branch dedicated to B2B services, is a leading global integrator of communications solutions for multinational corporations. With the world's largest, seamless network for voice and data, Orange Business Services reaches 220 countries and territories with local support in 166. Offering a comprehensive package of communication services covering cloud computing, enterprise mobility, M2M, security, unified communications, videoconferencing, and broadband, Orange Business Services delivers a best-in-class customer experience across a global landscape. Thousands of enterprise customers and 1.4 million mobile data users rely on an Orange Business Services international platform for communicating and conducting business. Orange Business Services was awarded three of the telecom industry’s highest accolades at the annual World Communication Awards 2012 – Best Global Operator, Best Cloud Service and the User’s Choice Award. Orange Business Services is a five-time winner of Best Global Operator. Learn more at www.orange-business.com or follow us on LinkedIn, Twitter or Facebook.
Orange is one of the world’s leading telecommunications operators with annual sales of €41 billion in 2013 and has 165,000 employees worldwide at Dec. 31, 2013. Orange is listed on the NYSE Euronext Paris (symbol ORA) and on the New York Stock Exchange (symbol ORAN).
Orange and any other Orange product or service names included in this material are trademarks of Orange Brand Services Limited.
About SIA
SIA is European leader in the design, creation and management of technology infrastructures and services for Financial and Central Institutions, Corporates and Public Administration bodies, in the areas of payments, e-money, network services and capital markets. SIA Group is currently present in around 40 countries, and also operates through its subsidiaries in Hungary and South Africa. The company has offices in Milan and Brussels.
With 9.2 billion transactions annually relating to cards, collections and payments, corresponding to over 4 billion operations, SIA manages 63 million cards and carries 11.9 thousand billion bytes of data on the network.
The Group is made up of seven companies: the parent SIA, the Italian companies Emmecom (innovative network applications for banks and businesses), Pi4Pay (services for Payment Institutions), RA Computer (treasury solutions for banks, businesses and P.A.), and TSP (payment collection services for companies and P.A.), Perago (infrastructures for central banks) in South Africa and SIA Central Europe in Hungary.
For more information, go to: www.sia.eu | 金融 |
2016-30/0358/en_head.json.gz/10730 | 1367.5 - Western Australian Statistical Indicators, Dec 2009 Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 28/01/2010 SummaryDownloadsExplanatory Notes
Contents In this issue List of Historical Feature Articles About this Release Expanded Contents Adult literacy in Western Australia (Feature Article) Housing Finance - Subsidies For First Home Buyers (Feature Article) History of Changes Seven-in-ten adults have insufficient problem-solving skills for everyday life (Media Release) FEATURE ARTICLE 2: HOUSING FINANCE - SUBSIDIES FOR FIRST HOME BUYERS INTRODUCTION
The housing market has long been recognised as having a significant impact on the Australian economy. With one of the highest home ownership rates in the developed world, Australia has had, in recent years, a number of government policies implemented to stimulate the construction industry and the housing market when under threat of decline.
In the last decade, there have been two periods of change in the housing market when grants for first home buyers have been made available. The first initiative, the First Home Owner Grant (FHOG) was for owner-occupied housing and commenced in July 2000, coinciding with the Commonwealth government's introduction of the Goods and Services Tax (GST). The FHOG was introduced to offset the additional cost of building a home, due to the GST, through a one-off payment of $7,000 to eligible first home buyers. This grant program was then adopted by all states and territories through their respective treasury and finance departments. The second initiative commenced in November 2008, when the global economic downturn caused many Australians to be unsure of where to invest their money. To reduce the impact of the Global Financial Crisis (GFC) the Commonwealth Government introduced the First Home Owners Boost (FHOB) for homes purchased after 14 October 2008 (and before 30 June 2009). With an emphasis on stimulating construction of new dwellings, this boost was then extended to 30 September 2009, when it was halved until it ended on 31 December 2009.
In Western Australia, as in other jurisdictions, the FHOB was additional to the State Government's provision of the FHOG and the reduction of stamp duty for eligible buyers. The additional funding assisted many Western Australians entering the housing market for the first time, with up to $21,000 being available for those wishing to build. The FHOB was one of the Commonwealth's responses to the GFC, reflecting concerns about the likely effect of reduced residential building activity on the economy. The provision of first home buyer grants is only one of several factors which may impact on the housing market at any given time. Bank interest rates on home loans are one of the critical factors, with lower interest rates enabling home buyers to service relatively larger loans. Since the official cash interest rate is set by the Reserve Bank of Australia (RBA) and housing loan interest rates are set by the various lending institutions, these are outside the direct control of State and Commonwealth Governments. As shown below, the movement in interest rates in late 2008 was different from that in 2000 when the first home buyer scheme was implemented.
This article presents an analysis of the impact of first home buyer grants on the Western Australian housing finance market over the last decade, while highlighting some other factors such as changes in loan interest rates. The data used in this article are monthly owner-occupied commitments data from Housing Finance, Australia (cat. no 5609.0) for the period from January 2000 onwards. Although seasonally adjusted and trend data on first home buyers are available at the national level, comparable data for the states and territories are not and, therefore, original data only are used in this analysis.
BACKGROUND TO THE HOUSING MARKET
In the past decade, there has been a significant growth in mortgage loans due to factors affecting both supply and demand. The growth in the supply of mortgage loans was the result of innovation in the financial markets and competition between mortgage providers. The most significant innovation was securitisation, whereby lending institutions remove mortgages from their balance sheets by selling them to special purpose vehicles (usually a trust), which finance purchases by issuing debt. The cash proceeds from the sale are then used by the original lending institution to make additional lending. The growth in securitisation resulted in an increase in the number and type of institutions involved in financing home loans beyond traditional lenders, which contributed to a greater variety and flexibility of loan products on offer and increased competition between lenders. On the demand side, average mortgage loan size has increased markedly due to an increase in housing prices, especially in Perth and other capital cities, where sustained economic growth during the period of the resources boom continued until 2007. In addition, incentives offered by the Commonwealth and State and territory governments, in the form of the first home buyer scheme and a series of stamp duty concessions for first home buyers, increased demand for owner-occupied housing, while borrowing for investment housing was stimulated by tax incentives, such as depreciation allowances and lessening of capital gains tax. These incentives, along with an economic climate of relatively low interest and unemployment rates, contributed to households' willingness to significantly increase their indebtedness.
FIRST HOME BUYERS Number of Loan Commitments One way of assessing the impact of first home buyer grants is through a comparison of the number of housing finance commitments (loan approvals) in the months before and after the introduction of the grants. The table below shows an increase in the number of new commitments following the introduction of each grant. In Western Australia, the implementation of the grant in July 2000 was followed by a 91% increase, from the previous month, in the number of commitments to first home buyers, while the November 2008 grant was accompanied by a much smaller increase (6%). The difference in the size of these two increases in first home buyer loans can, in part, be related to the economic climates prevailing in 2000 and 2008. In July 2000, the impact of the GST on the cost of new residential building appears to have been mitigated by the $7,000 grant to new home buyers. By contrast, the global financial downturn of 2008 initially brought about a crisis of confidence among home buyers, which continued until the government stimulus packages and lower interest rates took effect. This manifested in many would-be home buyers deciding to postpone their entry into the housing market despite the further boost in the grant to first home buyers. First Home Buyer Commitments, Western Australia, 2000 and 2008
June 2000July 2000ChangeOct 2008Nov 2008Change
no.no.%no.no.%
Housing Loan Commitments776 1 48190.91 3071 3845.9
Average Loan Size ($'000)117.1114.4-2.3266.4281.75.7
Source: Housing Finance, Australia (cat. no 5609.0)
Average Loan Size
The average housing loan commitment size is determined by both the number of commitments and the size of the aggregate value of the loan commitments. While commitments to first home buyers might be expected to decrease, on average, by an amount equivalent to the grant received, this assumes no other mitigating circumstances such as changes to the tax system (e.g. GST), interest rates or house prices due to rises in building costs or changes in buyer demand. Following the introduction of the FHOG in July 2000, a small decrease (2%) in the average loan size of first home buyers did occur in Western Australia, notwithstanding the introduction of the GST. It is noteworthy that the average home loan interest rate remained steady at 7.80% in the month the FHOG was introduced. (While interest rates did increase slightly in the following months, there was a corresponding decrease in the average loan size. By October 2000 the number of first home buyer commitments had reduced to 1,204 and the average loan for these borrowers was $107, 200.)
In contrast, the introduction of the FHOB grant in late October 2008 was associated with an increase in average loan size. This increase was particularly pronounced in Western Australia, where the average size of the first home buyer loan rose immediately by almost 6% to $281,700. At the same time, the average interest rate dropped between October and November from 8.35% to 7.75% and continued to fall for a further seven months, reaching a record low of 5.75% in April and May 2009. This would be expected to have some impact on the borrowing capacity of first home buyers. The following graph shows average home loan interest rates over the last decade and is based on average standard variable rates offered by the four major lending institutions in Australia.
NON-FIRST HOME BUYERS
Among non-first home buyers, the number of new home loan commitments in Western Australia fell by 13% in July 2000, the month in which the FHOG was introduced, with a similar pattern of a fall of 15.7% occurring in 2008 with the introduction of the FHOB. Non-First Home Buyer Commitments, Western Australia, 2000 and 2008
Housing Loan Commitments4 455 3 862-13.35 3594 518-15.7
Average Loan Size ($'000)116.5118.11.4259.6248.2-4.4
Source: ABS publication, Housing Finance, Australia (cat. no 5609.0)
The average loan size for non-first home buyers increased marginally by 1.4% in 2000 after the introduction of the FHOG. In contrast, after the introduction of the FHOB in 2008 the average loan size decreased by 4.4%, which perhaps reflects the impact of the GFC on the mind set of the non-first home buyer.
COMPARISON OF FIRST HOME BUYERS AND OTHER BORROWERS Proportion of Loan Commitments One consequence of government intervention in the housing market in the last decade appears to have been an increase in the number of loan commitments to first home buyers as a proportion of the total number of commitments. The graph below shows this proportion over the last 10 years, with pronounced peaks in the 2000-01 and 2008-09 financial years at both the state and national level. For example, in the first six months after the introduction of the government grant in November 2008, the proportion of loans to first home buyers (excluding re-financing) in Western Australia grew from just over 30% to a record 43%. During both periods (2000-01 and 2008-09) the steep growth in the proportion of first home buyers can reasonably be assumed to be a direct consequence of the grants available at the time and the knowledge of their systematic wind-down by December 2009. Loan Size Comparisons
In March 2008, the average loan size for first home buyers was $234,400, compared with $239,800 for non-first home buyers. Since that time, these figures have shown an increasing divergence, with loans to first home buyers outstripping those of non-first home buyers. By March 2009 the average loan of first home buyers had increased by 25%, to $293,900 while, for non-first home buyers, it had increased by less than 14%, to $272,900. If the effects of re-financing are removed from the non-first home buyer series, a different story emerges. While the average size of a first home buyer commitment has typically been smaller than that of a non-first home buyer, the implementation of the FHOB appears to have had the effect of increasing the average first home buyer commitment to a similar or higher level. In November 2008 the average size of a first home buyer commitment exceeded that of the non-first home buyer commitment for the first time since April 1992.
In 2008 there was also a notable increase in re-financing loans as a proportion of all non-first home buyer loans. In January 2008, re-financing loans accounted for 42% of all Western Australian non-first home buyer loans. By January 2009 this proportion had risen to 48%. Given the RBA's move during the global financial downturn to lower interest rates, it is likely that a significant proportion of non-first home buyers re-financed their home loans to take advantage of lower interest rates, which fell from an average of approximately 9% in January 2008 to 6% in January 2009. Not unexpectedly, this increase in the number of re-financed loans, together with the relative small size of these loans, had an impact on average loan size for non-first home buyers and contributed to the disparity in average loan size between these borrowers and first home buyers.
Both the 2000 and the 2008 grants had a positive impact on the number of housing finance commitments among first home buyers and thereby achieved their primary purpose of stimulating residential building activity. However, due to other market forces, these government interventions did not have the same impact on average loan size. While the FHOG in 2000 was followed by a decrease in the average loan size of first home buyers, the average loan increased in 2008 following the introduction of the FHOB. In 2008-09, the combination of low interest rates, grants of up to $21,000 and state initiatives including reduced stamp duty, enabled an increase in the amount eligible first home buyers could borrow from lending institutions. In November 2008, the average loan size of first home buyers exceeded that of non-first home buyers for the first time. In addition, declining interest rates between November 2008 and June 2009 enabled other home buyers to re-finance their existing home loans, with a consequential downward effect on the average loan size of non-first home buyers. While government initiatives such as the FHOG and the FHOB clearly influenced the housing market, grants to first home buyers have now been phased back. On 1 October 2009, the total grant was reduced to $14,000 for new homes and to $10,500 for established homes. On 1 January 2010, the grant was further cut back to pre-2008 levels ($7000 for both new and established homes). These reductions in the grant have been accompanied by a drop in new housing loan finance commitments. In November 2009 total commitments in Western Australia fell by 3.6% in original terms (which translates to a fall of 2.5% in seasonally adjusted terms). For first home buyers the comparable fall was 10.8% in original terms (with seasonally adjusted figures not being available).
Although movements in interest rates will impact on the demand for housing loans in 2010, the prevailing economic conditions, as well as the introduction or reduction in government initiatives, will have a significant impact on trends in housing finance.
Housing Finance, Australia, 2009 (ABS cat. no 5609.0)
Financial Markets (F Tables), Indicator Lending Rates, Australia 2009 (Reserve Bank of Australia, Table F5) http://www.rba.gov.au/statistics/bulletin/index.html | 金融 |
2016-30/0358/en_head.json.gz/10834 | Twitter drawing on lessons learned from Facebook IPO
Jessica Guynn and Chris O'Brien
SAN FRANCISCO — Call it the anti-Facebook IPO.It may be the most hotly anticipated initial public stock offering since Facebook Inc. But Twitter Inc. is doing all it can to distance itself from the Facebook fiasco, which has become a case study on how not to take your company public.
"Certainly the crew at Twitter has had ample opportunity to study recent history and draw whatever lessons they can from it," said Kevin Landis, whose Firsthand Technology Value Fund has a substantial stake in the San Francisco social media company.For one thing, Twitter is likely to price its shares more modestly so it has room to grow once it goes public, analysts say, and probably will offer a smaller percentage of the company than Facebook did to goose demand.
Twitter's caution was apparent Thursday when it announced via a surprise tweet that it had confidentially submitted paperwork to begin selling stock to the public.It was the antithesis of Facebook's splashy announcement in February 2012, which gave investors an early and revealing glimpse into every aspect of its financial performance.Each subsequent public filing received intense scrutiny, especially the one that raised worrisome questions about Facebook's lack of mobile advertising revenue. Facebook sold $16 billion in stock to investors in May 2012, only to see its share price skid in the following months amid doubts about its ability to make money from its 1 billion users.Twitter took advantage of a provision in the law that allows a company with less than $1 billion in annual revenue to keep its financial data under wraps from competitors and the media until it begins actively marketing its stock to investors.
By filing under the Jumpstart Our Business Startups, or JOBS, Act, Twitter can avoid the pitfalls that Facebook encountered while still stirring excitement over the IPO."Twitter gets to have its cake and eat it too," said Landis, whose fund bought more than 1 million Twitter shares on the private market at an average cost of $17 a share. "Twitter gets to start the drumbeat for the stock without revealing too much."The process gives Twitter a greater measure of control than Facebook had, Altimeter Group analyst Charlene Li said. Twitter can consult with the staff at the Securities and Exchange Commission about providing numbers and estimates, and may be able to sidestep some of the pitfalls faced by Facebook."Twitter's business model is really confusing. It's not obvious how they make money," Li said. "They can spend the next few months going out and educating the marketplace."The shroud of secrecy is an ironic touch for a company that prides itself on transparency — and it leaves prospective investors very little to go on."Twitter is a strong, fast-growing company that is increasingly important in the media industry while still being relatively small," Pivotal Research Group analyst Brian Wieser said. "But we really know very little about it at this point in time. We don't know how big its business in Japan is. We don't know about its capital expenditures or its data center expenditures. We know far less than we need to know to make any real assessment."Twitter is seizing on an opportune moment to sell stock to the public — and it has Facebook to thank. Investors have warmed up to social media stocks, especially as mobile advertising revenue growth accelerates.Facebook's shares hit a record high of $45 this week, above the $38 IPO price. LinkedIn, the professional networking service, is trading at sky-high levels even after selling an additional $1 billion in stock to investors in a secondary offering.That's why Twitter is also working on a faster timetable. Most analysts expect Twitter to hold its IPO by December to take advantage of Facebook's dramatic comeback with investors and LinkedIn's continued success.Twitter was built to send simple text messages on mobile devices, and has been growing rapidly. It said in December 2012 that it had 200 million active users, and there's widespread speculation that it's closing in on 300 million."Facebook and LinkedIn have done a tremendous amount of the work for Twitter in terms of establishing these types of businesses as important and worth investing in," said Michael Scissons, chairman of Grid Ventures, an investment and business consulting firm.Still, Twitter's business is at a much earlier stage — it only began showing ads to its users in 2010 — and analysts say it has a lot to prove. Research firm EMarketer expects Twitter to increase advertising revenue 63% to $950 million in 2014 from $583 million this year. That's up from $140 million in 2011.It's wildly popular with celebrities, musicians and politicians and has deep tentacles into the worlds of media, sports, politics and entertainment, but it's confusing to new users.And its business is not as easy to understand as Facebook, Wedbush Securities analyst Michael Pachter said."I'd say 90% or more of institutional investors are on Facebook, 20% or fewer are on Twitter," Pachter said. "Twitter has a huge uphill battle to explain to the investing community what it does."Twitter makes most of its revenue from an ad called a "sponsored tweet," which is given a prominent spot in users' timelines, the streams of updates from the accounts they follow. Advertisers bid for their messages to appear in the timelines of certain demographics or with certain keywords.The key challenge facing Twitter: Ads on Twitter only work on Twitter, Li said."That makes ad buying — and scaling to media buyers — more difficult," she said.But Twitter has an edge Facebook did not at the time of its IPO: Its mobile advertising business. Ads on smartphones and tablets are expected to make up more than half its revenue this year, according to EMarketer.It also has the seasoned guidance of patient managers, Scissons said.Dick Costolo, who took over as chief executive in October 2010, has taken his time putting in place the right executives and rolling out advertising products that generate results for marketers and don't alienate users, Scissons said.With the IPO, Twitter is looking to build a war chest to fuel its global expansion and take on Facebook, with which it competes for online advertising dollars and eyeballs.
It's also a way for employees and investors to cash in their shares. Twitter has received more than $1 billion in venture funding. In recent months, Twitter put an airtight lid on selling shares on the private [email protected]
[email protected]
Twitter's IPO: Questions and answers
Twitter files for an IPO; five things you should know
Could Twitter's stunted growth prospects scare off investors? | 金融 |
2016-30/0358/en_head.json.gz/10862 | « Health Reform and Obesity--Posner |
| The World Recession is Ending: What Next? Becker »
I see the economic situation somewhat differently from Becker. The least significant of our differences concerns nomenclature. Many economists describe any economic downturn less severe than the Great Depression of the 1930s as a mere "recession." The consequence is to lump together economic downturns of greatly varying severity. The current downturn is far more serious than any of the downturns the nation has experienced since the end of the Great Depression. It is true that unemployment was higher for a time in 1982 than it is now, but unemployment is not the only measure of economic distress. Duration is important as well, but even more important are the political consequences of the downturn. These are likely to be profound, as I believe Becker agrees.
Other economists use an arbitrary benchmark, like 10 percent unemployment or a 10 percent drop in output. Unemployment was 9.5 percent in June, 9.4 percent in July (a drop due solely to the fact that fewer people are looking for work--they have given up hope of finding a job in the near term). If it rises to 9.6 percent next month, will that convert a recession to a depression?
I also disagree with the view that a recession or depression ends when output stops falling. That would mean that the Great Depression ended (though it later restarted, as Becker mentions) in March 1933, when unemployment was 25 percent and output had fallen by a third since 1929. A recession or depression ends, in my view, when output rejoins the GDP trend line, that is, when it reaches the level it would have reached had the economy grown at its average rate of growth, rather than being depressed. At the moment, as I point out in my Atlantic blog entry of August 1, output is 7.2 percent below the trend line, which suggests that the economy will remain depressed for at least the next two years. Distance from trend line seems, by the way (to recur to the discussion in the previous paragraph), a better measure of the gravity of an economic downturn than drop in GDP. If GDP is flat, or rises only very slowly, for years, the gap between actual and trend-line output eventually becomes enormous.
The global economic crisis has exposed many weaknesses, mainly I think in government and in the economics profession, specifically that part of the profession that studies the business cycle. These weaknesses are among the most interesting aspects of the current depression. I attribute the depression mainly to unsound monetary policy by the Federal Reserve under Greenspan and (initially) Bernanke and lax regulation of financial services by the Fed, the SEC, and other government agencies, and to a general complacency concerning the self-regulating capacity of free markets. Government officials (many of them economists), business economists, economic journalists, and academic economists alike were, with rare exceptions, taken by surprise by the bursting of the housing bubble (they didn't realize it was a bubble), the ensuing banking collapse, the stock market crash, the sharp decline in output and employment, the global scope of the crisis, and the onset of deflation in the late fall of 2008 that created fears of a depression comparable to the Great Depression of the 1930s. By the beginning of this year Bernanke and other senior officials, along with many economists, businessmen, and consumers, were in a state of near panic.
A number of macroeconomists and financial economists, including leading figures in these important branches of economics, had believed until last September that there could never be another depression, that asset bubbles are a myth, that a recession can be more or less effortlessly averted by the Fed's reducing the federal funds rate, that the international banking industry was robust, and that our huge national debt was nothing to worry about, nor our very low personal savings rate. All these beliefs have turned out to be mistaken, along with influential versions of the rational expectations hypothesis, the efficient-markets theory, and real business cycle theory.
The rapid increases in housing prices during the early 2000s were a bubble phenomenon (contrary to Bernanke's statement in October 2005 that they were driven by "fundamentals"), and the bursting of the bubble brought down the banking industry because the industry was heavily invested in financing the bubble. The low personal savings rate reflected people's belief that ownership of houses and common stocks was a stable form of savings, so that when the prices of these assets plummeted the market value of people's savings fell steeply. People had to rebuild their savings, and so personal consumption expenditures fell, precipitating a steep decline in output and a sharp rise in layoffs. That in turn created a downward spiral accelerated by the distress of the banks, which reduced access to credit by both businesses and consumers. Our national debt, and the government's unwillingness or inability to prevent it from growing--the Bush Administration having established, contrary to traditional Republican principles, a pattern of coupling extravagant government expenditures with steep tax cuts--complicated the response to the economic crisis by limiting the amount of new debt that the government could prudently take on.
Because economists have yet to achieve an adequate understanding of the macroeconomy and business cycles, I do not think it is possible to fault the government for having acted aggressively--and expensively--to fight the crisis. By flooding the economy with money (in part by purchasing huge amounts of private and long-term public debt, rather than just short-term Treasury notes), and bailing out the major banks (particularly the "nonbank banks" that have become indispensable sources of credit) with government loans, the government placed a floor under the precipitous drop in lending that began last September. Lending has continued to decline, though slowly. The continued decline is due partly to the fact that banks have hoarded most of the money they've received from the government rather than lending or otherwise investing it (because default rates are high and bank capital is still impaired despite the government largesse), and partly to the fact that the demand for loans has dropped as overindebted consumers, and businesses facing reduced demand for their output, have retrenched.
Many mistakes were made in the government's response to the crisis, in part because the possible need for aggressive interventions to stave off economic disaster had not been foreseen (the problem of complacency)--notably the failure to save Lehman Brothers. But on the whole the government's response was--until reccently, as I am about to explain--appropriate, given the risk of an even worse economic collapse.
The most controversial measures taken by the government have been the bailout of General Motors and Chrysler, which began last December, and the $787 billion stimulus (Keynesian deficit spending) program enacted in February. I believe both these measures were justified, though for reasons that do not receive sufficient emphasis. Contrary to what until recently most macroeconomists believed, a capitalist economy, though superior to any other economic system, is inherently unstable because of its potential for adverse feedback effects; hence the need for watchful monetary and fiscal regulation. A severe shock, such as the economy received last September, can, without prompt and effective government intervention, trigger a steep downward economic spiral, with sharply reduced consumer spending, resulting in falling output that precipitates layoffs that result in reduced personal income and so further reduces spending and hence output, which induces further layoffs, which further reduce incomes and spending. As spending falls, sellers reduce prices, which creates expectations of further price reductions (deflation), which induces hoarding, since in a deflation the purchasing power of money rises even if the money is kept under one's mattress rather than being invested; so investment drops. Deflation also increases the burden of debt, which precipitates defaults and bankruptcies and further reduces incomes and spending.
The fear of a deflationary spiral such as I have just described was acute at the end of 2008 and the beginning of this year, and could not be dismissed as unfounded. In that setting, bailing out GM and Chrysler was a prudent measure, since without it both companies would have had to declare bankruptcy and might have liquidated rather than reorganized, because the credit crunch had temporarily eliminated the availability of "debtor in possession" financing, essential to a reorganization in bankruptcy. The auto companies would have run out of cash by the end of December. To continue operating, therefore, they would have had to borrow money. But no bank or other private entity was lending "DIP" money then; it was near the peak of the credit crunch. If the auto companies had been unable to obtain DIP financing, their creditors would have had to force liquidation, which would have resulted in an increase in the unemployment rolls, possibly by millions, within a very short time. That would have been a severe further shock to an already deeply wounded economy.
Similarly, with regard to the stimulus, when Obama took office on January 20 the measures the government had taken to date--the easy money, the bailouts, and so on--had not arrested the economic decline. For the new Administration to have announced that it had run out of ideas for arresting the decline, and we'd just have to tough it out, could have produced a catastrophic drop in business and consumer confidence, which could in turn have increased hoarding, layoffs, deflation, and so forth.
The auto bailouts staved off the collapse and possible liquidation of GM and Chrysler; and the stimulus package, by showing that the President and Congress were determined to react with maximum vigor to the economic crisis, buoyed (I am guessing) business and consumer confidence. In addition, although estimates of jobs saved by the stimulus are bogus, the initial expenditures under the program, consisting of tax credits and increased unemployment-insurance and health benefits, are probably responsible for a slight increase in personal consumption expenditures, which in turn may have had a slight indirect benefit on output and employment.
The much-criticized "cash for clunkers" part of the stimulus, though it will do nothing for the environment, has, at the least, by inducing increased purchases of motor vehicles, increased confidence that the economic downturn is bottoming.
Unfortunately, the auto bailouts of last December have morphed into a huge and possibly quixotic project of revitalizing, rather than just postponing the demise of, two highly inefficient enteprises; and the stimulus package, being poorly designed, is likely to have its maximum impact late next year and in 2011 and 2012, when it may not be needed but will contribute to the danger of a serious inflation. Economic recovery is also being undermined by the Administration's efforts, in the midst of crisis and without adequate study of its causes, to revamp the regulatory structure of the finance industry.
The economy remains imperiled. If the Administration's trillion-dollar health care program is enacted in anything like its proposed form, the costs, on top of the rapidly rising public debt that is the consequence both of the impact of the depression on tax revenues and the costs of the anti-depression programs may create an aftershock to the current depression that will do almost as much harm to the nation as the--I insist on the term--depression itself.
Needs an editor to fix punctuation
I am enjoying this series of posts. I have to make one observation relative to economists and ability to predict. I am a mere banker, and no economist. Yet as far back as March 2007 I was picking up on threads that told me we had a problem. Not that I saw everything, but then neither am I an economist. My point is that perhaps traditional economics and thinking got in the way of rational thinking.
http://thebankwatch.com/2007/03/14/more-on-the-us-sub-prime-mortgage-market-wharton/
"This analysis from Wharton in Philadelphia describes the strategic run up to the current issues. It also implies the possibility that there might be a soft landing out of this, but its a definite maybe. In particular the tie to the overall capital markets is worrisome."
I agree with Professor Posner on this one although for a slightly different line of thinking. As you know, the "news" is always several months behind the facts of social movemnent which often drives economic movement. If you ask almost any traditional ethnic immigrant group they will tell you that their first generation members are returning to their native homelands in particular the Indians and the Polish. They cite the fall of the dollar, the diminishing real wages in the US, the growth in India and the fact that Poles can settle anywhere in the EU. If that kind of thinking is going on in those communities, you can bet it is happening in others as well. I know many first generation immigrants who are telling their children that the future is not in the US in addition to their thinking that the US is losing its freedoms to a more all encompassing government. If one adds all of that thinking to the obvious fact that our economy is based on consumer spending and bubbles (the next one being the "green" bubble), the economy will remain stagnant for quite some time. Who could imagine that the US goverment would own the financial sector (and indirectly the housing sector) the auto sector, the insurance sector and potentially the healthcare sector and that federal deficits would approach 40% of the GDP. Next they will be attaching personal financial assets. Does anyone think that productive people will work harder in these circumstances? Does anyone think that federal spending is "productive"?
I'm with the Judge on this one. We've got a "W" rally in Wall St investment securities, that's all. The U.S. had one in 1938 but only the WW II mobilization pulled the vast majority of American households out of the ditch. A year or two from now we'll still be wrestling with unemployment/underemployment, soaring govt deficits, residential foreclosures, and a severe bust in commercial real estate values and loan defaults. Quit listening to the pump-n-dump rapid-trader crowd and read the handwriting on the walls of Main St.
Posner errs in speculating that bankruptcy filings by GM and Chrysler, without government intervention, likely would have led to liquidations of those firms. This is rather shabby dismissal of the bankruptcy system established by Congress -- with authority granted by the Constitution -- as compared to the neo-bankruptcy system crafted by the Obama Administration, which in ends and means amounts to sheer political thuggery.
That aside, Posner is correct in noting (even though he doesn't come right out and state the fact) that the Obama Administration is like a bunch of children unleashed in the dynamite shack with lots of matches.
Mr Posner's comments on the adverse feedback possibilities of a capitalist economy remind me of "Lazarus Long's" comments in Heinlein's novel.
The present crisis is not one of economic theory or economic policy. It is a crisis of character. Either we will insist upon fiscal discipline, or we will not. In the late 1970s, we had the extreme good fortune to appoint a man to the Chairmanship of the Federal Reserve who was prepared to do whatever it took to halt the spiral of inflation. Today, alas,there is no one individual, or group of individuals, who has the power to put a stop to the spiral of federal spending. Only a committed electorate can accomplish that, and I am far from confident that there is enough character left in the nation to sustain that effort. Next to that question, all other issues of economic policy seem to me to be utterly trivial.
I agree with the comment above. It is not a matter of economic theory but rather of national character or the lack thereof. The public elects the followers who make destructive decisions to keep the public voting for them in the short term while the long term keeps going down hill. It is a sad case of national suicide.
All said and done, banks are still big, regulation is still lax, savings is still low, nothing in the horizon which promises productivity, higher deficits and profligate spending. While we can debate on whether this recession is going to be over or not, it is probably the effect of Tylenol. Where is the antibiotic?
"Because economists have yet to achieve an adequate understanding of the macroeconomy and business cycles, I do not think it is possible to fault the government for having acted aggressively--and expensively--to fight the crisis."
This is an interesting argument in the sense that it is very similar to the "Neoconservative" case for torture. The perceived worse case scenario is another great depression in one case and a another 9/11 in the other. I'm not passing judgment, just thought I would point that out.
Also, I think a lot of people will be proven wrong when we come out of this with a without a high level of inflation. The more the fed inflates -- the more tools they have to deflate. The fed still seems to have a lot of tools at their disposal to get credit flowing again, especially, if they heed Scott Sumner's advice on negative interest rates on excess bank reserves.
I'm not exactly sure how stocks and houses are necessarily much different than savings. It is possible for some level of over investment in these areas, but generally savings also get used for loans or investments by banks to justify a rate of return.
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I agree with you on the actual crisis being not only financial and economic, but also theoretical – in economical theory, but also in political and business ethics. However I think both your analysis, especially Berger’s but also your own, lack the long term perspective. Namely, the analysis of this crisis according to something like Carroll Quigley’s “instrument of expansion”. For your readers that understand Portuguese, I’ve developed this idea in http://onodoproblemaocidental24x7.blogspot.com/2009/08/perspectivas-economicas-para-proxima.html.
Thanks for the post. Reading it late, but that's why I love your site--it's timely, but not ephemeral.
A minor note on your point that "[a] recession or depression ends, in my view, when output rejoins the GDP trend line"--there is some evidence that after a financial crises GDP may never rejoin the original trend line. See here, for example: http://gregmankiw.blogspot.com/2009/08/blanchard-on-outlook.html
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2016-30/0358/en_head.json.gz/11053 | US corporations skip taxes in new 'exceptionalism': Washington Post
Monday, 14 Jul 2014 | 12:03 PM ETCNBC.com
Not paying corporate taxes—while still being able to retain the perks of being a U.S. corporation—has become the new black. In a weekend edition of the Washington Post, Forbes editor Allan Sloan says big companies benefit from a "new kind of American corporate exceptionalism: companies that have deserted our country to avoid paying taxes but expect to keep receiving the full benefits that being American confers, and for which everyone else is paying." Sloan wrote in a lengthy Op-Ed that companies are benefiting from "inversion," a process by which a company re-incorporates in a tax-haven country with low corporate taxes, such as Ireland. The Emerald Isle offers the lowest corporate tax rate in Europe, which is a draw for both European and U.S. companies.
The surge in shell-game tax aversion efforts "threatens to undermine our tax base, with projected losses in the billions," Sloane wrote. "It also threatens to undermine the American public's already shrinking respect for big corporations." Some 60 U.S. mega-companies are guilty of ducking out on domestic taxes, Sloane said. Among the guiltiest parties are Accenture, Pfizer, Michael Kors, Carnival, Nielsen and Medtronic. The latter has reaped nearly $500 million in U.S. federal government contracts over the last five years–yet has proposed to move its headquarters to Ireland by using a complex tax strategy. For more information on this story, please click here. Related Securities
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2016-30/0358/en_head.json.gz/11301 | Edit & columns Should petroleum and liquor be out of GST
Updated: Dec 4 2013, 08:37am hrs Related
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Gujarat has consistently represented in the meetings of the Empowered Committee of State Finance Ministers that petroleum products should not be included in the Goods and Services Tax (GST) as their inclusion will drastically reduce the states revenue. Our view is that the states should retain the power to levy Sales Tax and Central Sales Tax (CST) on petroleum products.
In the revised Constitution (115th) Amendment Bill, 2013, the union government has proposed to define GST as any tax on supply of goods or services or both, leaving out those exemptions from GST that were suggested in the earlier drafttaxes on supply of petroleum crude, high speed diesel, motor spirit or petrol, natural gas, aviation turbine fuel and liquor.
The states, at present, have exclusive power to levy state excise duty on alcohol for human consumption. The Empowered Committee felt that if potable alcohol is deleted from Clause 12 (A), then the Centre will also get the power to levy GST. Therefore, the committee was of the view that liquor should be exempted from GST. Moreover, the committee felt that the Centre should firmly commit to the exemption of petroleum products from the GST regime till GST stabilises and the need for compensation goes away.
The power to levy sales tax and CST on petroleum products should be retained by the states. The revenue-neutral GST rate of states may be worked out based on this decision.
The Empowered Committee has maintained that all entry taxes should be subsumed into GST except the entry tax levied in lieu of Octroi, the proceeds of which go to local bodies. If such entry taxes are subsumed into GST, the states would incur substantial revenue loss. Hence, the committee broadly felt that entry taxes in lieu of Octroi should be exempted from GST.
If this, however, is subsumed under GST, then all the states must be permitted to levy any cess, surcharge, additional tax in lieu of Octroi, on behalf of local bodies, and these should be kept out of the ambit of GST.
The Standing Committee of Parliament had recommended that since the destination-based interstate GST (IGST) model favours the consumer states more than the producer states, the revenue concerns of the latter need to be factored in and duly addressed. Thus, GST should not act as a dampener or as a disincentive for states with a strong manufacturing base.
The states are incurring huge revenue loss under the proposed GST regime due to the destination-based taxation principle. The revenue losses are mainly due to removal of CST, subsumation of a number of indirect taxes and the removal of the cascading effect. The proposed IGST model has to address the issue of revenue loss. Therefore, we suggested a modification in the proposed IGST model itself to meet the requirement upfront and provide for independent compensation to the states.
As per this proposition, there would be an upfront deduction of 10% (assuming GST rate of 20%, this would come to 2%) of the total output IGST amount of all the dealers in the state in a given tax period. The said amount would directly be credited into the account of respective exporting state. This amount will take care of loss on account of abolition of CST.
There will be a further deduction of 10% of the total output IGST amount of all the dealers across the country in a given tax period and the said amount will be kept separately in an escrow account with the GST Council. The Council should be empowered to distribute the said amount among the states in proportion to their GST loss. This will take care of the concerns of all the states including exporting states and also take care of the independent mechanism for compensation to states.
If we adopt this modification, the IGST input tax credit chain will not be affected as the dealer in the importing state gets full tax credit while the importing state gets full revenue. Accordingly, the central government revenues would be curtailed to the extent of percentage set aside for the Compensation Fund/retained by the exporting state from IGST revenue.
Saurabh Patel
The author is minister, planning and energy, Government of Gujarat GST has been pegged as the most radical tax reform in India. It is estimated that its introduction would lead to additional growth of anywhere between 0.9% to 1.7% of GDP. That is, only if it is based on principles of simplicity, equity and minimal exceptions/ distortions. From the very inception of proposed GST framework, inclusion of petroleum products and alcohol under GST net has been a matter of intense deliberation. The states have been opposing this on the ground that these two streams are major revenue-earners and the states stand to lose substantially if these are brought under GST. It is important to point out that both petroleum products and alcohol are heavily taxed products and there are huge variations in tax rates across the states. The Centre has been in favour of inclusion of both petroleum products and alcohol under GST. The Parliamentary Standing Committee report submitted to the central government in August 2013 also states that these should not be constitutionally debarred from ambit of GST. This move also finds unequivocal support from all leading trade bodies and industry in general. However, in a recent meeting, the Empowered Committee of State Finance Ministers reiterated that these should not come within the ambit of GST. Therefore, it means that existing taxes on these products should continue to apply even under the GST regime. These include excise duty, sales tax, cesses on petroleum products and state excise duties on alcohol. A parallel tax regime on these would substantially distort the GST framework. While there would not be any GST on these products, the inputs (raw material, capital equipment, labour, etc) would continue to be taxed under GST. Take for example, setting up of a refinery, which requires huge capital expenditure. The GST incurred on this expenditure would also become a cost substantially increase the overall cost of the project. The exploration-and-production sector would continue to suffer high incidence of taxes, more so because tax on services is likely to increase under GST (from the current 12.36%) which will again be a cost to the industry. Similarly, the tax paid on Aviation Turbine Fuel (ATF), a major cost for airlines, would not be available as a set-off against GST to be paid on air fare. It is one of the reasons why most international airlines today choose to fuel their aircrafts outside India. Currently, the alcohol industry is bogged down by high taxes, particularly in the case of imported spirits. This hampers free movement of these products from one state to another, leads to inefficiencies in supply chain and incentivises illegal trade (including the sale of spurious products). If it is kept outside the GST net, then the challenges would remain. This would trickle down to allied sectors. For example, hotels and restaurants serving alcohol that sell both GST and non-GST items would have to deal with administrative complexities. However, it does not mean that the concerns of the states about potential impact on revenues are completely unfounded. These can be addressed by having a higher rate of GST on these products or providing a recourse in additional non-credible levies, as suggested by the Standing Committee and also the task force constituted by the 13th Finance Commission. This would be in line with international practice in several counties like Australia, Canada, Singapore and Brazil. Specific rules could be made to ensure that concerns such as potential misuse of GST credits are addressed. For example, it could be provided that credit would only be available to industrial customers and not to individuals. An effective compensation mechanism for the states which suffer revenue loss would also go a long way in persuading them.
It is imperative that there are no constitutional restrictions to include these products under GST. This is because even if there is a consensus between Centre and the states later, amending the Constitution is a very complex and time-consuming process. The country has waited long for GST. The exclusion of these products from GST is certainly not desirable.
Pratik Jain
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2016-30/0358/en_head.json.gz/11317 | Real Estate Vulnerability Index
Housing prices have risen so far and so fast, who can afford to buy anymore? Plenty of people. Of course, those people don’t live in New York. Or San Francisco. Or Miami. As everyone knows (or should know by now), home prices have increased around the country over the last few years. In some places, they have shot up like wayward bottle rockets–and many people expect them to eventually come dropping down. But prices alone can’t tell the whole story. To get a better picture of which cities are likely to be vulnerable to a real estate decline, with the help of Economy.com, we compared incomes to home prices, factoring in interest rates. We were surprised at the results: While it has become much more difficult to buy the median house with the median income in many cities, in others it has actually become easier, pointing to a boom taking place in pockets, rather than the nation as a whole. That backs up what many economists, including Federal Reserve Chairman Alan Greenspan, have opined–that some areas appear more “frothy” than others and could be primed for a bust–or, more likely, a slow decline, as real estate prices tend to stagnate rather than crash. “I think low affordability does present a risk for markets,” says Celia
Celia Chen
, director of housing economics at Economy.com, a research company based in West Chester, Pa. The firm supplied income, home price and affordability data going back to 1980 for 12 major metropolitan areas. “It’s a condition that can’t persist forever. If income streams are not sufficient to cover your housing costs, eventually demand is going to slow.” Economy.com calculates affordability using incomes, sale prices for single-family homes and composite interest rates for a 30-year mortgage. (See sidebar: “Inside Interest Only.”) The resulting index shows what percentage of a median home (the one for which half the sale prices were above and half below) a family can afford with the median income. A low number means that home owners can’t afford the standard home or that they must pay much more of their income toward it. A high number means the average house is easily within reach. Five of our 12 cities had affordability indexes below 100: San Francisco, New York, Los Angeles, Miami and Boston. Some of these cities–including Boston and Los Angeles–are slightly more affordable now than they were in 1980. But in nearly every metro area, affordability has declined in the past few years. But it’s all relative. In Dallas, the median income can get you more than 200% of the median home. In Los Angeles, you can still get only 57%. In Philadelphia, the median home price more than tripled between 1980 and 2004, rising 220% from $57,570 to $184,190, which would suggest that houses would be harder to afford. But incomes rose, too, albeit not as dramatically, increasing 195% from just under $19,000 to more than $56,000. In Miami, the affordability index hit a high of 124 in 1993, but now is down to just 75. Robert J.
, a Yale University economics professor whose book Irrational Exuberance predicted the dot-com bubble, pegs Miami as a “glamour city,” where people are buying because it’s glitzy and trendy, making the city more vulnerable to a bust. In March, Florida-based investment firm Raymond James & Associates said that 85% of condo sales in downtown Miami might be due to investment and speculation. “Speculation changes the normal market,” says John H. Vogel, professor at the Tuck School of Business at Dartmouth College. “People are buying a half-million-dollar house not because they have the salaries to support it, but because they think next year it’s going to be worth $600,000.” So does this mean we’re headed for a crash? That’s difficult to predict. In 2002, we dubbed the housing market a bubble and predicted its fall. Since then, home prices have gone up about 32%, according to the National Association of Realtors. But that doesn’t mean a bust is not on the horizon–at least in some places. Greenspan used the phrase “irrational exuberance” to refer to tech stocks in 1996; it took another three years for the market to tank. And when it did, it hurt. Click here to see which major U.S. cities are most vulnerable to a real estate bubble. Click here to see how housing prices rank in relation to income in each major U.S. city. Want to track news by this author or about this industry? Forbes Attaché makes it easy. Click here. Comments are turned off for this post. | 金融 |
2016-30/0358/en_head.json.gz/11796 | Progress doesn’t have to come at the expense of preservation
A home along Highway 17 was purcahsed a rennovated to house the Bosse Insurance Agency.
The trademark red roof was added to this former residence so that Heather Bosse could move her State Farm Insurance Agency into it.
The beams in the ceiling were uncovered and left exposed.
This long hallway led to the four bedrooms in which Victoria Galliard raised her four children.
The home’s original fireplace was left intact.
State Farm Insurance Agent Heather Bosse at an entrance to her new office in Mount Pleasant.
Heather Bosse, State Farm Insurance Agent
Insurance agent Heather Bosse’s new State Farm office is on U.S. Highway 17 near S.C. Highway 41.
Relocating one’s established business must be a strategic decision that will benefit the business owners, staff and clients in the long run.
But as Heather Bosse quickly realized, there is much more to it than bricks and mortar - it’s about preserving and maintaining the very culture that so seemlessly enfolded her business.Bosse established her State Farm Insurance Agency on Longpoint Road in 2008. The agency quickly grew and as they outgrew their space, Bosse began contemplating a move, looking for more square feet.Through her banker, Seth Horton, she was introduced to commercial realtor David Seay. “Budget-wise, we were limited,” she said. “There were a lot of empty lots available where we wanted to be, but the cost was beyond what I could reason.”Bosse was looking to tap into the northern Mount Pleasant market. Obviously, location and visibility were important.Seay found some options but took it a step further and began researching properties and locations not necessarily for sale.He knocked on the door of Victoria Galliard and asked if she would be willing to sell her private residence.This property is not a traditional insurance office, but with the building located right on Highway 17, just past the intersection with Highway 41, it would be ideal.Galliard agreed to consider the idea, but wanted to meet the potential buyers.According to Bosse they sat down in her living room over sweet tea and discussed the details. “It was very old fashioned,” said Bosse. “We agreed to the deal with a hug and a handshake.”Part of the reason that Galliard agreed to sell her home is that Bosse promised to preserve the integrity of the house and stay true to the original design of the home. Galliard raised four children in that house. The walls were adorned with their military medals and other accomplishments,A sweetgrass basket maker’s stand stood outside. There was so much history about the residence that you could feel it, Bosse explained.As renovation work begun, the neighbors dropped by to see the progress. They all had a story to tell about parties and weddings and special memories regarding the house.It was as if it was meant to be, particularly when Bosse met the brick mason who arrived on the job. He was the original brick mason on the house when it was built in the 1970s.Pete McKellar, principal/owner of Harbor Contracting ,took on the renovation work. His workers found beams above the popcorn ceiling that are now beautifully exposed in the foyer of the agency.The only major change was the location of the front door, which was originally a bay window.The beautiful brick fireplace remains a focal point of the main waiting room, which was once a living room.And while an enclosed sun porch is not crucial to the operation of an insurance agency, it has come in quite handy.Bosse turned it into a break room for her staff, complete with a homework desk for their children.Conveniently enough, the school bus drops off right beside the building so the children can come straight to the office to be with their parents.The original hardwood floors were simply re-sanded and coated, and the four bedrooms were turned into offices.A receptionist desk was added and a red roof, indicative of State Farm’s trademark color, was added.Bosse is the daughter of two State Farm Insurance agents. She originally intended to become a certified financial planner but insurance provided her an opportunity to help families in all stages of their lives, particularly the fun milestones like marriage, new homes and babies.Her work is intricate to the life changes of her clients and those who she has had for the last six years will be with her for 30 more, realizing their dreams. “There is a sense of permanence in this industry,” she said.Bosse maintains the old fashioned ideal of main street, she said. She volunteers at local schools, sponsors recreation department teams and volunteers in many capacities.“I am proud we could preserve a home that has been part of this community for over 40 years,” Bosse said.“Progress doesn’t have to come at the expense of preservation.”Bosse has a team of six. Those team members can be reached 884-8119 or visit the bosseagency.com. They are open Monday through Friday from 9 a.m. to 5 p.m. Appointments can be scheduled and walk-ins are welcome.A grand opening is schedule for December.The new agency is located at 2917 Highway 17 North. Latest Videos | 金融 |
2016-30/0358/en_head.json.gz/11906 | New York Life Tower Unveiled In Downtown Mexico City
New York Life's Chairman and CEO calls Seguros Monterrey New York Life
An Important Part of Our Corporate Strategy"
NEW YORK, N.Y., July 31, 2012 – New York Life, America's largest mutual life insurer, today announced that its wholly-owned Mexican subsidiary, Seguros Monterrey New York Life (SMNYL), the second-largest life insurer in Mexico, celebrated the official opening of the New York Life Tower, a 32-story tower on the prestigious Paseo de la Reforma Avenue in Mexico City's central zone.
Attending the opening ceremony in Mexico City were Mexico’s Minister of Finance and Public Credit, José Antonio Meade, New York Life's Chairman and CEO Ted Mathas, President and CEO of Seguros Monterrey New York Life Mario Vela, Executive Vice President and Head of New York Life’s Insurance Group Chris Blunt, as well as other top New York Life and SMNYL executives.
Seguros Monterrey New York Life is an outstanding operation and an important part of our corporate strategy," said Mr. Mathas during the opening ceremony. "New York Life is enormously proud of what Seguros Monterrey has accomplished in more than 70 years of serving the people of Mexico. The state-of-the-art New York Life Tower stands proudly as a symbol of our commitment to Mexico and the strong partnership between our two countries. In fact, New York Life has worked closely with the Hispanic community in the U.S. for almost 40 years and today, more than 1,500 New York Life agents, the majority of whom are of Mexican American descent, currently serve this critical market, one of the most rapidly growing segments of the U.S. population."
The New York Life Tower, sheathed in reflective glass, is a 500-feet-tall, 32-story building and one of the tallest buildings in Mexico. Approximately 2,500 employees and agents, or about 36 percent of Seguros Monterrey New York Life’s workforce, will work across 15 stories of the new tower.
The tower's design was inspired by the El Ángel de la Independencia ("The Angel of Independence") monument, built to commemorate the centennial of the beginning of Mexico’s War of Independence, celebrated in 1810. El Ángel, which is directly in front of the tower, is one of the most recognizable landmarks in Mexico City.
The tower, which utilizes the abundant natural light of the setting to create a bright and open working environment, has acheived LEED (Leadership in Energy and Environmental Design) certification. The LEED rating system is recognized nationally and internationally as the green building design standard. The building was designed by Jean Michel Colonnier.
About Seguros Monterrey New York Life
Seguros Monterrey New York Life, wholly-owned by New York Life Insurance Company, has more than 70 years of experience in Mexico* and more than 2 million policyholders throughout the country. Headquartered in Mexico City, Seguros Monterrey New York Life is one of the leading insurance companies in the market offering specialized life insurance and major medical expense services through 183 locations and more than 5,000 highly-trained professional agents. Please visit our website: www.monterrey-newyorklife.com.mx.
New York Life Insurance Company, a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States** and one of the largest life insurers in the world. New York Life has the highest financial strength ratings currently awarded to any life insurer by all four of the major credit rating agencies.*** Headquartered in New York City, New York Life's family of companies offers life insurance, retirement income, investments and long-term care insurance. New York Life Investments**** provides institutional asset management and retirement plan services. Other New York Life affiliates provide an array of securities products and services, as well as institutional and retail mutual funds. Please visit New York Life's Web site at www.newyorklife.com for more information.
*New York Life has owned Seguros Monterrey since 2000.
**Based on revenue as reported by "Fortune 500, Ranked within Industries, Insurance: Life, Health (Mutual)," Fortune magazine, May 23, 2011. See http://money.cnn.com/magazines/fortune/fortune500/2011/faq/ for methodology.
***Source: Third Party Ratings Reports as of 6/22/12.
****New York Life Investments is a service mark used by New York Life Investment Management Holdings LLC and its subsidiary, New York Life Investment Management LLC. Most Popular | 金融 |
2016-30/0358/en_head.json.gz/12157 | Peak oil review - Jan 2
by Tom Whipple, originally published by ASPO-USA
| Jan 2, 2012
1. Oil and the Global Economy NY crude closed out the year quietly at $98.83 a barrel, eight percent higher than where it opened 12 months earlier. For 2011, NY crude averaged $95 a barrel as compared with $79 in 2010 and $62 in 2009. Brent crude averaged $111 for the year, $11 a barrel more than the previous high set in 2008. Last week's excitement came on Tuesday when a senior Iranian official started talking about closing the Straits of Hormuz to all shipping in retaliation for sanctions on Iranian oil. Prices climbed about $2 a barrel for a day or so until traders realized that this threat was likely just more bluster for domestic consumption. Natural gas prices in NY closed at $2.98 per million BTU, the first time gas has closed below $3 during the winter months in more than a decade. Overproduction of shale gas and mild weather in the northeastern US were behind the decline. At $3 per million most shale gas is unprofitable to produce, but drillers are locked into contracts which require them to keep drilling and either lose leases or violate partnership agreements. Drilling for shale gas in the US has been slowly declining in recent weeks as rigs are moved to the more profitable oil drilling sites. Unless prices rise markedly in the years ahead, many drillers, including Exxon and Chesapeake Energy, are going to suffer large losses on their natural gas projects. As we enter 2012, the major issues that affected oil prices in 2011 – the potential for a global recession and more upheavals across the Middle East – still seem destined to remain the major issues affecting oil prices. It is hard to find anyone, outside of government spokesmen, who does not believe that the EU will suffer an economic setback, perhaps a major one, in the near future. Optimists say these problems will be muddled through or confined to Europe, but pessimists hold that the slowdown will spread across the globe and will keep a cap on oil prices in the coming months. Despite endless talk of the recovery that is supposed to be going on in the US, there is little evidence that a turnaround is actually talking place. Last week the EIA reported that US consumption of oil products over the previous four weeks was down 7.8 percent as compared to December 2010. A decline of this magnitude is not indicative of any economic rebound. The EIA is warning that recently announced plans to shutter three large refineries in Pennsylvania --more than half of the refining capacity in the northeastern US -- is likely to affect the availability and prices of oil products in the region. To make up for the loss, more refined products will have to be imported or transported from refineries on the Gulf coast – adding to the costs and logistical difficulties of keeping adequate supplies in stock. There is no end in sight to the assorted ongoing confrontations in the Middle East - Syria, Iran, Egypt and Yemen. The Egyptian uprising has already cut off natural gas supplies to Israel, Jordan, and Lebanon; Syrian and Yemeni oil production has been reduced substantially. The western powers are attempting to slow Iran's exports. While Libyan oil exports are returning, it is likely to be some time before pre-uprising levels are attained. A new factor in recent weeks is reports of troubles in Kazakhstan which is currently producing about 1.6 million barrels of crude per day. In short, the year ahead is shaping up to be a race between faltering economies that will cut demand for oil, and numerous political confrontations that could curtail supplies. In the background is the continued growth of China, India and several other large oil consumers that may be growing more slowly in the future, but are still likely to continue increasing their oil consumption. 2. The Iranian Confrontation The threat by Iran's Vice President last week to block the Straits of Hormuz in retaliation for EU sanctions against Iranian oil exports reminds us that the confrontation over Tehran's alleged efforts to acquire nuclear weapons is still with us. Despite Moscow's and Beijing's refusal to let the UN impose meaningful sanctions on Iran, the combined economic power of the US and its NATO allies is starting to worry the Iranians. Over the weekend President Obama signed a bill giving him authority to impose new sanctions on companies doing business with Tehran. The EU has already imposed numerous sanctions and seems ready to slow purchases of Iranian crude in an effort to increase the pressure on Tehran while keeping oil prices under control. There is some evidence that the increased pressures are paying off. Iran's currency has fallen by 50 percent in relation to the dollar and oil production is starting to slip. Many foreign companies are pulling out of contracts with the Iranians or refusing to write new ones. In short, the Iranian economy is starting to be hurt by the sanctions. The political disarray in Tehran seems to be increasing. The uncertainty following the attack on the British embassy a few weeks back shows that there is much disagreement within Tehran's ruling circles. When you have to lock up your major opposition politicians and keep anti-government demonstrations suppressed by military force, all is not well. On top of all this the situation in Syria continues to deteriorate raising the possibility that Iran will lose one of its best friends in the Middle East and much political influence at the same time. So far Tehran has responded with threats and predictions that oil prices will climb to $200 a barrel should serious efforts be taken to restrict Iran's exports. Over the weekend the Iranians indicated that they are willing to enter fresh talks on their nuclear program, but Tehran has done this many times before in an effort to buy time and the West will need to see significant concessions by the Iranians before opening another round of talks. In the meantime the situation seems destined to fester into the indefinite future. Hostilities or blockades are not in anybody's interest especially Iran's which is certain to be hurt the worst in any kind of military confrontation with countries dependent on oil from the Gulf. The more serious threat to global oil supplies would seem to be miscalculation either by the West which results in oil prices increasing more than intended or by some Iranian faction that does something to provoke hostilities. 3. Trouble in Baghdad The news out of Baghdad last week was not good for those hoping to see a major increase in the production of "cheap" crude from the easy-to-produce Iraqi oil fields in the next few years. Events in Baghdad suggest that the carefully crafted coalition that Washington left behind when it withdrew its remaining combat forces is breaking down rapidly. Last week started with a suicide bomber attack on the Iraqi Interior Ministry, likely in retaliation for the arrest warrant issued by the Shiite Prime Minister against the country's Sunni Vice President who currently is seeking sanctuary in Kurdistan. Last week's bombing followed a series of bombings across the country the previous week. With the Sunnis and their allies the Kurds no longer participating in the government, the chaos was joined by the Shiite followers of the anti-American cleric Moktada al-Sadr who called for the al-Maliki government to be dissolved and new elections held. New elections would take months to organize and would likely result in the same sort of stalemate that arose after the elections in March 2010 which took nine months to resolve. It is possible that visions of Saudi-class wealth that would come to Iraq should oil production increase by millions of barrels per day could keep age-old animosities in check. Alternatively, it is possible that the situation could devolve into so much anarchy that it will become impossible to increase oil production. Quote of the week "The United States, alone or with Canada, will never produce a sustained volume of 19 million barrels of oil a day." -- Steve LeVine The Briefs (clips from recent Peak Oil News dailies are indicated by date and item #) For three decades, the U.S. government sought to protect American corn farmers and ethanol makers from a feared flood of Brazilian imports by imposing a tariff. But as the contentious tax finally expires at year-end, American farmers' fears of being swamped by sugar-based tropical biofuel seem unfounded. (12/31, #10) Brazil's national petroleum agency says it had imposed a new fine on Chevron for allegedly failing to comply with its development plan for the appraisal well that caused a leak last month. (12/31, #11) For the first time, the top export of the United States is fuel. Measured in dollars, the nation is on pace this year to ship more gasoline, diesel, and jet fuel than any other single export, according to US Census data going back to 1990. (12/31, #14) Authorities in Islamabad said Pakistan, despite U.S. reservations, needs to consider a natural gas pipeline from Iran to cope with energy shortages. (12/29, #12) (12/30, #5) Chinese manufacturing activity declined for the second consecutive month in December but showed tentative signs of stabilizing. (12/30, #10) A Chinese court accepted a lawsuit that claims that leaks from offshore oil production facilities operated by ConocoPhillips caused $78 million in damages to local fishermen. (12/30, #13) California's low-carbon fuel standard was blocked by a federal judge who found that it discriminates against out-of-state corn ethanol and crude oil and violates the Commerce Clause of the U.S. Constitution. (12/30, #14) Nebraskan environmental regulators said they outlined a map for pipeline company TransCanada delineating areas the Keystone XL oil pipeline should avoid. (12/30, #15) Turkey this week gave a boost to plans by Russia's Gazprom by issuing permits for its South Stream natural gas pipeline to be built under Turkish territorial waters. (12/28, #19) (12/30, #17) Four international companies were invited to submit bids for the first liquefied natural gas terminal for Bangladesh. Bangladesh produces around 630 billion cubic feet of natural gas each year. Proven reserves, located in the east of the country, total an estimated 1.4 trillion cubic feet of natural gas. (12/29, #15) U.S. prosecutors are preparing what would be the first criminal charges against BP employees stemming from the 2010 Deepwater Horizon accident, which killed 11 workers and caused the worst offshore oil spill in U.S. history. (12/29, #17) Gasoline prices may rise above $4 a gallon next summer as refineries along the US East Coast close, reducing fuel supply. (12/28, #15) (12/29, #19) Turkey and Azerbaijan signed an agreement for a new "Trans-Anatolian" natural gas pipeline stretching from Turkey's eastern to western borders. (12/28, #20) Israel's Energy and Water Ministry has ordered the setting up of a team to deal with a gas shortage in the country which is likely to peak mid-2012. (12/27, #9) The worst Nigeria offshore oil spill in more than a decade has been contained before reaching the West African nation's coast, officials with Royal Dutch Shell said. (12/26, #11) (12/27, #10) Afghanistan's cabinet cleared the way to sign a contract with China's state-owned oil giant China National Petroleum Corp (CNPC) for the development of oil blocks in the Amu Darya basin. (12/26, #5) What do you think? Leave a comment below.
Consumption & Demand
Geopolitics & Military
About Tom Whipple: Tom Whipple is one of the most highly respected analysts of peak oil issues in the United States. A retired 30-year CIA analyst who has been following the peak oil story since 1999, Tom is the editor of the daily … | 金融 |
2016-30/0358/en_head.json.gz/12187 | Business | National / World Business Study: 1 in 5 consumers had error in credit report
By MARCY GORDONThe Associated Press | February 12,2013
WASHINGTON � One in five consumers had an error in a credit report issued by a major agency, according to a government study released Monday. The Federal Trade Commission study also said that 5 percent of the consumers identified errors in their reports that could lead to them paying more for mortgages, auto loans or other financial products.The study looked at reports for 1,001 consumers issued by the three major agencies � Equifax, Experian and TransUnion. The FTC hired researchers to help consumers identify potential errors. The study closely matches the results of a yearlong investigation by The Columbus Dispatch. The Ohio newspaper�s report last year said that thousands of consumers were denied loans because of errors on their credit reports. The FTC says the findings underline the importance of consumers checking their credit reports. Consumers are entitled to a free copy of their credit report each year from each of the three reporting agencies.The FTC study also found that 20 percent of consumers had an error that was corrected by a reporting agency after the consumer disputed it. About 10 percent of consumers had their credit score changed after a reporting agency corrected errors in their reports. The Consumer Data Industry Association, which represents the credit reporting agencies and other data companies, said the FTC study showed that the proportion of credit reports with errors that could increase the rates consumers would pay was small. The study confirmed �that credit reports are highly accurate, and play a critical role in facilitating access to fair and affordable consumer credit,� the association said in a statement.In September, the federal Consumer Financial Protection Bureau gained the authority to write and enforce rules for the credit reporting industry and to monitor the compliance of the three agencies. Prior to that, the reporting agencies weren�t subject to ongoing monitoring by federal examiners.The CFPB hasn�t yet taken any public action against the agencies. However, it is accepting complaints from consumers who discover incorrect information on their reports or have trouble getting mistakes corrected. The agencies have 15 days to respond to the complaints with a plan for fixing the problem; consumers can dispute that response.By contrast, the FTC can only take action if there is an earlier indication of wrongdoing. It cannot demand information from or investigate companies that appear to be following the law. | 金融 |
2016-30/0358/en_head.json.gz/12241 | http://www.sfgate.com/opinion/editorials/article/Preserve-venture-capital-from-banks-2431812.php
Opinion Preserve venture capital from banks
ON BANKING
Congress' attempt to keep banks from gambling on the taxpayers' dime threatens to end banks from sponsoring and investing in venture capital funds, the mother's milk of Silicon Valley innovation and an engine of job creation nationwide. The Volcker Rule, named after former Federal Reserve Chairman Paul Volcker, who championed tighter regulations on bank trading, should exempt venture investments.
The rule is nine pages in the 5-inch-thick Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010 after taxpayers spent billions to bail out banks. Even Volcker has despaired that the rule became too complicated. The bill's authors have said it was never their intent to constrain venture capital.
To figure out how to implement the rule, federal regulators have drafted a 383-question proposal and given the public until Feb. 13 to comment. Only question 310 deals with venture capital. As it stands now, Volcker limits banks to an investor adviser role in venture capital investments, potentially drying up more than a billion dollars a year in venture funding nationally. Banks provide about 7 percent of funds invested in venture capital. The problem is that a broad legal definition sweeps venture funds in with private equity and hedge funds, which Volcker bans banks from investing in.
Mary Dent, an attorney for Silicon Valley Bank, points out that venture funds function differently and carry a different risk. Venture investors are:
-- Investing in a company, typically a local start-up where they know the management, not in a collection of highly leveraged financial instruments where the underlying investments are impossible to know or value. -- Investing for the life of a privately held company where the value doesn't change at the speed of a stock trade.
Venture capital-funded companies contribute 21 percent to the national GDP and account for 11 percent of private-sector jobs, according to a 2011 study. Regulators, suspicious that hedge funds have added to the banking system's problems, are right to question exemptions that may undermine protections. Yet surely they can craft an exemption narrow enough to keep banks investing in the innovative companies that are creating our new economy. Most Popular | 金融 |
2016-30/0358/en_head.json.gz/12393 | Dutch would be 'better off' if they left the euro
There are big economic benefits for the Dutch in leaving the EU, finds a major study The independent study was commissioned by Geert Wilders, the leader of the Dutch anti-EU Freedom Party, to assess the cost for the Netherlands of leaving the EU as he leads national opinion polls in the run up to European elections By Bruno Waterfield, Brussels
11:05AM GMT 06 Feb 2014
Follow The average Dutch household could be better off by over £8,000 a year and national income will grow by over £1 trillion if the Netherlands leaves the euro and the EU, according to a new study. The study by the respected British Capital Economics research consultancy into "Nexit" - as a potential exit by the Netherlands has been termed - finds significant benefits over the next two decades if the country swaps its EU membership for a status similar to Switzerland or Norway. "Any decision to leave the EU is first and foremost a social, cultural and political one. It must revolve around issues of national sovereignty, citizenship and freedom of determination," the report found. "However, there are also good reasons to believe that a nation, untied from the bureaucracy of Brussels and able to make decisions for itself rather than have imposed one-size-fits-all policies, will benefit economically too." The research has been seized upon by Eurosceptics to counter what they see as alarmist warnings from prominent business leaders and mainstream politicians of an economic meltdown if Britain left the EU. Related Articles
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"This report is significant because it has been produced by a credible City research group. It cannot be easily dismissed," said Douglas Carswell, the Conservative MP for Clacton. "It shows we are no longer alone. It is not just us Brits who have come to realise that European integration is fundamentally flawed. We're very like the Dutch, a small country that has prospered by trading globally. Think what countries like ours could be in a different type of Europe." While acknowledging risks to leaving the EU, Capital Economics concludes that the Netherlands, a AAA rated creditor country in the eurozone, is better out of the EU because the threat posed to its long-term wealth by the structural problems of the European single currency. "There are, of course, risks to leaving the union - and these need to be recognised and addressed by anyone considering Nexit," the report said. "But there are also significant risks to staying in a bloc with a fundamentally flawed currency. In this instance, our analysis shows that the Netherlands would be better off taking control of its own destiny, rather than sticking with the 'devil it knows'." The report concludes that Dutch national income could increase by as much as €1,500 billion (£1.3 trillion) by 2035 bringing new wealth equivalent to between €9,800 (£8,134) per household each year. Even if the Netherlands was unable to win a deal the same Switzerland or Norway, which are in the European single market but not members of the EU,"the economy would be better off out of the union than in", he report found. The independent study was commissioned by Geert Wilders, the leader of the Dutch anti-EU Freedom Party, to assess the cost for the Netherlands of leaving the Union as he leads national opinion polls in the run up to European elections this spring. "Contrary to what the scaremongers claim, our economy would not grind to a halt. We would earn billions more than right now," he said. "In the beginning there is a transition period, for example, to switch from the euro to the guilder. But after that time, the economy will grow harder faster than now, ten per cent extra in 2024 and 13pc in 2035." Dutch opinion polling by Maurice de Hond has found that a majority of 55 per cent support leaving the EU if it can be shown to lead to if this additional economic growth and job creation. In 2012, Capital Economics won the prestigious Wolfson Prize for a study into how to manage an orderly break-up of the euro, at the height of the European debt crisis. The 164-page study plays down the costs and turbulence involved in leaving the euro. "There are economic costs to leaving the EU, particularly in relation to replacing the single currency with a national one. But these costs are modest and manageable," it said. Much of the economic growth forecast by leaving the EU, in a country dominated by the port of Rotterdam, comes by growing "exports to non-European markets faster by negotiating and trading with high growth emerging economies without being tied to a common [EU] trade policy". Currently many EU free trade deals are on hold or mired in internal disagreement between free trade countries such as Britain and Netherlands and a more protectionist Latin bloc led by France and Italy. The report on "Nexit", an expression merging the abbreviation for Netherlands and the word exit, also finds economic benefits to being outside the EU, including a reduction in business costs by "a minimum of €20 billion annually by 2035 through ﾑrenationalisingﾒ regulations in areas currently in the jurisdiction of Brussels institutions". Overall the report concludes that the Dutch would be able to manage their economy "more effectively by having the freedom to set monetary and fiscal policy to fit Dutch national conditions, and not the euro-zone as a whole". The study also finds"a reduction in public expenditure by a minimum of €7.5 billion annually by 2035 by not being bound by EU free movement laws and "through revising immigration policy to focus more tightly on admitting only those who make an economic contribution". The study contradicts an official Dutch study previous studies on the benefits of EU membership, which calculated it was worth €2,000 Netherlands per person every year. Jeroen Dijsselbloem, the Dutch finance minister and chairman of eurozone meetings, attacked the idea of Nexit as "very unwise" and defended the EU's single currency. "I'm going to read it, but I know one thing for sure: Netherlands is an economic powerhouse in Europe. We earn the bulk of our wealth in trade with EU countries so Netherlands has lots of interest in an internal market with easy trade," he said. "There is also the single currency. This is very strong at present and the state of the eurozone looks a lot better than a few years ago. There is no reason to take us into new adventures. I would be very against." Economics
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2016-30/0358/en_head.json.gz/12474 | Goldman Sachs, Morgan Stanley to pay $557M in mortgage case
WASHINGTON (AP) -- Goldman Sachs and Morgan Stanley will pay a combined $557 million to settle federal complaints that they wrongfully foreclosed on homeowners who should have been allowed to stay in their homes.The agreements announced Wednesday with the Federal Reserve were similar to deals struck earlier this month with 10 other major banks and mortgage lenders. Combined, the 12 firms will pay more than $9 billion.Goldman will pay $330 million. Morgan Stanley is paying $227 million.The settlements could compensate hundreds of thousands of Americans whose homes were seized because of abuses such as "robo-signing," when banks automatically signed off on foreclosures without properly reviewing documents. The agreement will also help eliminate huge potential liabilities for the banks.Consumer advocates say regulators settled for too low a price by letting banks avoid full responsibility for foreclosures that victimized families.Under the settlement, Goldman and Morgan Stanley will pay a combined $232 million in cash compensation to homeowners to end an independent review of loan files required under a 2011 action by the Fed and the Office of the Comptroller of the Currency. The remaining $325 million will be used to reduce mortgage balances and to forgive outstanding principal on home sales that generated less than borrowers owed on their mortgages.About 220,000 people whose homes were in foreclosure in 2009 and 2010 are eligible for payments under the deal with the two banks, the Fed said. The payments could range from hundreds of dollars up to $125,000, depending on the type of possible error.Spokesmen for both Goldman and Morgan Stanley said the banks are pleased to have the matter settled.The structure of the deal is nearly identical to the $8.5 billion settlement announced last week with Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, MetLife Bank, PNC Financial Services, Sovereign, SunTrust, U.S. Bank and Aurora.Those banks are paying about $3.3 billion to 3.8 million homeowners to end the review of foreclosures. The rest -- $5.2 billion -- is going toward mortgage modifications and principal forgiveness.Two other banks were subject to the 2011 independent reviews. HSBC and Ally Financial have been in discussions with regulators on similar settlements but have yet to reach deals.Banks and consumer advocates had complained that the loan-by-loan reviews required under the 2011 order were time-consuming and costly and didn't reach many homeowners. Banks were paying large amounts to consultants to review the files. Some questioned the independence of those consultants, who often ruled against homeowners.The settlements don't close the book on the housing crisis, which brought more than 4 million foreclosures. They cover only borrowers who were in foreclosure in 2009 and 2010. And resolving millions of claims involving multiple banks and mortgage companies is complicated and time-consuming.The deals announced this month are separate from a $25 billion settlement struck last February with five major banks by the federal government and 49 states. Those banks are Ally, Bank of America, Citigroup, JPMorgan and Wells Fargo. | 金融 |
2016-30/0358/en_head.json.gz/12485 | TD Bank Chief Economist Is Bullish on U.S. for 2013 Craig Alexander sees growth in U.S and emerging markets; worst of Europe ‘behind us’
"I see 2013 as a year of transition," Craig Alexander said.
Breathe a sigh of relief—Craig Alexander is optimistic about 2013.
After delivering a stark global outlook for 2012 last year, Alexander took to the stage at this year’s TD Ameritrade annual conference in San Diego on Thursday to tell advisors in the audience that he’s bullish on the U.S., the recession in Europe is mostly behind us and he’s seeing growth in emerging markets.
“I see 2013 as a year of transition,” Alexander, senior vice president and chief economist of TD Bank Financial Group, began in his lunchtime keynote. “After very soft performance in 2012, in which global growth dropped below 3%, I see the global economy picking up once again.”
Zeroing in on Europe, a region he described at last year’s conference as the No. 1 risk facing the globe, Alexander noted it’s still a problem, but the odds of some sort of bank shock have greatly diminished and leaders have made progress in separating “the sovereign crisis from the bank crisis.”
“The ECB has injected liquidity and the bottom line is that their headed in the right direction and moving towards a fiscal union, which is difficult but doable.”
The largest positive development of the recent past, he added, was when the ECB said it would do whatever it takes to save the euro.
“Market fears of a debt default can cause a debt default,” Alexander said. “It becomes self-fulfilling because the fear causes interest rates to rise. The ECB said if the individual countries’ markets don’t buy the debt, then the ECB will. As a result, Europe will muddle through.”
Moving on to the developing world, Alexander said that after a slowdown in emerging markets in 2012, a soft landing has taken place, and many economies are already reaccelerating.
“China won’t go back to 9% to 10% growth, but the government is comfortable with the expectation of 7% to 8% growth," he said. "Not all emerging-market countries will do well, but it should be good for countries like India, Brazil and Mexico. This will also be very good for commodities.”
As for the U.S., he said he’s bullish, noting that all eyes were on the fiscal cliff.
“Make no mistake; the cliff would have caused a recession, but I argued all along that they would turn away from it, which they did. Odds of a debt default are now close to zero. America will raise the debt ceiling; the costs of not doing so are too great.”
He added that tax policy and fiscal policy will slow growth, since a “fiscal rebalance of the unsustainable debt load” will have to occur, but it won’t be enough to stop it completely. If fiscal restraint does not occur this year, GDP growth will be 3%; if fiscal restraint is implemented, it will fall below 2%.
“But the reason I’m bullish is that credit is once again flowing, manufacturing is seeing something of a renaissance and housing construction has doubled in the rate of new units being constructed.”
So how should investors react to Alexander’s outlook? After a strong performance form equities in 2012, there won’t be “as much of a shift in risk assets,” but economic growth should support an increase in corporate earnings.
Additionally, a bond portfolio of government and corporate issues should be enough of an “aggregate basket” to outpace inflation, but it won’t be enough for solid wealth accumulation.
“People always ask me if stocks or bonds will win,” he concludes. “In this environment, I say equities, but do you know how low the bar is?”
TD Ameritrade 2013
TD Bank Financial Group
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2016-30/0358/en_head.json.gz/12688 | Student-Loan Debt Tops $1 Trillion
Josh Mitchell and Maya Jackson-Randall
Updated March 22, 2012 12:46 p.m. ET
The amount Americans owe on student loans is far higher than earlier estimates and could lead some consumers to postpone buying homes, potentially slowing the housing recovery, U.S. officials said Wednesday. Total student debt outstanding appears to have surpassed $1 trillion late last year, said officials at the Consumer Financial Protection Bureau, a federal agency created in the wake of the financial crisis. That would be roughly 16% higher than an estimate earlier this year by the Federal Reserve Bank of New York. Total student debt outstanding appears to have surpassed $1 trillion late last year, roughly 16% higher than an estimate earlier this year by the Federal Reserve Bank of New York. Joshua Mitchell has details on Markets Hub. (Photo: AP/Reed Saxon)
The new figure—released Wednesday at a banking conference in Austin, Texas—is a preliminary finding from a study of student debt that the bureau plans to release this summer. Bureau officials said the estimate is based on a survey of private lenders, as opposed to other estimates that rely on a sampling of consumer credit reports. CFPB officials say student debt is rising for several reasons, including a surge in Americans going to college in recent years to escape the weak labor market. Also, tuition increases—which many colleges say are needed to offset big cuts in state funding—have many students taking out bigger loans. In addition, the interest costs on older loans are climbing as borrowers fall behind on payments, reflecting mounting financial strains, bureau officials said. New York Fed data show that as many as one in four student borrowers who have begun repaying their education debts are behind on payments. More Law School Wins in Graduate Suit Economists say college is an increasingly good investment because of the widening pay gap between jobs that require a degree and those that don't. Ultimately, the educational degrees and added skills are meant to help workers earn higher incomes that, in time, will more than offset the student debt. But as more people go to college and assume bigger loans for education, they may take longer than previous generations to hit key milestones such as buying a house or getting married, U.S. officials and economists say. It could take longer for heavily indebted graduates to save money for a down payment on a home, or it could be harder for them to qualify for mortgages. Rohit Chopra, student-loan ombudsman for the Consumer Financial Protection Bureau, said student debt could ultimately slow the recovery of the housing market. "First-time home-buyers are a substantial part of the housing market," Mr. Chopra said in a speech at the banking conference in Austin. "Instead of saving for a down payment, these borrowers are sending big payments every month." Student debt is a burden not just for recent college graduates in their 20s but also parents, who often co-sign their children's student loans, as well as midcareer professionals who opted to go back to school during the sluggish recovery. David Johnson, a 58-year-old groundskeeper from Milton, Wash., decided to leave gardening after more than two decades to become a nurse. Two years ago, he took out about $18,000 in private and federal loans to attend a local community college that had a nursing program. After completing prerequisite classes, he learned that the program had a waiting list. With no guarantee of getting into the nursing program, he is wondering whether to take out more debt to continue in school. "It's an awkward place to be. I'm not yet a nurse but I've got all this debt and interest compounding on me," he said. "I don't have a lot of working years left and I'm saddled with this debt." Write to Josh Mitchell at [email protected] 4 | 金融 |
2016-30/0358/en_head.json.gz/12694 | Current Economic Situation vs. The Great Depression
By Martha Spencer | Posted: Fri 8:30 PM, Sep 26, 2008
| Updated: Mon 1:22 PM, Jan 05, 2009 The country's current economic crisis is creating a sense of deja-vu for Americans who were around in the 1930's and early 40's. Financial Professor Robert Earl Stuart of Troy University says one of the major factor in both The Great Depression and our current economic crisis is too many risky investments.
Franklin Delanor Roosevelt said it best, "we have nothing to fear but fear itself".
Stuart said, “it was over-speculation or it is over-speculation on real estate and financial institutions to make higher risk loans over the last twenty years that has caused the current crisis".
Professor Stuart says banks right now aren't failing; they just don't have additional money to give out loans. During The Depression people were taking out high-risk loans to buy stocks, and when the stock market plummeted, no one could sell their stocks for what they owed on them. This caused banks to crash, and when that happened stock speculators weren't the only ones who lost everything, all the customers did too.
"There were people borrowing money to buy stocks thinking that the stock would continue to go up and they could sell out of those stocks and make a good gain, obviously they didn't understand that the stock market goes up the stock market can come down" said Stuart.
And though it appears banks are now failing for the same reason, this isn't the case. Only thirty one of eight thousand U.S. banks have gone under in the past three years. But banks still don't have the means to make loans available now.
According to Stuart, "This is a problem of the capital of our depository institutions being impaired because of having to write the value of these mortgages that are not paying, and when your capital is impaired it lessens your ability to make more loans." But the similarities between then and now are glaring. The inability to pay loans hurts banks, which causes banks to tighten credit lending. Tightened credit lending hurts businesses, causing them to downsize. People lose their jobs and don't have money to spend on goods and services.
"The private market got in trouble back in the twenties and government got us out. Now the government got us into the problem and the government is gonna get us out." The FDIC insures deposits up to one hundred thousand dollars, but finance experts believe something needs to be done soon in order to restore banks' capital, so the United States credit system can recover. | 金融 |
2016-30/0358/en_head.json.gz/12895 | Blue Global Media
12 January 2016 / By Chris Kay 7 Wise Money Moves From Warren Buffett, Tony Robbins, and Other Experts
Want to end 2016 with more money than you started it with? Here’s how. Will 2016 be the year you start building real wealth? It can be if you set your mind to it. Every year, the personal finance site GOBankingRates asks the world’s most famous financial experts for their tips for the coming year. Here are some of the best–which you can do no matter how much or how little money you have at the moment. Follow this advice and you’ll end 2016 with more money in the bank (or investments) than you have now. These are the seven best tips from the…
11 January 2016 / By Chris Kay Understanding Interest and APR
APR (Annual Percentage Rate) and Interest are all part of the banking or finance industry and affect consumers, sometimes, without their knowledge. Consumers should have a clear understanding of these terms to know how their credit is affected and how much money they are actually paying their creditor on borrowed funds. Complex financial jargon is typically hard to understand to the average consumer, but it is important to understand industry terms for the benefit of the consumer. This understanding will assist them in making positive financial and credit decisions in the future. For example, first time home or car…
04 January 2016 / By Chris Kay Evette Cecena Promoted to VP of Marketing at Blue Global Media
Positions company to continue as a leader in the online lead generation space. SCOTTSDALE, Ariz., Sept. 14, 2015 /PRNewswire/ — Blue Global Media, a Scottsdale-based online financial services company, is pleased to announce the promotion of Evette Cecena to VP of marketing. Cecena has been with the organization for nearly four years, where she has served as a senior PPC (pay per click) specialist and most recently, as the conversions and marketing director. For more than 10 years, Blue Global Media has operated a worldwide loan marketplace where borrowers of non-traditional financial products and lenders are matched together through a first-of-its-kind global platform. In her new…
04 January 2016 / By Chris Kay 10 Professional Resolutions for the New Year
By Caroline M.L. Potter, Yahoo! HotJobs The end of the year typically prompts people to reflect on what they’ve accomplished in the last 12 months — and what they might do better in the coming 12 months. Have the lessons of the last year formed how you will approach next year? Have you even thought that far ahead yet? If you’re not sure about your goals, consider borrowing one of these 10 resolutions from professionals who have already decided what they will focus on in the new year. Here’s what they resolve to do in the new year: Focus on…
30 December 2015 / By Chris Kay 6 Tips For Better Work-Life Balance
These days, work-life balance can seem like an impossible feat. Technology makes workers accessible around the clock. Fears of job loss incentivize longer hours. In fact, a whopping 94% of working professionals reported working more than 50 hours per week and nearly half said they worked more than 65 hours per week in a Harvard Business School survey. Experts agree: the compounding stress from the never-ending workday is damaging. It can hurt relationships, health and overall happiness. Work-life balance means something different to every individual, but here health and career experts share tips to help you find the balance that’s right…
28 December 2015 / By Chris Kay Simple Life Hacks For Enjoying Work Every Day
By Jason Shah Many people dread going to work — even entrepreneurs. They may dislike their job, the people they work with, the environment they’re in, or are simply bored of their monotonous routines. With a few simple tips and tricks (backed by science), you’ll finally be able to enjoy your job — and more importantly — look forward to going to work. Hack #1: Try Something New Every Day Psychologists assert that “nothing contributes to our happiness more than shattering the delusions to which we cling.” Opening up to trying or doing something new is often frightening at first…
23 December 2015 / By Chris Kay Innovating the Online Lending Industry to Boost Consumer Choice
By Chris Kay Blue Global has written before about our strong belief that if every participant in the online lending world would take the steps necessary to establish best practices for our sector and to promote transparency and equity, we would all raise the performance bar. Steve Jobs, the tech industry visionary and inventor behind the iMac, iPhone, iPad, iPod, and many other essential Apple products, once said, “Innovation distinguishes between a leader and a follower.” This has never been more true, and it is now particularly apt in the online lending industry, where “outside the box” thinking is…
21 December 2015 / By Chris Kay Restaurant Owners Seek Alternative Lending To Expand Business
With the circulation of online lending platforms, many small businesses are finding it is an effective way to obtain capital to help their business grow. This is especially true for the restaurant industry, which is commonly considered a huge risk to banks. While restaurant owners may have experienced being denied a bank loan, they are finding online lending is a great alternative and can be an effective way to get the financing needed for opening more locations, purchasing new equipment, or expanding in other ways. Before online lending was established, small business owners often had to put their home…
16 December 2015 / By Chris Kay Blue Global Media Becomes Partner In Hope At St. Jude’s Children Hospital
“The mission of St. Jude Children’s Research Hospital is to advance cures, and means of prevention, for pediatric catastrophic diseases through research and treatment. Consistent with the vision of our founder Danny Thomas, no child is denied treatment based on race, religion or a family’s ability to pay.” St. Jude’s Children’s Hospital counts on partners to keep their research and facilities going. About 75 percent of St. Jude’s budget comes from public contributions. Without partner’s, such as Blue Global Media this miracle-making hospital could not survive. No parent should have to worry about no being able to afford care for his or her…
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Why We Switched to Manufacturing Careers Meet seven women who moved into manufacturing and found the success -- and satisfaction -- they were looking for. By Nancy Mann Jackson
Finding Success in an Unlikely Sector
It shed more than 2 million jobs in the recession. But manufacturing has roared back to become one of the fastest growing industries in the United States today, according to the market research firm IBISWorld. Still it remains largely male-dominated. In fact, the percentage of women working in manufacturing has actually dropped in recent decades, even as we've made gains in other sectors. A recent Congressional study found women now account for just 27 percent of U.S. manufacturing jobs, the lowest level since 1971. But for those who do enter the industry, the pay-off can be considerable.
“Today’s manufacturing is not dirty, dark or dangerous,” says Allison Grealis, director of Women in Manufacturing, a professional association offering networking, mentoring and educational opportunities for manufacturing women. “Manufacturing today is much more about brains than brawn.”
Along with being increasingly high-tech, manufacturing jobs are also among the highest-paying, offering a 17-percent premium in compensation over non-manufacturing jobs, according to the U.S. Department of Commerce. (The U.S. Bureau of Economic Analysis found that in 2011, the average manufacturing worker in the United States earned $77,060 annually, compared to the average worker in all industries who earned $60,168.) And there are less quantifiable perks too, from robust health and retirement benefits to flexible hours.
Here are the stories of seven women who successfully switched to manufacturing careers — and haven’t looked back.
NEXT Anna Wald, Quality Manager, Wyoming Machine, Inc., Stacy, Minnesota
How she made the switch: Underemployed as a store manager in the 1980s, I was not able to provide financially for my three children, for whom I was the sole provider. The traditional work for women in my community with my skills didn’t pay a living wage. I was directed to a non-traditional training program through the state of Minnesota, and because I grew up on a farm and have always enjoyed working with my hands, welding interested me. I returned to secondary education and received an industrial welding degree, and began working as a welder in 1988.
Why she stayed: Working in manufacturing allows me to learn new things and satisfies my need to build something new. It’s very rewarding to me to see the finished product, and I’m not afraid to work hard. Also, manufacturing opportunities are located in my community. I don’t have to work weekends and can spend time with my family. After 12 years welding in a manufacturing production environment, I moved into process engineering work and then quality work. I am now the quality manager for Wyoming Machine and a certified weld inspector by the American Welding Society. I’ve enjoyed a competitive salary and full benefits, and I strongly believe that if I would not have made the choices I did when I did, my children (now gainfully employed, college grads) may not have gone down the path that has, to this point, given them success. I am very thankful and fortunate for the opportunities I was allowed in my life.
NEXT Siobhan Ryan, Sales Account Manager, Art Technologies, Hamilton, Ohio
How she made the switch: I studied hotel management in college and then got a master’s in public accounting and my CPA. I took a 20-year hiatus from my career to raise children, but I’m back in the real world, working for a manufacturing company and loving it! It was like walking on Mars the first time I toured the plant floor at my company when I was hired to do accounting. But I was eventually promoted to sales, and now I sell metal stampings to a global market and know every employee, machine, process, raw material and end product or potential end product. Why she stayed: Arriving at work in a golf shirt and a pair of khakis beats the suits and high heels of Manhattan; it’s as fast and easy as putting on my old parochial school uniform. And the team of engineers, press operators, purchasing agents and operations managers have such a wonderful camaraderie and sense of group achievement, compared to the career-jockeying I’ve seen in large corporations with employees ranked each year for value and waiting for the next downsizing. It’s rewarding to be part of manufacturing a component that will make a car run for a family, a solar panel turn to face the sun or a school bus deliver a child to school.
I think manufacturing is the new frontier for young women and a tremendous growth career as the United States roars back in the global marketplace. I’m now encouraging my 17-year-old daughter to study industrial engineering or supply chain management in college.
NEXT Christine Benz, Training Manager, TRUMPF, Inc., Farmington, Connecticut
How she made the switch: Before, I worked as a medical-technical assistant in doctors’ offices and hospitals. But I wanted to develop and build the technical equipment I used as a medical-technical assistant, rather than just being their end user. I started my career in manufacturing as a development engineer in TRUMPF Inc.’s laser development lab. I later worked in project engineering and now head the training department, focusing on the training and education of our customers and employees. Why she stayed: My job requirements change constantly as the machine-tool technology evolves. This forces me to learn continuously and to keep enhancing my skills, which I enjoy greatly. My company also allowed me work flexible hours when needed to balance work life and family and kids. TRUMPF provides me with a highly diversified work environment. Getting results in diversified teams is exciting, stimulating and provides endless learning possibilities. I am convinced that the manufacturing industry benefits greatly from female views and talents. I feel many women wind up with typical “female jobs” because “this is how it’s always been done.” Keeping an open mind and leaving the beaten path might lead to an exciting and satisfying career.
NEXT Linda Deaton, Production Planner, SCA Tissue, Barton, Alabama
How she made the switch: After three years as a high school math teacher, I decided I did not want to continue my career in education, but I was not sure what I wanted to do. I just wanted a job that I enjoyed doing that paid enough to support my family. I thought about all the jobs I had in the past and the things I liked and disliked about them. I realized that I enjoyed working with people, problem solving and hands-on work. When I saw the job posting for production technicians at SCA, the job requirements were a perfect fit for me. I was hired as a production technician in 2003 and eventually moved into a quality technician role, then was promoted to production planner. Why she stayed: My job is fast-paced and changes daily. There are always challenges. My hours are flexible, which is very beneficial while trying to balance my career and family. And I enjoy what I am doing, which has a positive effect on my entire life. Many people think of manufacturing jobs as unskilled, labor-intensive jobs that require a lot of heavy lifting. That is not always the case. With the technological advances in this industry, the jobs are becoming more high-tech and computerized. Women are often very detail oriented, making them perfect candidates for manufacturing quality products. Manufacturing jobs also pay well, have great benefits and offer opportunities for advancement.
NEXT Lesa Nichols, Owner, Lesa Nichols Consulting, Louisville, Kentucky
How she made the switch: I’ve always been curious, and both my dad and stepdad were plant managers and chemical engineers. So when I was working in public relations on my company’s Toyota account, being out on the production floor was just exciting and interesting to me. After a few years writing speeches for the head of the Toyota plant in Kentucky and doing other communications projects, I had a hunger to get closer to the stuff that was actually happening, not just talking about it. I joined Toyota as a production manager and stayed there 21 years. My last position was assistant general manager of Toyota’s operations and management development division. Now I’m consulting with other manufacturing companies to help them implement effective manufacturing processes and procedures.
Why she stayed: I love to learn, and working in manufacturing at Toyota was like learning on steroids. I was exposed to so much. If you are curious, persistent and open, the company will teach you anything and everything you want to learn.When we’re younger, many of us don’t necessarily know what’s out there in a career. We just assume you go to school to learn and then you go to work. But real learning can continue to take place over a lifetime if you’re in a career where problems are constantly solved and change is constantly happening.
NEXT Traci Tapani, Co-President, Wyoming Machine Company, Stacy, Minnesota
How she made the switch: I worked in the banking industry in international trade finance, and my sister, Lori [co-president of Wyoming Machine], worked in public accounting as a CPA. When our father was doing some estate planning in the early 1990s, he asked if we would be interested in owning his company, which he started in 1974. While we had never intended to work in the business, we realized we were both interested. We became owners in 1994.
Why she stayed: Both Lori and I are raising children, and having a job where you have fairly regular hours is really helpful. I think it is the same whether you are in management or working on the shop floor. We can participate in after-school activities. And the job is interesting: There are always changes, challenges and improvement opportunities in a manufacturing company. We work with interesting companies who are constantly designing new products for us to manufacture, and we have to continually evolve to meet their changing needs. It's an exciting field.
NEXT Diana Elrod, Manager of Quality and Metallurgy, Waupaca Foundry, Etowah, Tennessee
How she made the switch: Before, I worked in restaurants and retail, and I first got into manufacturing to have a steady, generous income. Then after I began working, I thought, “Hey, I can do this just as well as anyone else.” I always wanted to be the one who could make a difference in an organization's success. I started as a line operator, then moved into an administrative assistant role. From there, I advanced to engineer and now serve as manager of quality and metallurgy. Why she stayed: I love that I can have an impact on the success of both the company I work for and the personal development of employees who work for me. I was there once, and I am appreciative that someone wanted to develop me. I like to give back. Also, I’ve been able to earn my BA while working full time. Women who are grounded and want to give back should think about manufacturing. It's a great way to be a positive influence and role model for other young women, and it's an avenue to obtain a [higher] education, one that's often paid for by your employer.
You Might Also Like: 11 Smart Career Moves The Real Reasons You’re Unhappy at Work Make More Money: 5 Stories of Major Income Increases
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Famous People who Failed to Plan
Date: 09/13/2013 You might think that those who are famous would be planning their estates properly. Yet, there are plenty of celebrities who died with inadequate or nonexistent estate plans.
It's almost impossible to overstate the importance of estate planning, regardless of the size of your estate or the stage of life you're in. A close second to the need to plan your estate is getting it done correctly, based on your individual circumstances.
You might think that those who are rich and famous would be way ahead of the curve when it comes to planning their estates properly, considering the resources and lawyers presumably available to them. Yet, there are plenty of celebrities and people of note who died with inadequate (or nonexistent) estate plans.
No estate plan
It's hard to imagine why some famous people left this world with no estate plan. A case in point involves former entertainer-turned-congressman Salvatore Phillip "Sonny" Bono. He died in a skiing accident in 1998, leaving no will or estate plan of any kind. His surviving wife had to petition the probate court to be appointed her deceased husband's administrator, seek court permission to continue various business ventures in which Sonny was involved, and settle multiple claims against the estate (including one from Sonny's more famous prior spouse, Cher). To make matters worse, a claim against the estate was brought by a purported extramarital child, which necessitated a DNA test from Sonny's body to determine whether he'd fathered the claimant (he did not).
Do-it-yourself disaster
We've all seen the ads for do-your-own legal documents, including wills and trusts. And the law does not require that you hire an attorney to prepare your will. But even the highest ranking jurist of his time should have relied on estate planning experts to prepare his estate plan. Instead, U.S. Supreme Court Chief Justice Warren E. Burger, who died in 1995, apparently typed his own will (consisting of only 176 words), which contained several typographical errors. More importantly, he neglected to address several issues that a well-drafted will would typically include. His family paid over $450,000 in taxes and had to seek the probate court's permission to complete administrative tasks like selling real estate.
The importance of updating your estate plan
Sure, formulating and executing an estate plan is important, but it shouldn't be an "out-of-sight, out-of-mind" endeavor. It's equally important to periodically review your documents to be sure they're up-to-date. The problems that can arise by failing to review and update your estate plan are evidenced by the estate of actor Heath Ledger. Although Ledger had prepared a will years before his death, there were several changes in his life that transpired after the will had been written, not the least of which was his relationship with actress Michelle Williams and the birth of their daughter, Matilda Rose. His will left everything to his parents and sister, and failed to provide for his "significant other" and their daughter. Apparently his family eventually agreed to provide for Matilda Rose, but not without some family disharmony.
Let someone know where the documents are kept
An updated estate plan only works if the people responsible for carrying out your wishes know where to find these important documents. Olympic medalist Florence Griffith Joyner died at the young age of 38, but her husband claimed he couldn't locate her will, leading to a dispute between Mr. Joyner and Flo Jo's mother, who claimed the right to live in the Joyner house for the rest of her life.
The will of baseball star Ted Williams instructed his executor to cremate his body and sprinkle the ashes at sea. However, one of William's daughters produced a note, allegedly signed by Ted and two of his children, agreeing that their bodies would be cryogenically stored. Before the will could be filed with the probate court, the body was taken to a cryogenic company, where its head was severed and placed in a container.
If you have any questions about this article, stop by or call your FineMark Office. We are always happy to help.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2011-2014.
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2016-30/0358/en_head.json.gz/13048 | Bank of America Castoff Doing Way Better Than Bank of America
Jefferies analyst Casey Haire says the high-flying San Francisco private banking player's agreement to purchase Luminous Capital will improve its revenue mix.
NEW YORK ( TheStreet) -- First Republic Bank ( FRC), was already one of the best bank growth stories out there, but its recent agreement to acquire Luminous Capital will further improve its earnings and revenue mix, according to Jefferies analyst Casey Haire. After being acquired by Bank of America ( BAC) as part of that company's purchase of Merrill Lynch in January 2009, First Republic was sold in July 2010 for $1.86 billion to an investor group that included Colony Financial ( CLNY) and General Atlantic LLC, and was led by First Republic's original management team. First Republic completed a public offering of common shares in December of 2010. First Republic is headquartered in San Francisco and had $32.6 billion in total assets as of Sept. 30, with offices in with offices in California, Oregon, Connecticut, Massachusetts and New York, focusing on private banking and jumbo mortgage lending. The Bank on Nov. 2 announced a deal to acquire Luminous Capital of Los Angeles, which is an investment advisor with $5.5 billion in assets under management. The cost of the deal was not disclosed, but the bank made clear that Luminous team would stay in place, saying that "the six partners of the firm will sign long-term employment contracts as part of the transaction," which is expected to close by the end of the year. Haire on Tuesday upgraded First Republic to a "Buy" rating from a "Hold" rating, while increasing his price target for the shares to $39 from $35, saying that the "the addition of Luminous is not only accretive to EPS (2% in our view) but also boosts FRC's fee contribution into the mid-teens (vs. 12% in 2011), & thus decreases the company's reliance on spread income." While many of the largest U.S. banks -- especially Bank of America and Citigroup ( C) -- have touted cross-selling opportunities when making transformative acquisitions, with some very disappointing results, First Republic has a specialized focus on high-net-worth clients, with a reputation for excellent customer service, that Haire expects to lead to a successful integration with Luminous. Haire said that "on the Luminous side, the firm can now recommend banking products to its clientele without worrying about tarnishing its brand due to poor service quality. For FRC, the addition of Luminous provides the company with a reputable & established team to extract more wealth management business from its borrower base, which is under-penetrated from a wealth management perspective (only 25% of FRC clients participate)." Prev | 金融 |
2016-30/0358/en_head.json.gz/13229 | http://blogs.wsj.com/economics/2013/11/15/shiller-weighs-in-on-key-economic-issues-while-preparing-nobel-lecture/
Shiller Weighs in on Key Economic Issues, While Preparing Nobel Lecture
Brenda Cronin
Yale economics professor Robert Shiller is drafting a pivotal lecture and running out of time. In less than a month, he and other Nobel laureates will travel to Sweden to deliver their talks before the December 10 prize ceremonies.
“I have little time to do it and lots of interruptions,” Mr. Shiller said last week, about the frenzy ignited by the award.
The festivities in Stockholm aren’t just a matter of meeting King Carl XVI Gustaf and flying home. “I’m going to be there for two weeks!” Mr. Shiller said. “I have 16 friends and relatives coming with me. It’s like a wedding. I have to rent a tuxedo.”
In October, Mr. Shiller and the University of Chicago’s Eugene Fama and Lars Peter Hansen were cited by the Royal Swedish Academy of Sciences for “their empirical analysis of asset prices.” The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel will be presented in Stockholm.
On a recent morning at Yale’s Cowles Center, in a late 19th-century former residence beside the school’s economics department, Mr. Shiller fielded a stream of phone calls as well as congratulations from graduate students.
In his office, books—including many of his own works—spilled over shelves on to the floor by the fireplace near his desk. Mr. Shiller, who is 67 years old, joined the Yale faculty in 1982. He is the Sterling Professor of Economics, a named position that is the university’s highest academic distinction.
He is a creator of the Standard & Poor’s/Case-Shiller Home Price Index, which tracks changes in residential values across the U.S. Mr. Shiller is at work on another book with George Akerlof, husband of Janet Yellen, who has been nominated for the top spot at the Federal Reserve. Next year he will teach an online introductory course in financial markets through Coursera. The lectures are far from ready, he says, admitting, “I have so much work to do.”
Here are excerpts from the interview:
On the most recent economic crisis: “It’s really embarrassing to the economics profession that this crisis was hardly predicted. There are a few people, I count myself among them, who warned of this crisis…but it makes you wonder about … [economic] models…..I wrote a couple of papers with Ray Fair here at Yale evaluating forecasting models…And we found that they do forecast somewhat, but not very far out….It seemed like the models aren’t very good at seeing major turning points.”
On whether uncertainty hinders business investment and growth: “We have to be careful about what John Locke called ‘taking words for things.’ We have one word ‘uncertainty’ but it has many meanings. In the breakup of the Soviet Union in 1991, there was enormous uncertainty and yet, that was stimulating. This was a gold rush time, when we could stake our claim and do all sorts of things… Traders love uncertainty, maybe entrepreneurs love it especially. You’re thinking differently, you know that the government might step in with some new regulation and so you’re gaming that.”
On the potential Fed stewardship of Janet Yellen: “I can’t read her mind, but she seemed to me a very sympathetic person. Right now, unemployment is the prominent problem, but if there ever were substantial inflation, that would hit a lot of people unfairly. You know, a lot of retired people are living off fixed incomes and you can’t just let them down. My sense of Janet is that she wouldn’t ever do that.”
On the housing market: The S&P/Case-Shiller “numbers went up 12.8% in the last year, so it’s going up at a pretty good clip. But it might well slow. Part of it is that the initial impact of very low mortgage rates is still with us but they’ve gone up. Mortgage rates have gone up a lot and they might go up with tapering.”
On investors v. traditional home-buyers: “We’ll see how these … investors are going to manage buying single-family homes. And they may decide that this was a mistake and dump them. Homebuyers are very inertial. They stay in a place for years and years, but we have a new dynamic element in all these professional investors and something like half of all sales now are cash sales. It’s not the same market. The same kind of people who pay cash seem to me people who might sell more quickly.”
Why Stronger Summer GDP Is Horrible News
Weak Inflation Not Surprise It Appears to Be, Cleveland Fed Says Save Article | 金融 |
2016-30/0358/en_head.json.gz/13245 | Inside the Fed's First Financial-Crisis Meeting; Cramer Was Right
BAC JPM NEW YORK ( TheStreet) -- We now know the Federal Reserve was terrified of the crisis brewing in 2007. Something was wrong, but no one knew what.
The central bank called together three emergency conference calls in 2007 as the housing and financial crisis was beginning to frighten investors. The Fed made publicly available on Friday the conversations of meetings from the Federal Open Market Committee (FOMC), the policy-making wing of the Fed.
The minutes of the meetings reveal that Fed policymakers referred to TheStreet founder Jim Cramer's famous televised rant about the crisis, which follows our summary of the Fed proceedings.
Aug. 10, 2007, 8:45 a.m. Fed Chairman Ben Bernanke held an emergency meeting to inform FOMC members that the central bank would be issuing a statement later in the day to say that it would provide liquidity to maintain "orderly functioning" of the financial markets.
"As you know, financial markets have been fragile," Bernanke said. "They appeared to continue to be fragile overnight. There are difficulties with commercial paper funding and other short-term funding and a lot of concerns about counterparty risk."
Bernanke then turned to New York Fed President William Dudley, then the manager of the System Open Market Account, who revealed that two troubled companies were driving the market's uncertainty: Washington Mutual and Countrywide (now part of Bank of America (BAC) ). Also stoking fears was pressure on commercial paper markets in Europe and the U.S. "Washington Mutual and Countrywide have both made statements in their 10-Q filings that unnerved the market a little, Washington Mutual saying that they're having some trouble in terms of liquidity and Countrywide saying that there are unprecedented disruptions in the credit market," Dudley said.
Worries about these two companies, according to the conversations, hadn't yet prompted concerns that other financial institutions were beginning to feel the pressure.
Treasury Secretary Timothy Geithner, then the vice chairman of the FOMC and New York Fed president, chimed in to reassure members that the "more diversified" institutions had reported no funding pressure and that money actually was flowing to them.
"That, of course, could change quickly," Geithner said. "But apart from those that are more narrowly in the mortgage market that can't basically sell any non-agency products, I don't think we're seeing any sense of funding pressure."
In retrospect, we know that the crisis eventually spread to virtually every major financial institution in the country. But that was August 2007 -- seven months before the Fed provided a $30 billion loan to JPMorgan(JPM) for its purchase of the ailing Bear Stearns .
The FOMC continued to discuss the federal funds rate, when Dallas Fed President Richard Fisher and Geithner jumped into a minor scuffle. | 金融 |
2016-30/0358/en_head.json.gz/13785 | Looking to 70 1/2, a Magic Number in Retirement Plans
By ROBERT D. HERSHEY Jr.
CORRECTION APPENDED HOWEVER stout your tax defenses, there is almost no avoiding the levy against retirement plans for the year you reach 70 1/2, when you must start withdrawing cash from I.R.A.'s and 401(k) plans and paying ordinary income tax on it. But you can still improve your chances of keeping the present bite to a minimum, all while planning sensibly for future years and, quite likely, for your beneficiaries. For example, those who turn 70 1/2 in any given year have the option of waiting until April 1 of the next year to start withdrawals. But opinions differ about whether to do so. ''The general rule is you might as well take it early in the year and get it over with,'' said Natalie B. Choate, an estate planner specializing in retirement benefits at the law firm of Nutter McClennen & Fish in Boston. Otherwise, you might forget -- or even die, which is a particular problem if you haven't imposed any intended restrictions on your heirs. Moreover, deferring the 2012 required minimum distribution means that you'll be paying tax on two of them next year. This might not only push you into a higher bracket, but also into possibly higher tax rates -- if the government decides to raise them. On the other hand, Robert J. DiQuollo, chief executive and senior financial adviser at Brinton Eaton, a wealth manager based in Madison, N.J., counsels newbies to hold off taking distributions, especially this year, when a national election looms. ''Wait until December and see what's going on'' with respect to taxes for 2013, he advised, after the scheduled year-end expiration of the tax cuts originally enacted by President George W. Bush. Besides, Mr. DiQuollo added, ''why not get the extra 10 months of tax deferral?'' In addition to a possible increase in ordinary tax rates, the 3.8 percent Medicare payroll tax will start next year to apply to capital gains, dividends and other investment income for joint filers with at least $250,000 in income. Retirement distributions are excluded from the Medicare tax but still must be included in calculations of the $250,000 threshold. Of course, either strategy -- immediate payout or deferral -- involves market risk. While withdrawal in February means that money won't benefit from any stock or bond gains later in the year, waiting until December could expose it to any losses. You'll also need to decide whether to take your distribution in one lump sum or spread it into perhaps quarterly or monthly payouts. Choosing installments, as most people do, amounts to a variation on the risk-minimizing, dollar-cost-averaging strategy widely employed in buying securities. CATHARINE V. FAIRLEY, a tax and financial planner at Draper & McGinley in Frederick, Md., also suggested that those with relatively low earned taxable incomes keep an eye on how additional income from required minimum distributions, or R.M.D.'s, will affect taxable Social Security benefits as well as state taxes. That is especially the case for those with significant municipal bond income from other states. ''R.M.D.'s may push you into paying additional federal income taxes on your Social Security benefits as well as unexpected state income taxes,'' Ms. Fairley said. Calculating R.M.D.'s is fairly simple and is usually done by the institution where you have your account. Divide your Dec. 31 balance by what the Internal Revenue Service calls the distribution period, which represents the number of years that at least one of the two people in a couple is expected to be alive. For example, the uniform lifetime table shows a distribution period of 26.5 years for a 71-year-old married to a 61-year-old. If you have more than one I.R.A. other than Roth I.R.A.'s, which don't have required minimum distributions, you need to calculate the distribution separately for each but are then permitted to withdraw the total from any single source or a combination. So if you have four I.R.A.'s, you can withdraw your total R.M.D. from one of them. If you have more than 401(k), however, you must take a minimum distribution from each of them. You may withdraw more than is required, of course, as many people do for living expenses, but an excess amount in one year cannot be applied toward a subsequent year's obligation. Ms. Fairley recommends that taxpayers review how close they are to paying tax in the next higher bracket -- or perhaps even the alternative minimum tax -- and increase their R.M.D. by the difference. Accelerating income into the current year makes full use of the lower bracket. ''Some taxpayers think they are saving taxes by deferring what they can,'' she declared. ''In reality, there may be unique opportunities each year to take some income below the next marginal or A.M.T. rate, particularly in light of possible higher tax rates in the next few years.'' Minimum distributions are generally not required for 401(k)'s at an employer for whom you are still working, so long as you don't own more than 5 percent of the company. There is also an alternative mortality table, producing smaller payouts, for account owners with spouses more than 10 years younger than they are. And two recent tax breaks are no more. One was the waiving of required minimum distributions for 2009, when stock prices sank in the recession. The other break, which expired at the end of 2011, allowed people at least 70 1/2 to donate up to $100,000 to charity from retirement accounts without any tax liability. Ms. Choate, noting that the charitable break has been restored retroactively three times in the past six years, is advising clients to proceed with donations in the hope of another restoration. She also suggested gaining a small edge by using distributions to pay estimated income taxes, having the money directed to the I.R.S. late in the year but being credited for having been paid throughout the year. You can also take money from a retirement account before the age of 59 1/2 without incurring the usual 10 percent penalty. This can be set up under I.R.S. Rule 72(t), by agreeing to withdraw ''equally substantial'' amounts based on various factors over at least five years or until reaching 59 1/2, whichever comes last. With virtually all R.M.D.'s, however, there are beneficiaries to consider. Contrary to what many people assume, required distributions alone, although based on actuarial tables, will not consume your whole tax-deferred retirement nest egg unless market performance is extremely dire. Specialists underscore the importance of paying close attention to beneficiaries, both by naming them on a custodian's form -- a move that trumps a will -- by keeping your choices up to date and, perhaps, by placing conditions on how they are to receive and/or even spend their inheritance. FOR 401(k)'s, nonspouse beneficiaries can benefit from a rule change affecting plans that offer only lump-sum distributions. Since 2010, those beneficiaries have had the option of making a direct rollover of such plans into an inherited I.R.A., so they can stretch out the payout. Without the stretch, they would lose the chance for long-term, tax-deferred compounded growth, having to withdraw the money immediately or within five years and probably suffer severe tax consequences. You can also roll 401(k) or other employer-based plans from former jobs into an I.R.A.. But Ms. Fairley recommends that you do this only after you have finished any Roth conversions you plan to do with your I.R.A.'s; 401(k) balances are not included in the calculation of taxable I.R.A. conversions. Ed Slott, a retirement expert and author of ''Parlay Your I.R.A. Into a Family Fortune,'' noted that employers ''don't want the record-keeping headache of having to keep track of the beneficiaries of deceased ex-employees for payout purposes.'' PHOTO: Natalie Choate, an estate planning lawyer, says that when it comes to required withdrawals from I.R.A.'s and 401(k)'s, the general guideline has been to make them early in the year. (PHOTOGRAPH BY BRYCE VICKMARK FOR THE NEW YORK TIMES)
Correction: February 26, 2012, Sunday
This article has been revised to reflect the following correction: An article in the special Your Taxes report on Feb. 12 about tax planning for retirement accounts referred incorrectly to a federal tax break that expired at the end of 2011. It allowed people at least age 70 1/2 to donate up to $100,000 from an I.R.A. to charity without any tax liability; it did not let people of any age make such donations and avoid only capital gains liability. The article also omitted a 2010 rule change affecting nonspouse beneficiaries of 401(k) plans that offer only lump-sum distributions. Since 2010, those beneficiaries have had the option of making a direct rollover of such plans into an inherited I.R.A., so they can stretch out the payout. | 金融 |
2016-30/0358/en_head.json.gz/13821 | The Price Tag on Grasberg
The higher cost associated with the extraction in the region and royalties which the company was already paying to the stakeholders have been weighing on the profitability of the company. In addition, the treatment charges were also higher in this particular region as compared to the company's resources in other geographical areas. For these reasons, the company was already operating under gross loss from Indonesian region. However, other regions have more than made up for this setback up till now and are likely to continue to do so.
With the new royalty rates and export duties, the company would have to give a bigger piece of the pie to the government which means it is headed for further gross loss unless the price of copper rises. Here, we will have a rough idea of how much of a setback the company is likely to face and for how long it will face it.
According to the recent news release, Indonesian government will now increase royalties to 4% on copper and 3.75% on gold which were previously 3.5% and 1%, respectively - the export duties will take effect immediately. Initially, the duty will by 7.5%, which will later decline to five 5% as the smelter passes 7.5% development. The duty will remain at 5% until 30% smelter progress after which it will become 0%.
If we look at second quarter, the royalties paid are at $0.11 per pound of copper/per ounce of gold at the current royalty rates. With that, the unit net cash cost becomes $2.66 per pound/ounce of gold. After incorporating some other costs, the company goes into a gross loss of $0.37 per pound/ounce.
With the new royalty rates and export duties in effect, the company will have to bear an even higher cost. The effective tax rate is also the highest in the country at 40%, compared to other interests of Freeport-McMoRan. The following picture gives a clear idea of what the Indonesian subsidiary is contributing to the company. Although in losses in Indonesia, Freeport is at a far greater advantage in South America, North America and Africa.
Source: SEC Filings
When Will The Situation Get Better?
Although under losses, Freeport Indonesia is still the largest gold mine and the third largest copper mine in the world. The company will have to make some adjustments and incur some cost to build smelters, but this could turn out to be good for the company. Firstly, it took copper ore to other countries where it processed it into different element. Now, with the smelter in Indonesia, it can save that cost and directly sell the final product from Indonesia. This will increase the profit margin of the company from the region.
Copper prices have been favorable since the month of July due to the increased global demand. This increased demand is the result of expected greater copper demand from China due to industrial expansion. The actual growth in demand will be clear over the next few months, and if the actual demand goes above the expected demand, then we are likely to see a continued rise in copper prices - however, if the actual demand falls short of the expectations, then we might see a decline in the copper prices. Nonetheless, this gives Freeport-McMoRan at least one quarter of favorable copper prices for sure.
The agreement with the Indonesian government is not ideal but it looks like a good deal for the company in the long-term. In the short-term, however, the company will continue to have a loss from the region as the royalties will increase. Further, the decision to build a smelter in Indonesia will also result in a considerable rise in the capital expenditures of the company. Copper prices are also favorable for the copper producers and the expected demand a supply situation is indicating that the prices will remain strong. We believe these factors are favorable for Freeport-McMoRan and the company is well-positioned to grow.
Additional Disclosure: This article is for educational purposes only and it should not be taken as an investment recommendation. Investing in stock markets involves a number of risks and readers/investors are encouraged to do their own due diligence and familiarize themselves with the risks involved.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.About this article:ExpandAuthor payment: $35 + $0.01/page view. Authors of PRO articles receive a minimum guaranteed payment of $150-500. Become a contributor »Tagged: Investing Ideas, Long Ideas, Basic Materials, CopperProblem with this article? Please tell us. Disagree with this article? Submit your own.Top Authors|RSS Feeds|Sitemap|About Us|Contact UsTerms of Use|Privacy|Xignite quote data|© 2016 Seeking Alpha | 金融 |
2016-30/0358/en_head.json.gz/13832 | Search FINRA's bonus proposal gains support of big brokerages 3/12/2013
The four biggest retail brokerages are all supporting the Financial Industry Regulatory Authority's new plan to mandate that brokerages disclose to clients any "enhanced compensation" they pay to brokers. The comment period for the rule ended last week, although it must be approved by the Securities and Exchange Commission before it can become law.
FINRA rewrites broker-disclosure proposal 5/2/2014 The Financial Industry Regulatory Authority is seeking public comment on a reworked proposal to make it easier for the public to investigate the backgrounds of brokers and brokerages. The proposal, intended to clarify an earlier one that faced criticism, would require brokerages to put a link on their websites and social media sites that sends consumers to BrokerCheck, FINRA's online disclosure database.
Reuters FINRA drops controversial component of supervisory plan 7/1/2013 The Financial Industry Regulatory Authority has backed away from a plan, originally proposed in 2011, to require broker-dealers to monitor non-securities-related business in which their brokers engage. Brokerages pushed back against the plan, which was part of FINRA's new package of proposed supervisory rules.
InvestmentNews (free registration), Reuters FINRA revises guidance for reporting illiquid investments 4/25/2013 Broker-dealers might have to significantly change the way they report illiquid investments, such as nontraded real estate investment trusts, on client statements, according to a plan being developed by the Financial Industry Regulatory Authority. Broker-dealers would have several options under proposed changes to Rule 2340 that have been adopted by FINRA's board. IPA supports subtracting sales commission from nontraded REITs on clients' account statements immediately after their sale, but the association opposes subtracting other costs, such as due diligence expenses.
InvestmentNews (free registration) FINRA seeks ability to publicize complaints 3/25/2013 A Financial Industry Regulatory Authority proposal released last week for comment by the Securities and Exchange Commission would allow FINRA to publicize its monthly notices of disciplinary actions as well as its online reporting system in an effort to highlight pending regulatory complaints. The change would bring FINRA's policy closer to that of the SEC. However, some industry experts worry that the differing nature of the organizations make the changes a bad fit for FINRA.
InvestmentNews (free registration) More Summaries:
FINRA, Securities and Exchange Commission FINRA concedes RIAs will remain beyond its purview 2/8/2013 After repeated attempts, the Financial Industry Regulatory Authority has conceded that the House Financial Services Committee is not going to expand FINRA's powers to include oversight of registered investment advisers. "I'm not a big believer in beating a head against the wall. We'll focus on things we can impact," FINRA CEO Richard Ketchum said.
Financial Industry Regulatory Authority Get the News in your Inbox | 金融 |
2016-30/0358/en_head.json.gz/13865 | CANARY ISLES
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Switzerland is a peaceful, prosperous, and stable modern market economy with low unemployment, a highly skilled labor force, and a per capita GDP larger than that of the big Western European economies. The Swiss in recent years have brought their economic practices largely into conformity with the EU's to enhance their international competitiveness. Switzerland remains a safe haven for investors, because it has maintained a degree of bank secrecy and has kept up the franc's long-term external value. Request more information about opening a Swiss bank account.
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Swiss bank secrecy protects private banking information; the protections afforded under Swiss law are similar to confidentiality protections between doctors and patients or lawyers and their clients. The Swiss government views the right to privacy as a fundamental principle that should be protected by all democratic countries. While secrecy is protected, in practice all bank accounts are linked to an identified individual, and a prosecutor or judge may issue a "lifting order" in order to grant law enforcement access to information relevant to a criminal investigation.
Swiss law distinguishes between tax evasion and tax fraud. If any holdings are not declared to the taxation authorities, a natural or legal person commits tax evasion. Tax evasion is not considered an offence, but only a misdemeanour. It is assumed that failed declaration of one's assets is not sufficient evidence for criminal intent, as the chance of unintentional failure is too high. However, tax fraud is considered a criminal offence under Swiss law and prosecuted according to the Swiss Penal Code. A forged tax declaration, like the statement of significantly below-market valuation of real estate or the counterfeiting of bank statements, is such a criminal offence of tax fraud.
Pressure on Switzerland has been applied by several states and international organizations attempting to alter the Swiss privacy regime. The European Union, whose member countries geographically surround Switzerland, has complained about member states' nationals using Swiss banks to avoid taxation in their home countries. The EU has long sought a harmonized tax regime among its member states, although many Swiss banking officials (and, according to some polls, the public) are resisting any such changes.
Since July 1, 2005, Switzerland has charged a withholding tax on all interest earned in the personal Swiss accounts of European Union residents.
In 2001 and 2002, an amnesty was offered by the government of Italy in which taxes and penalties on repatriated funds were limited on funds repatriated from Switzerland; 30 to 35 billion euro worth of deposits were returned to Italy. In 2003, a similar amnesty was approved by the government of Germany.
In January of 2003, the United States Department of the Treasury announced a new information-sharing agreement under the already extant U.S.-Swiss Income Tax Convention; the agreement is intended to facilitate more effective tax information exchange between the two countries. Said a Treasury official, "This Mutual Agreement should improve our access to needed information" under the terms of the tax treaty.
There are several measures in place to counter money laundering. The Money Laundering Act sets forth requirements of account holders' identification, and requires reporting of any suspicious transactions to the Money Laundering Reporting Office.
According to the CIA World Factbook, Switzerland is "a major international financial center vulnerable to the layering and integration stages of money laundering; despite significant legislation and reporting requirements, secrecy rules persist and nonresidents are permitted to conduct business through offshore entities and various intermediaries..."However, Switzerland's cooperation in transnational financial issues has been praised by several major U.S. officials. A Federal Bureau of Investigation anti-terrorism official noted that Switzerland was one of several countries to participate in joint task forces targeting financing of Al-Qaeda terrorist cells; a former Assistant Secretary of the Treasury praised Swiss cooperation and the country's assistance in the finding and freezing of terrorist and Iraqi assets.
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Some bank accounts are afforded an extra degree of privacy. Information concerning such accounts, known as numbered accounts, is restricted to senior bank officers, rather than being accessible to all the employees of a bank. However, the information required to open such an account is no different from that of an ordinary account; completely anonymous accounts are prohibited by law. Should a criminal investigation take place, law enforcement has access to information related to a numbered account in the same way it has access to information about any other account.
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2016-30/0358/en_head.json.gz/13999 | Accounting & Tax PCAOB Review of Deloitte Prompts Restatement
When the accounting overseer inspected Deloitte's audit of Tenneco's financials, the PCAOB found that the company's accounting for interest-rate swaps was incorrect.
Stephen Taub July 24, 2007 | CFO.com | US share
Tenneco Inc. will restate three years’ worth of financial statements following the Public Company Accounting Oversight Board’s inspection of its external audit firm, Deloitte & Touche. When the PCAOB reviewed Deloitte’s audit of Tenneco’s financials, the oversight board found that the manufacturer’s accounting for interest-rate swaps was incorrect.
As a result, Tenneco will change how it accounts for interest-rate swaps and restate results for the past three years ending in 2006 as well as for the first three quarters of 2006. By now using mark-to-market accounting for the swaps, the company will increase the pre-tax interest expense it reports by $6 million for the affected periods, according to a regulatory filing.
PCAOB Finds Slip-ups in E&Y Audits PCAOB Ponders How to Audit Fair Value PCAOB: Deloitte Fails on Fair-value Testing The company’s current treatment of interest-rate swaps started with three fixed-to-floating interest-rate swaps Tenneco entered into with two financial institutions in April 2004. The company swapped a total of $150 million of its 10.25 senior secured notes to floating interest rate debt at LIBOR plus an average spread of 5.68 percentage points.
Since it executed the swaps, the company applied the so-called “short-cut” method of fair-value hedge accounting under SFAS 133, Accounting for Derivative Instruments and Hedging Activities.
As Tenneco explained in the filing, however, interest-rate swaps that qualify for the “short-cut” method of hedge accounting must match the terms of the debt it is hedging. If the swaps and the debt constitute “mirror images” of each other, the company can assume that the changes in the value of the hedges and the underlying debt exactly offset each other—and thus have no effect on earnings.
In its review of Deloitte’s audits, the PCAOB unearthed an issue that the audit firm had apparently missed: there were indeed differences between the swaps and the underlying debt. The swaps, therefore, failed to meet the mirror image requirements of the short-cut method. A Deloitte representative said that “professional standards preclude us from commenting on client matters that are confidential.”
One difference is between the 30-day notice period to terminate the swaps and the 30-day to 60-day notice period to redeem the notes, Tenneco explained. Another is that while the debt and swaps could both be redeemed before their maturity dates, the notes enable the company to make redemptions in increments of $1,000, while the interest-rate swap agreements imply that they can only be redeemed in their full amounts.
Tenneco will discontinue accounting for the swaps as hedges. Instead, the company will record the changes in the fair value of the interest-rate swaps as increases or decreases to interest-expense in each period, without recording an offset for changes in the fair-value of the underlying debt. The fair value of these swaps has been disclosed in the footnotes to the financial statements each quarter since the swaps’ inception, according to Tenneco.
“The accounting standards for interest-rate swaps are complex and we are disappointed in having to restate our financial results,” said Gregg Sherrill, Tenneco’s chairman and CEO.
Tenneco also said that the restatement will also reflect other accounting adjustments, which will not be significant. For example, the company will move the accounting charge taken for employee stock options in the fourth quarter of 2006 to earlier periods to which it relates. The company added it is still completing its analysis of these adjustments and will reflect all of the changes in an August filing.
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2016-30/0358/en_head.json.gz/14111 | Underwater on the mortgage, stationed away from home
Real Estate agent Margaret Woda Kenneth K. Lam, Baltimore Sun Real Estate agent Margaret Woda is pictured in front of a home owned by a military family whose mortgage is underwater and most likely will have to go through a short sale. Real Estate agent Margaret Woda is pictured in front of a home owned by a military family whose mortgage is underwater and most likely will have to go through a short sale. (Kenneth K. Lam, Baltimore Sun) Jamie Smith Hopkins, The Baltimore Sun
Air Force Maj. Justice Sakyi's change-of-station orders to Germany came with a built-in dilemma: what to do about his family's home in Maryland.He and his wife, Olivia, bought the single-family house in Bowie in early 2006, near the height of the housing bubble.
Then came the bust.Selling for what they owe is impossible. They can't rent the place out for nearly enough to cover the mortgage. And they haven't been able to negotiate a lower payment.
"We believe in miracles still happening and so we are waiting for ours, to get rid of the house," Olivia Sakyi wrote in an email from Spangdahlem, Germany.About 185,000 service members who own homes get orders to relocate each year, according to the Consumer Financial Protection Bureau. The agency estimates that potentially tens of thousands of them are in some form of housing bind: underwater on their mortgages, facing foreclosure or both.Their credit scores aren't the only things at stake. Financial problems can endanger security clearances.Hoping to ease the strain, regulators took steps in the last few months to make it easier for relocated military members to get loan modifications to lower payments.
They aren't disqualified from the federal Home Affordable Modification Program simply because they no longer live in the homes, the Treasury Department said in May.And in June, the regulator who oversees Fannie Mae and Freddie Mac said change-of-station orders are a sufficient reason to approve a short sale on a mortgage held by one of the financing giants, which allows an owner to sell a home for less than he or she owes on it.If the property was purchased before July 1, Fannie and Freddie will not pursue such a service member for the remainder of the mortgage balance, said Edward J. DeMarco, acting director of the Federal Housing Finance Agency.The Pentagon says short sales generally should not affect security clearances. Defense officials say the consolidation of clearance hearings and appeals under a single office — they were formerly conducted separately by each service branch — should lead to more consistency in the way such cases are handled."If circumstances are outside of a service member's control — in other words, they own a home and they're being required to [make a] permanent change of station — … a short sale may be the most responsible step they can take and they will not be looked at unfavorably," said Maj. Shawn McKelvy, deputy director of legal policy for the Office of the Under Secretary of Defense for Personnel and Readiness.But time is running out for help from a federal program that covers the difference between a service member's home sale price and mortgage balance.The Homeowners Assistance Program, which was expanded temporarily in 2009 to cover restationed service members, won't accept applications from that group after Sept. 30, according to theU.S. Army Corps of Engineers. Those who bought homes after June 2006 never qualified for the assistance.Margaret Woda, a real estate agent in Crofton who specializes in military moves, said she always tries to see if service members qualify for the program because it's the best of the few options available. About 7,900 transferred service members have received the help nationwide, with more in the queue."It is very predictable for anybody that qualifies for it — unlike a short sale, where you're in negotiations with a bank … and it can go on forever," said Woda, with Long & Foster.One of her clients, Navy Lt. Ethan Karp, is grateful he was eligible for the Homeowners Assistance Program.Karp thought his odds of staying in the area for a while were good when he paid $385,000 for his Crofton home in 2005. But he was transferred to California in 2008.He sold in 2010 for about $120,000 less than his purchase price. The Homeowners Assistance Program covered the remaining mortgage balance.Karp spent two years renting the home in Crofton for less than his mortgage payment before he was finally able to sell with the program's help. He said his mortgage broker wasn't able to suggest any other steps he could take, short of handing the keys back to the bank."It was almost like, 'If you're not going to walk away from your house, there's not a whole lot we can do,'" said Karp, who is now stationed in Texas — and renting.Olivia Sakyi says she was told recently that she and her husband don't qualify for the Homeowners Assistance Program. She said they've gotten the runaround on repeated requests for a loan modification or refinance, so now they're hoping Woda — their agent — can negotiate a short sale.Sakyi, who is a civilian employee of the Air Force, said the experience has heaped stress on top of an already stressful situation. Her husband was in Afghanistan from last August until January, and they are now expecting their third child.She said that she originally hoped to keep their home. No more."I just want it gone at this point," Sakyi, 35, said by telephone from Germany.Holly Petraeus, who heads service member affairs at the new Consumer Financial Protection Bureau, said she has heard many stories of housing woe.She talks of a commander in Florida who doesn't have enough space in his barracks for all the people who want to live on base because they left their families behind in homes they couldn't sell.Another theme she hears is mortgage servicers giving faulty information and being slow to respond to military members.Petraeus is the wife of CIA Director David Petraeus, the former four-star general who commanded international forces in Afghanistan and in Iraq.
In June, her agency issued a warning to mortgage servicers: If you abuse a member of the military, expect "appropriate enforcement action.""Civilians in many cases — or most cases — have the option of hunkering down and trying to wait until housing values go back up," Petraeus said. "Service members simply can't do that."
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2016-30/0358/en_head.json.gz/14114 | 2/13/201304:19 PMBryan YurcanSlideshowsConnect Directly0 commentsComment NowLogin50%50%
What Can Banks Learn from the U.S. Government’s Big Data Initiatives?Several federal agencies are currently involved in big data research and design projects.1 of 4 It's not just banks that have a pressing need to tackle the big data issue. The federal government, arguably even more so than financial services, has amassed massive amounts of data and continues to do so on a daily basis. To that end, the U.S. government has been working on a big data R&D initiative for the past year, with $200 million invested in projects at several different federal agencies. Bank Systems & Technology takes a closer look at some of the more notable of these projects. 1. Department of Defense
The Department of Defense is "placing a big bet on big data," according to a White House statement, investing in programs that will "Harness and utilize massive data in new ways and bring together sensing, perception and decision support to make truly autonomous systems that can maneuver and make decisions on their own."
Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio1 of 4Comment | Email This | Print | RSSMore InsightsWebcasts | 金融 |
2016-30/0358/en_head.json.gz/14359 | Home Page » P.M. Rajoy says Spain faces tough year ahead
P.M. Rajoy says Spain faces tough year ahead
By HAROLD HECKLEAssociated Press
Article Last Updated: Friday, December 28, 2012 11:22am
Spain faces another tough year as it grapples with recession, a deep financial crisis and 25 percent unemployment, its prime minister said Friday.In his end-of-year assessment, Mariano Rajoy said the country's crisis had been worse than anticipated."We are facing a very tough year, especially in its first half," he said. "Spain's economy will remain in recession for some time, but we expect it will improve in the second half of 2013."While Rajoy was speaking, investor concerns government over attempts to shore up the main cause of Spain's problems - its shaky bank system - sent shares in lender Bankia falling nearly 27 percent.Spain's economy has been hit hard by the collapse of the country's property market in 2008, which left ordinary Spaniards and banks struggling under the weight of toxic loans and assets. The country's government rushed to prop up its financial system, sending its debt levels higher.To get its deficit under control, the government introduced a series of harsh austerity measures, such as spending cuts and tax rises. This has had a damping effect on the Spanish economy, pushing it into recession and driving up unemployment.In its bid to overhaul the financial industry, Spain had to seek a (EURO)100 billion ($132.7 billion) lifeline from the 17 European Union countries to strengthen its failing banks. Some analysts said Rajoy acted too slowly to shore up failing banks. "Some measures, like bank restructuring, were taken too late," said Guillermo Aranda, CEO at ATL Capital investment company.The prime minister said Friday that structural reforms and "the restructuring of the financial sector" were key elements in Spain's road to recovery.However, the stock market showed it was not convinced by the progress made, as shares in Bankia SA fell for a second day, dropping 27 percent to (EURO)0.40 as investors rushed to offload their holdings in the bank.Bankia was formed in 2010 in a merger of seven troubled and unlisted Spanish savings banks, and was floated on the Spanish stock exchange last year. Its shares, a large number of which were sold to individual savers and pensioners, have fallen nearly 80 percent in value since the floatation.Officials with the country's bank bailout fund - the Fund for Orderly Bank Restructuring - revealed late Wednesday that Bankia was worth minus (EURO)4.2 billion. The bank's negative value - a result of combining the bank's current balance sheet with the level of business it is expected to generate in the future - was due to worse-than-expected losses of (EURO)3.2 billion on toxic property investments.FROB has used the negative value to determine the size of Bankia's capital injection. The bank, and parent company Banco Financiero y de Ahorros, have received a (EURO)18 billion bailout to strengthen their balance sheets - (EURO)4.5 billion of which was paid in September.In a statement released Thursday, BFA said it had received a capital increase of (EURO)13.5 billion. Bankia itself will receive (EURO)10.7 billion of this in the form of bonds.With both of these operations completed, the BFA-Bankia group said its capital ratios would be "above legal requirements" and would increase its capital levels over the next three years to (EURO)5.4 billion.However, investors have been offloading their shares in Bankia over the past few days because the (EURO)10.7 billion in bonds will convert into shares next year, thereby significantly diluting the value of existing stock.As a result of the capital increase, Bankia will be suspended from the IBEX-35 index of leading Spanish shares in January.Bankia's falling share price Friday also hit Banco de Valencia, another nationalized lender, whose stock fell 20 percent, having closed 21 percent down the previous day.In his address Friday, Rajoy acknowledged that some of the measures went against the manifesto commitments with which his party won elections by a large majority in November 2011. He said he was keenly aware of the wave of "skepticism, disappointment and mistrust" that was palpable throughout Spain."We must persevere in the reforms we have undertaken," said Rajoy. | 金融 |
2016-30/0358/en_head.json.gz/14440 | Battery Maker A123 Systems Acquired by Chinese Firm for $260M
Tiffany Kaiser - December 10, 2012 8:10 AM
18 comment(s) - last by maugrimtr.. on Dec 11 at 9:53 AM
(Source: bloomberg.com)
Congress isn't too sure about the outcome
A123 Systems finally has a new owner after its auction this past weekend, but Congress isn't too happy about the outcome.
Chinese firm Wanxiang Group won the auction for A123 Systems on Saturday for about $260 million. This has concerned certain members of Congress, who said that A123's contracts with the U.S. Department of Defense are at stake.
"I am very concerned by Wanxiang's acquisition of A123," said Rep. Bill Huizenga (R-Zeeland). "A123 maintains several contracts with the Department of Defense and given the thin line between Wanxiang and the Chinese Government, I am concerned about the Government of China having access to sensitive technologies being used by our military forces."
However, Wanxiang doesn't have full access to A123's technology. Part of A123 was also sold to Illinois-based Navitas Systems LLC, which will hold the DOD contracts for $2.2 million.
Back in mid-October, A123 Systems officially filed for bankruptcy and agreed to sell its automotive business assets to Johnson Controls -- a company that optimizes energy efficiencies in car batteries, buildings and electronics.
Before that, A123 was missing its loan payments. It had received $249.1 million in grants from the U.S. government in 2009 to develop green, electric car batteries. It was discovered that the U.S. government gave A123 a $1 million grant the day it filed for bankruptcy.
A123 Systems suffered a huge kick earlier this year when it announced a $55 million battery replacement program for Fisker Automotive's Karma. The vehicle had issues with the batteries' hose clamps. A123 Systems joins a list of other green companies that filed for bankruptcy after receiving government loans and grants. Back in September 2011, solar panel company Solyndra filed for bankruptcy after receiving a $535 million loan from the U.S. Department of Energy (DOE). In November, Beacon Power (maker of flywheels for grid efficiency) filed after receiving a $43 million loan guarantee from DOE in 2010. In January 2012, EV battery maker Ener1 filed for bankruptcy after its subsidiary, EnerDel, won a $118.5 million grant from DOE in 2009. The U.S. Bankruptcy Court in Delaware will hold a hearing on the result of the A123 Systems auction on Tuesday, December 11.
RE: Figures...
This is Dailytech. Take your Vulcan logic elsewhere. Here we listen to our guts, and our intestines do not digest well when contemplating China taking advantage of Laissez-Faire economics free from US Government manipulation. Wait, I though we conservatives stood for free markets and globalization?It's unlikely that the A123 purchase has any security impact since batteries are slowly becoming a commodity. They already ensured that the DOD contracts stayed with a US company. It's a pity the taxpayer funded Chinese R&D but that's what you get for being careless when playing venture capitalist.Who was monitoring their financials and writing grant reclamation clauses? The Windows paperclip man would have more sense. Parent
U.S. Gov Gave A123 Systems $1M Grant the Day It Filed for Bankruptcy
Official: A123 Systems Files for Bankruptcy
Battery Maker EnerDel/Ener1 Received $118M DOE Grant, Now Filing for Bankruptcy
DOE Deals Another Bad Energy Loan as Beacon Power Files for Bankruptcy
$500 Million Wasted on Bankrupt Solar Panel Company; White House was Warned | 金融 |
2016-30/0358/en_head.json.gz/14832 | David Drumm bought six U.S. homes in last decade
ANTOINETTE KELLY
READ MORE- David Drumm's property safe from U.S. creditors
The former Anglo Irish Bank boss David Drumm has been involved in the purchase of at least six properties in the U.S. over the past ten years it has been revealed.According to records, in the late 1990's Mr Drumm began buying US property after he moved to Massachusetts to expand Anglo's business in the northeast of the US.Among the properties include a home in Sudbury, a suburb on the outskirts of Boston for around $580,000 in 1999. Four years later he resold the property at a profit close to $245,000.
The disgraced banker also made a profit close to $270,000 when he sold a house at Watchhill Way in Cape Cod in 2007.Mr Drumm purchased two other properties with a business partner in Cape Cod in subsequent years.Another property in the same exclusive location of Cape Cod was bought in 2008 on Stage Neck Road. The extensive property was purchased for $6.4m and served as the family home up until earlier this year. The residence includes a swimming pool and a private dock for a yacht.The sixth property to be bought by the bankrupt Irish man is his new home in Old Colony Road, a well-to-do commuter town on the outskirts of Boston.The current home of Mr Drumm was purchased through a trust for $1.9m earlier this year. He has a 50percent interest in the trust which cannot be touched by his creditors.Mr Drumm fled to the U.S. in December 2008, he filed for bankruptcy last month in Boston.The former chief executive borrowed millions of euro from Anglo Irish to buy bank shares which are now worthless.
The Irish Government has since nationalized Anglo Irish Bank following the disclosure of reckless lending and the bank is now trying to push for the sale of his assets to pay off some of the debt owed.READ MORE- David Drumm's property safe from U.S. creditors | 金融 |
2016-30/0358/en_head.json.gz/14882 | Carolyn Kae Phillips '82 Jason Sissel '07
Michael Pirron KR-04
Kellogg grad ranked among world's best investors
Awarding adventure
Alumni Profile: Michael Pirron KR-04 Doing well and doing good
By Amy Trang
Michael Pirron spent more than 10 years working as a consultant in the IT and healthcare industries. Though he was making a decent living, he began to think about a broader definition of success. Michael Pirron (top row, third from the left)
with the Rx Partnership team, Impact Makers’
nonprofit partner.
"My co-workers were travelling the world, making loads of money, but not feeling like they were making any impact (on society) except on the company's bottom line," the 2001 Kellogg-Recanati graduate says. "That was not how I wanted to live my life."
Pirron imagined a different sort of consulting firm, one that would offer competitive, market-rate salaries and high-quality services to its clients but whose focus wouldn't be the fattening of shareholders' wallets. Instead, its goal would be to maximize profits to make a social impact. Pirron outlined this unusual business plan in 2001 in his final paper for an ethics and leadership course taught by Professor Emeritus David Messick. That plan came to fruition in 2006 when Pirron founded Impact Makers, a Richmond, Va.-based firm offering healthcare, management and IT consulting services to a range of clients, from large corporations to government agencies. Structured as a non-stock corporation, Impact Makers has no shareholders and cannot be acquired by another firm. After paying salaries and operating expenses, the company directs all its profits toward nonprofit partners. Its current partner is Rx Partnership, which provides free prescription medications for Virginia's uninsured. The organization fits Impact Makers' partnership criteria: It is a local, secular and nonpolitical nonprofit that "helps people help themselves." Over the past two years, the firm has directed more than $53,000 toward its charitable partners and given over 340 pro-bono consulting hours valued at another $34,000.
Impact Makers' unique business model has attracted national attention. In 2009, it was named second on BusinessWeek's list of "Most Promising Social Entrepreneurs." It was also one of the first firms to meet the rigorous social and environmental standards required for certification as a B Corporation by B Lab, an influential social-enterprise ratings group. Pirron reports to a volunteer board comprised of business and community leaders; the 12-member board has management control of and fiduciary responsibility for the firm. The company pays its consultants market-rate salaries and allows them to work on their own pro-bono projects on the firm's dime. "As a consulting company in a competitive labor market, your biggest asset is your employees," Pirron says. "This model allows you to attract and retain top talent in the labor market and also gives you an edge on client proposals because of the social impact factor." Impact Makers is contracted to give a minimum of $1,000 a month to Rx Partnership regardless of profitability, but can give more depending on the company's year-end profits. The goal is to endow at least 20 percent of Rx Partnership's $340,000 budget before adding another nonprofit partner, Pirron says. The company has already lived up to its name and made an impact: The funds donated thus far have enabled Rx Partnership to provide nearly $250,000 in free medications to about 400 families in Virginia, says Amy Yarcich, the organization's executive director.
Pirron says he hopes to scale Impact Makers nationally, so that his social business venture can succeed in communities across the nation.
"Impact Makers came out of the thought process that there has to be some other way to do well and do good — a way to transform your skills and experience into social impact, not just maximizing corporate returns," he says. By all accounts, Pirron has found a way to do both.
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2016-30/0358/en_head.json.gz/15020 | UAE- Marka's IPO likely to attract huge turnout MENAFN - Khaleej Times
(MENAFN - Khaleej Times) Company plans 100 fashion stores restaurants and cafes Marka’s initial public offering (ipo) is expected to attract huge turnout as the company is planning to open more than 100 fashion stores restaurants and cafes in the uae and rest of the gulf countries.The ipo is not restricted to the gcc nationals only and open to all investors top officials of the company told reporters at a media roundtable on wednesday in dubai.The event was attended by jamal al hai chairman of marka founders committee; khalid almheiri deputy chairman of the founders committee and dr mahdi mattar ceo of capm investment marka’s financial advisor and lead manager of the ipo.The 12-day offer of 275 million shares at dh1 each representing 55 per cent of the company’s capital has received final regulatory approval and will start on april 13.Responding a question to khaleej times regarding other listed companies’ move to increase foreign ownership al hai said that they are in different sectors and marka is into retail which is perfomring excellent in the country.“we expect that a large turnout for marka’s shares will revive the ipo market in the uae by encouraging other companies to go ahead with their ipo plans” al hai said.The founders committee of marka a public joint stock company under incorporation with a capital of dh500 million said that the company will use the proceeds from the ipo towards capital expenditures and operating expenses associated with the opening of fashion stores restaurants and cafes.It is planned that the company will allocate 50 per cent of its investments for retail and the other 50 per cent will be allocated for the opening of restaurants and cafes. these investments will see the introduction f five new concepts in fashion and six new concepts in restaurants and cafes over the next five years. Al hai expects that the ipo will enjoy a huge turnout in attributed to projected strong growth company prospects due in part to marka’s focus on the introduction of new concepts in the retail and food and beverages (f&b) sectors in the uae and the broader gcc region. he said both these sectors are witnessing increased activities and high profit margins exceeding the prevailing rates in many other sectors.Almheiri said: “in addition to marka being the first public shareholding company operating in the uae’s retail sector and f&b sectors the significant growth prospect of the company along with the growing confidence in the local economy and the current recovery in the stock markets in the country all contribute to stimulating the demand for ipo shares.”He said that marka in its first phase will focus on creating a strong presence in abu dhabi and dubai in particular and will gradually be expanding into the rest of the region. al muhairi noted that in the second phase marka will introduce new brands and concepts to the markets of saudi arabia kuwait and qatar.Dr mattar said: “we expect to have large turnout and an ipo oversubscription due to the high growth prospects which the company enjoys on the one hand and the return of confidence to the financial markets on the other.”Eight banks and financial institutions will receive the contributions of the investors willing to subscribe to the company’s shares including national bank of abu dhabi union national bank abu dhabi commercial bank dubai islamic bank national bank of fujairah commercial bank international finance house and islamic finance house.— abdulbasit?khaleejtimes.com MENA News Headlines | 金融 |
2016-30/0358/en_head.json.gz/15132 | There’s No State Pension Crisis After All!
Veronique de Rugy March 9, 2011 12:35 PM At least that’s what this new piece from McClatchy claims. According to the report, pensions are not in crisis because right now, pension costs represent only a small share of state budgets:
Pension contributions from state and local employers aren’t blowing up budgets. They amount to just 2.9 percent of state spending, on average, according to the National Association of State Retirement Administrators. The Center for Retirement Research at Boston College puts the figure a bit higher at 3.8 percent.
My colleague Eileen Norcross, a state-pension expert, explained to me why this 3.8 percent number is misleading:
The 3.8 percent of budgets is the current average for all states under an 8 percent discount rate. In other words, it’s an aggregate number, and it says nothing about the deep underfunding that certain states such as Illinois and New Jersey. I’ve seen the internal reports from NJ – it’s not good and they know it. In fact, when you look at the source of the McClatchy article’s data, this paper by Alicia Munnell, it’s clear that the journalist has cherry-picked numbers to tell a tale.
Whereas public plans are substantially underfunded, in the aggregate they currently account for only 3.8 percent of state and local spending. Assuming 30-year amortization beginning in 2014, this share would rise to only 5 percent and, even assuming a 5 percent discount rate, to only 9.1 percent. Aggregate data however hide substantial variation.
The key words ignored in the McClatchy piece are “substantially underfunded” and “substantial variation.”
Besides, the fact that states’ pension obligations are a small share of their budgets today is a relatively meaningless point, given the explosion in spending that’s coming now that bureaucratic baby boomers are starting to retire. As I note in my recent Reason column “The State Pension Time Bomb,” according to Joshua Rauh, professor of finance at Northwestern University, some states’ pension funds are scheduled to run out as soon as 2017. The below chart shows the ten states scheduled to run out of cash first:
Once the pension plans run out of money, the payments will have to come out of general funds, meaning taxpayers’ pockets. What does that mean concretely? In her testimony before Congress last month, Norcross explained:
By 2018 Illinois will run out of plan assets which will require that the state begin contributing $11 billion annually from revenues between 2019 and 2023. Currently, the state contributes $3.5 billion annually, and has often bonded its contributions. Using less generous assumptions, this scenario is much worse. Indeed, as Dr. Rauh notes this will present a “catastrophic shock” to Illinois’ current revenue needs.
The situation is not much better in New Jersey. Dr. Rauh estimates New Jersey will require $10 billion annually out of its revenues to pay for pension benefits it has already made beginning in 2020, which represents one-third of the state’s current budget. Other plans have a longer time horizon but face even more difficult scenarios. In 2031, Ohio will require 55 percent of its projected revenues, or roughly $13.8 billion annually to pay for existing liabilities.
Fifty-five percent? That’s quite different from the rosy 3.8 percent the McClatchy story is talking about. And those figures rely on very unrealistic assumptions about these plans’ rates of return.
The article also recycles a point we hear over and over again: that the only reason state pensions are underfunded is the recession.
Nor are state and local government pension funds broke. They’re underfunded, in large measure because — like the investments held in 401(k) plans by American private-sector employees — they sunk along with the entire stock market during the Great Recession of 2007-2009. And like 401(k) plans, the investments made by public-sector pension plans are increasingly on firmer footing as the rising tide on Wall Street lifts all boats.
Not so. #more#First, these numbers (which already look very bad) assume these plans will get average annual returns of 8 percent. Joshua Rauh, Andrew Biggs, Norcross, Doulgas Elliot of Brookings, and many others have hammered on how wrong and irresponsible this approach is.
Moreover, the problem started long before the recession began. A 2010 Pew study called “The Trillion Dollar Gap” finds that in 2000, slightly more than half of states had fully funded pension systems. (Check their exhibit 7.) By 2006, that number had shrunk to six states. By 2008, only four states (Florida, New York, Washington, and Wisconsin) could make that claim.
Let me repeat that. In 2000, only half of the 50 states’ pension plans were totally funded. There was no recession back then.
The bottom line: We can argue endlessly over when the pension plans will run out of cash, or what the value of their unfunded liabilities is. We can even debate the true meaning of being broke. But there is one issue where there is no room for debate: Once the pension plans run out of money, the payments will have to come out of general funds, meaning taxpayers’ pockets. That will happen very soon: The number of retirees is going up, the promises made have gotten more and more generous over time, and pension plans aren’t underfunded just because of the recession. States are already broke, so if they want to avert a pension crisis, they need to push through reforms as soon as possible.
By the way, this afternoon I will be on Bloomberg TV to do my weekly “Reality Check” segment with Carol Massar and Matt Miller — our focus will be state pensions.
Update: There was a tech bubble burst in 2000 but the country was coming out of many years of strong economic growth. Yet some 50 percent of the states had already underfunded their plans. State lawmakers can’t be trusted to fund they plan properly because they have too many incentives to use the money elsewhere. | 金融 |
2016-30/0358/en_head.json.gz/15136 | Submit TipsSend FeedbackTerms of ServicePrivacy PolicyThe day’s top national and international newsCyprus Banking Restrictions Could be Lifted in a MonthCash withdrawals are being capped at 300 euros, and no checks will be cashed By
MENELAOS HADJICOSTIS NEWSLETTERS Receive the latest national-international updates in your inboxPrivacy policy | More NewslettersAPPeople wait and use the ATM machine of a closed branch of Laiki Bank in capital Nicosia, Thursday, March 21, 2013. Cypriot lawmakers are enacting tight restrictions on bank transactions ahead of the planned reopening of the country's banks on Thursday, March 28.Banks in Cyprus reopened for the first time in nearly two weeks, but there are various restrictions on financial transactions to prevent people from draining their accounts. Among the capital controls, cash withdrawals will be limited to 300 euros ($383) per person each day. No checks will be cashed, although people will be able to deposit them in their accounts, according to a ministerial decree that was released late Thursday.Cyprus Foreign Minister Ioannis Kasoulides said on Thursday that, according to the country's central bank assessments, restrictions on financial transactions are to be fully lifted in a month. The restrictions were imposed for seven days initially and are being reviewed daily.For full world news coverage, visit NBCNews.com.Cyprus's banks were closed on March 16 as politicians scrambled to come up with a plan to raise 5.8 billion euros ($7.5 billion) so the country would qualify for 10 billion euros ($12.9 billion) in much-need bailout loans for its collapsed banking sector. The deal was finally reached in Brussels early Monday, and imposes severe losses on deposits of over 100,000 euros in the country's two largest banks, Laiki and Bank of Cyprus.Since Monday's deal, Cypriot authorities have been rushing to introduce measures to prevent a rush of euros out of the country's banks when they do reopen.Other capital controls include a cap of 5,000 euros on transactions with other countries, provided the customer presents supporting documents. Payments above that amount will need special approval.Travelers leaving the country won't be able to take with them anything over 1,000 euros in cash — as well as the equivalent sum in foreign currency.Tuition fees and living expenses of up to 5,000 euros for three months will be permitted for overseas students, but documentation must be provided proving the student's relationship to the dispatcher.Also investors will also not be able to terminate fixed-term deposit accounts before they mature unless the funds are to be used for the repayment of a loan in the same bank, the decree says.In the capital, Nicosia, armed police officers guarded several trucks carrying containers arriving at the country's Central Bank, while a helicopter hovered overhead.The contents of the trucks could not be independently confirmed, although state-run television said they were carrying cash flown in from Frankfurt for the bank reopening.Meanwhile, private security firm G4S will dispatch 180 of its staff to all bank branches across the island to keep a lid on any possible trouble, said John Argyrou, managing director of the firm's Cypriot arm."Our presence there will be for the comfort of both bank staff and clients, but police will also be present," he said.Argyrou said he doesn't foresee any serious trouble unfolding once banks open their doors because people had time to "digest" what has transpired."There may be some isolated incidents, but it's in our culture to be civil and patient, so I don't expect anything serious."Another 120 staff from G4S would be assigned money transportation duties.In Nicosia Wednesday night, several hundred demonstrators marched from the European Union's offices in the capital to Parliament to protest the bailout plan.Before its collapse, Cyprus's banking sector grew to nearly eight times the size of the country's economy, mainly on the back of substantial deposits from Russia. This sparked accusations that the country was being used by Russian criminals to launder their money. Over the past week, the government in Moscow has criticized Europe's handling of the crisis in Cyprus.Russian millionaire businessman Andrey Dashin told the Associated Press in an interview that he doesn't believe his fellow countrymen would rush to pull businesses or money out of the country once banks reopen, despite the fact that many will take a hit from a tax on accounts over 100,000 euros in both Bank of Cyprus and Laiki."There won't be a substantial Russian run" on Cypriot banks, said Dashin, 37, who runs his currency speculation company ForexTime from a brand-new high-rise in the southern coastal resort of Limassol. Dashin doesn't stand to lose on his deposits which aren't in either of the top two Cypriot banks."Russians are much more accustomed to such circumstances, we've had so many crisis in Russia...I don't have the feeling that (Russians) are ready to pull out their business or money out of their country," Dashin said.But he said Russians want to have a "clear picture" on the kind of capital movement limits that will be imposed so as not to choke off businesses, warning that tight restrictions would be "a sign for businesspeople that their cash is trapped."Dashin dismissed reports that Cypriot banks were being used to launder dirty Russian cash as unproven rumors and urged Cyprus to bring in internationally respected auditors to clear the air.Under the deal clinched in Brussels early Monday, Cyprus agreed to slash its oversized banking sector and inflict hefty losses on large Laiki and Bank of Cyprus depositors.Laiki is to be restructured, with its healthy assets going into a "good bank" and its nonperforming loans and toxic assets going into a "bad bank," officials have said. The healthy side will be absorbed into the Bank of Cyprus.The board of directors of both banks has been fired and administrators appointed to handle the restructuring and absorption, the banking official said.Bank of Cyprus CEO Yiannis Kypris issued a statement saying the Central Bank governor had asked him verbally Wednesday to resign."These are very difficult times for everyone. The Bank of Cyprus was and must remain the basic support of the economy and our society in the effort to deal with the crisis our country is going through," Kypris said. "I hope that the handling of this transition phase will respect the workers, shareholders and customers of the Bank of Cyprus."Cypriot officials said the deal would mean the country would shift its focus away from being an international center of financial services. That is expected to cost jobs, adding to the unemployment rate which now stands at around 14 percent.The country's foreign minister said his country almost left the eurozone during last week's bailout talks.Ioannis Kasoulidis told German daily Frankfurter Allgemeine Zeitung in an interview to be published Thursday that dropping the common currency was "a possibility which we seriously considered for a while."Published at 2:05 PM CDT on Mar 28, 2013 | 金融 |
2016-30/0358/en_head.json.gz/15160 | Dollars gone digital: Bitcoin is gaining acceptance as currency in the Granite State | New Hampshire Contact us
Attorney Seth Hipple of Martin & Hipple in Concord,one of the first law firms in the state to accept Bitcoin as payment. (. DAVID LANE/UNION LEADER)
Dollars gone digital: Bitcoin is gaining acceptance as currency in the Granite State
A stone foundry in Rochester, a martial arts studio in Derry, a chiropractor and a cafe in Newmarket and law firms in Concord and Manchester have something in common.They've joined the growing number of New Hampshire businesses that accept Bitcoin, a virtual currency that exists only on the Internet, as a form of payment...
The latest version of a Manchester company's Bitcoin machine was featured last week at the Consumer Electronics Show in Las Vegas. COURTESY The Granite State's reputation as a hotbed of activity for the digital currency was enhanced last week, as visitors to the Consumer Electronics Show in Las Vegas got a peek at the first Bitcoin ATM, created in Manchester by brothers Zach and Josh Harvey...
From left: Lamassu Bitcoin Ventures founders Matt Whitlock of Weare, and Josh Harvey and Zach Harvey, of Manchester, in Washington, D.C., at the International Students for Liberty Conference in February, with an earlier version of their Bitcoin Machine. COURTESY At this time last year, the machine was just an idea the brothers developed as they operated the Stomp Romp guitar store in the Millyard, which has since been closed. They now focus full-time on building a business around their invention, which hit the marketplace just as the value of bitcoins began to soar...When their invention was first featured in the New Hampshire Union Leader last May, the alternative digital currency was trading online for about $100 per coin."Many thought at the time that was a bubble," said Zach Harvey, "and it did go down to as low as $55, but then slowly built back up to $100 and now it's around $800. At one point in the past year, it went up as high as $1,200."..Investment in the Bitcoin phenomenon is not for the weak of heart. "It hasn't been very stable," said Harvey, "but it's been experiencing incredible growth."Bitcoin values started the day on Jan. 8 at $820, went to $790 and back to $806 before noon. Like any commodity traded in real time, a bitcoin is only worth what someone is willing to pay for it...Spawning imitatorsApparently, there are a lot of people willing to take the risk. Interest in alternative digital currency has spawned several other "altcoins" in the past two years, as programmers adapted the open Bitcoin protocol to launch Litecoin, Peercoin and Namecoin, among others...Creators of an "altcoin" called Coinye West last week had to speed up the release date of their crypto-currency after lawyers for rapper Kanye West threatened legal action. Kanye West's image came off the coin, which is now known simply as Coinye...Litecoin, called the "silver" to Bitcoin "gold," has been trading between $20 and $30, while other imitators are fetching below $10 a coin, some getting only fractions of a cent.The phenomenon appeals to people for a variety of reasons. Some see Bitcoin as a hedge against inflation, because unlike government-managed currency, there is a limit on how many bitcoins will ever exist. There are now 12 million bitcoins in circulation, with a total cap of 21 million...Others like the idea of online financial transactions with no middle man - no bank, no credit card, no Paypal.Supporters of the Free State Movement, which is very active in New Hampshire, are attracted by the lack of government control, at least for now, over the Bitcoin economy...The Free State Bitcoin Consortium, which meets every Saturday, at 6:30 p.m. in the Strange Brew Tavern is one of the most active and well-attended Bitcoin meetups in the world. The group has a Facebook page with 438 members...Manchester Attorney Brandon Ross, who has been accepting bitcoins and represents the Harvey brothers in their business, says Bitcoin has already helped make some New Hampshire people very rich."I've been accepting it since last fall," he said. "It's not a frequent thing, but there are people here who invested early, who have tons of it lying around. We're talking millions and millions of dollars. There are some people here who really made a lot of money."..Early adaptersThe Harvey brothers were among the first attendees at the Strange Brew meet-up, and from those meetings hatched the concept for what they call the Bitcoin Machine. They're reluctant to call it an ATM, since it does not convert bitcoins into cash...The machine's appeal is the easy trading of dollars (or any other currency) for bitcoins, a transaction that can now only be completed online through one of several Bitcoin exchanges. Unlike typical online transactions, however, Bitcoin exchanges require an electronic funds transfer and cannot be completed with credit or debit cards. Some exchanges take 30 days just to register...Bitcoin "miners" using expensive and complex computer technology should be able to generate Bitcoins from the original inventory for another 20 to 30 years, said Harvey, although the "mining" gets more difficult with every passing year. Eventually, the only way to get Bitcoins will be to buy on exchanges from the fixed inventory in circulation...The Harvey brothers debuted their Bitcoin Machine prototype last May, and started working on the production version last summer. The first 14 were shipped last fall from the manufacturer in Portugal to buyers in the U.S., Canada, Australia, Finland and Slovakia..."By the time we had shipped those out, we had finished another 28, and those are shipping out this week or next," Harvey said. The company the brothers created, Lamassu Bitcoin Ventures, is now into its third production run of about 100 machines, all of which are pre-ordered and scheduled for delivery between February and April to domestic and international clients...Starting to hireA company called Atlanta Bitcoin in Atlanta, Ga., was the first U.S. location to put one of the machines into operation."We are going to do some hiring in the near future, because a lot of orders have come in during the past five or six weeks," Harvey said. "We're getting a lot of interest and are really overworked. It's at the point where we definitely need some help."..Until now, they've been managing the business from their Manchester apartment, making trips to their manufacturer in Portugal and working primarily with freelancers.Attorney Seth Hipple, of Martin and Hipple in Concord, says his law firm decided to accept Bitcoin last week after getting requests from clients..."People kept asking me if I accept Bitcoin and I told them 'no,'" he said. "The main reason was that I was skeptical that it was worth something. At this point, it looks like it has crossed that barrier. It is now not that difficult to turn bitcoins into cash."The most common method is to use a service called bitpay.com...Businesses that accept bitcoins can be located at coinmap.org."There is some risk, but it's a risk we've discussed and are willing to take," Hipple said. "I'm not going to run my firm on bitcoins. If we have a $10,000 divorce case, I'm not going to take all of it in bitcoins, but I will take some. Obviously, we'll make decisions as they come."[email protected].. | 金融 |
2016-30/0358/en_head.json.gz/15198 | About Us > News > Press Releases.
Northern Trust Press Release
William Mak to Lead Asia-Pacific Region for Northern Trust
Northern Trust (Nasdaq: NTRS) announced today that William Mak has been appointed head of the Asia-Pacific region, succeeding Teresa A. Parker, who will assume a key strategic role at the companys headquarters in Chicago.
Singapore, May 12, 2014 —
Northern Trust (Nasdaq: NTRS) announced today that William Mak has been appointed head of the Asia-Pacific region, succeeding Teresa A. Parker, who will assume a key strategic role at the company's headquarters in Chicago.Mak has been Singapore Country Manager and head of South East Asia region since joining Northern Trust in July 2010. A Singapore native, he has more than 25 years of experience in the region's financial services industry, including government and corporate entities. Parker has been head of Asia-Pacific since August 2009, coming to the region from senior leadership posts in the London office."Northern Trust's business in the Asia-Pacific region has expanded dramatically over the past five years, with assets under custody increasing by 14 percent and assets under management growing by 11 percent on a compound annual basis during that period," Northern Trust Chairman and Chief Executive Officer Frederick H. Waddell said. "William Mak's experience and market knowledge in global custody, asset servicing and asset management make him a valuable leader who is well positioned to maintain our organic growth and strong client relationships in this region."Prior to joining Northern Trust, Mak was with BNY Mellon, ABN AMRO, and the Monetary Authority of Singapore in the Monetary and Reserve Management Division, where he spent 16 years. As head of Asia-Pacific he will lead almost 3,600 Northern Trust employees in offices located in Bangalore, Beijing, Hong Kong, Kuala Lumpur, Melbourne, Singapore and Tokyo.Parker, who joined Northern Trust in 1982, has held leadership positions in global custody operations including serving as the head of worldwide asset servicing, securities lending and chief operating officer for Europe, Middle East and Africa. In June, she will relocate to Chicago to serve as a strategic advisor to Corporate & Institutional Services President Steven L. Fradkin and his leadership team."Under Teresa Parker's leadership, the Asia-Pacific region achieved strong business growth in tandem with significant investment by Northern Trust, as we increased our employee base in the region by 84 percent," Fradkin said. "Along with his strong knowledge of markets across the Asia Pacific region, William brings a record of stewardship, an ability to develop client relationships and a focus on employee engagement and talent development to the role. Teresa, William and the rest of our team will work closely to ensure a smooth transition for our clients, partners, and regulators over the coming months."About Northern TrustNorthern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 states, Washington, D.C., and 18 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2014, Northern Trust had assets under custody of US$5.8 trillion, and assets under investment management of US$915.4 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com or follow us on Twitter @NorthernTrust.Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at http://www.northerntrust.com/disclosures | 金融 |
2016-30/0358/en_head.json.gz/15261 | Shapiro, head of SEC steps down, Elisse Walter appointed to replace her
Bailey McCann, Opalesque New York: After nearly four years in office, SEC Chairman Mary L. Schapiro today announced that she will step down on Dec. 14, 2012. Shapiro has been a controversial Chairman, leading the Commission through the 2008 financial crisis and ushering in a new wave of regulation. Chairman Schapiro is one of the longest-serving SEC chairmen, having served longer than 24 of the previous 28. She will be replaced by Elisse Walter, an existing member of the Commission.
By choosing an acting member of the Commission, Walter will be able to serve through 2013 without having to go through a Senate confirmation process as she was already confirmed to her original post. After this period, the Obama administration is expected to appoint a more permanent Chair, treasury official, Mary John Miller, has already been floated as a possible contender for the post. Walter previously served as a member of FINRA and was originally appointed by President George W. Bush. Schapiro's leadership has been challenged throughout the financial collapse and its subsequent aftermath. Both the Chairwoman and Commission were faulted for lax oversight that led to the collapse of Lehman Brothers. However, she has been successful in winning some of the largest settlements against financial services firms in the wake of 2008. "It has been an incredibly rewarding experience to work with so many dedicated SEC staff who strive every day to protect investors and ensure our market......................To view our full article Click here
Latest VideosFeaturing : �Hedge fund reinsurers� face criticism, but is it warranted?.Joe Taussig is one of the most accomplished experts on insurers and reinsurers which invest their assets in alternative investments, also known as �hedge fund reinsurers�. He was instrumental in the creation of Greenlight Re, T...� Watch the videoMore Videos �Subscribe to Video Feed � On this site people currently read about: PAULSON | 金融 |
2016-30/0358/en_head.json.gz/16007 | Bank Expansion after the Riegle-Neal Act: The Role of Diversification of Geographic Risk
Robert Clark (HEC Montreal)
Hui Wang (University of Toronto)
Victor Aguirregabiria (University of Toronto)
Registered author(s): Victor Aguirregabiria AbstractThe Riegle-Neal Act in 1994 established the conditions for the removal of restrictions on interstate banking and branching in US. One of the primary motivations for enacting this act was permitting banks to diversify geographic risk. The purpose of this paper is to study the role of diversification of geographic risk as one of the motives for bank expansion during the period 1994-2006. We propose and estimate a game theoretic model of banks' decisions to operate branches in local markets. A key feature of the model is that a bank's decision of where to operate branches is modeled as a portfolio choice between risky assets. The returns to a bank's investments in a local geographic market (e.g., loans to local business and households) have a risk component that is specific of the local market. A bank is concerned with both the aggregate expected return and the aggregate risk of its portfolio of geographic markets. To estimate this model, we construct a data set that combines information from four different sources: branch and deposits data from the FDIC database; information on mergers/acquisitions from the Chicago Fed; a detailed and comprehensive description of the timing of adoption of the Riegle-Neal Act in different states; and Census Bureau county-level data on population, income and industry composition.
File URL: https://economicdynamics.org/meetpapers/2010/paper_485.pdfDownload Restriction: no | 金融 |
2016-30/0358/en_head.json.gz/16161 | Home > News & Events > Speeches and Testimony
Speeches and Testimony
Testimony of
On Recent Bank Failures and Regulatory Initiatives
Committee on Banking and Financial Services
10:00 A.M., February 8, 2000
Room 2128 Rayburn House Office Building
Mr. Chairman, Congressman LaFalce, and Members of the Committee, I appreciate the opportunity to testify on behalf of the Federal Deposit Insurance Corporation on recent bank failures and on recent FDIC initiatives with respect to troubled banks. Several recent failures of insured institutions with unusually high losses have raised concerns among regulators and the Congress. In my testimony, I will first discuss the context of these failures. Then I will outline what we believe are the lessons of recent failures, and the initiatives that the FDIC has undertaken in response to these lessons -- specifically actions with respect to subprime lending, retained interests, fraud and risk-related premiums. Finally, I will discuss H.R. 3374, the Federal Deposit Insurance Corporation Examination Enhancement and Insurance Fund Protection Act, recently introduced by Chairman Leach.
The banking industry has been extraordinarily profitable and healthy in recent years. In the third quarter of 1999, the latest quarter for which data are available, commercial banks earned $19.4 billion, a quarterly record. The average annualized return on assets (ROA) was 1.42 percent and the average annualized return on equity (ROE) was 16.62 percent, both also quarterly records. Early indications are that net income for the full year 1999 will be another annual record, making it the eighth consecutive year in which commercial banks have set an earnings record.
Savings institutions have shared the prosperity. After the devastating savings and loan crisis, the surviving savings institutions achieved net income of $6.7 billion in 1992. The trend since then has been upward, reaching $10.2 billion in 1998. Earnings for savings institutions over the first nine months of 1999 were $8.4 billion, as compared to $8.2 billion over the same period the previous year. The average annualized ROA for the third quarter was 1.00 percent and the ROE was 11.8 percent.
However, even in the best of times for the banking industry and for the economy as a whole, some individual financial institution failures are to be expected. Banks and savings institutions are in the business of managing risk, and not all will be successful. In fact, the very concept of risk implies occasional failures. While we want to minimize the effect of these failures on general economic activity, bank regulators have never striven for zero bank failures. We cannot eliminate all bank failures, however, we can seek to ensure that any problems that do occur do not become widespread and do not require taxpayer funds.
Reflecting the health of the banking industry and the economy in general, the number of bank and thrift failures in recent years has been very low by recent historical standards: eight in 1995, six in 1996, one in 1997, three in 1998, and eight in 1999. These failure rates were, of course, far smaller than those seen in the 1980s and early 1990s when the annual number of bank and thrift failures measured in the hundreds in some years. Current failure rates are more in line with those in earlier periods when the banking industry was generally healthy. In the period from 1946 to 1974, insured bank failures averaged slightly less than four per year. Below is a chart showing bank and thrift failures over the past twenty years.
BANK AND THRIFT FAILURES 1980-1999
Number of Failed Banks
Number of Failed Thrifts
Loss rates vary widely among bank failures, reflecting the particular characteristics of the individual institutions involved. For the most part, recent loss rates, defined as the loss to the deposit insurance fund as a percentage of the total assets of the failed bank, have been within the range experienced in earlier periods. Over the past 20 years, the average loss rate for the bank and thrift failures resolved by the FDIC has been 12 percent. For the eight bank and thrift failures that occurred in 1999, estimated losses to the FDIC are zero in two cases and less than 10 percent of assets in four other cases. On the other hand, for three failures -- two in 1999 and one in 1998 -- estimated loss rates are significantly above historical norms. The three institutions are BestBank in Boulder, Colorado (BestBank); First National Bank of Keystone in Keystone, West Virginia (Keystone); and Pacific Thrift and Loan Company in Woodland Hills, California (PTL).
Looking ahead, the FDIC prepares projections each quarter of the volume of assets in banks anticipated to fail. These projections are made on the basis of the most recent supervisory information, the results of financial and statistical models, and consideration of market trends. Estimating the timing and effect of a recession or severe financial turbulence on the FDIC's insurance losses is extraordinarily difficult. A severe downturn that causes a significant increase in banking losses is always possible, and we cannot rule out a future experience similar to the last recession. Moreover, recent bank failures underscore the potential for unanticipated, fraud-related losses to defy the statistical projections of the models. We cannot rule out the possibility that other significant fraud-related losses will occur. The FDIC staff continues to develop tools that may help us to better quantify fund exposure and to recognize early warning signals of potential high-loss scenarios, but predicting the future will always be difficult.
Based on the most recent information, and subject to the uncertainty described above, we project over the next two years a range of failed bank assets between $500 million and $2.5 billion for the Bank Insurance Fund (BIF), and a range of $200 million to $1.1 billion for the Savings Association Insurance Fund (SAIF). As stated above, over the past 20 years, the average loss rate for failures has been 12 percent. It is important to note that these projections assume a continuation of current economic conditions. We are mindful that such conditions are unlikely to persist indefinitely. The U.S. economy has enjoyed a run of extraordinary prosperity driven in part by the absence of inflationary pressures and low interest rates supported by continued inflows of foreign capital to finance domestic business and household spending. Were this favorable confluence of events to reverse itself, the environment facing U.S. banks could rapidly become more challenging. Recent Bank Failures
In addition to the failure of Best Bank in 1998, which is described in the Appendix, there have been four failures of FDIC-supervised, state non-member banks in 1999 and 2000. Victory State Bank of Columbia, South Carolina, with total assets of $13.9 million, failed on March 26, 1999 after the FDIC appointed itself receiver under the statutory prompt corrective action provisions. The bank failed due to high operating expenses and weak underwriting. No loss to the Bank Insurance Fund is anticipated for Victory because of the premium received from the institution that assumed the deposits of the failing institution. Pacific Thrift and Loan Company of Woodland Hills, California, with total assets of $117.6 million, failed on November 19, 1999. The bank originated subprime loans for securitization and carried a substantial amount of retained interests as an asset on its books. As discussed in more detail in the Appendix to this statement, this asset is probably worthless because of losses and pre-payments on the underlying loans, with the result that a loss to the FDIC of approximately $50 million -- or roughly 40 percent of assets -- is projected. Golden City Commercial Bank, in New York City, with total assets of $89.3 million, failed on December 10, 1999 because of its unsafe and unsound condition. The bank and its CEO and founder were indicted on a variety of charges involving the use of apparently fraudulent loan applications and documents. We anticipate no loss to the fund from the failure of Golden City, again because of the premium received from the bank acquiring the failed institution. Most recently, Hartford-Carlisle Savings Bank of Carlisle, Iowa, with total assets of $113.8 million, failed on January 14, 2000. Hartford-Carlisle was declared insolvent after it was discovered that the CEO and controlling stockholder had apparently engaged in a scheme of extending nominee loans to obtain funds for personal use, including the purchase of stock in the bank. While we are currently evaluating the quality of the assets of the bank, we have estimated that the losses will be between $15 - $25 million or 10 to 20 percent of total assets of the bank.
As I stated earlier, the percentage and actual losses in three recent failures -- BestBank, Keystone, and PTL -- were unusually large. As discussed in the Appendix, these institutions exhibited some or all of the following characteristics: subprime lending and/or high loan-to-value lending without adequate prudential standards, apparent fraud, and/or large holdings of retained interests (sometimes referred to as residuals) with questionable valuations. Since the FDIC is engaged in a number of litigation and enforcement actions, with more expected, our discussion is in general terms.
Lessons Learned and FDIC Initiatives
BestBank, Keystone and PTL each had particular characteristics that contributed to proportionately large losses to the deposit insurance fund. All three had concentrations of subprime loans. Fraud contributed significantly to losses in two cases, and residual interests in the other. The FDIC has learned a number of lessons from these failures which should help us mitigate similar losses in the future.
Subprime Lending
A common element in some recent failures was extensive activity in subprime lending. Subprime lending can be -- and indeed, has been -- an activity beneficial to borrowers with blemished or limited credit histories and can be an acceptable activity for insured institutions, provided that the institution has in place proper safeguards, including adequate capital to meet unanticipated losses. Most banks active in subprime lending appear, in fact, to have such safeguards. However, a minority does not. As abundantly borne out by recent failures, subprime lending without sufficient capital and other safeguards -- especially when coupled with fraudulent or questionable accounting practices -- can cause enormous losses for the FDIC. Subprime lending can meet the credit needs of a broad spectrum of borrowers in a safe and sound manner if: (1) risks are effectively managed through proper underwriting standards and attention to servicing; (2) loans are priced on the basis of risk; (3) allowances for loan losses cover the credit losses embedded in the portfolios; and (4) capital levels reflect the additional risks inherent in this activity. Because these safeguards are not always maintained, a disproportionate number of institutions that engage in subprime lending are problem institutions. The FDIC estimates that approximately 140 insured institutions have significant exposures in the subprime lending business. These subprime lenders represent just over one percent of all insured institutions, yet they account for nearly 20 percent of all problem institutions -- those with CAMELS ratings of "4" or "5". Ninety-five percent of all insured institutions are rated CAMELS "1" or "2", while only 70 percent of the identified subprime lenders are so rated. While not necessarily the proximate cause of the failure, 6 of the 11 banks that have failed over the past 18 months had significant subprime lending portfolios. In order to assure that subprime lending is backed by sufficient capital, the FDIC has developed a draft proposal that addresses four issues: (1) concentration of subprime risk; (2) definition of subprime lending; (3) exclusion of the many types of community lending and flexible lending programs from the subprime definition; and (4) level of capitalization for subprime portfolios. We presented the draft proposal to the other federal banking agencies on December 8, 1999, and the proposal is currently being discussed with the other agencies. We believe that appropriate action can be taken with respect to the relatively few banks that operate with inadequate safeguards, and that action will not appreciably reduce the availability of credit to low- or moderate- income borrowers. Indeed, we believe that our efforts will strengthen the ability of prudently managed banks to serve the subprime market in the long run. After all, a bank that does not hold adequate capital in relation to the risks it takes is not a dependable, long-term source of such credit.
The FDIC's proposal to increase the capital requirement on concentrations of subprime loans recognizes that subprime lending is an activity that can be beneficial to borrowers with poor or limited credit histories and is an acceptable activity for insured institutions if that lending is carried out with appropriate safeguards. The proposal focuses only on banks that have significant concentrations of subprime loans or operate a subprime lending program, rather than attempting to address issues with individual loans. Under the proposal, banks that have significant subprime portfolios will be expected to manage them through a clearly defined, carefully planned, and properly controlled program that addresses the portfolio's inherent risks. A distinct line of business in the bank that involves a concentration of over 25 percent of Tier 1 capital in subprime lending will trigger the capitalization requirements of the proposal.
The proposal also offers a more explicit definition of subprime lending than currently exists in regulatory guidance. For purposes of the proposal, subprime lending includes separate lending programs that involve a significantly higher risk of default and higher interest rates or fees than traditional bank lending. The proposal would place the responsibility on the bank to identify and segregate its subprime portfolio and allows the supervisor to use the institution's grading criteria wherever possible. Although banks would be given flexibility to determine the status of their portfolio, underwriting that deviated from specified standards would have to be fully explained and justified. In the case of a bank making significant quantities of subprime loans outside a clearly defined program, the supervisor would normally conclude that the bank was simply making lower quality loans without appropriate controls. The bank would be rated and supervised accordingly.
The FDIC's proposed definition, however, also distinguishes subprime lending from the many forms of community development lending and flexible lending programs that have proven to be safe and sound, even while exhibiting atypical underwriting standards. Our intent to specifically exclude these types of loans is clearly stated in the proposal, and we are working with the other agencies to ensure that the final definition reflects that fact. Community development loans are excluded in the definition because the incremental risk associated with using non-traditional underwriting factors in these cases is typically mitigated by public or private credit enhancements. These enhancements include direct repayment guarantees through government and private programs, income or expense enhancements (such as guaranteed income, lease guarantees and tax credits), and collateral and equity cushions such as subordinated financing and secondary market programs. In addition, banks can mitigate risk through partnerships with community development organizations and agencies. These groups can provide applicant screening and referral services, assist in loan servicing, and provide ongoing homeownership, small business and small farm counseling services to borrowers. In addition, the FDIC's subprime definition generally excludes loans to first time homebuyers, emerging small businesses or other first time borrowers, or loans based on the borrower's "character" as known to the bank through a long-time customer relationship. These exclusions from the definition of subprime lending in the proposal recognize that there are types of loans that may have some of the characteristics of subprime lending but safely and soundly serve a significant public purpose in helping to meet community interests.
Finally, the FDIC's subprime proposal would require an institution to maintain additional capital only when subprime loans represent a significant concentration of the bank's capital, and only against those specific assets. Having identified a portfolio of subprime loans and established appropriate controls, an institution would be required to maintain sufficient capital to support the unusual risks undertaken in the process of generating potentially profitable, but highly variable income. The simple premise of the proposal is that an institution with a concentration of subprime loans should have sufficient capital to protect against unanticipated losses, and that the risk of loss is borne by the institution, rather than the deposit insurance fund.
Interestingly, nonbank subprime lenders generally hold capital significantly in excess of that generally required and held by FDIC-insured subprime lending specialists. Market forces dictate those higher capitalization levels. Investors in nonbank providers of subprime consumer loans have demanded a level of capital adequate to ensure the safety and profitability of their investment. In 1998, the common equity capital ratio for nonbank subprime consumer lenders was 22.5 percent as compared with 10.3 percent for banks engaged in similar activities. Yet despite the high levels of capital generally held by these nonbank subprime lenders, the riskiness of their business strategy is evidenced by the financial difficulties many have faced recently. Over the past two years, 13 of 51 publicly traded subprime lenders have declared bankruptcy. In addition, 9 were delisted from the stock exchange due to financial difficulties.
The FDIC has seen several applications of new banks that wish to engage in subprime lending as a significant line of business. New bank applicants have recognized the advantages of being able to conduct subprime lending business through an insured bank, which carries a cheaper cost of funds - with lower capital requirements - than is demanded for the same kind of business activity of nonbanks by the investment capital markets. That disparity creates an arbitrage opportunity that has resulted in a greater portion of subprime lending being undertaken in insured banks, transferring the risk from private investors to the deposit insurance funds.
The FDIC has attempted to craft a proposal that is flexible enough to permit subprime lending activities with appropriate controls, but without shifting the risk from the institution and its shareholders to the deposit insurance funds. At the same time, we have taken great care to avoid harming flexible lending programs, community lending or similar CRA-related loans. Because we recognize that crafting a standard for subprime lending is difficult, we have shared our proposal with our fellow regulators and asked for their assistance in this effort. We anticipate that the interagency participation and ultimately public comment on the proposal will produce a superior standard that will serve the public well.
The FDIC has already required that some individual banks under its supervision hold additional capital commensurate with their subprime lending exposures. The amount of capital expected of these banks has been determined on a case-by-case basis with the cooperation of bank management. Only a few banks have been required to raise additional capital, largely because many banks' capital levels already exceed regulatory minimums. The FDIC also is requiring additional capital for newly formed banks or those undergoing a change of control that plan a subprime lending program.
In addition to our subprime proposal, the FDIC has:
spearheaded interagency efforts to issue guidance to the industry that provide risk management standards that should be present prior to engaging in subprime lending activities, refined our off-site monitoring procedures to better identify which institutions have significant involvement in subprime lending activities, and enhanced our examination procedures and training materials to assist examiners in their assessment of these institutions. The FDIC also wants to add subprime lending information to the quarterly Commercial Bank Call Report and Thrift Financial Reports. The extent of subprime lending is difficult to track because there is no asset category for subprime lending on these quarterly reports. FDIC estimates of insured-institution involvement in this activity are derived from examination reports, but the quality of the information varies considerably and quickly becomes stale. A staff working group of the Federal Financial Institutions Examination Council has unanimously recommended that subprime-related line items be added to the banking agencies' quarterly reports beginning in March 2001. The FDIC strongly supports this recommendation.
Retained Interests
Retained interests generated from the securitization of high-risk assets (for example, subprime and high loan-to-value loans) pose significant valuation and liquidity concerns. If the valuations turn out to be overly optimistic or anticipated cash flows do not materialize, as we found in the failure of PTL, the safety and soundness of a bank or thrift may be threatened. This risk is particularly acute in institutions with excessive concentrations of these assets in relation to capital. The valuation and liquidity problems stem from the very nature of the retained interest asset. In transactions involving the securitization and sale of subprime loans, the selling institution often retains the right to receive a portion of the cash flows expected from the loans, which is generally referred to as the retained interest. These retained interests are often pledged as credit enhancements that provide protection to the investors that acquire the securities resulting from the securitization of the subprime loans. Under these types of structures, the retained interest holder's right to receive cash flows is generally a deeply subordinated position relative to the rights of the other security holders. Recent examinations have revealed that some institutions are not properly valuing the interests retained from the sale of assets. Under generally accepted accounting principles (GAAP), the fair value of these expected future cash flows are recorded on balance sheets as assets in the form of interest-only strips receivable, spread accounts, or other retained interests. The best evidence of fair value is a quoted market price in an active market. In the absence of quoted market prices, accounting rules allow a fair value to be estimated. An estimate of fair value should be fully documented, based on reasonable and current assumptions, and regularly analyzed for any subsequent value impairment. The key assumptions in all valuation analyses include default rates, loss severity factors, prepayment or payment rates, and discount rates. If a best estimate of fair value is not practicable, the retained interest should be recorded at zero in financial and regulatory reports. However, even when initial internal valuations are reasonable, unforeseen market events that affect default, payment, and discount rates can dramatically change the fair value of the asset. The banking agencies issued supervisory guidance concerning retained interests to banks on December 13, 1999. That guidance requires bank management, under the direction of its board of directors, to develop and implement policies that limit the type and amount of retained interests that may be booked as an asset and count toward equity capital. This interagency guidance also states that any securitization-related retained interest must be supported by objectively verifiable documentation of the interest's fair market value, utilizing reasonable, conservative valuation assumptions. Given the valuation problems associated with the securitization of high-risk assets, the federal banking agencies are working on a proposal to limit the amount of retained interest that can be recognized when computing an institution's regulatory capital. In the interim, the agencies are reviewing affected institutions on a case-by-case basis and, in appropriate circumstances, may require institutions to hold additional capital commensurate with their risk exposure.
Another element in some recent bank failures, including some of the most costly failures, has been apparently fraudulent activity by bank managers or directors. Fraud appears to have played a role in the failure of BestBank, Keystone, Golden City Commercial Bank and Hartford-Carlisle Savings Bank. From a supervisory standpoint, fraudulent activity is by its nature harder to detect than is conduct that is unsafe or unwise. Because fraud is both purposeful and harder to detect, it can -- and frequently does -- significantly raise the cost of a bank failure. Recently, we have seen a few bankers try to recoup their personal losses -- resulting from the deteriorating condition of their bank -- through illegal activities. In other cases, the same internal weaknesses that lead to credit and other operating losses have provided opportunities for dishonest and illegal activities. Fraud is particularly difficult to detect when there is collusion among various parties in the bank or between bank management and outside servicing contractors. Such collusion subverts the internal controls that are established to mitigate the danger of fraud.
In this regard, outsourcing -- contracting with third party suppliers for certain services -- helped to conceal apparently fraudulent activities in the BestBank case, including misrepresentation of the true delinquency status of the credit-card portfolio. This resulted in a delay in the detection and early resolution of growing credit problems. It took an on-site review of the records at the bank service provider, coupled with a full-scope examination of BestBank, to uncover these problems and allow bank examiners to identify significant losses in the subprime credit-card portfolio.
As a factor in bank failures, fraud is most noticeable during periods of general prosperity, such as the present period, when failures and losses accompanying business recessions are absent. An FDIC study of the 67 failures that occurred during the 1960-74 period of general prosperity concluded that 57 were caused by self-serving loans to bank management or friends of management, defalcations or embezzlement by bank personnel, and various fraudulent manipulations by bank officials. On the other hand, fraud-related failures are a relatively small proportion of the total number of failures in periods of widespread banking problems when recession-related failures increase. A 1988 study by the Office of Comptroller of the Currency indicated that fraud was a significant contributing factor in only 11 percent of national bank failures in 1979-87.
There are three levels of protection against fraud -- bank management, external auditors, and examiners. Bank management is the first line of defense against fraud. Management has the responsibility of establishing internal controls to mitigate the danger of fraud. The banks' independent auditors have a responsibility to perform appropriate tests to verify the existence of assets and to determine if the bank has the appropriate controls in place to prevent fraud. In the BestBank and Keystone cases, the banks had received clean audit reports despite the existence of the apparently ongoing fraudulent conditions that contributed to the failures.
Bank examiners also have a role to play in the prevention and detection of fraud through their responsibility to assess a bank's internal control system. Examiners' assessment of the internal control system may indicate weaknesses that provide opportunities for fraud. Examiners also need to be alert to possible indications of fraud and undertake reasonable steps, which may include directly verifying the assets located in the bank or service company.
A recent memorandum to FDIC examiners reemphasized that they must investigate any information leading to suspicions of fraud. We stressed that examiners give these investigations the highest priority, using whatever resources necessary. Examiners are to contact our Regional Fraud Specialists if they suspect fraud. These specialists have access to a database of Suspicious Activities Reports and other resources that would aid in an investigation. In senior management meetings and in more formal communications, we have also emphasized that examinations require a thorough assessment of internal control systems, and have listed particular warning signs or "red flags" that indicate a heightened potential for fraud.
The FDIC has also found that reviewing external auditor's work papers can be helpful in determining the severity of a bank's problems. Therefore, the FDIC plans to issue guidance directing examiners when and how to review external audit work papers of banks with more than $500 million in assets. The memorandum will also direct examiners to conduct such reviews in all troubled or problem banks with under $500 million in assets.
The FDIC recognizes the need for on-site review of unaffiliated service provider records with respect to services performed for insured depository institutions. The relevant records of such third-party service providers may be reviewed pursuant to authority contained in section 10(c) of the Federal Deposit Insurance Act, as well as section 7(c) of the Bank Service Company Act. Furthermore, the FDIC recognizes that institutions that have significant holdings of highly liquid securitizable loans that are held off-site by third parties present unique operational and internal-control risks. The FDIC has identified approximately 130 FDIC-insured institutions that currently have such highly liquid assets, retained interests, or operational and internal control weaknesses. Each FDIC region is pursuing supervisory strategies for each of these identified institutions so that the unique risks are properly assessed and any identified weaknesses are adequately resolved. Risk-Related Premiums
The FDIC is continually assessing ways to ensure that the risk-based premium system is adequately addressing risks inherent in the banking industry. The FDIC recently has implemented risk-related premium enhancements to provide a more flexible, forward-looking pricing system that keeps pace with new and emerging risks. The enhancements are intended to identify institutions with atypically high risk profiles among those in the best-rated premium category, and to determine whether there are unresolved supervisory concerns regarding the risk-management practices of these institutions. Where such concerns are present, the institutions will be notified that they may pay higher premiums if the concerns are not adequately addressed prior to the next assessment period.
Much like institutions that failed in the 1980s, a review of institutions that experienced significant problems in 1998 and early 1999 revealed a number of common characteristics including: rapid growth (often centered in potentially risky, high-yielding lending areas), significant concentrations in high-risk assets, and recent changes in business activities. These potentially risky traits, when accompanied by inadequate management systems and controls, can lead to a deteriorating financial condition even when economic conditions are favorable.
For more than a year, the FDIC has worked with the other bank regulatory agencies to develop off-site screens to identify atypical institutions in the best-rated premium category with extreme combinations of these risk characteristics. Back-testing of the screens resulted in flagging a number of recent bank failures and near-failures that were not identified by other systems used to trigger reviews in connection with determining premiums. The FDIC has implemented the screens, along with procedures for reviewing the risk-management practices of flagged institutions, and will charge higher premiums if deficiencies are not corrected within a reasonable period of time.
The FDIC will work with the other bank regulatory agencies on an ongoing basis to modify the screens and procedures as necessary to ensure that new and emerging risks to the insurance funds are considered in the review process for assigning deposit insurance premiums. An interagency group has been established to carry out this function and to ensure that premiums better reflect all relevant information from the supervisory process.
H.R. 3374, the Federal Deposit Insurance Corporation Examination Enhancement and Insurance Fund Protection Act
The FDIC appreciates the concerns of Chairman Leach in introducing H.R. 3374, and supports passage of this legislation. H.R. 3374 would give the Chairman of the FDIC, rather than the FDIC Board, the authority to authorize a special examination of an insured institution when such action is necessary to determine the condition of the institution for insurance purposes.
Congress granted the FDIC authority to perform special examinations in 1950. Over the years, the FDIC Board of Directors has adopted various policies governing special examinations. For example, in 1983 the Board authorized a Cooperative Examination Program, under which FDIC personnel automatically would be invited to participate in examinations of national banks currently rated CAMEL "4" or "5" and selected other banks. That policy was rescinded in 1993 when the FDIC Board adopted a policy wherein all recommendations for a concurrent or special examination were required to go to the Board for approval.
Under the current policy, which was adopted in 1995, the FDIC supervisory staff have been delegated the authority to request to participate in examinations of national banks, state member banks, or OTS-supervised thrifts. In the vast majority of cases, FDIC requests to participate in examination activities have been quickly honored at the regional staff level. If agreement on participation cannot be reached, the request for special examination authority is developed into a Board case and brought before the FDIC Board of Directors for their consideration and decision. In all cases since 1995, the agencies have reached an agreement while the Board case was being developed - in one case, agreement was not reached until immediately prior to Board consideration. Thus, the Board has not been asked to approve any cases under the existing policy. However, this process can result in delay. While cooperation between the regulatory agencies has been generally quite good, in the case of Keystone, coordination between the Office of the Comptroller of the Currency and the FDIC was not optimal. There were some delays and interagency friction, although there is no reason to believe this had any effect on the ultimate outcome. While some regulatory tensions may be healthy and in any event, inevitable, both Comptroller Hawke and I have taken steps to improve the situation. Both of us have instituted procedures whereby we, and the entire FDIC Board, are immediately informed of these types of interagency disagreements. I am confident that future Keystone-type incidents will not occur on the watch of this present FDIC Board. While I believe the new procedures we have implemented will be effective -- long-term, this issue has bedeviled the regulators. The policies and procedures regarding FDIC involvement have changed repeatedly over the decades. The matter has never been settled with any finality. Adoption of H.R. 3374 would expedite the initiation of special examinations in those situations where they are most needed and would bring closure to this long-standing issue. This statutory change also would be in keeping with the fact that the FDIC has responsibilities that go beyond its role as supervisor of state nonmember banks. The FDIC insures the deposits of all insured banks and thrifts, including those it does not directly supervise. As of September 30, 1999, the FDIC was the primary federal regulator for 5,773 banks and thrift institutions that represented 56 percent of the total number of FDIC-insured institutions. Yet, the total assets of institutions supervised by the FDIC represented only 19 percent of the total assets of all banks and thrifts insured by the FDIC. Thus, most of the risk to the deposit insurance funds comes from institutions the FDIC does not directly supervise. The FDIC needs to be in a position to expeditiously examine institutions that pose higher risk profiles to the insurance funds and H.R. 3374 would accomplish this objective. Consistent with the FDIC's past practice, H.R. 3374 requires the FDIC to cooperate with other bank regulators in exercising its special examination authority and to minimize any disruptive or burdensome effects on the institution being examined. The FDIC also strongly supports the information sharing provisions of H.R. 3374. Those provisions would require the FDIC to have access to information "in as prompt a manner as is practicable" and directs the federal banking agencies to establish procedures for providing the FDIC with such additional information as may be needed for insurance purposes. As noted earlier, the FDIC has responsibilities distinct from individual bank supervision including management of the insurance funds, least-cost resolution of failing institutions, and maximizing the value of failing banks' receivership assets, that require access to information. The changing banking industry will challenge regulators to consistently improve coordination and cooperation to ensure effective supervision. H.R. 3374 will assist the FDIC in this effort. In particular, the FDIC, in its capacity as insurer, must be assured access to information necessary to assess risk to the insurance fund that may be inherent in an insured institution directly or through transactions with affiliates. H.R. 3374 facilitates FDIC access to additional information it might need for insurance purposes from other banking agencies. Increased cooperation in ensuring the timely exchange of information among all functional regulators will be increasingly important as the financial services industry evolves.
Looking to the future, the FDIC believes it will need to place increased emphasis in two areas. First, we believe the FDIC will need to find ways to incorporate the results of the risk evaluations being conducted internally by the largest banks in our evaluation of risks to the insurance funds. As these banks increase in size and complexity, evaluating the risks posed by these institutions, the correlation among such risks, and the adequacy of the deposit insurance funds, will increasingly require an understanding of these banks' own views of the risks they are facing. Examples of such information include results of the bank's stress testing analysis, the underlying assumptions of such analysis, the timeliness and quality of the bank's internal credit ratings, and information about the largest credit exposures. Second, from the perspective of enhancing information flows, the FDIC will need to expand current agreements and understandings with the primary federal regulators about when FDIC contact with bank management, or a role in examinations, is appropriate. The FDIC believes that there are instances where the most cost-effective, timely, and practical approach for the FDIC to understand what may be a highly complex, or rapidly changing, situation involves some level of participation in examinations or attendance at meetings between the primary regulator and bank management. Where the bank's financial condition is rapidly deteriorating, and its failure may occur, such participation or attendance may be crucial to the FDIC's ability to efficiently manage the resolution of the bank, to protect depositors, and to maintain public confidence. The FDIC does not envision the use of its special exam authority as duplicating the primary regulator's efforts, but as a way of rapidly gaining a firsthand understanding of significant risks facing the bank and the insurance fund or, where failure may occur, of information critical to the resolution. As a practical matter, such instances would be limited to the largest banks that make up the bulk of the FDIC's insurance risk, and some smaller banks with highly atypical or problematic risk profiles. The FDIC shares information on the resolution of particular banks with the primary regulator in order to enhance the ongoing exchange of information. The FDIC staff is exploring both of these areas with its counterparts at the other federal bank and thrift regulatory agencies. Conclusion
The FDIC shares this Committee's concerns about the size of the losses in some recent bank failures that have occurred even in our current favorable economic environment. Although there will inevitably be failures in the banking industry, even in good times, our goal is to ensure stability in the banking system, protect depositors and minimize losses. We are carefully studying recent bank failures, identifying trends and initiating action where necessary. Our recent initiatives regarding subprime lending, retained interest valuation, fraud detection and risk-related premiums are key efforts to address important issues in the industry. These initiatives, along with the passage of H.R. 3374, will enable the FDIC and other bank regulators to proceed in a unified, coordinated effort to ensure the health of a rapidly changing banking industry.
APPENDIX RECENT BANK FAILURES WITH EXCEPTIONALLY HIGH LOSSES TO THE FDIC
As noted in the preceding statement, three insured institutions failed in 1998 and 1999 with unusually high losses to the FDIC. These were BestBank in Boulder, Colorado; First National Bank of Keystone in Keystone, West Virginia; and Pacific Thrift and Loan Company in Woodland Hills, California. This appendix describes the activities of these institutions that led to their failure and to the large losses incurred by the FDIC. Each of these institutions exhibited some or all of the following characteristics: subprime lending, apparent fraud, and large holdings of retained interests. BestBank
BestBank's activities were marked by apparent fraud, deceptive lending practices, and subprime lending without proper standards. As of November 1999, the FDIC had estimated losses from the failure that total $232 million on an asset base of $318 million, a 73 percent loss rate. When the FDIC was appointed receiver of the bank in July 1998, the vast majority of the bank's accounts were delinquent. The principal assets of BestBank were credit-card receivables originated by Century Financial Group. Century and entities related to Century's principals performed all normal credit-card functions, from collection of all payments, customer service issues, collection on delinquent accounts, reporting, and calculation of payments due BestBank and Century from cardholder payments. Century specialized in marketing travel club memberships to people with low incomes, no credit history, or bad credit histories. The marketing was conducted by a Century related-entity, All Around Travel Club, referred to as AATC. AATC would offer individuals with no or poor credit histories an opportunity to obtain a BestBank Visa card with a $600 credit limit as part of the purchase of a travel club membership in the AATC. The cost of the travel club was $498, which was immediately charged to the BestBank Visa along with the $45 credit card annual fee for a total of $543, leaving the cardholder with only $57 of available credit. However, a person purchasing the travel membership received little of real value. The membership entitled the member to a discounted Bahamas cruise (the main enticement) operated by another related entity of the owners of Century, known as New SeaEscapes. However, the member had to provide his or her own travel arrangements to Florida for the trip. If the member wanted to take another person, full fare was charged. The $543 in travel club membership and other fees that were charged to the BestBank credit card were then split between BestBank, Century and their various related entities. These subprime credit card receivables were extremely risky. Aggressive marketing techniques were used to issue cards to individuals with no or checkered credit histories. The FDIC has found that some of the cardholders were in nursing homes, and many other holders stated that they just received the card in the mail without requesting the card or hearing about the travel club. Once the cardholder discovered that he or she had purchased a travel club membership that had little value, the individual may have decided to try to cancel the credit card or may have decided not to make payments. The level of cancellations and delinquencies in the AATC credit card program were extremely high. BestBank entered into an agreement with Century wherein Century agreed to purchase all delinquent accounts from BestBank.
We believe that Century concealed delinquent accounts by apparently falsifying payment records, making delinquent accounts appear current. We suspect that Century used a portion of the proceeds that it received from new originations to make payments on delinquent accounts. As more and more accounts became delinquent, Century had to originate more new accounts to service the growing mountain of bad accounts, a classic Ponzi scheme.
The credit card portfolio grew at a rapid rate, particularly in the last months of the bank's existence, with thousands of new cardholders being enrolled in the program and an increasing number of improper credits being applied to the delinquent accounts. In fact, over 350,000 accounts, approximately 74 percent of the active AATC accounts, received these false credits in the last six months prior to the bank's closing in July 1998. As a result of the rapid growth in new cards and the apparent scheme to conceal delinquent accounts, BestBank carried in excess of $179 million in credit card receivables that were misstated and misrepresented as current by the improper credits posted by Century. When the concealment of the delinquent accounts was discovered in mid-1998, regulators determined that Century did not have sufficient capital to perform on the guarantee and the bank was closed. Because the credit cards were unsecured, recoveries on the delinquent accounts were extremely small. Additionally, in view of the high delinquency rates and the possibility of fraud even in connection with the current accounts, the FDIC in 1999 decided to write off the remaining balance. First National Bank of Keystone (Keystone)
Keystone exhibited apparent fraud, subprime and high loan-to-value lending without prudential standards, and large holdings of retained interests with questionable values. Keystone is projected to be the tenth-largest dollar loss in FDIC history. The current estimate is that the loss to the BIF will be between $750 million and $850 million, 70-80 percent of total assets. The loss appears to stem from two different sources. The largest portion of the loss, approximately $500 million, seems to be due to improperly recorded assets that did not belong to Keystone, with the result that there may be few assets to recover. The FDIC is tracing the cash and investigating other entries on the bank's books in an attempt to increase its recoveries or determine the validity of assets. The remainder of the Keystone loss is expected to stem from little or no recovery value in the $380 million in retained interests in subprime and high loan-to-value loans it had securitized. Subprime and high loan-to-value ratio loans usually have high interest rates relative to prime loans. When the loans are securitized, portions of the securities often have "credit enhancements." These are designed to reduce the risk to the purchaser of the security and lower the required interest rate on the security. For instance, if a pool of subprime loans has an interest rate of 12 percent and the credit-enhanced portion of the security has an 8 percent rate, there will be "excess interest" of 4 percent for that portion of the securitization. This excess interest is generally used to pay for servicing and other fees and to fund the credit enhancement reserve. Any leftover cash flow goes to the residual holder. During the life of the securitization, how much money actually accrues to the residual holder depends on the performance of the underlying loans. If there are low levels of defaults and pre-payments, the residual can have substantial value. If there are high default rates, particularly in the earlier years, and high levels of prepayments, the residual may be significantly reduced in value or become worthless. Most securitizations by Keystone had two types of credit enhancements: a Federal Housing Administration insurance co-payment that would absorb up to 10 percent of losses of the entire securitization and private insurance that absorbed additional losses. If the default rates were such that the private insurer began to absorb losses, the insurer was entitled to excess interest payments up to the amount of its loss. The FDIC has engaged an investment banking firm to value the retained interest; however, given the very large default rates and losses in the loans underlying the securitization, we expect the loss to be between $340 million and $370 million on the $380 million of retained interest.
Pacific Thrift and Loan (PTL)
Pacific Thrift and Loan, with $118 million in assets, exhibited the following characteristics: subprime lending and retained interest. PTL originated subprime first and second mortgages, sold those loans to its parent, and split the cash flow resulting from the securitization of the loans with its parent. PTL had on its books approximately $50 million in retained interest assets on which the FDIC estimates recoveries will be zero, yielding a total loss rate of approximately 40 percent. PTL originated subprime loans and sold the loans to its parent who sold the loans to firms that subsequently securitized the loans. Inter-company agreements relating to securitizations determined the priority of claims of various participants on future cash flows and therefore the value of each participant's claim. The loans were expected to generate substantial interest payments over and above those needed to support the cash flows to the security holders. The firms that securitized the assets agreed to share a portion of the retained interest with PTL's parent, which in turn executed an agreement to share this interest with PTL. However, there was a problem for PTL with this arrangement. The retained interest asset on the books of PTL did not generate any payments in the early years of the securitization; thus PTL experienced trouble generating sufficient operating income to pay its expenses. In order to generate cash flow, PTL's parent borrowed up to 75 percent of the estimated value of the retained interest from the investment firms and passed the funds to PTL. The borrowings were to be repaid from the excess interest due to PTL and its parent. This arrangement reduced the likelihood that PTL would receive any interest.
To illustrate this transaction, imagine that PTL had estimated that its portion of the retained interest was worth $10 million and it had booked that amount as an asset. It received from its parent $7.5 million and reduced the retained interest asset to $2.5 million (25 percent of the original amount).
The value of the remaining 25 percent retained interest that had not been pledged against borrowings was extremely tenuous due to the fact that PTL stood sixth in line for any payments from the securitization. Payments went first to scheduled principal and interest, second to fund delinquencies and defaults, third for monthly fees and servicing, fourth to fund required reserve balances, fifth to payments on the borrowings of PTL against the advance on the retained interests loan and finally, if any payments remained, to PTL. If almost any loss or prepayment assumption used in the valuation of the retained interests turned out to be too optimistic, the institution's retained interest would probably be greatly reduced in value or become worthless.
From the records received from the servicer of the securitization, it appears that the pre-payments and losses in the underlying loans so exceed those assumed in the valuation of the retained interests that there is little or no chance of receiving any payments. In this regard, FASB 125 requires periodic revaluation, taking into account differences between actual and assumed performance. In the case of PTL, the approximately $50 million in retained interests the bank reported on its books are probably worthless. | 金融 |
2016-30/0358/en_head.json.gz/16205 | Apple Grove Owner Files $5.6 Million LoanThe owner of the Apple Grove Alzheimer’s & Dementia Residence at 3575 Hacks Cross Road in Southeast Memphis has filed a $5.6 million loan on the property. Apple Grove LLC filed the deed of trust Aug. 1 through Oppenheimer Multifamily Housing & Healthcare Finance Inc. Ed Apple Sr. signed the trust deed as sole member of Apple Grove. Built in 2008, the 22,332-square-foot facility sits on 4.3 acres on the west side of Hacks Cross Road, north of its intersection with Winchester Road. The Shelby County Assessor of Property’s 2013 appraisal is $2.8 million. The assessor lists the owner as Eads-based Apple Investment Properties; it acquired the property in a 2007 quitclaim deed from Mary Anne Apple. Source: The Daily News Online & Chandler Reports – Daily News staff
Breen Takes Over as Chief Federal Judge U.S. District Judge Daniel Breen is the new chief judge of the U.S. District Court for the Western District of Tennessee. Breen’s new position is based on seniority on the federal bench and his never having held the position before. He succeeds Judge Jon P. McCalla, who took senior status in August. McCalla had been chief judge since 2008. The chief judge handles administrative duties for the set of U.S. district judges for the Western District of Tennessee, which has offices in Memphis and Jackson, Tenn. – Bill Dries Bigfish Redefines Strategy, Develops New Partnerships For the past year, Memphis-based creative agency Bigfish has implemented a branding initiative it’s called “The Year of You,” putting an emphasis on the things that its clients and the community at large are doing. That message led to a desire to focus on three key areas of the business: not-for-profits, health care and membership organizations such as fraternities, sororities and alumni associations. The company has developed a “Community Leader” model to help facilitate its plan. Bigfish president Tim Nicholson is leading the company’s efforts with a suite of solutions developed by his team. Addie McGowan, social giving community leader, will work with not-for-profits and alumni segments of membership organizations and higher education via the company’s social giving platform. Mandy Willhite, e-learning community leader, will leverage the company’s training platform for membership organizations and health care. Bigfish also is partnering with GIN System, a full-service technology solutions provider, and is developing similar relationships with third-party payment processors, content creators, database integrators and offline service providers whose work supplements its own. – Andy Meek Barnett Group Employees Train in Health Care ReformEmployees at The Barnett Group, a benefits consulting company, are ramping up training and preparation on health care reform policies, laws and regulations, mandated benefits and compliance deadlines. Several members of the group recently completed their Healthcare Reform Specialist Certification, a designation given to insurance agents, brokers and health care consultants who complete a specialized course and exam and fulfill a minimum number of requirements each year. The designation also requires specialists to remain up to date on best practices, rules and changes to the Affordable Care Act. “The Affordable Care Act can be tricky and difficult to understand, so if we can ease the process for our clients, we’re going to continue to take advantage of opportunities that provide additional training and education,” said Ed Barnett, founder and president of The Barnett Group. Barnett Group employees who have completed the certification are Ed Barnett, Wes Barnett, Chirag Chauhan, Jonathan Edwards, Lindsey Harmon, Brandon Kimbrough, Carla Lyles, Judi Mixon and Dora Da Silva. – Jennifer Johnson Backer
US Consumer Spending Up Weak 0.1 Percent in July U.S. consumers barely increased their spending in July as their income grew more slowly, held back in part by steep government spending cuts that reduced federal workers’ salaries. The tepid gains suggest economic growth is off to a weak start in the July-September quarter. The Commerce Department said Friday that consumer spending rose just 0.1 percent in July from the previous month. That’s slower than June’s 0.6 percent increase. Consumers cut their spending on long-lasting manufactured goods, such as cars and appliances. Spending on services was unchanged. Income rose 0.1 percent in July following a 0.3 percent June gain. Overall wages and salaries tumbled $21.8 billion from June – a third of the decline came from forced furloughs of federal workers. Consumers’ spending drives roughly 70 percent of economic activity. The weak spending report led some economists to sound a more pessimistic note about economic growth in the current July-September quarter. It follows July data showing steep drops in orders for long-lasting manufactured goods and new-home sales. “This is a disappointing report on a number of levels,” said James Marple, senior economist at TD Economics. “Prospects for a pickup in economic growth in the third quarter hinge on a broad-based acceleration in spending by households and business to offset the ongoing drag from government. The data for the first month of the quarter are not following this script.” – The Associated Press US Consumer Sentiment Falls From 6-Year High A measure of U.S. consumer confidence slipped this month from a six-year high in July, as Americans expressed less optimism about the coming months. The University of Michigan says that its final reading of consumer sentiment dropped to 82.1 in August from 85.1 in the previous month. Americans said they were less confident that the job market will improve but more confident that their income will rise. Even with the decline, the index is nearly 8 points higher than a year ago. That suggests consumer spending could pick up later this year. A separate report Friday showed that consumer spending barely increased in July as income growth slowed. Consumer spending drives roughly 70 percent of economic activity. – The Associated Press Judge: Airline-Merger Trial to Start in November A federal judge said Friday that the government’s lawsuit to block the proposed merger of American Airlines and US Airways will start Nov. 25, a timetable favored by the airlines. The U.S. Justice Department had wanted the trial to start in March, saying it needed more time to prepare for the complex case. The airlines said that such a long delay would threaten their merger. U.S. District Judge Colleen Kollar-Kotelly said in court Friday that March was “too far off.” The companies were close to completing a merger to create the world’s biggest airline, but the Justice Department and six states sued this month to block the deal. They said it would reduce competition and lead to higher prices for travelers. They said that the combined American-US Airways would be too dominant at Reagan National Airport outside Washington and on many routes around the country. Justice Department lawyers have also pointed to recent record profits at both airlines – July’s profit was a one-month high at American parent AMR Corp., which has been cutting costs under bankruptcy protection – to argue that the companies don’t need to merge to survive. The airlines argue that their merger would increase competition by creating another big competitor to United Airlines and Delta Air Lines, which grew through recent mergers. They also point to the presence of other competitors, including Southwest, which carries more passengers within the United States than any airline and which is coming to Memphis this fall. Both sides said in a court filing this week that they were open to a settlement that would avoid a trial, although each made comments suggesting that they were not close to agreement. If the merger is blocked, AMR will have to rewrite its plan for emerging from bankruptcy protection. The merger is a key part of that plan. – The Associated Press | 金融 |
2016-30/0358/en_head.json.gz/16245 | Equity release is being used to pay off debts, says Age UK
Report into equity release finds many older people are living on low to modest incomes and struggling to maintain their homes
Equity release does not play much of a role in lifting pensioners out of poverty, says report's author. Photograph: Sean Smith for the Guardian
Jill Insley
Older people are turning to equity release to generate money to pay off their debts, according to new research for Age UK.
The report Housing and Finance in Later Life, compiled by the University of Birmingham, found that more than a third of equity release customers used the extra cash to help clear their debts, while almost half have put it towards essential house maintenance.
The study also reveals that while a quarter of those surveyed have used equity release to make early bequests and large one-off purchases, the remaining three-quarters have used it as a way of boosting capital, either to increase financial security and enable a more comfortable retirement or as a last resort to relieve financial difficulty or debt.
However, less than half of those questioned said they were "very satisfied" with the value for money offered by their equity release plan, even though 75% said the plan was right for their needs, 79% were pleased with the information and advice they received and 66% were satisfied with the safety and security of their plan.
Louise Overton of the University of Birmingham and the report's author, said the research showed that equity release does not play much of a role in lifting pensioners out of poverty. "This suggests a need for more consideration of how those with very low incomes and limited housing assets might benefit from equity release should they wish to use it," she said.
For many of those using equity release, selling their home and downsizing to a cheaper property was not an option. Age UK says that although more than two-thirds of over-65s are homeowners without a mortgage, many are living on low to modest incomes and struggling to maintain their homes. One in seven (14%) of those surveyed were in receipt of pension credit, and some of the respondents felt there was no option but to use equity release to pay for housing repairs in order to continue living in their homes – a key concern for many older people.
Almost two-thirds did not want to move away from family, friends and local amenities, just over half did not want the upheaval of moving house, and over a quarter said that it would have been too expensive to move house.
Age UK said it was worried that many older people are finding it difficult to maintain a decent standard of living using their pension alone. The recession and rising inflation has further exacerbated this problem with many older people seeing their living costs rise as their savings and incomes fall.
The report argues that this could explain why equity release customers are getting younger, with the average age of purchasers falling from 74 to 72. Previous research for the charity found that about 25% of people reach state pension age with outstanding credit commitments.
Michelle Mitchell, Age UK's charity director, said: "Equity release is clearly a useful tool to ease financial pressures in later life, but anyone considering it as an option should first seek good quality information and advice." | 金融 |
2016-30/0358/en_head.json.gz/16252 | Superior Uniform Group Announces The Appointment Of Mr. Kenneth D. Hooten As A Director Of The Company
SEMINOLE, Fla., Aug. 9, 2010 (GLOBE NEWSWIRE) -- The Board of Directors of Superior Uniform Group (Nasdaq:SGC) announced today that effective immediately Mr. Kenneth D. Hooten has been appointed by the Board of Directors to be a Director of the Company until the Company's 2011 annual meeting of shareholders. Mr. Hooten will be one of four independent directors serving on the Board. Mr. Hooten is a partner with Concentric Equity Partners of Chicago, Illinois. Mr. Hooten founded the firm in 2003 and is responsible for the firm's activities and its overall performance. Prior to founding Concentric, Mr. Hooten was affiliated with ServiceMaster® in a variety of capacities. He founded ServiceMaster® Home Service Center, a joint venture between ServiceMaster® and Kleiner, Perkins, Canfield & Beyers. Mr. Hooten has been active on the Boards of Directors of various companies. He is currently a director of Marathon Data Systems, Provest, Inc., Tricoci University Beauty School and Nature Technologies. Mr. Hooten, who is 47 years old, holds a Bachelor of Science Degree in Finance from the University of Illinois and an MBA from the Kellogg School of Management at Northwestern University. "We are truly fortunate to find an executive with a blend of experience in founding businesses, hands-on management experience and a finance background to serve as a Director of the Company," said Paul Mellini, a fellow Director and Chairman of the Corporate Governance, Nominating and Ethics Committee of the Board. "We believe that Ken will be a valuable addition to the Board," said Jerry Benstock, Chairman of the Board. "His experience in founding businesses and his entrepreneurial spirit will be a great help in the further enhancement and development of our strategic initiatives," added Mr. Benstock. ABOUT SUPERIOR Superior Uniform Group, Inc., established in 1920, is one of America's foremost providers of fine uniforms and image apparel. Superior manages award winning apparel programs for major corporations. Superior is a leader in innovative uniform program designs, global manufacturing and state of the art distribution. Superior, through their subsidiary "The Office Gurus" is also a near-shore premium provider of cost effective bilingual contact center and office solutions. CONTACT: Superior Uniform Group, Inc. Andy Demott (727) 397-9611 Compare Online Brokers | 金融 |
2016-30/0358/en_head.json.gz/16257 | U.S. to Hit Debt Ceiling Dec. 31 -- Happy New Year, Everyone
Timothy Geithner says the Treasury is planning 'extraordinary measures' to postpone defaulting on $200 billion in bond payments.
Christopher Westfall
NEW YORK ( TheStreet) -- Uncle Sam will hit his debt limit on New Year's Eve in another sign that the U.S. is lurching closer to the much-dreaded "fiscal cliff." U.S. Treasury Secretary Timothy Geithner said in a letter to Senate Majority Leader Harry Reid (D, Nev.) on Wednesday that the federal government will reach its $16.394 trillion statutory debt limit on Dec. 31. Geithner said the Treasury is planning "extraordinary measures" to postpone defaulting on $200 billion in bond payments and create some "headroom" for Washington beyond New Year's Day. Those include suspending payments to several government employee-pension funds that are funded with U.S. bonds as well as halting ongoing foreign exchange stabilization programs where government debt is used as collateral. "Under normal circumstances, that amount of headroom would last approximately two months," Geithner said in the letter, which was copied to leaders of both the House and Senate. "However, given the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures." A major issue for Uncle Sam in paying off its debt is that the the Internal Revenue Service still does not know the fate of the Alternative Minimum Tax, a sticking point in fiscal-cliff negotiations. Without certainty around AMT -- as well as hundreds of other revenue boosts and spending cuts -- the federal government remains in financial limbo. "At this time, the extent to which the upcoming tax filing season will be delayed as a result of these unresolved policy questions is also uncertain," the letter says. "If left unresolved, the expiring tax provisions and automatic spending cuts, as well as the attendant delays in filing of tax returns, would have the effect of adding some additional time to the duration of the extraordinary measures." -- Written by Christopher Westfall in New York If you liked this article you might like
Bank of New York Hits Wall Street Expectations
The custody bank reports a 23% rise in year-over-year earnings.
ICE Makes Play for NYSE
The deal would continue the long, slow consolidation of the exchanges.
Deutsche Bank Papered Over $12 Billion Loss, Report Says
The German bank is accused by former staff of 'mismarking' big derivatives trades, including a deal with Warren Buffett. | 金融 |
2016-30/0358/en_head.json.gz/16477 | Jim Cramer Reflects on His 2007 'They Know Nothing' Fed Call
NEW YORK ( TheStreet) -- TheStreet's Jim Cramer slammed Federal Reserve members in August 2007, when he said they didn't understand the magnitude of the crisis that had begun to grip major financial institutions in the U.S.
More than five years later, the Fed Friday released its official transcripts of the Federal Open Market Committee meetings, which reveal policymakers' thinking at the time.
Though the 2007 FOMC transcripts revealed the early cracks of the impending financial crisis that would grip the U.S., its markets and the rest of the globe, they showed that the Fed still was uncertain as to how massive the problem would become. Thus, they support Cramer's assertions at the time.
Just before the FOMC held its first emergency meeting of the financial crisis in 2007, Cramer unloaded on Fed officials with then- CNBC host Erin Burnett:
"I have talked to the heads of almost every single one of these firms in the last 72 hours, and Ben Bernanke has no idea what it's like out there. None. And Former St. Louis Fed. President Bill Poole has no idea what it's like out there. My people have been in this game for 25 years and they're losing their jobs, and these firms are going to go out of business, and he's nuts! They're nuts! They know nothing! ... This is a different kind of market, and the Fed is asleep." Not long after Cramer's self-described rant , the FOMC members mentioned TheStreet's co-founder in an official meeting.
"I believe that the correct policy posture is to let the markets work through the changes in risk appetite and pricing that are under way, but the market observations of one of my more strident conversational counterparts -- and that is not Jim Cramer laughter -- are worth sharing," said Atlanta Fed President Dennis Lockhart, according to the transcripts.
Cramer emerged Saturday morning with his response to finding out that he had been mentioned in the early discussions of the crisis.
I find it incredible that the people in the fed meeting took the time out to actually laugh at me back in 2007. Laugh....— Jim Cramer (@jimcramer) January 19, 2013 Cramer mentioned in a Jan. 19 tweet that he remembered "fearing i would be fired for speaking my mind about the Fed being so wrong, but i work for a fabulous network that backed me."
Cramer continued by tweeting that he still finds it amazing that mortgage fraud perpetrators and Fed officials never "paid a price for their sins."
But he also specifically praised Fed Chairman Ben Bernanke, and noted that Treasury Secretary Timothy Geithner -- then the vice chairman of the FOMC and New York Fed president -- later apologized to Cramer. | 金融 |
2016-30/0358/en_head.json.gz/16990 | My all-time favorite among them being Fisher as well as Stone Ridge. If you are interested in reading my choices from Fisher's portfolio you can find them here, whereas StoneRidge is covered over here.
On the other side, while deciding a stock pick on financial or tech stocks, I always look at what Eqis Capital Management is buying. This investment firm has around 85% of its portfolio in financial stocks and the second preference of the firm lies in Technology. In this article, I have picked up my three favorite stocks from Eqis's recent additions. The stock prices of these three companies are on a recovery and their strong fundamentals are intact to drive future earnings. Let's discuss each of these stocks in detail.
Nokia Corporation (NYSE:NOK)
A Little sunshine after the storm
After hitting a record low of ~$1.69 in July 2012, Nokia's stock price seems to be getting its momentum back with around ~59% returns in the last six months. The company has been able to woo its investors by its Lumia range of phones, which have been widely accepted in the market. Nokia recently reported its 4Q12 earnings beating the analysts' estimates. The company finally posted an operating profit of ~$584 million after billions of losses in the last six quarters. The profits were mainly supported by the sales of Lumia, which stood at ~4.4 million smartphones as compared with ~2.9 million units in 3Q12. The company's improving gross margin was another positive for its results, which was at ~18% for the Smart devices much ahead of the consensus estimate of ~11%. I feel Nokia's turnaround strategy has started generating the financial gains for the company, which was reflected in the results.
Windows-based phones have started gaining acceptance with shipments increasing by around 36% globally in the first nine months of 2012. Nokia's deal with Microsoft for the windows-based phone was a perfect step to pull-back its lost market share in the industry. Nokia will get ~$1 billion from Microsoft for a period of five years, for the promotional activities of windows-based phones. This payment will help Nokia to cover its marketing expenses and will also give a boost to its financial position in the future.
Along with this, Nokia is also aggressively moving toward its cost-cutting targets to support its bottom line growth. As part of this strategy, the company has announced to cut down 10000 positions globally in 2013. It has also decided to retrench another 300 employees from its IT division and is outsourcing about 800 jobs to external organizations such as HCL and TCS. These initiatives will cost ~$1.26 billion as restructuring charges, but will also help the company in saving ~$3 billion per annum in its core devices segment.
Cisco Systems (NASDAQ:CSCO)
Another pick from Eqis's portfolio is the networking giant Cisco. Its stock has seen a downfall to ~$16.82 in November 2012, but has rebound with an increase of ~27% since then. The uptrend was mainly supported by its better-than-expected 1Q13 results with a strong order growth in the U.S. Most recently, the company has decided to sell off its Linksys home networking group to a privately held company, Belkin. This divestiture followed last year's shut down of its video camera unit Flip. These moves by the company clearly indicate that it wants to get rid of all its consumer businesses and focus mainly on its services and solutions for enterprises. Additionally, as the Linksys was a lower-margin segment for Cisco, this shedding will help the company with a gross margin improvement of ~25 bps.
Another interesting factor about Cisco is its continuous focus on the M&A strategy. It has been very aggressive on acquisitions in 2012 to expand its markets as per the technology demands. Its two acquisitions of Cloupia and Meraki were aimed to broaden its base in the cloud-based offerings. Another acquisition of Cariden Technologies was to gain an edge in the SDN offerings for its core providers. To continue with the same trend, Cisco recently announced its acquisition of the Israeli wireless technology company Intucell for ~$475 million. Via this acquisition, the company would enter SON (self organizing network) management software in an effort to gain from new sources of growth. This technology will also help Cisco to generate more revenue from the wireless carriers such as AT&T, which are using this to manage their networks in a better way. The deal is expected to close in April 2013 and will strengthen Cisco's base in next-gen mobile networks. It will further help Cisco to gain a competitive edge over Ericsson, Huawei and Nokia Siemens Networks. I believe Cisco's recent acquisitions are the right step to refocus its business aiming toward high ROE.
Wells Fargo & Company (NYSE:WFC)
Last month, Wells Fargo reported its 4Q12 results, which were overall strong depicting the recovery of the company after the financial crisis. The company posted an EPS of ~$0.91, which was higher than the consensus estimate of $0.87 and even 25% higher than the last year's same-quarter EPS of $0.73. It reported earnings of ~$4.9 billion, which increased by ~25% y/y. Wells Fargo witnessed another quarter with a strong balance sheet growth. Its total loans increased by ~$16.9 billion in the quarter, which included ~$9.7 billion growth in mortgages. The impressive mortgage banking results were mainly due to the company's increased focus on the high-margin retail business. Mortgage banking represents around 30% of the company's operating fee revenue. The company's strong refinance volumes due to the lower rates and HARP (Home Affordable Refinance Program) 2.0 will definitely help the company to continue the mortgage growth in 2013.
The company has remained focused on reducing its expense base by improving the efficiency ratio. In the year 2012, project compass - the cost cutting program - helped it in achieving ~$1.5 billion of expense cuts. This resulted in an efficiency ratio of ~56% in 4Q12. Wells Fargo has ~$125 million of quarterly expenses related to mortgages foreclosure review scheduled for 1Q13. Following which I expect its efficiency ratio to be in the range of 55%-59% for 2013.
The Investing opportunity
Nokia - On the whole, I believe the cost-cutting initiatives will help the company to achieve operational efficiency in 2013. Moving over to the long-term returns, Nokia is well placed with its portfolio of windows-based smartphones. Further innovations will definitely help the company to gain more market share in the industry.
Cisco - I remain bullish on Cisco's stock with its shifting focus on the enterprises business and software solutions. Also, the divestitures of under-performing units will help to further enhance its core offerings in the industry.
Wells Fargo - the company's strong best-in-class balance sheet, solid quarter results could drive an upside for the stock. I expect it to return around $11 billion to its shareholders in 2013 with ~35% y/y increase in the share buyback.
I recommend a buy on all three stocks. | 金融 |
2016-30/0358/en_head.json.gz/17070 | March 11, 2014 > Allen hired as Senior Vice President
Allen hired as Senior Vice President
Submitted By Kevin HartmanPatelco Credit Union announced the hire of Chris Allen to serve as Senior Vice President of Internal Audit. In this role, Allen will lead PatelcoÕs continued efforts for rigorous controls that effectively manage financial risk and ensure operational excellence across the credit union.Allen brings more than 15 years of audit and risk management experience to his new position. He previously held related leadership positions at First Niagara Financial Group and Bank of America/Countrywide. Most recently, Allen served as a management consultant and subject matter expert for Resources Global Professional, where he helped complex organizations rebuild internal audit and compliance processes.Allen holds a Bachelor of Science in Business Administration and Economics from Ramapo College of New Jersey. He is a Certified Public Accountant and Certified Information Systems Auditor and also has a certification in Risk and Information Systems Control. Allen is relocating to the Bay Area from Southern California.For more information, visit patelco.org. Home Protective Services | 金融 |
2016-30/0358/en_head.json.gz/17168 | Risk & Compliance The Prime of Ms. Nell Minow
For the shareholder activist, these have been both the best and the worst of times.
A CFO Interview March 1, 2003 | CFO Magazine share
For most of the past 16 years, shareholder activist Nell Minow has felt like a cross between Chicken Little and the Little Red Hen. Her calls for reforming corporate governance have often been spurned by companies and ignored by shareholders. “It’s been like crying, ‘The sky is falling — and who will help me bake my pie?’ ” she says.
No longer. Between the numerous financial frauds of the past year and the reform proposals, corporate governance has become topic A. The 51-year-old Minow has become a hot commodity, appearing on every program from Nightline to National Public Radio to relay her message to an audience more ready to listen than ever before.
Compliance Function Losing Access to CEOs Canadian Banks Face $114B Compliance Bill Don’t Fear the Whistleblower Minow’s message is twofold: boards of directors must be improved, and shareholders must take more responsibility for seeing that they are. In her view, boards that have complete access to corporate financial information and are not controlled by CEOs are the best defense against corruption. The meltdowns at Enron, Tyco, and WorldCom, she says, point to the need for a “board that can exercise oversight over the CEO and not just sit there and applaud politely through PowerPoint pep-rally presentations.”
While Minow, who currently serves as editor of The Corporate Library — an online repository for corporate-governance information — is pleased with many of the reform efforts, she worries that most have ignored the duties to shareholders. Instead, she says, the proposals have “focused only on the supply side of corporate governance — what managers must do, what accountants must do, what boards must do. There’s been no focus on the demand side.” She explains, “You can have all the disclosures in the world, all the rights. But if you don’t have a shareholder community that is willing and able to exercise those rights and act on those disclosures, you aren’t going to see a change.”
The University of Chicago-educated lawyer thinks this may be the year for “dramatic improvement” in shareholder involvement. Obviously, shareholders are angry about the scandals, she says, but that anger has been compounded by the silence in the business community and its members’ failure to “separate themselves from the bad guys.” Her advice to companies: take the lead in changing their own governance policies. “You don’t want to be in the middle of the pack on this,” she says. “You want to be at the front.”
Minow has never had a problem being out front in her previous incarnations, first as general counsel and president (alongside founder, governance activist, and longtime collaborator Robert Monks) of Institutional Shareholder Services, which advises large institutions on corporate-governance and proxy-voting issues; then as president of LENS, a fund that invested in troubled companies and pressured them to change their governance and improve their performance.
Corporations aren’t the only object of her scrutiny. A passionate movie critic, she wrote The Movie Mom’s Guide to Family Movies, which she recently moved online. By the end of the year, she’ll help launch a Web site for parents to give feedback to the movie industry. “So if you think a movie is particularly offensive,” she explains, “it will say, ‘Click here to send an E-mail to the board of directors or the company that produced it.'”
Recently, Minow sat down with CFO deputy editor Lori Calabro to discuss her hopes for reform. How will she know if governance is really improving? “I will look to see whether there are major changes in boards, whether compensation improves, whether nominating committees improve, and whether shareholders step up to bat and speak out. I’m very hopeful all of this will happen — at least until the next bull market arrives.”
You’ve been at this for the past 16 years. Did you ever think you’d see a year like we just had?
Never. I actually got to quote one of my favorite lines from literature: “[Her] face bore the triumphant look peculiar to those who, suspected of hyperbole, are found to have been employing meiosis [rhetorical understatement].” It’s from Mrs. Miniver, a novel by Jan Struther. That’s how I felt all year. We’d expressed mild concern about some of the companies that melted down. But even in my wildest and most-paranoid fantasies, it never occurred to me that there would be this level of corruption and neglect.
Many people still say the cause of the meltdowns was a few bad apples as opposed to a systemic problem.
It’s fair to say it was a systemic problem. But there are some good apples, and one of my strongest criticisms of the corporate community is that they have not done an adequate job of distinguishing themselves from the people who are corrupt.
I’ve spoken to many CFOs who voice that view individually.
Not good enough. Let’s talk about the person who was generally considered to be the best CEO of the last 30 years — Jack Welch. The fact that when he announced he might leave the company, [he demanded that] his lifetime dry cleaning, apartment, Knicks tickets, and catering bills be covered — and that the board went along — shows me that the problem was not just a few corrupt or neglectful individuals, but a failure to understand what the role of the board should be in those kinds of negotiations. That had a huge ripple effect. Because when Welch got his board to agree to that kind of retirement plan, then [IBM CEO] Lou Gerstner, who was on the GE board, got the IBM board to agree to a similar plan. The fact is, we haven’t seen widespread corruption on the level of Tyco or accounting fraud on the level of Enron and WorldCom. We have seen widespread excessive executive pay, widespread poor financial reporting, and widespread neglectful boards.
Do shareholders bear any responsibility?
Shareholders were the enablers. They voted in favor of a lot of bad pay plans, they voted to reelect a lot of poor boards, and they failed to pay attention to many, many red flags. Furthermore, shareholders themselves have been corrupt at times. In the Hewlett-Packard/Compaq merger last year, one of HP’s largest investors, Deutsche Asset Management, voted against the merger. Then, after receiving a call from the investment-banking side of Deutsche, they agreed to reconsider. Carly Fiorina went to visit, gave them a check for $1 million, and they changed their vote. That kind of behavior is inexcusable.
What were the lessons of the past year for the shareholder community?
The single most important thing I can say to you is that while both the Sarbanes-Oxley Act and the New York Stock Exchange reforms will make a difference, the most important change will come from the market itself, when shareholders insist on better corporate governance.
There have been egregious governance violations in recent years. Why has it been so hard to get shareholders to act?
When The Corporate Library first started, we picked Global Crossing as the worst [CEO employment] contract in America. I had read through about 20 contracts, which were fairly identical, before I got to this company. It said the CEO had a $10 million signing bonus, which was OK, but he also got 2 million options at $10 a share below market. Furthermore, the contract provided the make and model of the Mercedes the company would buy for him, and specified that once a month Global Crossing would fly his family, including his mother, first class to visit him.
So, from that contract I concluded that (a) the CEO thought the stock was going to decline in value and (b) the board was incapable of saying no to him.
But no one really took it very seriously. People said, “Isn’t that cute that he wants his mother to come out and visit?” I got E-mails saying, “This is the fastest-growing stock in the history of the NYSE, and if I am willing to spend a quarter of a cent a share to fly his mother out so he doesn’t have to worry about her, it’s not your business.” I just felt that there was what I would now call governance risk.
You’ve said you consider yourself to be “an anthropologist of boards.” What do you mean?
My training is in law, and lawyers tend to think in terms of structural solutions. But in the boardroom, there’s no structural solution that can’t be subverted in some way. So when you’re trying to figure out what’s wrong in the boardroom, you have to look at it more as an anthropologist — what is it about the human interaction and the culture in this little world that makes it so ineffective? I’ve met a lot of corporate directors, and almost without exception they are intelligent, honorable, and dedicated, and bring a tremendous set of experiences into the boardroom. For that reason, it’s really endlessly fascinating why they do such a bad job.
What is it about the culture that breeds ineffectiveness?
One thing is that the people who are invited on boards are consensus-builders. They are brilliant at sizing up the norms of whatever situation they’re in and adapting to them. But unfortunately, it creates a culture that makes it difficult to ask questions.
Why are you so convinced that a better board could have made all the difference in last year’s cases — or in others?
Who is in the best position to identify and mitigate damages when you do have a bad apple? Obviously, there are always going to be crooks. But let’s talk about some of these companies for a minute. At Tyco, Dennis Kozlowski did not ask for a contract until 2001. The contract he gave to his board, which they signed, provided that conviction of a felony was not grounds for termination. A better board might have said, “Dennis, we’re sorry: Are you planning to knock over a bank? Is there something you want to tell us?”
The Conference Board recently recommended a structural change — separating the roles of CEO and chairman–although it gave multiple methods for doing it. Why should that work?
Splitting the roles is inconsistent with the cowboy culture, and it’s certainly inconsistent with the popular notion of the CEO as superstar. But my concern is the same as The Conference Board’s — I don’t care how you do it, but you have got to pry the CEO’s fingers off the control of the agenda and the information. And if their egos are so sensitive that they can’t withstand a sharing of a title, then perhaps they should not be in the job.
There have also been calls for boards to meet without the CEO present. How significant is that?
When I testified before the New York Stock Exchange, I told them that that rule was the most important requirement they could impose. There again, you have to get this overpowering presence out of the room and allow for candid exchange. The problem is that the CEOs still pretty much control the nomination process [for board members] and will always say, “I’m looking for someone who has XYZ credentials and is a consensus-builder.” You don’t want people throwing things at each other in the boardroom, but when you have 11 consensus-builders and one visionary, dynamic leader who bosses people around all day, it becomes almost impossible to achieve anything but the lowest-common-denominator sort of performance.
What about independence? It seems to be the common denominator among all the reform proposals.
That’s gone a little too far. Independence does not guarantee competence or commitment, and those are more important than independence. Moreover, it is hard to judge who is or is not independent from the disclosures that we currently have. I once went to an annual meeting and stood up and said, “You’ve got five members on the board of directors: the CEO, a full-time employee, the company’s investment banker, the company’s lawyer, and another guy. Hey, other guy: stand up and tell everybody here what your connection is, because I don’t believe that you are independent.” We found out afterward that he and the CEO played jazz clarinet together. That’s why you can only judge independence by looking at what board members do.
The Corporate Library’s Interlock Tool analyzes the interconnectedness of board members. Just how many degrees of separation are there?
It makes the [six degrees of separation from] Kevin Bacon game look like nothing. Out of the 20,000 directors in our database, you can get from any one to almost any other one in no more than two or three steps. We consider first degree to be their corporate connections; second is their noncorporate connections, which include nonprofits, trade associations, and golf clubs; and the third degree is interlockings among them. If you are on two boards with people who are on a third board together, that’s a third-degree interlock. So they are all pretty connected.
How would you empower board members to stand up to management?
You need a carrot and a stick. The stick was the year 2002, which scared the heck out of all of them. The carrot is good ratings and pay that reflects board members’ performance. I have always said that boards are like subatomic particles — they behave differently when they are being observed, and knowing they are being observed will make a difference [going forward]. I think too that we’ll see more turnover on boards in the next 2 years than we’ve seen in the last 10. People who are not comfortable asking tough questions are going to leave, and people who are not uncomfortable asking tough questions will be more willing to serve.
How much should directors be paid?
A lot more than they’re getting paid. Pay them more because we have very high expectations: we want them to devote at least two days of background work for every day they spend in a board meeting. If that amounts to three or four weeks out of the year, we should pay them a commensurate rate. That pay should be in stock, and we should require them to hold the stock for three years after leaving the company.
What about their own equity stakes?
The first thing you should do after agreeing to go on a board is to buy a lot of stock. What’s a lot depends on who you are. But the academic studies tend to show that if people have at least $100,000 invested in a company, it seems to affect the stock performance.
And what would you do as far as changing the mechanism of the nominating process for the board?
If I ruled the world, I would allow shareholders to nominate one or two candidates on the management’s proxy slate every year. But understanding that my idea would require some very big changes, my backup is a very independent nominating committee working with a search firm. Obviously, we don’t want anybody the CEO doesn’t feel he can get along with. But there’s a strong human impulse to dance with the one who brung you to the party, and I want the new directors to know that the one who brung them was the nominating committee and not the CEO.
Do you think this might be the year when we actually see shareholders demanding pay cuts for executives in nonperforming companies?
I think so, and I think companies that are out in front announcing pay cuts will get a lot of support from shareholders. I worry that we’re going to see less of a tie between pay and performance, because of the overall market slowdown.
Is there any ideal way of linking performance to pay?
No; it depends on the company — whether you’re talking about an emerging company or an established one. What’s important is for the compensation committee to state very clearly what its goals are and how this compensation is in furtherance of those goals. If they want to say that market share is their number-one goal, then by all means, pay the guy for market share. But if the main goal is increasing the dividend, then pay him for that. Just say what your goals are, and let me judge if that’s something I want to invest in.
CFOs are understandably concerned about how much they are going to have to invest in all this additional regulation. Is there a point where oversight or regulation adds costs that could undermine shareholder value?
On behalf of the shareholders, for whom I’ve been working for 16 years, it is an investment we are happy to make. So spend the money, but spend it wisely. Don’t spend it for bureaucratic checklist minutiae. Spend it to get the best possible directors, and give them the best possible information.
As The Movie Mom, you warn parents about inappropriate material in movies. Are there any parallels between your day job and your night job?
I once got a question: “Dear Movie Mom, I tell my two-and-a-half-year-old that she shouldn’t watch videos, but she knows how to work the VCR, so she watches them anyway. What should I do?” So I wrote back: “OK, somebody has to be the grown-up, and you lose. And if you can’t make a rule about videos in your house, I guarantee that you are going to have a much bigger problem than movies.” That same day, I went to the office and read this Global Crossing contract, and it was like getting a letter from the board of directors: “Dear Corporate Governance Mom, I tell the CEO that pay and performance should be linked, but he says no. What should I do?” I felt like writing back, “Somebody has to be the grown-up, and you lose.”
Do you expect to be combining the jobs even more once the inevitable slew of movies about the scandals debut?
You know, my husband asked if I wanted to watch the recent TV movie about Enron. “No,” I told him, “I saw the play.”
← You’re Fired! Congratulations The Real Inspector Hounds → | 金融 |
2016-30/0358/en_head.json.gz/17215 | Alcoa in Brazil
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Community action in the Raphael Sanches school has the environment as the main theme
The event was promoted by Alcoa, in a partnership with the police, Emater MG and the Green Guard
To celebrate Environment Day and Green Works, a group of Alcoans, led by Elaine Generoso, an accounts analysts with GBS Financial, organized a community mini-ACTION in the Raphael Sanches municipal school, in the rural area. The event was held on June 6 and was a partnership with the police, Emater MG and the Green Guard.
There were talks on environmental education, a group dynamic exercise and a chat for students, teachers and parents about making compost, organic fertilizers and life in harmony with nature. The initiative also planted 50 fruit trees and 20 ornamental trees and distributed 90 seedlings to the school’s students.
This was the first of three mini-ACTIONs that will be led by participants of the Alcoa Earthwatch program from Alcoa’s unit in Poços de Caldas. Each of them will guarantee that the institution where the action is carried out receives the equivalent of US$ 1,500, donated by the Alcoa Foundation.
“During Alcoa Earthwatch we discovered just how much we can do to contribute towards the sustainability of our planet”, says Elaine. “And the community mini-ACTION, with partners that are so committed to the environment, provided me with an excellent opportunity to put this discovery into practice. It was a very gratifying experience”.
About Alcoa Earthwatch
Alcoa Earthwatch is a partnership of the Alcoa Foundation with the Earthwatch Institute. In this program, company employees from all over the world have the chance to take part in research into the climate and sustainability in different places on the planet, the idea being to understand current problems better and come up with possible solutions for doubts related to the theme. After the expeditions, those who participated develop a project to be applied in their community and share their knowledge and experience with other employees. In 2013, three employees from Alcoa’s unit in Poços de Caldas took part in Earthwatch. Elaine Generoso, Edson Reis and Karen Monteiro went on the expedition to Salto Morato, in Paraná.
About the Alcoa Institute
Established in 1990, the mission of the Alcoa Institute is to generate a sustainability legacy in the communities in which Alcoa operates, through strategic and articulated projects that value and strengthen their potential. The Institute works with programs and actions for encouraging corporate voluntary work, among which are ACTION, BRAVO!, Green Works, the World Month of Community Service, the Program for Supporting Local Projects and its signature program, known as the ECOA (Community Environmental Education) Program in partnership with CIEDS. The areas considered to be a priority for actions or community projects are education, health, the environment, security, governance, work and income. Since 1995 the Alcoa Institute, along with the Alcoa Foundation, has invested some R$ 100 million in more than 1900 projects, benefiting 39 Brazilian cities and involving more than 1.4 million hours of voluntary work.
About Alcoa Alcoa Alumínio S.A. is a wholly-owned subsidiary of Alcoa Inc. which is the world’s leading producer of primary aluminum and fabricated aluminum, as well as the world’s largest miner of bauxite and refiner of alumina. The company employs approximately 61,000 people in 30 countries and for the eleventh consecutive year the company is a member of the Dow Jones Sustainability Index. In Latin America and the Caribbean Alcoa has operations in Brazil, Jamaica and Suriname, which employ some 7,000 employees. This year it is completing 125 years of operations worldwide. In Brazil the company operates in the whole of the aluminum production chain from bauxite mining to the production of transformed products. Alcoa has six production units and three offices in the states of Maranhão, Minas Gerais, Pará, Pernambuco, Santa Catarina, São Paulo and the Federal District. The company also has shareholdings in four hydroelectric power stations: Machadinho and Barra Grande on the border of the states of Santa Catarina and Rio Grande do Sul; Serra do Facão in Goiás; and Estreito, between Maranhão and Tocantins. In 2012 Alcoa recorded revenues of US$ 2.6 billion in Brazil. In the same year it was considered a benchmark in sustainability and was one of the year’s 21 model companies in the Guia Exame de Sustentabilidade [Exame magazine’s Sustainability Guide], as well as being recognized as one of the Best Places to Work for the 11th consecutive year and the Best Company for Women to Work in Brazil by the Great Place to Work Institute. For further information access www.alcoa.com.br and follow @Alcoa on Twitter in twitter.com/AlcoaBrasil and on Facebook at facebook.com/AlcoaBrasil.
| Alcoa in Brazil | 金融 |
2016-30/0358/en_head.json.gz/17239 | The Biggest Risks Facing Chesapeake Energy
Arjun Sreekumar, The Motley Fool
Dec 22nd 2012 2:00PM
Being in the oil and gas exploration and production business comes with many inherent risks. The prices of oil and natural gas are prone to massive swings, as illustrated by Brent crude oil's movement from over $140 per barrel in the summer of 2008 down to below $40 by the end of that year. Hence, companies that have exposure to these volatile commodities must find a way to mitigate the risk of price fluctuations, especially in the current macroeconomic environment of tremendous uncertainty.
Most companies hedge their risks through derivative instruments like swaps and collars, often for years into the future. For instance, Linn Energy , one of the most conservatively hedged upstream companies out there, has hedged 100% of its expected oil production through 2016 and 100% of natural gas production through 2017.
Sometimes these hedges work in the company's favor and sometimes they don't. For instance, SandRidge Energy realized a total gain of nearly $194 million from its commodity derivative contracts in the three-month period ending in September of this year, while it suffered a $596 million loss in the same period last year.
Chesapeake Energy has been noticeably less conservative in its hedging strategy going into this year. Expecting a rebound in natural gas prices in the first half of the year, the company removed its hedges. Since that rebound never materialized, the company reported a larger than expected loss in the first quarter.
To take a closer look at commodity price and other risks facing Chesapeake, I created a premium research report on the beleaguered natural gas producer. Hopefully, the report will help investors get a better picture of the company's future. It includes opportunities, major risks, crucial areas to watch, and a closer look at the company's management.
The following is an excerpt from the report that addresses the biggest risks facing the company. It's just a short sample of one section, but I hope you find it useful.
RisksIn addition to the above factors, by far the biggest risk Chesapeake faces is a prolonged period of depressed commodity prices, especially natural gas prices. Even though the company is clearly gearing up for increased liquids production, natural gas still comprises 72% of its volumes of estimated proved reserves and 80% of its sales volumes. In addition, the company has tended to be lightly hedged in recent years, which exacerbates the impact of downward price movements.
The overarching theme sprouting from Chesapeake Energy is its indebtedness. If the company cannot shore up its balance sheet and is forced to cut its production schedule, then it runs the risk of losing some extremely valuable liquids-rich leaseholds. While Chesapeake has a bountiful amount of natural gas acres that are "held by production," the company still has plenty of drilling to do to turn its acres of liquids into permanent assets.
Interested in other opportunities and risks facing Chesapeake? That was just a sample of our new premium report on Chesapeake Energy. If you're debating whether the company is a buy or sell, the report may prove to be a crucial resource. In addition to an analysis of Chesapeake's risks, areas to watch, and its management, the report comes with complementary updates and delves into upside and downside catalysts looming on the horizon. To get started, simply click here now. The article The Biggest Risks Facing Chesapeake Energy originally appeared on Fool.com.
Fool contributor Arjun Sreekumar has no positions in the stocks mentioned above. The Motley Fool has options on Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. | 金融 |
2016-30/0358/en_head.json.gz/17505 | Burberry investors vote down Christopher Bailey’s 20m pounds pay deal
Andrea Felsted and David Oakley
Friday, 11 Jul 2014 | 5:51 PM ETFinancial Times
Burberry has suffered the first pay defeat of a FTSE 100 company for two years, as shareholders rejected a 20 million pound remuneration package for its new chief executive, Christopher Bailey.
Gareth Cattermole | Getty Images
Christopher Bailey attends the Serpentine Gallery Summer Party at The Serpentine Gallery in London.
Almost 53 percent of votes cast at the luxury goods group's annual meeting on Friday were against the directors' remuneration report, in a revolt against 1.35 million shares awarded to Mr. Bailey before he was named as Angela Ahrendts' successor last October. The shares are worth just under 20 million pounds and are not tied to performance. The backlash is a reminder of the still-febrile climate over executive pay in the UK, and investor concerns over whether corporate boards are doing enough to clamp down on excess. The Burberry revolt is the first such defeat of a FTSE 100 company since investors voted against the pay of Sir Martin Sorrell, WPP chief executive, in June 2012. It is only the sixth time that a FTSE 100 company has lost a vote on pay since 2002, when shareholders were given the ability to vote on remuneration, according to Manifest, the proxy shareholder service. More from The Financial Times:Google sets up 'right to be forgotten' councilBig tobacco set for $56bn mergerKerry faces weekend of frantic diplomacy
When Mr. Bailey succeeded Ms. Ahrendts after her defection to Apple, some investors were unsure of whether he could be a successful chief executive while retaining the creative director role, which he has held since 2001. But the primary concern of shareholders is now that some of his long-term incentives were not linked to performance. One top 10 shareholder in Burberry said: "This is a warning shot not just to Burberry, but to other companies that think they can return to their bad old ways of handing out excessive rewards to chief executives." But shareholders stopped short of taking the stiffest action available by forcing a change in future pay policy and instead opted to register their protest through a non-binding vote on pay already received.
Highest paid CEO surprise
CNBC's Mary Thompson runs down the new list of the highest paid CEO's in 2013.
Highest paid CEO surprise Monday, 9 Jun 2014 | 10:35 AM ET Sir John Peace, chairman, said he was "disappointed" by the vote, but acknowledged it reflected shareholder unease over Mr. Bailey's pay. "It is an expression to us of concerns over some aspects of our remuneration, and I think specifically relates to Christopher and the award of his shares"," he said. Burberry had been forced to award 1 million shares to Mr. Bailey in 2013 in the face of "competing job offers" which he said were "much more than his existing package." "We are acutely aware he could command a much higher package outside of the UK, where the size and nature of remuneration can be very different and quite often not publicly disclosed," Sir John said. "Angela went to Apple for over $60 million. There is no way we can do that." Read MoreBurberry warns exchange rates to impact profits Mr. Bailey, who was born to a carpenter father and window dresser mother, joined Burberry in 2001 after working for designers from Donna Karan to Tom Ford. On Friday he said he was aware he was paid a "significant amount." Asked whether he would forfeit some of it in light of the revolt, he added: "It's not about giving something up." Mr. Bailey insisted he had not held Burberry to "ransom" over the job offer. He would not comment on whether last year's approach had come from Louis Vuitton, which was then seeking a successor to Marc Jacobs. Read MoreUS CEO pay not rising as much as you may expect Some shareholders also took issue with a 440,000 pounds cash allowance paid to Mr. Bailey, who can earn up to about 10 million pounds a year in his role as chief executive, depending on performance.
Sir John said: "We know that the amount paid to Christopher is a lot of money, but much of it is performance related." Read MoreMorgan Stanley eyes pay cuts for advisors: Sources Shareholders in Standard Chartered are also unhappy that Sir John plans to keep juggling two FTSE 100 chairmanships—at the emerging markets bank and at Burberry—even after he steps down from Experian, the credit checking company, in July. The chairmen of the four other big British banks all do the job full-time. —By The Financial Times' Andrea Felsted and David Oakley. Martin Arnold contributed to this report. Related Securities
BRBY | 金融 |
2016-30/0358/en_head.json.gz/17506 | Fed Cuts Discount Lending Rate in Surprise Move AP
Friday, 17 Aug 2007 | 12:29 PM ETThe Associated Press
The Federal Reserve approved a half-percentage point cut in its discount rate on loans to banks Friday, a dramatic move designed to stabilize financial markets roiled by a widening credit crisis. The action had an immediate positive impact on Wall Street after days of losses. The Dow Jones industrial average shot up more than 300 points in early trading before surrendering some gains. The blue-chip index closed with a gain of almost 2%.
The decision means that the discount rate, the interest rate that the Fed charges to make direct loans to banks, will be lowered to 5.75 percent, down from 6.25 percent. show chapters
Market Watchers 1
News from the Fed, with Jack Bouroudjian, Brewer Investment Group principal; CNBC's Steve Liesman, Rick Santelli and Joe Kernen
Market Watchers 1 Friday, 17 Aug 2007 | 8:30 AM ET The Fed did not change its target for the more important federal funds rate, which has remained at 5.25 percent for more than a year. Friday's move was not expected to have an immediate impact on consumer borrowing. However, it has been infusing billions of dollars in money into the banking system over the past week to keep that rate from rising above the target level. Private economists praised the action by Federal Reserve Chairman Ben Bernanke and his colleagues, saying it should help steady jittery markets although many expect a cut in the federal funds rate to follow. "This is fine for temporary relief, but I think they will still have to cut the funds rate because the markets will still be turbulent," said David Wyss, chief economist at Standard & Poor's in New York. The move to cut the discount rate will not have a major impact on consumer interest rates in the way that cutting the federal funds rate triggers an immediate drop in banks' prime lending rate, the benchmark for millions of consumer and business loans. However, Friday's move was expected to help with a severe cash crunch facing many businesses, including mortgage companies, which are having trouble getting loans for short-term financing needs. In a statement explaining the action, the Fed said that while incoming data suggest the economy is continuing to expand at a moderate pace, "the downside risks to growth have increased appreciably." White House deputy press secretary Tony Fratto declined to comment on the announcement but said, "We have full confidence in the Federal Reserve on these issues and respect their independence." The Fed said it was "monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets." The Fed said that "financial market conditions have deteriorated and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward." The cut in the discount rate was approved by the Fed's board, which controls this rate. However the policy statement policy announcement was approved unanimously by the Federal Open Market Committee, the larger group of Fed board members in Washington and Fed regional bank presidents who set the federal funds rate. Economists saw that as a significant signal that the Fed stood ready to cut the funds rate, which has been at 5.25 percent since June 2006 when the Fed wrapped up a two-year rate tightening campaign aimed at slowing economic growth enough to keep inflation under control. The discount rate covers only loans that the Fed makes directly to banks. By moving it to 5.75 percent, the Fed put it closer to the funds rate. The central bank also announced other technical changes to make it easier for banks to get discount loans, such as extending the time the credit will be supplied to up to 30 days. The nation's once high-flying housing market is sinking deeper into gloom, and credit, the lifeblood of the economy, is drying up. Many economists believe these problems, including declining consumer confidence, could lead to a recession. Since setting a record close of 14,000.41 just a month ago, the Dow Jones industrial average has shed 1,154.63 points in a string of triple-digit losing days that have raised anxiety levels not just on Wall Street but on Main Street as well. show chapters
Faber Report
Stocks surge after Fed cuts discount, reports CNBC's David Faber
Faber Report Friday, 17 Aug 2007 | 9:48 AM ET The markets have been pummeled by a rapidly spreading credit crisis that began with rising defaults in subprime mortgages -- home loans made to people with weak credit histories. Now the problems are spreading to other borrowers. Countrywide Financial, the nation's largest mortgage banker, was forced to borrow $11.5 billion on Thursday so it could keep making home loans. It was a move that rattled investors who have watched a number of smaller mortgage companies go under because of credit problems. The shockwaves have extended to giant Wall Street investment firms such as Goldman Sachs, which announced earlier this week that it was pumping $2 billion into one of its struggling hedge funds. BNP Paribas, France's largest bank, last week froze three funds that had invested in the troubled U.S. mortgage market. The Fed and other central banks already had infused the banking system with billions of dollars in an effort to keep short-term interest rates from surging and making credit even more difficult to obtain. However, those billions did not calm investors worried about which big hedge fund or mortgage company will be the next to announce serious problems. For that reason, investors have become fearful to supply money through credit markets to companies even if they have strong credit records. SHOW COMMENTS | 金融 |
2016-30/0358/en_head.json.gz/17553 | Chicago tries art of fiscal juggling
By Lucia Mouat, Staff correspondent of The Christian Science MonitorChicago
— For a growing number of cities, the job of keeping bills paid and budgets balanced is evolving into a highly skilled juggling act. Faced with less money from Washington and taxpayer resistance to further property tax hikes, many cities searching for new sources of revenue are pioneering in what might be called creative taxing and borrowing. Just as home owners have had to resort to imaginative financing to sell their property, so cities find they are constantly pressed to devise new income strategies to pay for the daily services they must provide.Chicago, while regarded as in far better financial shape than New York, Cleveland, or Detroit, in many ways exemplifies the new juggling strategy at work.The city has been having a particularly tough time of late in financing its school and mass transit operations. Chicago Mayor Jane Byrne's fund-raising strategy, which reaches for a new detour as fast as roadblocks appear, makes headlines here on an almost daily basis. The result has left some Chicagoans trying to follow it a bit breathless. As one recent editorial in Chicago's sun Times put it: "We prefer less excitement and more dull stability."
One of the key new difficulties that Chicago and other cities are beginning to encounter is a poor market for the sale of many municipal bonds at rates offered. Just last week Chicago offered $140 million in municipal notes intended to finance transit operations through next March. Almost as swiftly, they were withdrawn. A key reason: public demand at the price and interest rate offered was not there.
New York's Citibank, the main underwriter of the offering, says it expects the notes to be back on the market in four to six weeks when market conditions are better and legal issues surrounding the sale are resolved. But some city fiscal experts, such as Donald Beatty, executive director of the Municipal Finance Officers Association, say they think market conditions for bonds mary remain tough for some time to come."My own prediction," says Mr. Beatty, "is that any governmental unit is going to have a difficult time selling securities at reasonable rates as long as there is inflation and the new All Savers Certificate offered by savings and loan firms. For all practical purposes the certificate has destroyed the municipal bond market. . . . The economy itself is going to have to get somewhat better before there's any improvement."What puts Chicago on an especially difficult course in the search for new sources of revenue is the fact that Mayor Byrne opted, in the face of what she felt was too little state help with too many controls, to pull the city's mass transit operation out of the regional system. She vowed that Chicago could and would if necessary run the system alone. A spokesman for the American Public Transit Association confirms that most big-city transit systems are regionally operated and rely on at least some state funding.While the city's public position is that it woudl still welcome state help to keep the transit system running, the Illinois Legislature will not convene again until October and downstate lawmakiers have made it clear they are opposed to further aid without corresponding reforms and service cuts.Accordingly, the juggling to keep bills paid continues.When local banks questioned the legality of raising local funds by the mayor's bond sale to support a state-created transit system, she promptly reached out to New York's Citibank to under write the notes. The Chicago banks, she said, "couldn't move fast enough."To pay off the bonds, the city launched an interim property tax increase and proposed new or increased taxes in three areas: a new 1 percent tax on professional services, a 5 cent tax on cigarettes, and a hike in the city's retail sales tax. The service tax is being challenged in court by the Chicago Bar Association on grounds that it is in effect an occupation tax and as such illegal under state law.When a new roadblock appeared as the bonds were withdrawn from the market, the mayor -- after several interim tries elsewhere for an emergency loan -- finally reached agreement with Illinois Governor Jim Thompson and a coalition of Chicago banks to get an immediate $60 million loan to keep the Chicago transit system operating.In the end the governor cooperated in the rescue effort, although Mayor Byrne had been sharply critical of him for what she saw as abandonment of his responsibility to help both the schools and the transit system. She had also charged that his fiscal policies virtually "bankrupted" the state.Chicago faces still another major financial hurdle these days in finding the cash to open its schools Sept. 9 and keep them running.The Chicago School Finance Authority, set up by state law a year ago to ensure that city schools keep a balanced budget, recently rejected the board of education's proposed financial plan for the next two years. A $151 million deficit projected for the 1982-83 school year stopped the approval. The Chicago Teachers Union, which was on the verge of winning 14 percent wage increase over a two-year contract, promptly termed the authority's action a "vote to close the schools."Technically the school board's budget is separate from the city's. However, Mayor Byrne, well aware that in the eyes of most residents the two stand together, has vowed that the schools will open on time regardless of what happens. Her hope is to borrow $100 million against future state school aid by selling city notes to the state. She insists no more spending cuts are in order but has been presiding over an effort to renegotiate the teachers union contract.Veteran financial analysts view the kind of juggling going on in Chicago and the forced coming-to-grips with priorities as a sign of more to come.
Chicago remembers Jane Byrne, city's only female mayor (+video)
Chicago: Why is the teachers strike ongoing? (+video)
Chicago's credit rating downgraded: how its woes differ from Detroit's | 金融 |
2016-30/0358/en_head.json.gz/17767 | Was the London Whale Dimon's Fault?
John Grgurich |
Bloomberg is reporting that a yet-to-be-released internal JPMorgan Chase (NYSE: JPM) report lays at least part of the blame for last year's London Whale trading debacle at the feet of the bank's silver-haired CEO. Say it ain't so, Jamie.
To release or not to release According to Bloomberg, the report takes issue with Dimon's "oversight" of JPMorgan's chief investment office, where the trading blunder occurred.
The report is also critical of Ina Drew, who ran the chief investment office, and Doug Braunstein, the bank's former chief financial officer. Drew resigned her position in May of last year, while Braunstein was replaced as CFO at the beginning of this year.
The report was to be presented today to JPMorgan's board, which is expected to vote on whether to release it to the public tomorrow along with the bank's quarterly results. Nothing to see here, folks Undoubtedly, there's plenty of blame to go around for the London Whale, a $6 billion-plus mistake for the country's biggest bank. How exactly does a $100 billion derivatives bet go unnoticed until it's too late?
Ina Drew ran the U.K. office where Bruno Iksil, the London Whale himself, actually worked, and she already fell on her sword. Braunstein is gone as CFO. And Dimon spent 2012 doubling down on risk and shaking up top management in the wake of the botched trade. For good measure, JPMorgan is also suing Iksil himself, along with Javier Martin-Artajo, Iksil's direct supervisor, over the incident. (Neither is with the bank any longer). Dimon is famously a control freak and completely obsessed with risk. It was this obsession that kept the superbank from the worst excesses of the financial crisis. He's still, almost unquestionably, the best risk manager in banking. Does he have to take a share of the blame for the London Whale, at least as captain of the ship? Yes. But for a ship as big as JPMorgan Chase to run smoothly, it needs a tip-top crew as much as it needs a tip-top captain.
We'll have to wait and see what the report says tomorrow, if it's even released, but I'm not holding my breath over whether it has anything game changing to reveal. The London Whale took a lot of people to bring in, but it also took a lot of people to set loose.
Even given the London Whale debacle, JPMorgan's stock performed exceptionally well last year, finishing 2012 up 25.7%. And with a P/E of just under 10, the House that Dimon Built is one of the great banking bargains out there. Find out more in The Motley Fool's just-published special report on JPMorgan Chase. You'll learn where the key opportunities for superbank the lie, where its core growth will come from, and what the potential business risks, and you'll also get an analysis of its leadership team. For instant access, click here now.
John Grgurich has no position in any stocks mentioned. The Motley Fool owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. | 金融 |
2016-30/0358/en_head.json.gz/17774 | Pinnacle Airlines Files for Bankruptcy Protection
Pinnacle Airlines Corp (PNCL) filed for bankruptcy protection late on Sunday, as the U.S. regional airline fell victim to high fuel prices and dampened travel demand that has negatively impacted some of the major players in the industry.
In the past, upon facing financial trouble, United Continental Holdings Inc's (UAL) United Airlines and Delta Air Lines Inc (DAL) have taken the Chapter 11 route to cut costs and later found merger partners. AMR Corp, the parent of American Airlines, had also filed for bankruptcy late last year.
In a filing with a U.S. bankruptcy court, Pinnacle said it seeks to resolve its operational and financial difficulties through the Chapter 11 process. It also seeks to implement a turnaround plan by cutting costs and restructuring certain agreements with major airlines.
Pinnacle is a regional airline headquartered in Memphis, Tennessee that provides transportation between hubs and smaller outlying cities for passengers ticketed by major carriers.
At present, Pinnacle's primary customer is Delta Air Lines, with additional flying currently provided to United Airlines and, to a much lesser extent, US Airways.
In light of high fuel costs and weak travel demand, Pinnacle said major carriers have aggressively cut costs and decreased capacity.
"The result has been a race to the bottom, as the debtors and other regional airlines have been forced to bid ever-lower rates and accept increasingly unfavorable contract terms to win the business of major carriers," Pinnacle said in the filing.
The regional airline said it had received a commitment for $74.3 million of debtor-in-possession (DIP) financing from Delta Air Lines that would help it to carry out normal operations.
As part of the bankruptcy plan, Pinnacle said it would restructure its key operating agreements with Delta Air Lines and would wind down its operations with United Airlines.
The company said it would also look to achieve workforce cost savings by seeking wage reductions and other concessions from labor unions. The airline said it hopes that consensual agreements can be reached with the unions.
However, there is a possibility that Pinnacle could face turbulence from the unions on the question of wage cuts, which could potentially result in a protracted court battle.
In November, AMR Corp, the parent of American Airlines, filed for bankruptcy and immediately flew into trouble with unions over negotiation of labor contracts.
In March, AMR sought bankruptcy court approval to throw out labor contracts, a move that puts new pressure on pilots, flight attendants and other unionized workers to quickly agree to concessions.
Pinnacle had listed estimated assets and liabilities above $1 billion, according to a court filing.
The case is Pinnacle Airlines Corp, Case No. 12-11343, U.S. Bankruptcy Court, Southern District of New York. | 金融 |
2016-30/0358/en_head.json.gz/17799 | Ansbacher: Writing success Fiscal cliff will be avoided by limited deal: Investors
Markets should react
By David J. Lynch
November 28, 2012 • Reprints Three out of four global investors expect President Barack Obama and congressional leaders to reach a short-term agreement to avert more than $600 billion in spending cuts and tax increases scheduled to begin on Jan. 1.
Only 6 percent of investors anticipate a political impasse that would send the U.S. economy over the so-called fiscal cliff and into a recession, according to a Bloomberg Global Poll conducted on Nov. 27.
“Both sides understand the importance of striking a deal, increasing taxes and cutting entitlements,” says Richard Salerno, director of fixed income for Kovitz Management Corp. in Chicago, in a follow-up interview. “The market just wants to know the rules going forward so they can move on and begin to lift us out of our fiscal mess.”
The survey of 862 Bloomberg customers who are investors, traders or analysts found that 40 percent expect financial markets to rise after a short-term tax-and-spending deal. An additional 28 percent forecast no significant market reaction while 26 percent say markets would fall, seeing a short-term deal as delaying an unavoidable day of reckoning with the country’s finances.
On Nov. 20, Federal Reserve Board Chairman Ben S. Bernanke, who enjoys a 65 percent approval rating in the Bloomberg poll, warned that failure to reach an agreement before the end of the year “would pose a substantial threat to the recovery.”
Seeking Framework
White House and congressional negotiators are seeking to reach a framework deal by year’s end setting targets for tax- revenue increases and spending reductions. Both sides have spoken of a so-called grand bargain that would carve $4 trillion from projected deficits over the next 10 years.
Investors are skeptical such a sweeping accord can be reached, with just 7 percent calling it the most likely outcome and 50 percent predicting a package that “moderately reduces the deficit over 10 years.” An additional 38 percent expect no significant cut in the federal government’s red ink.
“The problem is fundamentally attributable to the difference in political philosophy,” said Kenichi Katsuhara, a trader at Aozora Bank Ltd. in Tokyo. “That’s why it is really hard to bridge the gap.”
Investors’ confidence that the U.S. will turn back before toppling over the fiscal cliff is part of a broader mood lift in the wake of the Nov. 6 elections.
Market Optimism
By a margin of 52 percent to 46 percent, those surveyed said they were optimistic about the impact of the president’s policies on the investment climate. And by 51 percent to 40 percent, they said his re-election was good for the financial markets. Both results represented a sharp gain from the previous Bloomberg Global Poll in September.
American investors, however, remain overwhelmingly negative about the president, with just 30 percent describing themselves as optimistic and 68 percent saying they are pessimistic.
“While the goals of the president’s policies are well- meaning, the actual impact has been and will be damaging to our economy,” says Uzi Zimmerman, portfolio manager of Ventura Capital Management LLC in Los Angeles, citing the health-care overhaul and the Dodd-Frank financial-regulation legislation.
Outside the U.S., investors endorse the president’s policies by a 65 percent to 33 percent margin, according to the quarterly survey.
That split also is reflected in approval ratings for the president and House Speaker John Boehner, an Ohio Republican. Obama draws an overall favorable rating from 55 percent of investors and unfavorable marks from 42 percent, while Boehner gets a favorable rating from 33 percent and an unfavorable response from 38 percent.
On the president’s home turf, it’s a different story. Just 26 percent of U.S. respondents say they approve of him, while 73 percent disapprove. U.S. respondents approve of Boehner by a 54 percent to 43 percent margin.
Perceptions of the health of the U.S. recovery also vary geographically. Forty-six percent of investors say the U.S. economy is improving, up from 34 percent in September. The percentage of those seeing deterioration in the rebound was almost unchanged from the previous Bloomberg poll.
Among non-U.S. investors, 53 percent say economic growth is getting better compared with 34 percent of their U.S. counterparts.
A particular bright spot is the housing market, which was the epicenter of the financial crisis and subsequent recession. Investors say they’re now certain the housing recovery is for real, with 62 percent saying they expect house prices to be higher in six months compared with 9 percent who expect a renewed decline. In September, 46 percent predicted higher prices while 14 percent said they would fall.
U.S. investor angst may be related to the likelihood of higher income-tax rates for the nation’s biggest-income earners. By a margin of 88 percent to 7 percent, investors say taxes are going up.
Respondents to the Bloomberg poll also back the president’s view that higher taxes will help rather than hurt the economy. Fifty-one percent say returning top marginal tax rates to Clinton administration levels will help the economy by shrinking the deficit while 35 percent say it will damage growth.
Only 35 percent of U.S. investors say higher taxes will help compared with 60 percent of those outside the U.S.
Won’t Hurt
“I don’t think these tax increases will hurt,” says Philippe Giordan, head of investments for KBL Monaco Private Bankers and a professor of finance at the University of Paris Dauphine. “Recovery will first come from real estate and mass consumption, which will not be affected by limiting tax cuts for the 2 percent richest.”
As of Jan. 1, a new 3.8 percent tax on unearned income designed to help pay for the president’s health-care law takes effect. Investors are taking one or more actions in response: 25 percent are taking profits; 13 percent are moving into tax- favored investments such as municipal bonds; 11 percent are selling dividend-paying shares; 9 percent are exercising stock options and 38 percent are standing pat.
Nessan O’Carroll, Mizuho Corporate Bank’s co-head of derivative products in London, says he doesn’t expect “significant reallocation of investment outside the U.S. or a significant hit to entrepreneurial efforts by wealthy people” affected by the tax increases.
The Bloomberg Global Poll was conducted by Selzer & Co., a Des Moines, Iowa-based firm. The poll has a margin of error of plus or minus 3.3 percentage points.
Markets tell
Dan Gramza: Stock market finds buyers
Bloomberg 5254Economy 1349finance 1292Barack Obama 910Ben S. Bernanke 751Ben S 613real estate 562White House 506federal government 370Ohio 313Iowa 249John Boehner 174Obama 153Federal Reserve Board 142fiscal cliff 139Congress 83Taxes 48Clinton 42derivative products 35health-care law 23Clinton administration 19Mizuho Corporate Bank 9Selzer & Co. 3Kovitz Management Corp. 1Aozora Bank Ltd. 1Ventura Capital Management LLC 1KBL Monaco 1University of Paris Dauphine 1Philippe Giordan 1Uzi Zimmerman 1Richard Salerno 1Kenichi Katsuhara 1 | 金融 |
2016-30/0358/en_head.json.gz/17929 | Goldman Sachs Executive Greg Smiths Explains Why He Is Leaving The Bank
A former Goldman Sachs executive director has launched an astonishing broadside at his company for being "callous" and "toxic" in an article explaining why he was resigning from the banking giant.
In a New York Times opinion piece described as a "wake up call" Greg Smith explains at how he arrived at his decision to resign from Goldman Sachs.
"It makes me ill how callously people talk about ripping their clients off," he wrote.
"I can honestly say that the environment now is as toxic and destructive as I have ever seen it."
He hit out at the bank's CEO Lloyd Blankfein and president, Gary Cohn, saying they presided over a decline in "moral fibre" of the bank. "Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets," he added.
His honesty was welcomed by tweeters, who said the attack was "on the mark" and brutally honest. For more twitter reaction click here This month Goldman Sachs reshuffled its board of directors in Britain. Goldman Sachs said they disagreed with Smith's views and did not think it reflected "the way we run our business." "In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves."
Byron Tau
New York Business The New York Times UK Media Goldman Sachs | 金融 |
2016-30/0358/en_head.json.gz/17936 | Banks and Congress Grapple With Stubborn, Stupid Facts
Michael Winship
Senior writer, BillMoyers.com. Former senior writing fellow, Demos. President, Writers Guild of America, East.
Facts are stubborn things, said founding father John Adams, a basic truth Ronald Reagan famously mangled at the Republican National Convention in 1988, when he tried to quote Adams and declared, "Facts are stupid things," before correcting himself.
Nonetheless, in practice, certain of our financial and political leaders seem to embrace Reagan's verbal misstep as closer to reality than Adams' original aphorism. Witness the resistance on the part of banking institutions and certain members of the congressional leadership, despite regulations demanding that they allow facts and figures to be reported, information that could keep us from the edge of yet another economic meltdown.
The March 5 Wall Street Journal reported that as the Federal Reserve prepares to release the results of the latest round of stress tests, evaluating how banks would respond in the event of another severe financial crisis, Bankers are pressing the Fed to limit its release of information -- expected as early as next week -- to what was published after the first test of big banks in 2009.
Three years ago, as the financial crisis was abating, the Fed published potential loan losses and how much capital each institution would need to raise to absorb them. This time around, the Fed has pledged to release a wider array of information, including annual revenue and net income under a so-called stress scenario in which the economy would contract and unemployment would rise sharply.
The banks cite competitive concerns but regulators "view full disclosure as critical to assuaging investor concerns about banks' capacity to withstand a market shock or economic setback." Add to the mix the banks' fear of further government interference -- when it's of the non-bailout variety, that is -- and continued resistance to the new rules imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act. In any case, they're being assured by the Fed that it won't release data "that rivals could mine for future acquisitions or other moves," such as quarterly breakouts of projected losses.
Banks also are dragging their heels over a requirement that arose from last November's G-20 meeting. Representatives of 19 of the biggest industrial and emerging nations, plus the European Union, decreed that the world's largest banks -- including eight from the United States -- must create "living wills," plans that lay out what they would do in the event of another crisis, including how banks could be stabilized or even shut down. The wills are an idea that makes perfect sense. Think of them as a business model for the apocalypse. But drafts of the banks' projected scenarios are due by June and must be completed by the end of the year, and the Financial Times reports, Independent research showed only one bank out of 29 globally considered itself to have finished a draft recovery and resolution plan, according to a survey by Ernst & Young...
Living wills form a critical part of global efforts to avoid a recurrence of the 2008 financial crisis, when governments in the US, UK and elsewhere were forced to shell out billions of dollars in taxpayer funds to rescue troubled financial institutions. Some bankers also hope that regulators will reward institutions that write credible plans that allow an easier wind up with lower capital requirements.
Off the record, bankers in the United States and the UK told the Financial Times that "cross-border disagreements among regulators were proving to be the biggest hurdle to writing comprehensive plans."
Meanwhile, Simon Johnson, the savvy MIT and former International Monetary Fund economist, warns that if the Republican Party takes over both the House and Senate, they may attempt to force the heretofore non-partisan Congressional Budget Office (CBO), which evaluates the impact of the Federal legislature's fiscal proposals, to switch to a scoring system "that would attach magical growth implications to tax cutting." At The Baseline Scenario website, Johnson writes, If you cut taxes, revenues will fall and deficits will increase. If you change the CBO's scoring process to hide this fact -- as is under consideration by leading Republicans on the House Budget Committee and the House Ways and Means Committee -- you are engaging in exactly the same sort of deception that brought down Greece.
So whether bankers or politicians, it's those at the top and not the facts that are being stubborn. And maybe they're being that other thing Ronald Reagan said facts were, too.
######
Michael Winship, senior writing fellow at Demos and president of the Writers Guild of America, East, is senior writer of the weekly public television series, Moyers & Company. Comment at www.BillMoyers.com.
Follow Michael Winship on Twitter:
www.twitter.com/MichaelWinship
Financial Crisis Business Economy Banks The Fed | 金融 |
2016-30/0358/en_head.json.gz/18071 | FUND WATCH
Dispatch From Morningstar, Part 3
For years, Oakmark manager Bill Nygren has insisted that big-company stocks hold the best value in the market, even as shares of small and midsize companies have outperformed. Could he finally be right?
By Thomas M. Anderson, July 3, 2006
Bill Nygren feels like the boy who cried wolf. For three years, the lead manager of Oakmark and Oakmark Select has said that stocks of the biggest companies offered the best value in the U.S. market. For three years, investors have waited for the wolf to come as stocks of small and midsize companies have outperformed shares of larger companies. Nygren sounded his call to arms again Friday in a speech at the Morningstar conference in Chicago. He acknowledged that "investors are tired of hearing'' him make the same call that doesn't pan out.But Nygren is sticking to his guns. He's honing in on stocks that traded at sky-high valuations in early 2000 but have dropped to dirt-cheap prices. The price-earnings ratios of most of these stocks are selling unusually close to the underlying company's growth rates. This means investors don't have to pay premium prices to own a higher quality company.
Traditionally, as a value investor, Nygren prefers to buy below-average companies with shares selling at low price-to-earnings ratios. Now he's targeting above-average companies selling at average prices. Since 2003, value investors have been able to own "great growth businesses," he says.
Nygren dubs these stocks "fallen angels." He named ten that fit the profile: Citigroup (C), Dell (DELL), Harley-Davidson (HDI), Hewlett-Packard (HPQ), Home Depot (HD), Kohl's (KSS), Texas Instruments (TXN), Time Warner (TWX), Tyco (TYC) and Wal-Mart (WMT). Nygren thinks these companies will achieve long-term earnings growth that will significantly exceed the earnings growth of companies in Standard Poor's 500-stock index and that the market will recognize that growth in the form of high stock prices in the future.
Nygren urged financial advisers attending the Morningstar conference to focus on long-term fund performance. He told them to look for companies with successful families of mutual funds rather than those with one hot fund because good managers tend to want to be around other good managers. He encouraged advisers to select managers who invest heavily in their own funds and candidly communicate their successes and failures to shareholders. And he stressed the importance of managers having a consistent investment strategy. His call on the prospects of large-company growth stocks was early, but it has been consistent. Nygren acknowledges that "there is a fine line between being early and being wrong." Investors who have stuck with Oakmark and Oakmark Select realize that patience is a virtue. For the past couple of years, these funds have lagged more than half of their peers that invest in large-company stocks. More investors are withdrawing money from Oakmark fund than are putting money in for the second year in a row, Nygren says. Yet his funds have done well over the long haul, which is why Oakmark Select (OAKLX) is in the Kiplinger 25, the list of our favorite no-load funds.
Read more about the goings-on of the Morningstar conference in our Dispatches From Morningstar, Part 1, Part 2, Part 4 and Part 5.)
More on FUND WATCH » | 金融 |
2016-30/0358/en_head.json.gz/18106 | Straddling the worlds of high finance and community activism
Jim Reynolds Jose M. Osoria/Chicago Tribune Loop Capital CEO Jim Reynolds, middle, talks with representatives of the By The Hand Club For Kids at D.S. Wentworth Elementary School in Chicago, seen here during a tour of the program on Wednesday, March 13, 2013. For a business profile story on Reynolds who grew up in Englewood and supports a program called By The Hand Club For Kids at D.S. Wentworth Elementary School. Loop Capital CEO Jim Reynolds, middle, talks with representatives of the By The Hand Club For Kids at D.S. Wentworth Elementary School in Chicago, seen here during a tour of the program on Wednesday, March 13, 2013. For a business profile story on Reynolds who grew up in Englewood and supports a program called By The Hand Club For Kids at D.S. Wentworth Elementary School. (Jose M. Osoria/Chicago Tribune) Becky Yerak, Chicago Tribune reporter
In 1972, Jim Reynolds was less than two months shy of graduating from Chicago Vocational High School, with plans of becoming a television repairman.Raised in Englewood on the city's South Side, he had been studying the trade for two years when his mother's TV set broke.
Reynolds grabbed his screwdriver, removed the back of her Zenith, looked inside and was stumped about what to do next."I didn't recognize much of anything back there," Reynolds says. "I was totally lost, and I realized I couldn't fix televisions."
That realization helped put Reynolds on a path toward earning an MBA at Northwestern University and co-founding Loop Capital, a Chicago-based global investment services firm of which he's chairman, chief executive and majority shareholder.This year, Reynolds, 58, said he'll consider the first outside investment ever for Loop, perhaps an initial public offering or private equity investment.When it comes time to find outside backers, Reynolds should have no trouble forging relationships.He counts President Barack Obama among his friends, having played basketball regularly with the former state senator at the East Bank Club and golf with him at the city's South Shore course.Reynolds is active in Chicago civic circles, including helping to lead a private, $50 million anti-violence fundraising initiative and serving on the seven-member state board that runs U.S. Cellular Field.The self-described "health nut" with a 34-inch waist on a 6-foot-3-inch frame snacks on kale chips made by Amy Rule, wife of Mayor Rahm Emanuel.Reynolds' company helps businesses and governments raise money. If a company wants equity financing, Loop might be the intermediary that sells shares to the public. A big part of Loop's operation is serving governments that want to borrow from the public to build or repair bridges, schools, streets, and water, sewage and public transportation systems. Business with the city of Chicago counts for less than 3 percent of its revenue, Reynolds said.Loop finished 15th among lead municipal bond managers in 2012, a position unchanged from the previous year, according to data tracker Thomson Reuters. Loop makes its money on fees and commissions.Loop has about 200 workers in 22 U.S. offices, including 110 in Chicago's central business district, and is coming off of a big win with Pfizer's former animal health subsidiary, Zoetis, which raised $2.6 billion in its recent initial public offering. Loop was a co-manager on the stock offering, among the biggest IPOs by a U.S. company since Facebook.Reynolds starts the year with a written list of 10 business and 10 personal priorities. A daily list helps provide discipline and structure."As an entrepreneur, you begin with a blank canvas," Reynolds said. "You can put a lot of junk on there, and if you're not careful, people can put junk on there for you."Humble startReynolds grew up around West 58th Street and South Carpenter. Though he, his parents and siblings didn't go hungry, the family just "didn't have any money," he said. His father, who attended school through the third grade, ran a fleet of jitneys, basically unlicensed cabs that served the city's South Side. His mom, who barely got beyond elementary school, was a nurse's aide.After Reynolds' plans to be a TV repairman fell through, he felt lost. High school graduation was approaching, and he hadn't applied to any colleges. A cousin visiting Chicago from Mississippi encouraged him to apply to the University of Wisconsin in La Crosse because it accepted applications through June."I filled out the application — in pencil," Reynolds said. The university accepted him."Had that television not broken on that day, I probably would have gone on to graduate and not thought about college," he said over carrot juice during a late-afternoon interview from newly expanded Loop headquarters on the 19th floor of a downtown office building.As for the cousin who recommended applying to college in Wisconsin, her daughter runs Loop Capital's equity desk.Reynolds' oldest son, 20, is a college economics major who works at the firm but is going to Argentina for a semester. His daughter, 18, a college freshman in California, has interned at Loop for the past five years and still goes into a West Coast office after classes. "She loves it," he said. "My daughter seems to have the most passion for it."A second son, 17, is in high school and plays basketball.After earning his MBA, Reynolds became a bond trader for First Chicago. He later went on to run Midwest municipal bond sales teams at PaineWebber and Merrill Lynch.Eventually, Reynolds got an itch to start his own business and in 1997 co-founded Loop Capital. It started as a municipal bond firm but has branched out into other lines of business and is among the nation's biggest minority-owned financial services firms.Public and private set-aside programs generate business for women- and minority-owned firms, he notes. "We took advantage of a lot of those because when we were starting off, the fact that a small, fledgling investment bank could underwrite bonds for the city of Chicago would not have been possible without a preference," Reynolds said.But he calls that a "Venus' flytrap" because, at some point, a business wants to vie for a bigger piece of the pie, not just for the limited portion reserved for women and minorities."You've got to be careful not to create a business that could be successful in the minority program world but not competitive when you leave," Reynolds said. "They're good for starting you up, but when you want to grow, you've got to run from them."
While not dependent on set-asides from governments, or preferences from corporations trying to be more inclusive, Loop still gets them. In 2012, Chicago-based Northern Trust Corp. picked 15 firms owned by minorities, women and disabled veterans for its stable of equity and fixed-income broker dealers. Loop was among them.'This is not a loan'
Among Reynolds' early employees was Craig Robinson, a former Morgan Stanley banker and Michelle Obama's brother. In his 2010 biography, "A Game of Character: A Family Journey From Chicago's Southside to the Ivy League and Beyond," Robinson recounted how he was going through a divorce while working at Loop.Reynolds walked into Robinson's office and gave him a $5,000 check, saying: 'This is not a loan, and don't even try to pay me back.'""Jim was a prince of a human being who had been through the divorce mill already," Robinson recounted in his book. And Robinson was also planning to leave his job at Loop for a less-lucrative job of coaching basketball.In a recent interview, Robinson said he did repay Reynolds when he got a head coaching job about six years later. Reynolds, upon receiving the check in the mail, had no recollection of giving him the money.Robinson, now head coach of Oregon State University's men's basketball team, said that he has borrowed a page from Reynolds' management playbook with his college staff and players, giving them some room to be creative and independent."Jim had a vision and recruited guys who could execute, but he always made me feel like it was my show to run," Robinson said. "A lot of managers, particularly entrepreneurial managers, can't give up that kind of control," especially in the high-finance arena.Reynolds, married for 21 years to his second wife, Sandy, lives in the Hyde Park neighborhood and also has an Arizona home. He and former Chicago Bears player Richard Dent share a skybox at Soldier Field."Here is a person who could have (one of) the first minority firms on a stock exchange," said Dent, whose Chicago-based energy company RLD Resources provides voice and data services to Loop.Reynolds said he has been friends with Obama since the president was a state senator. Reynolds learned from Obama, on the golf course, that he was going to challenge Rep. Bobby Rush for his congressional seat."I ran his campaign then — the only one he lost," said Reynolds, who also helped raise money for Obama's Senate and presidential races.Having such a high-profile friend can also bring unpleasant scrutiny. In 2008, USA Today ran a story about how Obama and Republican rival John McCain had both relied on fundraisers whose names had surfaced in federal corruption investigations."In 2003, James Reynolds, a Chicago investment banker who is a member of Obama's national finance committee, was recorded on FBI wiretaps arranging what prosecutors said was a 'sham' consulting contract with a woman they called the 'paramour' of a mayoral adviser in Philadelphia," USA Today wrote. "His firm later won $300,000 worth of city contracts."In a statement to the paper, Reynolds pointed out that, after a thorough examination, no criminal charges were ever brought against him. "I can assure you, if the U.S. attorney's office believed that (my company) or I had violated any law, they would have brought charges," he said.Today, Reynolds says again that after rigorous examination, "I was not a part of anything they wanted to investigate further."Remembering his rootsOne recent day, Reynolds showed a Tribune reporter and photographer where he grew up.A house that Reynolds lived in when he was 12 to 14 years old, on the 5800 block of South Carpenter, had busted-out windows."The building was in better condition when I lived there," he said. It had been a vibrant block with children playing sports outside. "Everybody up and down this block knew each other."Later, the family lived in two other houses nearby."You'd see people going to work, and you'd see cars in pretty much every space," he said. "It was a lower-middle-class neighborhood, but there was more commerce in the area."Reynolds then got into his own car, a 2003 BMW 745 with 97,000 miles on it, and paid a visit to an after-school program, By the Hand, at Wentworth Elementary School at 6950 S. Sangamon St.Loop makes charitable contributions amounting to seven figures a year, Reynolds said, and By the Hand is among the charities it supports.Reynolds visited with two young program participants, a boy and a girl, in the school and was heartened that both like math. "Stay with math, algebra, calculus," he told them. "That will help you excel when you get to college."Besides donating money, Reynolds brings kids to Loop offices, hires summer interns and invites them to use the Bears skybox and Loop's suite at the United Center for Bulls and Blackhawks games to show them what is possible if they work hard."I'm a big believer in the visual for these kids," Reynolds said. "They have to see it so it becomes real."In recent years, Reynolds has resigned from some cultural boards and turned down other director invitations to focus on community causes, including the mayor's anti-violence initiative.Reynolds said the city sowed seeds years ago that have resulted in killings occurring today.
"The leadership of Chicago made a decision 15 or 20 years ago that, 'We're going to develop Michigan Avenue, downtown, have a nice Gold Coast and North Side, but somehow in the neighborhoods on the South and West Side, maybe the resources aren't going to find their way there,'" Reynolds said. "Now, those kids we abandoned when they were 2, 3, 4 are now 16, 17, 18, 19 and 20."Reynolds remains on World Business Chicago, whose board consists of dozens of Chicago business leaders. Reynolds was instrumental in recruiting U.S. Cellular CEO Mary Dillon to the group.
"We had a meeting to talk about the fact that there are a lot of guys in there, mostly old white guys," Reynolds said.World Business Chicago Vice Chairman Michael Sacks and Reynolds are friends who discuss family, business, politics and sports. Sacks, whose day job is CEO of Grosvenor Capital Management, said Reynolds has "built a terrific business."In 2011, Reynolds and the head of his public finance banking group, a key part of Loop, parted ways after what Reynolds had called a disappointing year for the firm. Reynolds characterized 2012 as a "great" year.Reynolds is also one of three Emanuel appointees to the Illinois Sports Facilities Authority, along with former LaSalle Bank CEO Norm Bobins and Mesirow Financial CEO Richard Price. All three were on the losing end of an effort to oppose Gov. Pat Quinn's selection of Kelly Kraft, a former TV reporter, to become CEO of the authority.Reynolds said he still considers Quinn "a great friend and a great supporter, as I am of him." As for Kraft, Reynolds said she's a "hard worker" who is "dedicated" and doing "a really good job.""The first thing she did that impressed me is she called me" after she officially got the job, Reynolds said. The two had coffee, and she now calls him "a wonderful mentor."Their cordial relationship shows that professionals can move on from conflict with respect, he says.Still, he's unlikely to join a board unless he feels that he has something to contribute.Says Reynolds: "There's not a room I'm in or a board I sit on that my presence isn't felt and that my opinion isn't stated."[email protected] @beckyyerakJim Reynolds chairman, CEO and majority owner of Loop Capital.Middle name: None, officially. "They forgot to put it on my birth certificate. It's supposed to be Sylvester, but it never made it on there, which is fine with me."Hobbies: Works out daily, including in his home gym. "Every week I hit every body part a couple of times. I don't know how you function without a gym."Office conversation-starter: A photo of Reynolds with former Pennsylvania Gov. Ed Rendell, athletes Julius Erving and Franco Harris, and former Penn State football coach Joe Paterno and his wife, Sue.Early hours: While both sat on a Bloomberg TV panel hosted by Betty Liu, Mayor Rahm Emanuel talked about Reynolds' concern for poor children in the city. "I know it keeps him up at night, because he is often communicating with me in the middle of the night about that," Emanuel said. Reynolds told the Tribune that he'll text the mayor at 5 a.m. or even 4 a.m. — and "he'll text you right back."
Illinois Governor
Loop Capital CEO Jim Reynolds meets after-school kids | 金融 |
2016-30/0358/en_head.json.gz/18934 | SEC Enforcement Roundup: Hedge Fund Manager Fined $44 Million in China Scheme SEC also hits securities attorney for forgery; more
Among recent enforcement actions taken by the SEC were charges against a Miami-based entrepreneur for defrauding investors against a hedge fund manager for trading illegally in Chinese stocks, which cost the manager and his firms $44 million in disgorgement and penalties; charges against a Florida-based securities lawyer for forging attorney opinion letters on microcap stocks; and charging a New York-based fund manager for running fraudulent trading schemes, as well as charges against a New Jersey-based cosultant to Chinese reverse merger companies for securities law violations.
Hedge Fund Manager Pays $44 Million over Illegal Chinese Stock Trades
Sung Kook “Bill” Hwang of Tenafly, N.J., the founder and portfolio manager of Tiger Asia Management and Tiger Asia Partners, two New York-based hedge funds, was charged by the SEC with conducting a pair of trading schemes involving Chinese bank stocks that made $16.7 million in illicit profits.
The SEC also charged Raymond Y.H. Park, of Riverdale, N.Y., for his roles in both schemes as the head trader of the two hedge funds involved: Tiger Asia Fund and Tiger Asia Overseas Fund. In a parallel action, the U.S. Attorney’s Office for the District of New Jersey also announced criminal charges against Tiger Asia Management.
According to the SEC, Hwang committed insider trading by short selling three Chinese bank stocks based on confidential information he and his firms received in private placement offerings. Hwang and his firms then covered the short positions with private placement shares purchased at a significant discount to the stocks’ market price.
According to the SEC’s complaint filed in federal court in Newark, N.J., from December 2008 to January 2009, Hwang and his advisory firms participated in two private placements for Bank of China stock and one private placement for China Construction Bank stock. Before disclosing material nonpublic offering information, the placement agents required wall-crossing agreements from Park and the firms to keep the information confidential and refrain from trading until the transaction took place.
Despite agreeing to those terms, Hwang ordered Park to make short sales in each stock in the days prior to the private placement. Hwang and his firms illegally profited by $16.2 million by using the discounted private placement shares they received to cover the short sales they had entered into based on inside information about the placements.
The SEC further alleges that on at least four occasions from November 2008 to February 2009, Hwang and his firms, with Park’s assistance, attempted to manipulate the month-end closing prices of Chinese bank stocks publicly listed on the Hong Kong Stock Exchange. These stocks were among the largest short position holdings in the hedge funds’ portfolios.
The manipulation was designed to lower the price of the stocks and increase the value of the short positions, thus enabling Hwang and Tiger Asia Management to illicitly collect higher management fees from investors. The more assets the hedge funds had under management, the greater the management fee that Tiger Asia Management was entitled to collect.
So Hwang directed Park to place losing trades; this would depress the stock prices and inflate the calculation of the management fees. Hwang and Tiger Asia Management made approximately $496,000 in fraudulent management fees through this scheme.
Hwang and his firms have agreed to pay $44 million to settle the SEC’s charges. The settlements, subject to court approval, require Hwang, Tiger Asia Management, and Tiger Asia Partners to collectively pay $19,048,787 in disgorgement and prejudgment interest. Each has agreed to pay a penalty of $8,294,348 for a total of 24,883,044.
Park also agreed to pay $39,819 in disgorgement and prejudgment interest, and a penalty of $34,897. With the exception of Tiger Asia Management, the defendants neither admit nor deny the charges.
Consultant to Chinese Reverse Merger Companies Charged
Huakang “David” Zhou, a New Jersey-based consultant, was charged by the SEC with violating securities laws and defrauding some investors while helping Chinese companies gain access to the U.S. capital markets.
The SEC alleges that Huakang “David” Zhou and his consulting firm Warner Technology and Investment Corp. located more than 20 private companies in China to bring public in the U.S. through reverse mergers, and then committed various securities laws violations in the course of advising those companies and later assuming operational roles at some of them.
After earning millions of dollars in consulting fees, Zhou and his firm have left several failed Chinese companies in their wake in the U.S. markets including China Yingxia International, whose registration was revoked after the company collapsed amid fraud allegations. Zhou’s son as well as a number of other individuals and firms have previously been charged with misconduct related to China Yingxia.
The SEC alleges that the elder Zhou engaged in varied misconduct ranging from nondisclosure of certain holdings and transactions to outright fraud. For instance, Zhou failed to disclose to investors in one company that he engaged in questionable wire transfers of their money to evade Chinese currency regulations, and he orchestrated an elaborate scheme to meet the requirements necessary to list a purported Chinese real estate developer on a national securities exchange. Zhou also stole $271,500 in investment proceeds from a capital raise to make mortgage payments on a million-dollar condo where his son lives in New York City.
According to the SEC’s complaint filed in U.S. District Court for the Southern District of New York, Warner Technology and Investment Corporation advertises itself on its website as the first U.S. consulting firm that successfully brought a Chinese private company public in the U.S. through a reverse merger with an OTCBB trading company.
Zhou’s misconduct occurred from at least 2007 to 2010. After completing the reverse mergers, Zhou strongly influenced or even directed many of his clients’ newfound U.S. presence and obligations as public companies. He opened and controlled U.S. bank accounts for many of his clients to pay for services rendered and receive any proceeds from fundraising done in the U.S. This enabled Zhou to control how and when offering proceeds were wired to China, and gave him the ability to direct money to himself purportedly to collect fees or repay loans made to the companies.
The SEC alleges that while Zhou raised $2 million for client American Nano Silicon Technologies, he concealed from investors that their money would be put at risk due to the circuitous way he purportedly sent investment proceeds to China. Unknown to investors, Zhou controlled a U.S. bank account for the issuer and sent hundreds of thousands of dollars by wire transfer to multiple individuals in China who had no apparent affiliation with American Nano. The individuals were to then wire the money to the company’s CEO, who would transfer the money to the company’s Chinese bank account. Zhou failed to disclose to investors that he engaged in these questionable wire transfers to evade Chinese currency regulations.
Although investment proceeds were in part used for seemingly legitimate company expenses in the U.S. such as to pay accountants, the transfer agent, and an investment bank, Zhou used some of the money as his own. In addition to the $271,500 of investor money he used for mortgage payments, he paid his wife a “refund” of $40,000 for undisclosed reasons and wrote a check for $5,824 to “cash.”
The SEC alleges that Zhou engaged in manipulative trading as part of his scheme to list China HGS Real Estate on a national exchange, including matched orders to meet the $4 minimum bid required for listing. Through gifts of stock and a purportedly private sale to a broker-dealer, Zhou schemed to artificially create a sufficient number of shareholders to meet a listing requirement to have more than 400 “round lot shareholders” with 100 shares or more. The scheme succeeded, and Zhou’s client was approved for listing on the exchange.
According to the SEC’s complaint, Zhou engaged in unregistered sales of securities for several clients, including a $5 million offering to roughly 85 Chinese-Americans living in several U.S. states. Zhou and his firm also improperly assisted with securities offerings for two clients while not registered as broker-dealers, and they aided and abetted violations by other unregistered brokers.
The SEC’s complaint against Zhou and Warner Technology and Investment Corp. alleges violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Sections 10(b), 13(d), 15(a), and 16(a) of the Securities Exchange Act of 1934, and Rules 10b-5, 13d-1, 13d-2, and 16a-3. It further charges Zhou for control person liability and aiding and abetting violations of Section 10(b) and 15(a) of the Exchange Act, and Rule 10b-5(b).
Securities Lawyer Charged with Forging Attorney Opinion Letters
The SEC has charged securities lawyer Guy Jean-Pierre of Pompano Beach, Fla., also known as Marcelo Dominguez de Guerra, with issuing fraudulent attorney opinion letters that resulted in more than 70 million shares of microcap stock becoming available for unrestricted trading by investors.
Jean-Pierre was banned by the Pink Sheets (now OTC Markets Group) in April 2010 from issuing attorney opinion letters–required from a licensed and duly authorized securities lawyer to facilitate the transfer of restricted microcap shares on the over-the-counter markets–due to “repeated missing information and inconsistencies” about the issuers and his lack of due diligence in his past letters.
However, a ban apparently was not enough to stop Jean-Pierre from conducting business as usual. The SEC alleges that he has since engaged in a scheme to continue writing and issuing attorney opinion letters in the name of his niece by applying her signature without her consent, and even formed a new company to do so: Complete Legal Solutions. He misrepresented that his niece conducted the legal work allegedly performed, when he never requested any such work of her and she was not paid for such work.
According to the SEC’s complaint filed in U.S. District Court for the Southern District of New York, within two weeks of his ban, Jean-Pierre hatched his plan to continue issuing attorney opinion letters through Complete Legal and his niece’s identity.
He told his niece, a licensed attorney who was looking for work at the time, about his work issuing attorney opinion letters, and offered to pay her to assist him. He suggested they form Complete Legal and asked her to send him three copies of her signature and a copy of her driver’s license. She complied, with the understanding this information was needed to incorporate Complete Legal.
Instead, the SEC alleges that Jean-Pierre continued to issue attorney opinion letters using Complete Legal and his niece’s identity. Each letter contained fraudulent statements and falsely represented his niece as the signatory. Jean-Pierre’s niece did not write any of the letters and did not make the representations concerning the issuers.
Jean-Pierre fabricated attorney opinion letters on Complete Legal letterhead for at least 11 companies that traded publicly on the Pink Sheets. Certain letters resulted in Pink Sheet issuers being granted the improved status of having adequate current information in the public domain under Rule 144(c)(2) of the Securities Act of 1933. This status kept the issuers from being tagged on the Pink Sheets’ website with a red “STOP” sign near its ticker symbol with the moniker of “OTC Pink No Information” and a large warning that the company “may not be making material information publicly available.”
According to the SEC’s complaint, adequate current public information about an issuer must be available for certain selling security holders to comply with the Rule 144 safe harbor allowing companies to issue unregistered securities pursuant to Section 4(1) of the Securities Act. Jean-Pierre falsely issued letters bearing his niece’s signature to transfer agents opining that restrictive legends could be legally removed from either preexisting stock certificates or newly issued stock certificates pursuant to Rules 144 or 504 of the Securities Act.
The SEC is seeking disgorgement of ill-gotten gains with prejudgment interest and financial penalties, a permanent injunction, and a bar from participating in the offering of any penny stock pursuant to Section 20(g) of the Securities Act. Its investigation is continuing.
Miami Entrepreneur Charged with Defrauding Investors
A prominent Miami-based entrepreneur was charged by the SEC with defrauding investors by grossly exaggerating the financial success of his company, InnoVida, which purportedly produced housing materials to withstand fires and hurricanes. Claudio Osorio stole nearly half the money raised from investors to pay the mortgage on his multimillion-dollar mansion and other lavish living expenses.
The agency also charged InnoVida’s chief financial officer Craig Toll, a certified public accountant living in Pembroke Pines, Fla., who helped Osorio create the false financial picture of InnoVida. In a parallel action, the U.S. Attorney’s Office for the Southern District of Florida also announced criminal charges against Osorio and Toll.
According to the SEC’s complaint filed in U.S. District Court for the Southern District of Florida, the scheme began in 2007 and lasted until 2010. InnoVida was purportedly in the business of manufacturing building panels used to construct houses and other structures resistant to fires and hurricanes. The company entered bankruptcy in 2011.
The SEC alleges that Osorio, a former Ernst & Young Entrepreneur of the Year award winner, raised at least $16.8 million from investors by portraying InnoVida Holdings LLC as having millions of dollars more in cash and equity than it actually did. Osorio sometimes solicited investors one-on-one at political fundraising events. To add an air of legitimacy to his company, Osorio assembled a high-profile board of directors that included a former governor of Florida, a lobbyist, and a major real estate developer.
To induce funds from investors, Osorio and Toll allegedly produced false pro forma financial statements. A pro forma financial statement for March 31, 2009, stated that InnoVida had more than $35 million in cash and cash equivalents and more than $100 million of equity. A pro forma financial statement for Dec. 31, 2009, listed more than $39 million in cash and cash equivalents and $122 million of equity. In reality, the company’s bank accounts held less than $185,000 on March 31, 2009, and less than $2 million on Dec. 31, 2009.
Toll failed to review all of InnoVida’s bank account statements when he drafted financial statements. Instead, he accepted Osorio’s misrepresentations that InnoVida had these assets in an account to which Toll did not have access.
The SEC alleges that Osorio offered bogus share prices to prospective investors based on false valuations. He told one investor that InnoVida was valued at $250 million, and then a week later told a different investor that the company was worth $50 million. The latter investor purchased $100,000 of Osorio’s stake in the company for five cents per share.
The SEC further alleges that Osorio lied to an investor when he said that he had personally invested tens of millions of dollars into InnoVida. He had in fact made no such investment.
Osorio also enticed an investor to increase an investment in InnoVida by touting a supposed $500 million deal he was negotiating with a Middle Eastern sovereign wealth fund that would significantly benefit InnoVida investors. Osorio went so far as to create a document showing the investor how much he would make once the sovereign wealth deal closed and was funded.
Based on Osorio’s misrepresentations, the investor was able to raise approximately $700,000 and later borrowed $3 million from a close friend. However, no sovereign wealth buyout deal ever materialized, and InnoVida investors never benefited as promised.
The SEC alleges that besides his Miami Beach mansion, Osorio illegally used investor money to pay for his Maserati, a Colorado mountain retreat home, and country club dues. He stole at least $8.1 million in investor funds. The complaint seeks disgorgement of ill-gotten gains, financial penalties, and injunctive relief against InnoVida, Osorio, and Toll to enjoin them from future violations of the federal securities laws. The complaint also seeks an order barring Osorio and Toll from serving as an officer or director of a public company.
Fund Manager Charged with Running Fraudulent Trading Schemes
Steven Hart, a New York-based fund manager, was charged by the SEC with conducting a pair of illegal trading schemes to financially benefit his investment fund Octagon Capital Partners LP.
The SEC alleges that Hart made $831,071 during a four-year period through illicit trading while also working as a portfolio manager and employee at a New Jersey-based firm that served as an adviser for several affiliated investment funds. In one scheme, Hart illegally matched 31 premarket trades to benefit his own fund at the expense of one of his employer’s funds. In the other scheme, he conducted insider trading in the securities of 19 issuers based on nonpublic information he learned in advance of their offering announcements. Furthermore, he signed two securities purchase agreements falsely representing that he had not traded the issuer’s securities prior to the public announcement of the offerings in which he had been confidentially solicited to invest.
According to the SEC’s complaint filed in U.S. District Court for the Southern District of New York, Hart conducted his schemes from 2007 to 2011. He caused Octagon to purchase stock in small, thinly traded issuers at the going market price so that he could sell the same stock the following day to his employer’s fund at a price substantially above the prevailing market price. Each of the sales from Octagon to the employer’s fund occurred in premarket trading; that way Hart was able to ensure that the trades matched. Later that same day or within a few days of the matched trades, Hart directed the employer’s fund to sell the recently acquired stock on the open market at a loss. This scheme generated $586,338 in ill-gotten gains for Octagon.
The SEC’s complaint also says Hart was confidentially solicited by 19 issuers to invest in securities offerings where he expressly agreed to go “over-the-wall” and keep confidential the information he received and not trade on it. Nevertheless, Hart traded for Octagon, bringing in $244,733 in more ill-gotten gains, on the basis of material nonpublic information about the offerings. Hart’s illegal trades involved PIPE offerings, registered direct offerings, and confidentially marketed public offerings.
The SEC alleges that, to induce two issuers to sell securities to his fund, Hart signed securities purchase agreements falsely representing that Octagon had not traded the issuers’ securities after he had been solicited. Despite going “over-the-wall” during the solicitations conducted by the two issuers, Hart directed short sales of these issuers’ securities and obtained insider trading profits. He subsequently signed the securities purchase agreements misrepresenting that he hadn’t traded in their securities in the days leading up to the public announcements about the offerings.
Without admitting or denying the allegations, Hart has agreed to pay more than $1.3 million to settle the SEC’s charges: $831,071 in disgorgement, $103,424 in prejudgment interest, and a $394,733 penalty. He also consented to the entry of a judgment enjoining him from future violations of the respective provisions of the Securities Act, Exchange Act and Advisers Act. The settlement is subject to court approval. | 金融 |
2016-30/0358/en_head.json.gz/19404 | Hungary and the IMF
Conditionality
Watch video summary
Anne-Marie Gulde, Senior Advisor, European Department
Press Release: IMF Executive Board Approves €12.3 Billion Stand-By Arrangement for HungaryNovember 6, 2008
Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. Modify your profile Transcript of a Press Conference on the Executive Board Approval of a Stand-by Arrangement for Hungary, With Anne-Marie Gulde, Senior Advisor in the IMF's European Department and Mission Chief for Hungary, James Morsink, Division Chief in the European Department
With Anne-Marie Gulde, Senior Advisor in the IMF's European Department and Mission Chief for Hungary
James Morsink, Division Chief in the European Department
Washington, D.C., Thursday, November 6, 2008
MS. GAVIRIA: I am Angela Gaviria with the IMF's Press Office. Welcome to this conference call on the IMF's approval of a Stand-By Arrangement for Hungary. Now let me introduce the speakers. We have Anne-Marie Gulde, who is Senior Advisor in the European Department and the Mission Chief for Hungary. And we also have James Morsink, who is Division Chief in the European Department. Anne-Marie will make some brief points to start and then they both will be happy to take your questions. Anne-Marie?
MS. GULDE: Good afternoon. I want to give you some background on the situation in Hungary. As you know, Hungary was among the first emerging-market countries affected by the current global financial crisis. In response to this situation, the Hungarian authorities developed a strong program to restore financial-market stability and economic growth, and the Executive Board of the IMF supported this program by approving the Stand-By Arrangement for Hungary in the amount of 12.3 billion euros.
The economic program rightly focuses on the fiscal and banking sectors, which were the two key areas of vulnerability at the outset of the difficulties. In the fiscal sector, a necessary reduction in the size of the public sector through lower expenditures will ease the country's short-term financing pressures and bring down the high levels of debt. In the short-term, the rollover of debt will become easier and debt will become more sustainable in the medium-term. The fiscal measures are also in line with the country's goal to slowly reduce the large size of its public sector and to provide more room for private activities to grow. In deciding on the necessary adjustments, the authorities have been mindful of the social impact, and on the pension measures that are included in the program, low-income pensioners are excluded from cuts of benefits.
The second pillar of the program are decisive measures in the banking area. They include a preemptive recapitalization of eligible banks and a strengthening of the supervisor and crisis-management abilities of the Hungarian supervisory agencies. Those steps will ensure that banks' capital in Hungary remains high and that the supervisory authorities are always well prepared to recognize risks and take necessary preemptive measures should vulnerabilities occur.
The nature and the strength of the measures under the authorities' program justify the large level of access under the IMF's arrangement. The authorities' commitment has also helped gathering broad support for their program by the international community. So in addition to the IMF, major contributions to the overall financing packages are committed by the European Union and the World Bank.
We are all aware that the road ahead is challenging, yet the measures in the program will facilitate a hopefully rapid return of investor confidence in the Hungarian market and confidence that they should allow the country to resume on its convergence and growth path.
MS. GAVIRIA: Thank you, Anne-Marie. Now we are ready to take questions.
QUESTIONER: Thanks very much for that. I'm not sure if I got all of the details. I wonder if you could elaborate on what exactly Hungary has decided to do with its public pensions. And also, how large exactly is its public sector relative to its GDP? And what kind of specific targets does it have on reducing its public debt?
MS. GULDE: Mr. Morsink will take this question.
MR. MORSINK: Three points. First, on the size of the public sector, it's about 45 to 50 percent of GDP, which is much larger than other countries in the region. Secondly, with regard to how they're going to go about reducing their public debt, right now public debt is about two-thirds of GDP, about 66 percent of GDP, and so the government has set a target of a fiscal deficit in 2009 of about 2-1/2 percent of GDP. This is essentially consistent with a primary surplus of about 2 percent of GDP which will help reduce public debt over time.
The third question you had was about the composition of the measures to reduce expenditures, and there is a broad range of measures that include a wage freeze and a cut in the 13-month bonus for public-sector employees. Back in 2003 a 13-month salary was introduced for the public sector and this is now being suspended for 2009. And so that will result in a nominal wage cut for public-sector workers.
In the pension sector, essentially the 13-month bonus is being eliminated for higher-income pensioners. In other words, the 13-month pension for those who have pensions up to 80,000 forints will be preserved. Then there is also across-the-board expenditure restraint. So the combination of those measures yields a reduction in expenditure as a share of GDP of about 2 percentage points between this year and next year.
QUESTIONER: I was wondering if you could just talk a little bit more broadly. Are you seeing some impact in the market since this deal was announced? How quickly do you think Hungary can stabilize itself if it sticks to this program? I'm talking generally, more confidence in Hungary. What are the sorts of things that you think are going to be tangible signs that the country is now on a more surer footing?
MS. GULDE: I think one has to look at various elements. One question is clearly what is happening to the exchange rate. Do you see an exchange rate overshooting? And we have seen some very encouraging sign of the exchange rate stabilizing. Another source of vulnerability has been the issue that there is a bank that's regionally active. We have seen that the stock price of that bank had recovered, there has been renewed pressure, and I think, in terms of stabilization, we would look toward a fuller stabilization of the situation of that bank.
In addition, very clearly there is the question of what is happening in the treasury bill market. The difficulties originated in the treasury bill market, where several auctions were undersubscribed and the yield was very high. The authorities have been very careful in dealing with these auctions. They have reduced the supply. So a return to more normal market conditions where the authorities would feel confident that they can rollover the maturing debt would be another way where we would see the return of confidence.
On how quickly we should expect that, I think the reaction to the initial announcement of the program has been very strong and a lot clearly depends on confidence. So we would think that, barring big problems in the global markets and in home countries of banks that are operating in Hungary, a good-case scenario could be that this happens in weeks.
QUESTIONER: Is there any sort of further money in the bag from any other European countries?
MS. GULDE: As to bilateral money?
QUESTIONER: Yes.
MS. GULDE: We are not sure. Nothing has been committed. But there are definitely discussions with the EIB and the EBRD that already are active in Hungary and they're looking at potentially increasing their commitment to the country.
QUESTIONER: I wondered if you could say something about conditionality. As these loans start to come in, people will be assessing whether the conditions attached to IMF loans are less strict and more focused than it was the case under the Asian crisis. When you look at these conditions overall, in what way would you say that they are more focused and more relevant than the conditions that the Fund was asking for a decade ago?
MR. MORSINK: I would say that conditionality in this case is focused on the key measures that are required to stabilize the situation in the short-run. So that means that we focus on the government deficit and the banking system. Those are the two main areas that we have performance criteria, in terms of the submission of the bank support package to parliament, which will happen in the next few days, as well as in terms of the strengthening of the supervisory powers of the supervisory agency.
More generally, I would emphasize that this economic program and the set of policies that underpin it was developed by the government, by the central bank, by the authorities generally, and that therefore we feel very confident about its implementation because they have very strong ownership of this program.
QUESTIONER: There is also some conditionality on inflation targeting. Is that correct?
MR. MORSINK: Yes, that's absolutely right. I should have mentioned that too. There's what's called a consultation clause on the projection for inflation. So inflation is projected to come down from its current level of about 5-3/4 percent to about 4 percent by the end of 2009, and eventually to the inflation target of 3 percent. So, yes, there is also conditionality on that.
QUESTIONER: I wanted to follow-up on the exchange rate. Is there any sort of policy shift when it comes to the exchange rate at all?
MS. GULDE: You're talking about a change in the exchange rate regime?
QUESTIONER: Right.
MS. GULDE: No. We think at this stage that a flexible exchange rate is the most appropriate regime for Hungary. There are a lot of global changes, a lot of domestic changes so any kind of band or limit would create a vulnerability of reserve loss for the country, and so under the program we expect that the exchange rate will remain market determined.
MS. GAVIRIA: If we don't have any more questions, we end the conference call here. Thank you all for participating. | 金融 |
2016-30/0358/en_head.json.gz/19510 | Ralph Lauren Corporation Declares Quarterly Dividend
Ralph Lauren Corporation (NYSE:RL) announced that its Board of Directors has declared a regular quarterly dividend of $0.
Ralph Lauren Corporation (NYSE:RL) announced that its Board of Directors has declared a regular quarterly dividend of $0.45 per share on Ralph Lauren Corporation Common Stock. The dividend is payable on April 11, 2014 to shareholders of record at the close of business on March 28, 2014. ABOUT RALPH LAUREN Ralph Lauren Corporation (NYSE: RL) is a leader in the design, marketing and distribution of premium lifestyle products in four categories: apparel, home, accessories and fragrances. For more than 46 years, Ralph Lauren's reputation and distinctive image have been consistently developed across an expanding number of products, brands and international markets. The Company's brand names, which include Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Collection, Black Label, Blue Label, Lauren by Ralph Lauren, RRL, RLX, Ralph Lauren Childrenswear, Denim & Supply Ralph Lauren, Chaps and Club Monaco, constitute one of the world's most widely recognized families of consumer brands. For more information, go to http://investor.ralphlauren.com. This press release and oral statements made from time to time by representatives of the Company contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding, among other things, our current expectations about the Company's future results and financial condition, revenues, store openings, margins, expenses and earnings and are indicated by words or phrases such as "anticipate," "estimate," "expect," "project," "we believe" and similar words or phrases. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from the future results, performance or achievements expressed in or implied by such forward-looking statements. Forward-looking statements are based largely on the Company's expectations and judgments and are subject to a number of risks and uncertainties, many of which are unforeseeable and beyond our control. The factors that could cause actual results to materially differ include, among others: the loss of key personnel; the impact of global economic conditions and domestic and foreign currency fluctuations on the Company, the global economy and the consumer marketplace and our ability to access sources of liquidity; our ability to successfully implement our anticipated growth strategies, to continue to expand or grow our business and capitalize on our repositioning initiatives in certain merchandise categories; changes in our effective tax rates or credit profile and ratings within the financial community; our ability to secure the technology facilities and systems used by the Company and those of third party service providers from, among other things, cybersecurity breaches, acts of vandalism, computer viruses or similar events; changes in the competitive marketplace and in our commercial relationships; risks associated with changes in social, political, economic and other conditions affecting foreign operations or sourcing (including tariffs and trade controls, raw materials prices and labor costs); risks associated with our international operations, such as violations of laws prohibiting improper payments and the burdens of complying with a variety of foreign laws and regulations, including tax laws; risks arising out of litigation or trademark conflicts; our ability to continue to maintain our brand image and reputation; the potential impact on our operations and customers resulting from natural or man-made disasters; and other risk factors identified in the Company's Annual Report on Form 10-K, Form 10-Q and Form 8-K reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Prev
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2016-30/0359/en_head.json.gz/18 | Bush: Bail Out Economy, or Face 'Long and Painful Recession'
Congressional negotiators emerged today and announced they had reached a deal in principal on President Bush's $700 billion proposal to buy up a mountain of Wall Street debt that has threatened to torpedo the U.S. economy.
Led by Sen. Chris Dodd, D-Conn., nine members of the House and Senate announced that the deal was struck on several key items that would form the framework for the agreement the Bush administration has argued was needed immediately.
Dodd told reporters they had reached a"...Full Story | 金融 |
2016-30/0359/en_head.json.gz/569 | Share this:FacebookTwitterGoogleWhatsAppEmailCopy Google’s stock price breaks $800 for 1st time
February 19, 2013 | 3:38pm
SAN FRANCISCO — Google’s stock price topped $800 for the first time Tuesday amid renewed confidence in the company’s ability to reap steadily higher profits from its dominance of Internet search and prominence in the increasingly important mobile device market.
The milestone comes more than five years after Google’s shares initially hit $700. Not long after breaking that barrier in October 2007, the economy collapsed into the worst recession since World War II and Google’s stock tumbled into a prolonged malaise that eventually led to a change in leadership.
Besides enriching Google’s employees and other shareholders, the company’s resurgent stock is an implicit endorsement of co-founder Larry Page. He replaced his managerial mentor, Eric Schmidt, as CEO in April 2011. Google’s stock has risen by about 35 percent since Page took over. By contrast, the benchmark Standard & Poor’s 500 index has climbed by 15 percent over the same stretch. Most of Google’s gains have occurred in the past seven months.
In morning trading, Google’s stock was at $801.99, up 1.2 percent, or $9.10.
The significance of crossing the $800 threshold is largely symbolic. If Google had its way, the stock wouldn’t even be priced near these levels. The company, which is based in Mountain View, Calif., had hoped to split its stock last year in a move that would have at least temporarily halved the trading price by doubling the total number of outstanding shares. But the proposed stock split was put on hold until Google resolves a shareholder lawsuit alleging that the stock split unfairly cedes too much power to Page and fellow co-founder Sergey Brin. Page and Brin have been the company’s largest shareholders since its inception. A trial on the lawsuit is scheduled to begin June 17 in a Delaware state court.
Assuming more investors wouldn’t have bought the stock had it split, the company’s market value probably wouldn’t have changed from its current level of about $265 billion.
There is little dispute among analysts that Google appears well positioned for many years of prosperity. The reasons: Its Internet search engine remains the hub of the Web’s biggest marketing network; its YouTube video site has established itself as an increasingly attractive advertising vehicle; and its free Android software is running on more than 600 million smartphones and tablet computers to create even more opportunities to sell ads.
The lower prices attached to mobiles ads have raised recurring concerns on Wall Street about the decline in the average rate paid for ads that run alongside Google’s search results. The company, though, is trying to reverse the trend with upcoming changes to its ad system that will prod more marketers to buy mobile ads when they are creating campaigns for desktop and laptop computers.
Opinions about Google weren’t as upbeat a few years ago. Although Google weathered the Great Recession better than most companies, its revenue growth slowed and its stock plummeted to as low as $247.30 near the end of 2008.
Things looked so bleak in 2009 that Google took the rare step of re-pricing stock options that had been doled out to its employees to give them a chance to make more money when the shares rebounded. The program allowed Google workers to swap their old stock options for new ones with an exercise price of about $308.
Even after the economy snapped out of the recession toward the end of 2009, Google’s stock began to lag the rest of the market. Investors began to wonder if the company was losing its competitive age as it morphed from a hard-charging startup to giant organization with thousands of employees working in dozens of offices scattered around the world.
At the same time, Facebook was emerging as the Internet’s fastest growing company in a meteoric rise. The social networking company had some people convinced it would eventually become a more important advertising vehicle than Google’s search engine.
Perceptions have changed since Page became CEO. Under Page’s leadership, Google has streamlined its decision-making and operations while closing dozens of services. It established its own toehold in social networking with the 2011 introduction of Google Plus.
Meanwhile, Facebook Inc. has lost much of the luster that made its initial public offering of stock one of the biggest in US history. Since going public at $38, Facebook’s stock has sunk 25 percent.
By contrast, Google’s stock has never slipped below its August 2004 IPO price of $85.
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2016-30/0359/en_head.json.gz/572 | Why in the World is Dov Charney on the Cover of Portfolio?
By John Koblin • 10/16/08 5:12pm At a moment when the market is crashing and we’re still trying to make sense of why the Dow goes up 900 points one day and down 700 another, when The Washington Post, The New York Times and The Wall Street Journal cover the crisis on their front pages daily, and a once-in-a-lifetime story lands in your lap, is there a monthly magazine better positioned than Portfolio to break this story down? The Condé Nast business magazine has been publishing for 18 months, and those rocky staffing issues have—for the most part—been put to bed. So, now it’s game time! Lehman Brothers went down a month ago, the story hasn’t stopped for a second, and there has been plenty of time to flood the zone. So, what’s the November cover story? A profile of Dov Charney, the American Apparel chief, by Claire Hoffman, a writer who seems to be the Boswell of sexed-up executives. It’s an understatement to say that it’s perplexing that the magazine would so willfully ignore the crisis with its cover story. That’s a charitable assessment of the November issue; a less generous one is to call it the biggest blunder in the magazine’s 18-month history.
This would be the case even we hadn’t read about Dov Charney many times before. Joanne Lipman, the magazine’s editor, said that Dov Charney graces the cover because of the brisk business American Apparel did in the third quarter 2008, and because of his importance to the presidential election. "American Apparel is a huge retail story," said Ms. Lipman in an e-mailed statement sent through a Portfolio spokeswoman. "Its sales are up 24% for the 3rd quarter at a time when the entire retail industry is in deep decline‹ plus Dov Charney (the owner) is out there on the eve of the biggest election in decades talking provocatively about the immigration issue."
The spokeswoman said that the cover decision belongs to Ms. Lipman. Ms. Lipman continues in the email: "The bulk of the inside of the magazine is about the financial crisis, including three major pieces by Jesse Eisinger and John Cassidy, including the definitive piece on the ‘patient zero’ of the crisis, the JP Morgan team that invented credit default swaps."
Actually, the bulk of the inside of the magazine isn’t about the financial crisis.
In the November issue, there are three pieces pegged to the crisis: Two by Mr. Eisinger, and one by Mr. Cassidy. In total, they add up to roughly 6,600 words.
The Dov Charney profile alone is 6,000 words, not including the roughly 22,000 other words published that include a profile of billionaire David Koch, a two-page spread on James Bond and an 11-page spread ranking which billionaires have donated the most to charitable causes.
Ms. Lipman also said her statement, "We’ve been ahead of the crisis for more than a year."
Which is true. The magazine ran a piece last May by Jesse Eisinger called, "The $300 Trillion Time Bomb" that was one of the earliest pieces that predicted the dangers of credit default swaps.
But does that give the magazine a pass?
In her editors’ letter this month, you get the impression that’s how Ms. Lipman feels:
When historians study the Wall Street crisis of 2008, they’ll ask, How did this happen? In the immediate aftermath of the banking meltdown, a sense of shock was on ostentatious display…Give us a break. It’s infuriating to see people who should know better expressing surprise. This train was coming for well over a year. Wall Street and regulators should have seen it coming. Condé Nast Portfolio readers certainly did.
Filed under: 2008 Financial Crisis, Dov Charney, Joanne Lipman, Portfolio, Si Newhouse, The Media Mob Trending Now | 金融 |
2016-30/0359/en_head.json.gz/667 | Traditional market-capitalization-weighted bond indexes get a lot of flak for assigning the largest weights to the most-heavily-indebted issuers. For instance, it may not be optimal for investors to hold more General Motors (NYSE:GM) debt just because GM needs to raise more money. Market-cap-weighted equity indexes share this potential drawback. Companies that issue stock can increase their market capitalizations without any changes in the fundamentals of the business, simply by raising more cash through the sale of additional shares to the public. However, this issue is likely less pronounced for stock than bond indexes because most companies rely more heavily on debt financing. Skewing toward the most-indebted issuers may be particularly problematic in the high-yield bond market because these issuers may carry greater default risk than their less indebted counterparts. The biggest debtors may also be more likely to suffer a credit-rating downgrade, which could hurt performance.
PowerShares Fundamental High Yield Corporate Bond (NYSEARCA:PHB) attempts to address this issue by weighting its holdings according to fundamental measures of their issuers' size, including sales, cash flow, dividends, and the book value of their assets. This approach may give the fund less exposure to heavily indebted companies than its peers that weight their holdings by the market value of each issue. But where market-cap weighting offers the advantage of tilting a portfolio toward the most-liquid bonds, this fund may overweight some of the less liquid issues. These bonds can be more difficult to obtain and more expensive to trade. In order to limit this potential problem, the fund's benchmark, the RAFI Bonds US High Yield 1-10 Index, restricts its holdings to issues with at least $350 million in par value outstanding.
Yet this benchmark may still be more difficult to replicate than a market-cap-weighted index. Over the trailing three years through March 2014, PHB lagged its benchmark by 1.26% annualized, considerably more than its 0.50% expense ratio. This underperformance does not inspire confidence, and if it continues, it could erode the index's potential performance edge relative to a market-cap-weighted alternative.
Although the fund's fundamental weighting approach may reduce its exposure to the most-indebted companies, nearly all high-yield bonds are issued by companies with a high degree of leverage. Companies can get there either intentionally by way of a debt-financed acquisition or recapitalization, or unintentionally as a result deteriorating business fundamentals. Either way, the risk posed by leverage is the same. As leverage increases, so does the probability of default and bankruptcy. The high yield that these bonds offer is compensation for this risk. In contrast to some of its index peers, PHB excludes bonds that either Moody's or S&P rate below B3/B-. This exclusion may help improve the fund's risk-adjusted performance. Investors reaching for yield may be tempted to tilt toward the lowest-grade bonds and, in their quest for income, push the prices of these bonds above their fair values. During the past 10 years, the Bank of America Merrill Lynch US High Yield CCC or Below Index generated lower risk-adjusted returns than the corresponding BB and B indexes. The CCC index's option-adjusted spread (yield adjusted for embedded options, minus the yield on duration-matched Treasuries) is currently the lowest it has been since 2007. This means that the incremental reward for bearing this credit risk is lower now than it has been during the past few years. During the past 10 years, BB rated bonds offered better risk-adjusted returns than their investment-grade and lower-credit-quality counterparts. Most investment-grade funds cannot hold BB rated securities, which can create forced selling when investment-grade issues are downgraded to BB. These issues may also be less attractive to investors reaching for yield than their lower-quality counterparts. As a result, they may become undervalued relative to other bonds. BB/Ba bonds account for close to 60% of PHB's assets, which may give it a more favorable risk/reward profile than many of its peers, even if it offers a slightly lower yield.
As of this writing, PHB carries a 4.4% yield to maturity. While this yield may appear attractive relative to investment-grade alternatives, high-yield bonds' spread over Treasuries is currently fairly low. As of June 20, 2014, the option-adjusted spread on the Bank of America Merrill Lynch US High Yield Master II Index (a commonly cited high-yield bond benchmark) was about 3.4%. Since the end of 1996 (the earliest this data is available), the median spread was 5.3%. Credit spreads tend to widen during recessions and times of uncertainty, when issuers may have less capacity to service their debt. For instance, the spread on the high-yield index grew to more than 20% at the end of 2008 and jumped again toward the end of 2011 during the European sovereign debt crisis. However, credit spreads have been tightening during the past couple of years as economic conditions have improved. This sensitivity to the business cycle causes high-yield bonds to behave more like equities than investment-grade bonds. The Bank of America Merrill Lynch US High Yield Master II Index was 0.74 correlated with the S&P 500 during the past decade. During that time, it was only 0.27 correlated with the Barclays U.S. Aggregate Bond Index. A stable U.S. economy should help keep default rates low. According to S&P, the default rate on U.S. speculative-grade debt was 2.1% in 2013, which is below the 4.3% average dating back to 1981. However, most of these defaults tend to come from bonds rated CCC and below, which this fund does not own. High-yield bonds tend to outperform investment-grade bonds during periods of rising interest rates, which usually occur as the economy strengthens, because the benefit of tightening credit spreads partially offsets the negative effect of rising rates. The fund's moderate duration (4.0 years) should also help mitigate losses when rates rise. Portfolio Construction PHB employs representative sampling to track the RAFI Bonds US High Yield 1-10 Index, which includes nonconvertible, fixed-coupon high-yield corporate bonds with up to 10 years until maturity. All issuers must be publicly traded companies. Each bond in the index must also have a par value of at least $350 million outstanding and carry either a Moody's or S&P rating of BB+/Ba1 or lower, but not below B3/B-. That means the fund may hold some bonds that one of the agencies has rated BBB/Baa, as long as the other assigned a BB+/Ba1 rating or lower (but above B3/B-). The index calculates the percentage weight of each issuers' sales, cash flow, dividends (where applicable), and book value of assets against the aggregate values of each of those metrics. To reduce turnover, the index uses five-year averages for each factor, except book value. The index averages those four values to assign each issuer's weight. For those companies that do not pay dividends, the average of the other three factors determines the issuer's fundamental weight. If the issuer has more than one qualifying bond, the index selects the largest issue with one to five years to maturity and the largest issue with five to 10 years to maturity. Therefore, there can be up to two bonds per issuer. In these cases, the index divides the issuer's weight equally between the two bonds. The index rebalances to the fundamental weights annually in March and makes other adjustments monthly.
Alternatives SPDR Barclays High Yield Bond (NYSEARCA:JNK) (0.40% expense ratio) and iShares iBoxx $ High Yield Corporate Bond (NYSEARCA:HYG) (0.50%) offer similar exposure. In contrast to PHB, these funds apply market-cap weighting. They also include CCC rated bonds, which could make them a little risker. JNK currently offers a higher yield to maturity (5.7%), while HYG's 4.5% yield is comparable to PHB's. Actively managed Fidelity High Income (SPHIX) (0.72% expense ratio) may be more appealing for investors who prefer to stay away from market-cap weighting and potentially benefit from fundamental research. It is currently the only high-yield bond U.S. open-end mutual fund that carries a Morningstar Analyst Rating of Gold. Disclosure: Morningstar, Inc. licenses its indexes to institutions for a variety of reasons, including the creation of investment products and the benchmarking of existing products. When licensing indexes for the creation or benchmarking of investment products, Morningstar receives fees that are mainly based on fund assets under management. As of Sept. 30, 2012, AlphaPro Management, BlackRock Asset Management, First Asset, First Trust, Invesco, Merrill Lynch, Northern Trust, Nuveen, and Van Eck license one or more Morningstar indexes for this purpose. These investment products are not sponsored, issued, marketed, or sold by Morningstar. Morningstar does not make any representation regarding the advisability of investing in any investment product based on or benchmarked against a Morningstar index. About this article:ExpandTagged: ETFs & Portfolio Strategy, ETF AnalysisProblem with this article? Please tell us. Disagree with this article? Submit your own.Top Authors|RSS Feeds|Sitemap|About Us|Contact UsTerms of Use|Privacy|Xignite quote data|© 2016 Seeking Alpha | 金融 |
2016-30/0359/en_head.json.gz/868 | Technology GAAP Goes Interactive
The SEC creeps closer to making XBRL mandatory.
Alan Rappeport September 25, 2007 | CFO.com | US share
The Securities and Exchange Commission announced Tuesday that it has completed the development of data tags for the entire system of U.S. generally accepted accounting principles, an important step towards putting in place its agenda for interactive data, or XBRL.
The development of data tags for GAAP has been a slow-moving process because of the complexity of American financial reporting standards. In July the SEC launched a preliminary, or “alpha,” version of the taxonomy— the data-labeling information needed to run XBRL (extensible business-reporting language). Christopher Cox, the SEC chairman, touted the latest development as a move from “paper cuts to the cutting edge.”
Ready or Not, XBRL Is Coming The Good and Bad About XBRL’s Future No Extra Audit for XBRL, Says Cox Seven different SEC offices will now be working on a recommendation as to when the use of XBRL will be mandated, according to Cox. The recommendation is expected to be made by next spring and a decision could come by next fall, he said.
The GAAP taxonomy, which fits on a tiny memory chip, is expected to enable companies to file their financial reports with an automated system. The process of creating data tags for GAAP has been a complicated one because the taxonomy is comprised of 12,000 different elements.
Working with U.S. companies that have volunteered to take part in the pilot program, the SEC has reverse-engineered financial statements so that companies will be able to report anything with the interactive data software. Cox said the new taxonomy will be posted on the SEC website in its final form by December 5.
XBRL is intended to save investors and analysts time when comparing companies across industries and could eventually simplify and accelerate the financial reporting process. Critics have argued that overhauling how they report data will be costly and time consuming.
The SEC’s pilot program is growing. Last week the commission announced that the combined market capitalization of companies submitting interactive data financials to the SEC has surpassed $2 trillion. More than 40 companies are taking part in the program. Earlier this month NYSE Euronext said it will join that group of companies, a move which Cox called a “milestone in the evolution” of interactive financial filing. Post navigation
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2016-30/0359/en_head.json.gz/1160 | Bank of Canada keeps interest rate at 1%
Loonie loses another 3rd of a cent on sign that rate cut may be coming
Posted: Dec 04, 2013 10:27 AM ET
Last Updated: Dec 04, 2013 8:20 PM ET
Central bank focuses on dollar
Central bank focuses on dollar 3:46
Home sales climb in Canada
Home sales climb in Canada 3:41
Interest rates around the globe Bank of Canada governor Stephen Poloz kept Canada's benchmark interest rate steady on Wednesday. (Adrian Wyld/Canadian Press)
The Bank of Canada kept its benchmark interest rate at one per cent on Wednesday. That's the rate on which other retail banks base their rates for savers and borrowers. The rate, known as the target for the overnight rate, sets the terms at which banks can borrow from the central bank and each other for short-term loans. 'The Bank continues to expect a soft landing in the housing market.'
- Bank of Canada, in its rate decision
The rate has been at that level for more than three years, dating back to September 2010. The bank meets every six weeks to decide on interest rates, and has now decided to leave the rate unchanged for 26 consecutive meetings — its longest stretch of inaction ever. Broadly, the bank lowers the rate when it wants to stimulate the economy, and raises it when it wants to slow down growth. "The Bank continues to expect a soft landing in the housing market," the bank said in a statement announcing its decision. "The downside risks to inflation appear to be greater," it added. The language of the statement is a sign the central bank is leading toward cutting rates, not raising them. The dollar, which has been trending steadily lower in recent weeks, lost another third of a cent following the news. The loonie is now at 93.66 cents US, its lowest level in more than three years, dating back to May 2010. BMO economist Doug Porter suggested the bank is just fine with that, as it has repeatedly scaled back its talk of raising rates in recent policy meetings. "I would almost think, if I didn't know better, there's a drive here to push the Canadian dollar even lower," Porter said. "Let's just say they are not unhappy about the weakness of the currency." Andrew Pyle, wealth advisor for Scotia Capital, says Poloz’s style as Bank of Canada governor is notable for this focus on the currency, and the lack of inflation in the Canadian economy. "The export pie is not growing as fast as Canada needs it – one way around that is get a cheaper currency. I think the Bank of Canada wants the dollar down around 90 cents," he said in an interview with CBC's Lang & O'Leary Exchange. Report Typo or Error | 金融 |
2016-30/0359/en_head.json.gz/1229 | Opening Bell: Fannie and Freddie’s Grim Outlook
Shares nosedive as housing crisis deepens; IndyMac’s disintegration; WaPo’s new boss; etc. By Ryan Chittum
The mortgage crisis continued to deteriorate as Fannie Mae and Freddie Mac shares tumbled more than 16 percent on fears that they will have to raise tens of billions of dollars in new capital to shore up their balance sheets.
The Wall Street Journal, New York Times, and Financial Times all go page one with the news, which was sparked by a Lehman Brothers report. The NYT says in its lede that Wall Street is saying “The worst is yet to come” with the housing bust and economic downturn.
The Lehman report said accounting changes could force the new capital-raising but also said Washington wouldn’t let those accounting changes happen. Still, the companies’ cost of borrowing has risen in recent weeks and investors are worried about the fallout from the problems of the monoline bond insurers. Fannie and Freddie are government-sponsored enterprises, created to support the nation’s housing market—a task that’s even more critical these days as others in the mortgage market have fallen away. The NYT:
“Everything points to a lot more bad news to come,” said Paul Miller of the Friedman, Billings, Ramsey Group in Arlington, Va. “If Fannie and Freddie are vulnerable, it means no one is absolutely safe.”
And the Journal points out that if Fannie and Freddie, which would likely be bailed out by the government if their failure seemed imminent, can’t buy as many mortgages that would further cripple the nation’s housing market by raising borrowing costs for home purchasers.
IndyMac finds bed it made most uncomfortable
Mortgage lender IndyMac Bancorp said it will no longer issue most home loans and will slash its work force by more than half, the Journal says on C1. It had been trying to raise capital but was unable to do so.
The Pasadena, Calif., mortgage company and savings-bank operator is one of the largest lenders yet to be forced by the credit crunch to ditch the bulk of its business. IndyMac specialized during the housing boom in Alt-A loans, a category between prime and subprime that typically involves borrowers who don’t fully document their incomes or assets.
The Journal notes that the lender also has $18 billion in bank deposits, which were threatened recently by a mini bank run after a senator questioned their solvency. The Los Angeles Times briefly cites a Center for Responsible Lending report heavily criticizing IndyMac lending practices.
Brauchli’s baggage
The Washington Post hired the ex-Wall Street Journal managing editor Marcus Brauchli to be its first new top editor in seventeen years. It’s a remarkable comeback for Brauchli, who just a couple of months ago was forced out at the Journal after less than a year in the top job.
The NYT puts the news on page one, while the Journal stuffs it on B10 and doesn’t mention that he was forced out at the paper, instead saying he “stepped down” and leaving it at that. It isn’t clear why Post publisher Katharine Weymouth went outside her paper to find a new editor, though the Times quotes former Post editor Ben Bradlee saying she had to “shake the place up.” It also reports Weymouth wants to merge the Post’s Web and print news operations, which the Post on A1 reports Brauchli did at the Journal. Here’s the justification from Weymouth in her paper:
Despite The Post’s culture of “promoting from within,” Weymouth said, “I thought that we could benefit from someone who would come in and look at what we do with fresh eyes.”
The Post also quotes a weird self-justification from Brauchli on why he stepped down rather than fight Murdoch under the protection granted him by the Journal’s editorial-integrity agreement (and follows with a quote from The Audit’s Dean Starkman criticizing the move).
“What was important,” Brauchli said, “was the Journal, not me—that the editorial integrity be preserved, not that my job be preserved… . Fighting for my job would have been mostly selfish and undermined the fight to maintain quality journalism.”
SEC finds conflicts at credit-raters
Bloomberg and the Financial Times on its page one say that the Securities and Exchange Commission has found “significant problems” with credit-ratings firms that didn’t deal with their conflicts of interest correctly in rating bonds, including those backed by subprime mortgages.
“The public will see that there have been significant problems,” SEC Chairman Christopher Cox said in a Bloomberg Television interview today. “There have been instances in which there were people both pitching the business, debating the fees and were involved in the analytical side.”
No info on what actions the SEC might take to remedy the situation.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at [email protected]. Follow him on Twitter at @ryanchittum. | 金融 |
2016-30/0359/en_head.json.gz/1243 | At Tiny Rates, Saving Money Costs Investors Stephanie Strom|The New York Times
Saturday, 26 Dec 2009 | 11:09 AM ETThe New York Times
Millions of Americans are paying a high price for a safe place to put their money: extremely low interest rates on savings accounts and certificates of deposit. The elderly and others on fixed incomes have been especially hard hit. Many have seen returns on savings, C.D.’s and government bonds drop to niggling amounts recently, often costing them money once inflation, fees and taxes are considered. “Open a Savings Plus Account today and get a great rate,” read an advertisement in the Dec. 16 Newsday for Citibank , which was then offering 1.2 percent for an account. (As low as it was, the offer was good only for accounts of $25,000 and up.) “They’re advertising it in the papers as if they’re actually proud of that,” said Steven Weisman, a title insurance consultant in New York. “It’s a joke.” The advertised rate for the Savings Plus account has expired, according to the bank’s Web site; as of Friday, the account paid an interest rate of 0.5 percent. The bank’s highest-yield savings account, the Ultimate, was paying 1.01 percent. The best deal Mr. Weisman has found is 2 percent on a one-year certificate of deposit offered by ING Direct , an online bank that has become a bit of a darling among the fixed-income crowd. Interest on one- and two-year Treasury notes was just 0.40 percent and 0.89 percent, as of Monday. Bank of America offers 0.35 percent on a standard money market account with $10,000 to $25,000, and Wells Fargo will pay 0.05 percent on a basic savings account. Indeed, after fees are subtracted, inflation is accounted for and taxes are paid, many investors in C.D.’s, government bonds and savings and money market accounts are losing money. In fact, Northern Trust waived some $8 million in fees on money market accounts because they would have wiped out all interest, and then some. “The unemployment situation and the general downturn in the economy had an impact, but what’s going to happen now as C.D.’s mature is that retirees and the elderly are going to take anywhere from a half to three-quarters of a percent cut in their incomes,” said Joe Parks, a retired accountant in Houston on the advisory board of Better Investing, an organization that works to help people become savvier investors. “It’s a real problem.” Experts say risk-averse investors are effectively financing a second bailout of financial institutions, many of which have also raised fees and interest rates on credit cards. “What the average citizen doesn’t explicitly understand is that a significant part of the government’s plan to repair the financial system and the economy is to pay savers nothing and allow damaged financial institutions to earn a nice, guaranteed spread,” said William H. Gross, co-chief investment officer of the Pacific Investment Management Company, or Pimco. “It’s capitalism, I guess, but it’s not to be applauded.” Mr. Gross said he read his monthly portfolio statement twice because he could not believe that the line “Yield on cash” was 0.01 percent. At that rate, he said, it would take him 6,932 years to double his money. Many think the Federal Reserve is fueling a stock market bubble by keeping rates so low that investors decide to bet on stocks instead. Mr. Parks of Better Investing moved more money into the stock market early this year, when C.D.’s he held began maturing and he could not nearly recover the income they had generated by rolling them over. He began investing some of the money in blue chip stocks with a dividend yield of at least 3 percent and even managed to find an oil-and-gas limited partnership that offered 8 percent. Mr. Parks said, however, that he would not pursue that strategy as more of his C.D.’s matured. “What worked in the first quarter of this year isn’t as relevant, because the market has come up so much,” he said. No one is advising a venture into higher-risk investments. Katie Nixon, chief investment officer for the northeast region at Northern Trust, said that, in general, “no one should be taking risks with their pillow money.” “What people are paying for is safety and security,” she said, “and that’s probably just right.” People who rely on income from such investments for support, however, are being forced to consider new options. Eileen Lurie, 75, is taking out a reverse mortgage to help offset the decline in returns on her investments tied to interest rates. Reverse mortgages have a checkered reputation, but Ms. Lurie said her bank was going out of its way to explain the product to her. “These banks don’t want to be held responsible for thousands of seniors standing in bread lines,” she said. Such mortgages allow people who are 62 and older to convert equity in their homes into cash tax-free and without any impact on Social Security or Medicare payments. The loans are repaid after death. “If your assets aren’t appreciating and aren’t producing any income, you’re getting eaten up in this interest rate environment,” said Peter Strauss, a lawyer who advises the elderly. “A reverse mortgage is one way of making a very large asset produce income.” Eve Wilmore, 93, has watched returns on her C.D.’s drop to between 1 percent and 2 percent from about 5 percent a year or so ago. Yet the Social Security Administration recently raised her Medicare Part B premium based on those higher rates she had been earning. “I’m being hit from both sides,” Mrs. Wilmore said. “There’s some way I can apply for a reconsideration, and I’m going to fight it. I have to.” She said she was reluctant to redeploy her money into higher-risk investments. “I don’t know what my medical bills will be from here on in, and so I want to keep the money where I can get to it easily if I need it,” she said. Peter Gomori, who taught a course on money and investing for Dorot, a nonprofit that offers services for the elderly, did not advise his students on investment strategies but said that if he had, he would probably have told them to sit tight. “I know interest rates are very low for Treasury securities and bank products, but that isn’t going to be forever,” he said. But investment professionals doubt rates will rise any time soon — or to any level close to those before the crash. “What the futures market is telling me,” Mr. Gross said, “is that in April 2011, these savers that are currently earning nothing will be earning 1.25 percent.” Related Securities | 金融 |
2016-30/0359/en_head.json.gz/1355 | Women’s Economic Agenda
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Blog Posts 06.16.11 Press Conference Today
Today, Leader Pelosi was joined by Rep. Sandy Levin, Ranking Member on the Ways and Means Committee, and Rep. Mark Critz at her weekly press conference:
Leader Pelosi. Good morning. Thank you for joining us once again for our regularly-scheduled Thursday morning press conference.
As usual, we are here to talk about jobs, about protecting Medicare, and protecting the middle class.
If you’re here to ask a question about Congressman Weiner, I won’t be answering any. I have made the statements I am going to make. It is my understanding that later in the day he will be having a press conference, and after that I will have a statement available. I just tell you that up front.
It is day 163, 163 days since the Republicans have taken over the majority of the House of Representatives—almost 6 months, and still no jobs bill on the floor. Instead, the Republicans have put forth a budget that ends Medicare, while making seniors pay more to get less or give tax subsidies to Big Oil. They are harming seniors by changing Medicaid, while they give tax breaks to businesses that send jobs overseas. They are reducing our investment in education and making it worse for our children and making it more expensive for nearly 10 million young people to go to college, making it prohibitively expensive for them, while they give tax cuts to the wealthiest people in our country.
We want to put people back to work. We want to do so as we put our fiscal house in order. We will not do it on the backs of our children, our seniors, or the great middle class. Democrats are focused on creating jobs, strengthening the middle class, preserving Social Security, and responsibly reducing the debt.
We have introduced—you have been here with our Whip, Steny Hoyer with a Make It in America agenda. It is an agenda about stopping the erosion of our industrial manufacturing and technological base. It is an agenda about, again, making it in America by building the infrastructure of our country with Build America Bonds and the rest.
We have had this presentation over and over again. We have not been able to get one of these bills brought to the floor under the leadership of the Republican majority, and so we are going another route.
We are taking one element of the Make It in America agenda that is a component that addresses the manipulation of currency by the Chinese government. This is unfair to American workers. It is costing us over 1 million jobs.
And I’m very proud of the leadership of our Members who are here with me. I’m very honored to be joined by the former chair and current ranking and hopefully soon again chair of the Ways and Means Committee, Sandy Levin, who knows this issue well and has worked on it for a long time, and with one of our newer Members of Congress, Congressman Mark Critz, who knows firsthand with his interaction with his district the impact of the manipulation of the currency by China on exports to our country.
It is a subsidy for their exports. It is a disservice to our workers. And we are going to have—and Mr. Critz will talk about a discharge petition. They won’t bring to the floor. We are moving to discharge this legislation.
And now I’m very pleased to yield to the gentleman from Pennsylvania, Congressman Mark Critz.
Congressman Critz. Thank you, Madam Leader; and it is actually an honor to be here to stand with the Leader and Former Chairman Levin talking about the manipulation of the currency by the Chinese government.
What you may or may not remember is that, last year, Chairman Levin brought the bill to the floor; and in September of last year, 348 Members voted to pass it. It was a majority of both Democrats and Republicans. We all recognize that this is an issue.
And here again, because it didn’t pass in the Senate, Ranking Member Levin on Ways and Means introduced the bill again—it is H.R. 639—in February of this year; and it has been sitting at Ways and Means ever since.
When I go back to the district—I’m from southwestern Pennsylvania—all I hear is concerns about the economy, concerns about what we are doing to create jobs, and the manipulation of the Chinese currency costs this country and the estimates range, as the Leader said, around 1 million jobs every year in this country. Now, when we are talking about a high unemployment rate, that is real numbers; and that is real jobs in my district where we lost steel, we lost garments, because of foreign competition.
So here we are 4 months later. The estimates are that the Chinese currency is undervalued by about 24 percent, and this costs us a million jobs. It reduces our GDP by estimates by about 1.5 percent. So here we are standing, waiting for the Republican leadership to move on what Americans want us to talk about. It is about jobs and the economy.
So this morning I dropped the discharge petition to the Rules Committee so that we can get Congressman Levin’s bill to the floor, which both Democrats and Republicans support. We just need to get their leadership to move it.
So, with that, I would like to yield to Congressman Levin so he can talk about more details of the bill.
But this is something that we need to talk about. This is about the future of this country, and this gives our administration—gives our country leverage when they are dealing with foreign countries who manipulate their currency.
Congressman Levin. Thank you, Mark and Madam Leader.
Currency is a jobs issue. That is the major point. And when another country manipulates its currency, especially a China with its huge economy, it hurts American jobs.
The estimates do vary from a half a million to a million and a half American jobs. We get every day from the ITC the latest on China currency, and the basic estimate of IIE is that it is more undervalued now than last year.
Mark, you mentioned about 24 percent. IIE estimates 28 percent undervalued. So it tips the scale like this.
So I just want to show you, as I finish, a chart. This has essentially an every two-week estimate. And it shows when we acted on the bill in the fall, it impacted. It impacted, and there was this kind of a drop, a change in the undervaluation. Since then, it has been much smaller, and so the playing field continues to be rigged.
And this discharge petition is being introduced as another effort to make it clear to everybody that this Congress cares. Now, it is up to the majority to show it cares. It has said this is not a priority. If jobs is the number one priority—it is for us—they will act on the currency bill.
Leader Pelosi. And we, of course, would hope to get 218 signatures to discharge that bill to come to the floor.
Needless to say, all of the Republicans who voted for the bill more than one time I would hope would see the need to do it and address the concerns of their own constituents about the impact of China’s unfair trade policies on their constituents.
Yes, ma’am?
Q: I know you say you’re not going to answer questions about Anthony Weiner. But, at this point, do you plan to withdraw your call for an ethics investigation or keep that call in place?
Leader Pelosi. Perhaps I was unclear. I’m not going to be responding to questions on Anthony Weiner. Let’s see what he decides to do today, and then we will go from there. But I’m not making any announcements for him or about him at this time. But I appreciate your question.
Q: Could you talk generally, though, about what it takes for you to call for one of your own Members to resign?
Leader Pelosi. No, I can’t. I won’t be doing that.
We will have a chance to talk about this, but we are not doing it before we have a decision from Mr. Weiner, Congressman Weiner. We respectfully gave him time when his wife came home for them to talk. He is going to make an announcement. I’m not going to predicate any remarks on a decision that we haven’t heard yet.
But let me say this. We will not be deterred from our quest for jobs, and I wish that the ardor for information on our jobs initiative would be as strong as it is on this other subject. Not that I don’t think it is important, and I respect your question.
But over the kitchen table in America’s homes across our country, people feel very concerned about the fact that the manipulation of currency and other unfair trade practices impacts their lives. We are doing something about it, something that has passed the House before.
And let me say again, this comes in the context of the fact that we may be seeing some trade bills come to the floor in the House in the short term. And we want to be very clear about the interest of America’s workers, jobs in our own country, and put that first.
Q: Speaker Boehner said this morning that the President’s rationale for not having to say we are not in hostilities in Libya does not pass the straight face test. Do you believe that the President has laid out a credible case for why we are not in hostilities and therefore the war powers resolution does not apply in this situation?
Leader Pelosi. Let me respond by saying I have always believed that it is very important to respect the prerogatives of the Congress in terms of being involved in any military action, A. B, that the consultation between the executive and the legislative branch is essential whenever we engage in a military action.
I believe the limited nature of this engagement allows the President to go forward.
Now, I am reviewing the report that they have sent to the Congress. The unclassified is in the public domain. I’m going over the classified aspects of it.
But I think that part of that report shows an interaction and consultation with Congress, and I am satisfied that we can continue in the limited role that we have as part of NATO.
[If] we have boots on the ground; and mano y mano, that is a different story. But the charge that we went into in the beginning, which was to stop a humanitarian disaster with our overhead flights and refueling of other planes, I think from the readings that I see up until now—and I have to read the unclassified. I don’t think it is going to change my view, because I have had classified briefings all along. But I’m satisfied that the President has the authority he needs to go ahead. And I say that as one very protective of Congressional prerogative and very supportive of consultation all along the way.
Q: Madam Leader, with that said, in spite of you saying that you think they are within the realm of what they should be doing in terms of consulting with Congress, the term I hear some people use is we are in this “zone of twilight”, sort of between where the Constitution and the War Powers Act isn’t what the authority of the President and the Congress are. Don’t you feel that we are on shaky constitutional footing here without having at least some up or down vote by the Congress?
Leader Pelosi. Well, the War Powers Act is a controversial initiative in the first place. Usually, the Congress puts more stock in it than the White House.
Having said that, a person who supports the War Powers Act, I say that if the Congress doesn’t feel that it is adequately communicated with, then the administration should intensify the communication. I don’t think they should stop the support that they are giving to NATO, to stop the humanitarian disaster and our limited role there.
Q: Was this amping up of that communication what just happened in the past 24 hours?
Leader Pelosi. Well, I think that was important, yes, with the 12, 20-page report, however you divide up the classified and unclassified aspects of it. But it references, what, over 1,000 e mails to—it references other communication as well.
Q: Do you think that the President has done enough generally to make the case not just to Congress and to communicate with Congress but with the American public about U.S. military action, not just in Libya but our direction in Afghanistan?
Leader Pelosi. I saw as I was coming here—and you take it for what it was worth; I saw it on TV—that over 50 percent of the American people support what the President is doing in Libya, 30—is it 30 percent—oppose. So, somehow or the other, the message, while it may not be enough communication for Congress, has reached the American people.
Should there always be more? There should always be more.
I always say to my colleagues, it is like a marriage. You may think you’re communicating; if the other party doesn’t think you’re communicating, you’re not communicating enough.
So think of it that way. You can always do more. It always, I believe, strengthens our hand. You have heard me say it before. President Lincoln said, public sentiment is everything.
Respectful of that, I would always encourage any President to communicate with the American people, especially when we are engaged in a military action. But I also think that if the Congress doesn’t think it is being adequately communicated with, they ought to step up the communication.
Q: Madam Leader, you’re saying that the President did not need authorization initially and still does not need any authorization from Congress on Libya?
Leader Pelosi. Yes.
Thank you all very much. Don’t forget, job, jobs, jobs.
I want to make two more points.
One is, it is very important for us to keep emphasizing Medicare and what the Republicans are doing to end it, because they are now censoring mail of Members of Congress so that you can’t refer to a voucher. For example, you can’t refer to ending Medicare. They changed their policy I think the day before the election in New York. Before the 23rd of May, you could say whatever you want—and we have the documents to demonstrate, Members sending out mail saying the Ryan plan ends Medicare. After the election, you can’t say Ryan plan, you can’t say ends Medicare, you can’t say voucher. Have you seen all of these charts and the rest?
We want to focus today on specifically the jobs issue as relates to the manipulation of currency by the Chinese.
Q: Can I ask you about WIC? That is another program that Democrats have defended, particularly since the House Agriculture Approps bill was on the floor, as a safety net for the poor. Was the defense of it just a one shot deal because it was on the floor, or will we be hearing more from the Democrats on that?
Leader Pelosi. No, we will be hearing more about it, because this is fundamental.
When I spoke yesterday on the floor on this bill, it was—was that yesterday? I have lost track of the days it was 6:00 o’clock in the East; 6:00 o’clock when families sit down at the kitchen table to have dinner. Usually, parents are saying to children, eat your vegetables, eat your dinner. Congress was saying to them, we are not going to provide food to our children, one in five of whom live in poverty in our country, many of whom go to sleep hungry.
So I was very proud of the leadership, of course, of Congresswoman Rosa DeLauro and Sam Farr, our ranking member on the committee, and Keith Ellison and Jim McGovern, who have been leaders and fighters on this issue. But not only is this issue important of itself, but it is illustrative of the foolish cuts. That you would cut feeding children as a way to reduce the deficit while you give tax cuts to Big Oil, corporations sending jobs overseas, and the wealthiest people in America I think makes the case of misplaced priorities in our budget. And this is really a big fight for us. Rosa won in the committee, but the Republicans did not protect that amendment when it came to the floor, which is most unfortunate.
Q: What kind of message will we see built around that? You say this is fundamental. What additional…
Leader Pelosi. It is comfortably around that kitchen table or where we are saying to families it is not a priority for us to be able to put food on the table. It is not a priority for us to be concerned about seniors or others who depend on Medicare, because we are going to end that. It is not a priority for us to make college affordable for your children so they have better prospects for the future.
This is all about values, and that is where we will try to find our common ground with our colleagues. If we agree that we must invest in our children, their health, and education; if we agree that we must respect our seniors and their retirement; if we agree that we must create jobs and make investments and budget decisions that do not deter the growth of our economy but encourage it; if we agree that that is the way we must reduce the deficit; then we should be able to come to find common ground down here.
But we must take the higher ground first and agree on those values. The other decisions would then fall into place. If you believe that investing in our children is important for the future, you couldn’t possibly support a cut in WIC. If you believe in respect for the dignity of our seniors, you would not consider ending Medicare, making seniors pay more to get less while you give tax cuts to businesses and sending jobs overseas.
Q: And Anthony Weiner has not helped you take that higher ground, has he?
Q: Madam Leader, we know he is resigning and he is resigning today. Why wait for him to announce it?
Leader Pelosi. So you’re suggesting that I should make his announcement for him? That won’t happen. You will see what his announcement is.
As was discussed at the press conference, Rep. Critz and other House Democrats launched the process to force the Republican leadership to consider the Currency Reform for Fair Trade Act (H.R. 639) today. The bill, authored by Rep. Levin, is a key part of our Make It In America initiative to increase American manufacturing and create new American jobs by providing effective tools to address unfair currency manipulation by countries like China and could help:
Create from one-half to about 1.5 million manufacturing jobs in the U.S. [Fred Bergsten of Peterson Institute for International Economics and Paul Krugman]
Level the playing field for American workers and businesses
Enhance our economic and national security – by cutting our trade deficit with China by $100 billion per year, at no cost to America’s taxpayers
Specifically, the legislation makes clear that additional countervailing duties can be imposed to offset the effects of a “fundamentally undervalued” currency under U.S. trade remedy laws by:
Reversing a current Commerce Department practice that has precluded it from treating foreign government currency practices as an export subsidy
Directing the Commerce Department on how to measure subsidies provided to foreign producers through currency undervaluation.
The bill passed the House last year with 348 votes, including a majority of both parties voting in favor but Republicans have not once, but twice, unanimously rejected Democratic attempts to consider this critical jobs legislation this year. Members of Congress, U.S. businesses, and workers are concerned that the Chinese government has intervened in world markets, causing its currency to be undervalued by as much as 25-40%. This unfair trade practice translates into a significant subsidy to China, artificially making Chinese imports into the United States much cheaper and U.S. exports to China much more expensive, jeopardizing efforts to create and preserve manufacturing jobs in America. Economic News · Labor and American Jobs · What's Happening Share on Facebook
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2016-30/0359/en_head.json.gz/1374 | Using KM to Insure Profitability
A payment protection insurance company adopted data warehousing software to allow it to more efficiently audit its profit/loss ratios and respond to different regional business climates.
By Evelyn Beck
Many companies talk about using customer data to improve decision making and increase business. But too often those vital statistics end up in a growing mass of data that only fosters a sense of information overload across the company.Life of the South Service Co., located in Jacksonville, Fla., sells payment protection insurance indirectly through banks, automobile dealerships and other consumer finance operations. Customers buy this insurance to protect expensive purchases such as cars and electronics. If they become sick or injured and unable to work, Life of the South will make their payments. If they die, the company will pay the account in full.Like most other insurance companies, Life of the South faces two major constraints on its efforts at profitability and growth. First, state insurance commissions regulate insurance rates. Second, says Robert Fullington, the company's senior vice president and CIO, the insurance business is "basically a data business," in which companies balance the cost of claims against the number of policies they gain income from. To improve profits and margins, insurance companies must be adept at managing, reviewing and identifying profitability on tens of thousands of accounts and developing new products aimed at emerging market niches.As a standard measure of profitability, all insurance companies figure a loss ratio, which is calculated by dividing losses incurred by premiums earned. For example, losses of $250,000 divided by earned premiums of $1 million produce a 25 percent loss ratio. Loss ratio and policy sales commissions together produce a combined ratio, which Life of the South would like to see at 85 percent. So management was dismayed at its inability to reduce it from 92 percent; just a few points' improvement in this ratio can mean an extra million dollars of profit.Too much informationRevenues at Life of the South have grown steadily since its founding in 1982, but with only 200 employees, trying to sift through the data from 65,000 accounts became a monumental challenge. The marketing staff and a probability analyst had time to examine only a handful of those thousands of accounts each quarter. "We used to take a set of accounts and go through a set of query tools and spreadsheets to construct a profitability model," says Fullington. "We could do about three at a time and never with any depth."
Life of the South invested $250,000 and what Fullington calls "a horrendous amount of time" over three months in 1998 to build a data warehouse using the Rodin Data Asset Management 3.2 application from Coglin Mill of Rochester, Minn. The project's goal was to provide a way to gather information from various company resources, including the people who track finances, those who process premiums and those who take claims, as well as employees at insurance companies in all 50 states for whom Life of the South performs third-party administration.The choice of product and the installation proved more straightforward than explaining to Life of the South managers how data warehousing would help them work more effectively, according to Fullington. "We had never had experience using this kind of product," he says. "It was foreign." So Life of the South began with the basics, getting employees to use the software to create simple financial summaries. Eventually they became confident enough to perform specific analyses, says Fullington, and were able to "make better decisions because they understood the dynamics of the business better."As well as working with data differently, people also had to change their attitudes toward its possession. "People consider their data to be their own," says Ned Hamil, Life of the South's president. "So there is some adjustment when all of us use data drawn from a common warehouse rather than asking people questions and fitting that into the puzzle." The price of having more accurate information available more quickly is that departments must let go of territorial feelings and embrace widespread sharing.For the 20 employees who use the system regularly for analysis, the switch was not so difficult. Robert Hudson, senior vice president and COO, who remembers doing business without computers, welcomed the transformation of mountains of paper reports into a data warehouse. Hudson uses the software to help solve mysteries. For example, in trying to figure out why the number of claims has gone up in a particular location, he might learn that people in the area are experiencing high unemployment and a large number of health problems; in this case, the company has to raise prices to protect its profitability.Or Hudson might query the data warehouse to examine the average age of purchasers. If he finds that an account is selling primarily to older individuals he might encourage the salespeople to focus on a wider age range, because while senior citizens are more inclined to buy life insurance, they bring in lower profits than younger individuals. "If we sold where everybody is 55, we'd lose our shirts," says Hudson.Tailored productsLife of the South also wanted to pinpoint ways to improve the attractiveness of existing products. One example is a policy for an individual who holds a six-year loan but doesn't want to buy insurance to cover payments for the entire period. Running the analysis across all its policies helped the company recognize that the critical period of that loan is the first two years, when the balance of the loan is highest. With that understanding it could tailor its product to cover only those years, thereby reducing the cost to the consumer and making the insurance more attractive, in the hope of increasing sales.Being able to sift through the accumulated history of its policies also dispelled some myths. When one of Life of the South's bank customers insisted that no one who takes out a loan of more than $20,000 ever buys insurance, the data proved otherwise. "We pointed out that a fairly significant number of people were doing just that," says Fullington. "Before, that market didn't have a loan. After seeing the data, they put an emphasis on that market and sold more insurance."staff productivity has increased as well. Previously, when company representatives fielded calls from the banks, credit unions and auto dealers that make up its clients, only about 20 percent of the questions would be answered immediately. Now, because employees have greater access to information from their desktop computers, the percentage of questions that can be answered quickly has tripled. And because each claim examiner can look closely at the number and type of claims handled daily, along with where the potential to save time exists, the number of claims that individuals handle has risen.Life of the South's small staff is further freed by its clients' ability to use the system directly and to receive specific responses even to "fuzzy" requests, for which no report already exists. For example, the owner of 10 branch banks can easily find out how many insurance policies two of his branches sold this month in comparison to the same month a year ago.Sharing data has helped to boost the company's income in premiums from about $250 million to $300 million annually by allowing management and the marketing experts to measure the value of customers by profit--customers who provide the highest return--instead of by revenue. Life of the South has saved $3.5 million and reduced its combined ratio from 92 percent to 88 percent by canceling unprofitable accounts in which claims exceeded premiums. "Under the old method, we would never have recognized them," says Fullington. "Because they're not high-volume accounts, we would never have looked at them."An unanticipated benefit of sharing has been to level hierarchy. "Before, information was created in the financial department, passed to the vice president or chief financial officer and then delivered to the president," says Fullington. "Now, preliminary information is available to everyone quickly. I never thought about that result, but it's a positive thing."Of course, the president still makes the ultimate decision, but he also appreciates the speedy availability of critical data. "The earlier I get information," says Hamil, "the earlier we can take action." | 金融 |
2016-30/0359/en_head.json.gz/1429 | Discover more about working at the ECB and apply for vacancies. More Navigation Path: Home›Media›Press releases›By date›2013›21 March 2013 Media
ECB publishes first SEPA Migration Report and warns against risks of late migration
The European Central Bank (ECB) has today published its first Report on the Migration towards the Single Euro Payments Area (SEPA), which describes the state of play of the migration process in euro area countries towards the creation of a single market for credit transfers and direct debits in euro across Europe, and provides guidance on the management of the transition process. The SEPA Migration End-date Regulation [1] established 1 February 2014 as the deadline for the euro area migration to SEPA credit transfers and SEPA direct debits. The project is therefore entering a critical stage. End-users such as public administrations and businesses, large and small, have less than 11 months to ensure that their payment orders are made according to the SEPA payment instruments so that they are not refused by payment service providers. [2] The report shows that most corporations have already completed the planning phase and know what SEPA will mean for them in practical terms. However, when it comes to the actual implementation, a number of companies have adopted very late internal deadlines, even as far as to the end of 2013. This is a source of concern in particular when it comes to the migration to the SEPA direct debit scheme. More worryingly, Small and Medium Enterprises’ (SMEs) and local public administrations’ awareness of SEPA is still fragmented and the level of preparedness is rather poor.
Late migration is highly undesirable in projects like SEPA, where many technical details need to be reflected in end-users’ back-office systems and internal processes. In some cases, companies could even face the risk of some level of disruption in their handling of payment orders. Therefore, the Eurosystem strongly advocates that all stakeholders, including “big billers”, public administrations and SMEs, migrate at the earliest stage possible, preferably by the third quarter of 2013 at the latest, in order to avoid risks which could impact the wider supply chain and would put the SEPA migration at risk. To avoid such risks, payment service providers should make customer servicing channels ready for SEPA transactions as soon as possible (and no later than the second quarter of 2013), and should also devote sufficient resources to familiarise end-users with technical, business and contractual issues related to migration to the SEPA schemes.
While the process is technical in nature, it has a direct bearing on the successful integration of the payments market in euro, which will facilitate trade, increases competition and innovation, fosters financial integration and is a key element in the completion of the monetary union.
“Adapting to SEPA involves adjusting a lot of technical and business procedures over a limited period of time. Projects of this kind should not be left to the last moment,” said Benoît Cœuré, Member of the Executive Board of the ECB. “I hope that all stakeholders will take migration to SEPA Payment instruments as a top priority.”
The report is available on the ECB’s website at www.ecb.europa.eu.
[1]Regulation (EU) 260/2012 of the European Parliament and of the Council of 14 March 2012
[2]In line with Regulation (EU) 260/2012 of the European Parliament and of the Council of 14 March 2012
Publications SEPA mirgration report [en] Payment Systems Single euro payments area (SEPA) European Central BankDirectorate General Communications Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany Tel.: +49 69 1344 7455, E-mail: [email protected] Website: www.ecb.europa.eu Reproduction is permitted provided that the source is acknowledged. Media contacts Twitter
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2016-30/0359/en_head.json.gz/1437 | Asset managers face long haul in China passport scheme
Michelle Price View more content by Michelle Price
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14 May 2014,
Newspaper: Issue 899
International asset managers eager to capitalise on a new scheme to open up China’s retail funds market must brace themselves for a long and bumpy ride.
Asset managers face long haul in China passport scheme The country is in the final stages of agreeing a deal that will allow foreign asset managers to access its retail funds market through a passporting scheme with Hong Kong which, although part of China, has its own financial system.
But while the “mutual recognition” scheme has been hailed as a landmark development for the international investment management industry, making it work in practice will not be easy and it may take years for managers to feel the benefits.
Xiaofeng Zhong, chief executive of the Hong Kong and North Asia operation of international asset manager Amundi, said: “It’s a significant move that would contribute to the opening of the fund market in the greater China region and we, like other industry participants, are waiting for the agreement to be approved and details to be exposed. We know, however, that it’s going to be a gradual process that intensifies over time. We don’t view it as something that changes the landscape overnight.”
The Hong Kong and Chinese authorities have released few details of the scheme, which is expected to be fully unveiled this summer. In principle, it will allow mutual funds domiciled in Hong Kong to be sold into China and vice versa, expanding on the existing cross-border investment schemes. These include the 2002 Qualified Foreign Institutional Investor programme and the 2011 Renminbi Qualified Foreign Institutional Investor programme, which allow foreign institutional investors to access the Chinese stock market. Chinese investors, meanwhile, can invest in foreign stocks and bonds through the 2007 Qualified Domestic Institutional Investor scheme.
These quota-based schemes are focused on institutional investment, comprise a range of institutions including banks and brokerages, and require a licence to participate. Mutual recognition, on the other hand, would allow foreign asset managers to sell directly into China’s retail and high net worth market without having to partner with a mainland Chinese firm or apply for a licence.
Land of opportunity
The potential prize is huge: China’s investment management industry is just a decade old and product offerings are limited. As a result, there was $4.7 trillion in assets under the management of bankers, insurers, mutual fund managers, trust companies, private equity, and securities houses in China at the end of December 2012, according to data from EY. Household savings, meanwhile, were among the highest in the world at around $6.6 trillion in cash deposits.
Hedge funds prepare for Hong Kong to become gateway to access Chinese savers
Brand names are crucial in Chinese market but can be lost in translation
Distribution strangleholdView
International asset managers believe they have an opportunity to take on the immature Chinese investment management industry and divert some of these savings into international mutual funds. Lieven Debruyne, chief executive of Schroder Investment Management Hong Kong, said: “Currently, in China most of the products made available are domestic products. Only 2.5% of products have an international investment objective, and we think as the wealth market continues to grow rapidly people will want diversification in their savings, and that will be positive, and mutual recognition can play a big role in this.”
Jack Lin, head of Asia and the Middle East for Pioneer Investments, said: “Chinese investors will need to diversify. At the moment they lack options, which is why the property market is so high.”
Managers expect the scheme to begin with relatively simple products such as China and Asia equities. Complex products, based on derivatives or with leverage, will be excluded until after this initial phase is successfully under way. Regulators are also expected to restrict the scheme to fund managers and funds that have a record in Hong Kong and meet a certain threshold with respect to assets under management. The Hong Kong subsidiaries of Chinese asset managers are also expected to be first in line for the scheme.
Peng Wah Choy, chief executive of Harvest Global Investments, the Hong Kong subsidiary of China’s third largest asset manager, Harvest Fund Management, said his company had submitted products to the regulators to participate in the scheme.
International managers largely use Hong Kong as a regional hub from which to market and distribute funds domiciled in the Cayman Islands, Luxembourg and Dublin, with offshore funds accounting for 95% of funds sales in Hong Kong, according to data provided by Citi. Some managers have begun relocating funds and building new infrastructure in Hong Kong to take advantage of the scheme when it swings into action.
Shelly Painter, regional head for Asia at Vanguard, based in Hong Kong, said: “When mutual recognition was announced, our ears pricked up. We didn’t use it as the single catalyst to do anything in particular, but it did help us shape our strategy and our speed to market. We don’t necessarily know in dollars and cents what it will mean to us, but we believe it will be significant.”
Painter said Vanguard was in the process of obtaining a local Hong Kong asset management licence, which would allow it to participate in the scheme.
Likewise, JP Morgan Asset Management has been busy preparing. Jed Laskowitz, chief executive, Asia Pacific at JP Morgan Asset Management, said: “We feel like there are many opportunities for us. We formed an internal working group across functions and all aspects among the firm, like sales, client servicing, operations, tax, etcetera to prepare.”
However, amid these activities, there are lingering questions over how long, if at all, Hong Kong will enjoy exclusivity as other financial centres knock on China’s door. The Association of the Luxembourg Fund Industry has said it is in discussions with China about a mutual recognition deal.
Although the Hong Kong Securities and Futures Commission has said it has received assurances from Beijing of some level of exclusivity, many Hong Kong asset managers believe it is a matter of when, not if, other centres are granted the same status.
This has created a dilemma for international managers fearful that any investment in Hong Kong will ultimately be wasted – a dilemma intensified by uncertainty over when the scheme will be announced and put into action. The Hong Kong Securities and Futures Commission, which is broking the details of the scheme with the China Securities Regulatory Commission, has said repeatedly in recent months that the deal was in its final stages.
Bo Kratz, head of Asia Pacific at Northern Trust Asset Management, based in Hong Kong, said: “Some people won’t do anything until they have clarity. You need clarity before you can make any significant investment on a broad scale. From a China perspective, it makes sense to broaden mutual recognition beyond Hong Kong, but that may not make sense for Hong Kong.”
There is also the question of whether the scheme will have a quota, and how large it will be. A small quota could discourage second or third-tier managers from trying to participate.
One chief executive of the Asia operation of a top-10 asset manager said he would not do anything until the company had regulatory clarity, adding: “I’ve been burnt before.”
Distribution issues
Even for international managers with a developed Hong Kong platform, several challenges remain – the most pressing being distributing funds across China’s vast and varied territory.
Currently, the country’s distribution market is dominated by its “big four” banks – Industrial and Commercial Bank of China, China Construction Bank, Bank of China and Agricultural Bank of China – which are thought to account for about 80% of all sales, with a further 10% sold by securities firms, according to data from EY.
Painter said distribution was the number one talking point among her Hong Kong peers. “How do any of us get shelf space without clambering all over each other and paying more dollars to get in? That is the key question and I don’t have a brilliant answer: it’s likely we’ll go in through the fringes,” she said.
Some international managers may be able to use an existing joint venture on the mainland to distribute their products, and insurance companies are another option. The internet could also prove a further direct sales channel, subject to regulatory approvals.
JP Morgan’s Laskowitz said he was discussing “all options” with the firm’s joint venture partner, China International Fund Management, but added that shelf space was only half the problem. “Ultimately investor education will be crucial.”
International managers such as JP Morgan will have to overcome a significant disconnect between the return they can offer and the return Chinese investors expect.
Northern Trust’s Kratz said: “The issue is what kind of investment suits the Chinese buyer. They have made a lot of money in a short amount of time and their wealth expectations are different.”
Pioneer Investments’ Lin said: “Chinese retail clients have unrealistic expectations about returns: you tell them that a fund that tracked the S&P for the past 15 years would have got a return of 12% and they’re like ‘Is that it?’ So there is a bit of investor education needed there.”
Then there are technical issues: how to administer funds cross border and overcome currency convertibility issues.
Schroder’s Debruyne said: “There are a number of operational challenges down to tax implications.
Again we can’t really finalise that. There are lots of things to work through on the operational side. It’s far from straightforward.”
This article was first published in the print edition of Financial News dated May 14, 2014
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2016-30/0359/en_head.json.gz/1496 | FASB Home››NEWS & MEDIA››In the News. . .
NEWS RELEASE 05/22/06
Representatives of the Financial Accounting Standards Board and the Accounting Standards Board of Japan Meet In Pursuit of Global Convergence
Norwalk, CT and Tokyo, Japan, May 22, 2006—Representatives of the Financial Accounting Standards Board (FASB) and the Accounting Standards Board of Japan (ASBJ) met in Tokyo on May 18th and 19th in the first of what is expected to be periodic meetings to enhance dialogue between the two Boards in their pursuit of international convergence.
Companies in more than 90 jurisdictions around the world are now using International Financial Reporting Standards (IFRS) promulgated by the International Accounting Standards Board (IASB). Accounting standards in both the U.S. and Japan, while similar to IFRS in many respects, also contain differences from IFRS. Accordingly, both the FASB and the ASBJ are working with the IASB toward the goal of developing a common, high-quality set of global accounting standards that will enhance the consistency, comparability, and efficiency of financial statement information, enabling international markets to move with less friction and reduced cost of capital.
At the initial meeting, representatives of the ASBJ described the structure of the financial reporting system in Japan, providing analyses of differences between Japanese GAAP and U.S. GAAP, the current status of their joint project with the IASB, and the conceptual framework underlying Japanese accounting standards.
FASB representatives described the current status of its joint projects with the IASB, including the conceptual framework, fair value measurements, accounting for investment properties, and others.
Both Boards exchanged views on the current FASB/IASB business combinations project and the financial statement presentation project (formerly performance reporting), which are currently under deliberations by the FASB and the IASB. It was agreed that both Boards will continue to exchange views on longer-term issues and current concerns.
“We are delighted to join together with the ASBJ in pursuit of global convergence,” said Robert Herz, Chairman of the FASB. “Our meetings reflect both the FASB’s and the ASBJ’s strong commitment to work together and, with the IASB, to bring about a common set of accounting standards that will enhance the quality of global financial reporting and enable the world’s capital markets to operate more effectively.”
Shizuki Saito, Chairman of the ASBJ, said: “I am confident that periodic meetings-to-be between representatives of the ASBJ and the FASB, two national standard setters for the world’s largest capital markets, will be of great significance in the history of international convergence of accounting standards. In collaboration with the IASB, the ASBJ and the FASB will work together with all their might to support the sound and proper order of capital markets in the world.”
The next meeting between representatives the FASB and the ASBJ will be held in the U.S. in November 2006.
About the Financial Accounting Standards Board
Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting in the United States. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at www.fasb.org.
About the Accounting Standards Board of Japan
The Accounting Standards Board of Japan (ASBJ) was established in July 2001 as a private-sector organization. Accounting standards developed by the ASBJ are to be authorized by the Financial Services Agency as part of generally accepted accounting principles applicable to public companies. The ASBJ develops accounting standards and implementation guidance that appropriately reflect the environment in which business enterprises operate. The ASBJ also communicates with corresponding organizations abroad and contributes to the development of global accounting standards. For more information about the ASBJ, visit our website at www.asb.or.jp/index_e.html.
IN FOCUS: FASB Accounting Standards Update on Credit Losses | 金融 |
2016-30/0359/en_head.json.gz/1521 | Obama's Remarks To The Business Roundtable
It is great to be back here with the men and women of the Business Roundtable. Over the last year we have worked together on a number of issues–from economic recovery and tax policy to education and health care. And more often than not, we’ve found common ground. This is important because we meet at a time of great economic anxiety and sharp political divisions. We are still emerging from the worst economic crisis since the Great Depression. Eight million Americans have lost their jobs over the last two years. Home values in too many parts of the country have plummeted. Too many businesses are still reluctant to invest and expand. What’s more, this recession follows what some have called a “lost decade”–a decade in which the average family income fell while the costs of health care and tuition skyrocketed; a decade in which a continued erosion of America’s manufacturing base hollowed out many communities and put too many good jobs out of reach. No wonder, then, people are frustrated with both business and government. They’re angry at a financial sector that took exorbitant risks in pursuit of short-term profits, and they’re angry at a government that failed to catch the problem in time. They’re angry at the price they paid to prevent a financial meltdown they didn’t cause, and they’re angry that recovery in their own lives seems to be lagging the recovery of bank profitability. They’re angry at the lobbyists who use their influence to put their clients’ special interests ahead of the public interest. And although both parties are predictably scrambling to align themselves with people’s frustrations, neither the usual answers from the left or right seem to inspire much confidence. So we have big challenges before us. And I think all of us know that we cannot meet them by returning to the pre-crisis status quo–an economy too dependent on a housing bubble, consumer debt, financial speculation, and growing deficits. That’s not sustainable for American workers, and it’s not sustainable for American businesses. Instead, we need to build an economy where we borrow less and produce more. We need an economy where we generate more jobs here at home and send more products overseas. We need to invest and nurture the industries of the future, and we need to train our workers to compete for those jobs. Nations around the world, from Asia to Europe, have already realized this. They’re putting more emphasis on math and science. They’re building high-speed railroads and expanding broadband access. They’re making serious investments in clean energy because they want those jobs. These countries know what’s required to compete in the 21st century. But so do we. And as I said in the State of the Union, I do not accept second place for the United States of America. We did not achieve global leadership in the last century by luck or happenstance. We earned it by working together to define our own destiny and seize the future. And to maintain our leadership in this new century, we must summon that same resolve. A thriving, competitive America is within our reach. But only if we move forward as one nation; only if we move past the old debates and crippling divides between left and right; business and labor; private enterprise and the public sector. Whatever differences we have in this country, all of us have a stake in meeting the same goal: an America in which a growing prosperity is shared widely by its people. So today I want to spend most of my time talking about the specific steps we need to take to build this more competitive America. But before I do, I want to talk about the relationship between business and government in promoting economic growth. Contrary to the claims of some of my critics, I am an ardent believer in the free market. I believe businesses like yours are the engines of economic growth in this country. You create the jobs. You develop new products and cutting-edge technologies. And you create the supply chains that make it possible for smaller businesses to open their doors. So I want everyone in this room to succeed. I want your shareholders to do well, and I want your workers to do well. Because I firmly believe that America’s success in large part depends on your success. But I also believe this: Government has a vital, if limited, role to play in fostering sustained economic growth. Throughout our history it has done so in three ways. First, government has set up basic rules of the marketplace–from the enforcement of contracts and managing the money supply to maintaining airline safety standards and creating federal deposit insurance. On balance, these rules have been good for business, not bad. For they ensure honest competition, fair dealing, and a level playing field. Second, only government can make those investments in common goods that serve the general welfare but are too expensive for any individual or firm to buy on their own. Our Armed Forces is the most obvious example. But government has also built infrastructure–roads and ports; railways and highways that enabled commerce and spurred entire industries. Government has invested in basic research that led to new crop yields for farmers and the Internet. Government has invested in our people, through land grant colleges and the GI Bill. Finally, government has provided a social safety net to guarantee a basic level of security for all of our citizens. This last role has obviously been a source of great controversy over the last several decades. But I think most Americans and business leaders would agree that programs like Social Security, Medicare, Medicaid and unemployment insurance have not only saved millions from poverty; they have helped secure broad-based consensus that is so critical to a functioning market economy. The Business Roundtable has always understood that in each of these instances, government hasn’t stepped in to supplant private enterprise, but to catalyze it–to create the conditions for entrepreneurs and new businesses to adapt and thrive. But I take the time to make these points because we have arrived at a juncture in our politics where reasonable efforts to update our regulations, or make basic investments in our future, are too often greeted with cries of “government takeover” or even “socialism.” Not only does that kind of rhetoric deny our history, but it prevents us from asking hard questions about the right balance between the private and public sectors. Too little investment in a competitive infrastructure or education system and we risk falling behind countries that are making these investments today. On the other hand, if we just throw money at poorly-planned projects or failing schools, we will remain in debt to those same countries for decades to come. If we do not pass financial reform, we can expect more crises in the future. But if we design the new rules carelessly, they could choke off the supply of capital to businesses and families. If we allow our safety net to be weakened, or lose a sense of fairness in our tax code, we can expect more anger and frustration from citizens across the political spectrum; at the same time, if an exploding entitlement state is gobbling up more and more of our tax dollars, there is no way we will retain our competitive edge. Rather than hurling accusations about big government liberals or mean-spirited conservatives, we will have to answer these tough questions. And getting this balance right has less to do with big government or small government than it does smart government. It’s not about being anti-business or pro-government; it’s about being pro-growth and pro-jobs. And while there are no simple formulas or bumper-sticker slogans, let me discuss a few specific areas where we have to get this right. Our first and most immediate task is to complete the economic recovery by taking additional steps to bolster demand and keep credit flowing. Along with our efforts to unfreeze credit and stabilize the housing market, the Recovery Act helped do this, and it’s one of the main reasons our economy has gone from shrinking by 6% to growing by nearly 6%. But we need to do more. We should make it easier for small businesses to get loans and give them a tax credit for hiring new workers or raising wages. We should invest in infrastructure projects that lead to new jobs in the construction industry and other hard-hit businesses. And we should provide a tax incentive for large businesses like yours to invest in new plants and equipment. That would make a difference now. We need businesses to support these efforts. The Business Roundtable supported the Recovery Act, and for that I’m grateful. But I think one of the reasons businesses haven’t been as vocal about their support is a belief that extraordinary measures like the Recovery Act or our financial stability plan represent a lasting increase in government intervention. Let me assure you–they do not. One year ago we were looking at the possible end of General Motors. Today GM has increased production and is paying us back ahead of schedule. One year ago there was a chance we would lose most of the $700 billion we spent to rescue the banks. Today most of that money has been repaid. The financial fee we’ve proposed is simply designed to recover the rest and close the books on government’s involvement. And let me say a word here about compensation. Most Americans–including myself–don’t begrudge reasonable rewards for a job well done. What has outraged people are the outsized bonuses at firms that so recently required massive public assistance. Once that money is fully repaid, I don’t believe it’s appropriate for the government to be in the business of setting compensation levels. What I do believe is that shareholders should have a say in the compensation packages given to top executives, and that those packages should be based on long-term performance instead of short-term profits. That’s particularly important in the financial industry, where reckless risks in pursuit of short-term gains helped create a crisis that engulfed the world economy. So the steps we took last year were about saving the economy from collapse, not expanding government’s reach into the economy. The jobs bills now working through Congress is similarly designed to be targeted and temporary, and I am pleased that a few hours ago, the Senate just passed a series of tax cuts for small businesses that hire more workers. This is an important step forward in putting more Americans back to work as soon as possible. But the larger question is this: Beyond the immediate requirements of recovery, how do we lay the foundation for a more competitive America? I believe it starts with investments in innovation, education, and a 21st century infrastructure. To build the infrastructure of tomorrow, we’re investing in expanded broadband access, health information technology, clean energy facilities and the first high-speed rail network in America. To spur the discovery of services, products, and industries we have yet to imagine, we are devoting more than three percent of our GDP to research and development–an amount that exceeds the level achieved at the height of the Space Race. We’ve also proposed making the research and experimentation tax credit permanent–a tax credit that helps companies like yours afford the high costs of developing new technologies and new products. To train our workers for the jobs of tomorrow, we’ve made education reform a top priority in this administration. Last year we launched a national competition to improve our schools based on a simple idea: instead of funding the status quo, we only invest in reform–reform that raises student achievement, inspires students to excel in math and science, and turns around failing schools that steal the future of too many young Americans. I just met with the nation’s governors this week, and education reform is one of those rare issues where both Democrats and Republicans are enthusiastic. And to achieve my goal of ensuring America again has the highest proportion of college graduates in the world by 2020, I’m urging the Senate to pass a bill that will make college more affordable by ending the unnecessary taxpayer-subsidies that go to financial intermediaries for student loans. It’s a bill that will also revitalize our community colleges, which this organization has recognized are a career pathway to the children of so many working families. And just as government needs to support young people eager to learn, I’m pleased to see that the business community has already begun to bet on the next generation of American talent. Just yesterday 17 high-tech companies announced plans to hire over 10,000 recent college graduates this year. Finally, we’re investing in innovation that will lead to a more efficient, affordable, and consumer-friendly federal government. Many of you have harnessed new technologies to build thriving businesses and provide better services to your customers. There’s no reason government shouldn’t do the same, and give taxpayers a better bang for their buck. With new technology we’re creating a single electronic medical record for our men and women in uniform that will follow them from the day they enlist until they day they are laid to rest. We’re cutting down the time it takes to get a patent approved by cutting out unnecessary paperwork and modernizing the process. We’re working to give people the chance to go online and book an appointment at the Social Security office or check the status of their citizenship application–services countless businesses already provide. In all of these areas–infrastructure, research, education and government reform–we are making investments that will lead to new products and services that will help America compete on the world stage. Of course, winning that competition also means we need to export more of our goods and services to other nations–something that supports more jobs here in America. Unfortunately, the federal government has not done a good enough job advocating for companies’ exports abroad. That’s why in the State of the Union, I set a goal of doubling our exports over the next five years, an increase that will support two million jobs. To help meet this goal, my Secretary of Commerce, Gary Locke, recently announced that we’re launching a National Export Initiative where the federal government will significantly ramp up its advocacy on behalf of U.S. exporters. We are substantially expanding the trade financing available to exporters, including small and medium-sized companies. While always keeping our security needs in mind, we will reform export controls to eliminate unnecessary barriers. And we will pursue a more strategic and aggressive effort to open up new markets for our goods. Now, I know that trade policy has been a longstanding divide between business and labor; Democrats and Republicans. But to those who would reflexively support every trade deal, I would say that our competitors have to play fair and our agreements have to be enforced. We simply cannot cede more jobs or markets to unfair trade practices. And to those who would reflexively oppose every trade agreement, they need to know that if America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. Other countries, whether China or Germany or Brazil, have been able to align the interests of workers, businesses, and government around trade agreements that open new markets and create new jobs. We must do the same. That’s why we launched the Trans Pacific Partnership to strengthen our trade relations with Asia, the fastest growing market in the world. That’s why we will work to resolve outstanding issues so that we can move forward on trade agreements with key partners like South Korea, Panama, and Colombia. And that’s why we will try to conclude a Doha trade agreement–not just any agreement, but one that creates real access to key global markets. A competitive America is also an America that finally has a smart energy policy. We know there is no silver bullet here–that to reduce our dependence on oil and the damage caused by climate change, we need more production, more efficiency, and more incentives for clean energy. Already, the Recovery Act has allowed us to jumpstart the clean energy industry in America–an investment that will lead to 720,000 clean energy jobs by 2012. To take just one example, the United States used to make less than 2% of the world’s advanced batteries for hybrid cars. By 2015, we’ll have enough capacity to make up to 40% of these batteries. We’ve also launched an unprecedented effort to make our homes and businesses more energy efficient. We’ve announced loan guarantees to break ground on America’s first new nuclear plant in nearly three decades. We are supporting three of the largest solar plants in the world. And I’ve said that we’re willing to make tough decisions about opening new offshore areas for oil and gas development. But to truly transition to a clean energy economy, I’ve also said that we need to put a price on carbon pollution. Many businesses have embraced this approach–including some here today. Still, I am sympathetic to those companies that face significant transition costs, and I want to work with organizations like this to help with those costs and get our policies right. What we can’t do is stand still. The only certainty of the status quo is that the price and supply of oil will become increasingly volatile; that the use of fossil fuels will wreak havoc on weather patterns and air quality. But if we decide now that we’re putting a price on this pollution in a few years, it will give businesses the certainty of knowing they have time to plan and transition. This country has to move toward a clean energy economy. That’s where the world is going. And that’s how America will remain competitive and strong in the 21st century. We’ll also be more competitive if we address those costs and risks that are preventing our economy from reaching its full potential–outdated financial regulations, crushing health care costs, and a growing deficit. Right now, we have a financial system with the same vulnerabilities that it had when this crisis began. As I said in the State of the Union, my goal is not to punish Wall Street. I believe that most folks in the financial sector are looking to make money in an honest, transparent way. But if there aren’t rules in place to guard against the recklessness of a few, and they are allowed to exploit consumers and take on excessive risk, it starts a race to the bottom that results in all of us losing. That’s what we need to change. We cannot repeat the mistakes of the past. We cannot allow another AIG or another Lehmann to happen again. We can’t allow financial institutions, including those that take your deposits, to make gambles that threaten the whole economy. We must ensure consolidated supervision of all institutions that could pose a risk to the system. We must close loopholes that allow financial firms to evade oversight and circumvent rules of the road. And we need robust consumer and investor protections. I ask the members of the Business Roundtable to support these efforts. The lobbyists up on the Hill right now are trying to kill reform by claiming that it would undermine businesses outside the financial sector. That couldn’t be further from the truth. This is about putting in place rules that encourage drive and innovation instead of short-cuts and abuse. And those are rules that will benefit everyone. Another undeniable drag on our economy is the cost of health care. Now, I appreciate the willingness of the Business Roundtable to work with us on health care reform, and when you’ve had concerns about specific measures or policies we’ve listened and, in some cases, made changes. Still, I know there are many who have been skeptical of our reform efforts. In the wake of the extraordinary measures we took to rescue our economy, it’s been an easy political tactic to characterize any effort at health reform as a “big government takeover.” But the truth is just the opposite. We have not called for the elimination of private insurance or our employer-based system. What we’ve called for is an insurance exchange where individuals and small businesses can pool together in order to get a better deal from insurance companies. In return for getting more customers, we would require insurance companies to stop discriminating based on preexisting conditions or arbitrarily jacking up premiums. We’ve also incorporated almost every serious idea from across the political spectrum about how to contain the rising cost of health care. As a result, our proposal would reduce the deficit by as much as $1 trillion over the next two decades. These steps would provide more certainty for businesses, not less. Because there is no certainty in a future where premiums rise without limit; a future where companies are forced to drop coverage or cutback elsewhere. That can’t be good for business. Our proposal contains good ideas from Democrats, Republicans, and experts from across the spectrum. And tomorrow, I look forward to a good exchange of ideas at the Blair House. I hope everyone comes with a shared desire to solve this challenge, and I hope the Roundtable supports our efforts to finally pass this reform. Now, one of benefits of health care reform is that by bringing down the cost of Medicare and Medicaid, it would significantly reduce our deficit. I know this an issue of great concern to many of you. Believe me–it’s been on my mind too. I walked into office facing a massive deficit, most of which was the result of not paying for two wars, two tax cuts and an expensive prescription drug program. And the lost revenue from the recession put us in an even deeper hole. The steps we took to save the economy from depression last year have necessarily added to the deficit–about $1 trillion, compared to the $8 trillion we inherited. But I’ve also said that we intend to pay for what we added. My administration is doing what families and businesses all across the country are doing during these difficult times: we’re tightening our belts and making tough decisions. We’re investing only in what we need and sacrificing what we can do without. We’ve gone line by line through the federal budget, and identified more than 120 programs for elimination–a total of $20 billion in savings for next year. And starting in 2011, I’ve proposed a freeze on non-security, discretionary government spending for three years–something that was never enacted in the last administration. I’m also grateful that Congress responded to my request and restored a simple budgeting rule that every family and business understands: Pay-as-you-go. And I’ve established a bipartisan, Fiscal Commission that will provide a specific set of solutions by the fall to deal with our medium and long-term deficit. Of course, as many of you have reminded us, budget cuts aren’t the only step we’ve proposed this year to help bring down the deficit. Which brings me to everybody’s favorite topic: taxes. You’ll notice I saved the best for last. I want to set the record straight on this issue, because it’s been one of the largest sources of tension between our administration and the business community. During the campaign, I promised a tax cut for 95% of working Americans. I have kept that promise. We’ve provided over $150 billion in tax cuts to small businesses and families. We haven’t raised anyone’s income taxes by a single dime. This year I expect to sign into law another $70 billion worth of business tax cuts for 2010 and 2011–a more than ten percent cut in corporate taxes. But I also made two other promises during the campaign. I promised that folks making over $250,000 a year would go back to paying the tax rates they did in the 1990s–a time when businesses did well and many millionaires were made. I’m not doing this to be punitive–I’m doing it because at a time of two wars and massive deficits, I just can’t justify continuing to give billionaires massive tax cuts. The other promise I made during the campaign was to ensure that our tax code doesn’t provide relief and a competitive advantage to companies that move jobs and investment outside of the U.S. Now, a number of you have made the point that we shouldn’t discourage anyone from keeping headquarters and operations in America and that we have to balance your need to compete overseas. So after listening to you, we’ve made some modifications in our proposal. But as president of the U.S., my interest is to reward–or at least not disadvantage–companies who are creating more jobs and doing more business within the borders of this country. That’s not anti-business, it’s pro-America, and I don’t apologize for it. On all of these issues–from education to health care to taxes–my first question can’t be “Is this good for business?” or “Is this good for labor?” It can’t be “Is this good politics?” or “Will this tag me as liberal or conservative?” It has to be, “Is this good for America? Does it help us compete? Does it grow our economy? Does it create jobs for the middle-class and those trying to join it? That’s my job as president. But what I also know is that government can’t meet all of these challenges on its own. When it comes to education, we need parents who are willing to read to their children and help with their homework. When it comes to energy, we need consumers who are willing to buy more efficient appliances and automobiles, and conserve where they can. And when comes to an economy that works for every American, we need business leaders like you who understand that private enterprise comes with a public responsibility. Andy Grove, who most of you know was the CEO of Intel, once gave an interview where he said, “Those of us in business have two obligations in my opinion. The one that’s un-debatable is that we have a fiduciary responsibility to
the shareholders who put us in our place…There is another obligation that I feel personally, given that everything I have achieved in my career, and a lot of what Intel has achieved in its career, were made possible by a climate of democracy, an economic climate and investment climate provided by our domicile, the United States.” It is undoubtedly in the short-term interest of individual corporations to pay less in taxes and deal with fewer regulations. But it is in the long-term interest of all companies to do business in a nation that maintains the world’s best research facilities and universities; a nation with public schools that graduate highly-skilled, highly-educated workers; a nation with functioning railways and airports; a nation that is not dragged down by crushing debt. If you pay your workers a salary they can raise a family on, they will feel more loyalty to your company. If we have rules of the road that guard against recklessness in our financial system, it will protect the interests of everyone from the wealthiest CEOs to the lowest-paid workers. If we give a child in the Bronx a world-class education, it doesn’t just benefit that child, it benefits the company that might hire him down the road and the country he lives in. To put it simply, we are all in this together. We face some very big and difficult challenges as a nation right now. And the only way we’ll get through them–the only way we ever have–is if we align the interests of workers and businesses and government around a common purpose; if we all pick up an oar and start rowing in the same direction. At a time of such economic angst, it is tempting, and perhaps easier, to turn against one another, and find scapegoats to blame. Politicians can rail against Wall Street or against each other. Businesses can fault Capitol Hill. And all of it makes for easy talking points and good political theater. But it doesn’t solve our problems. It doesn’t move us forward. It only traps us in the same debates and divides that have held us back for far too long. We can’t afford that kind of politics anymore. Not now. We know the way forward. We know what the future can be. And I am confident we can get there. I am confident because we have the hardest-working, most productive citizens in the world. I am confident because our universities and research facilities are second to none. And I am confident because of the caliber of the leaders and businesses represented in this room. We will not always agree on every issue or support the same policies. But I will never stop listening to your concerns and your ideas. Because we are in this together. All of us. And whether we rise or fall as nation does not depend on some economic forces beyond our control. It depends on us–on the ingenuity of our entrepreneurs, the determination of our workers, and the strength of our people. I will always believe in that strength and remain hopeful about our future. Thank you. Comments are turned off for this post. | 金融 |
2016-30/0359/en_head.json.gz/1771 | Lloyds pension schemes look to diversify risk investment strategy
8 August 2011By Cecile Sourbes.
UK - The HBOS Final Salary Pension Scheme (HBOS FSPS) and other pension plans at Lloyds Banking Group are seeking to diversify their source of risk by investing in new asset classes. Commenting on news reports that revealed the HBOS pension plan would be looking to invest more in infrastructure and reinsurance products, Simon Lee, head of investment for Lloyds Banking Group pensions, told IPE: "All schemes within the Lloyds Banking Group are looking to diversify their risk return across several asset classes."The HBOS pension fund is one of the largest schemes in Lloyds Banking Group, with £8.4bn of assets under management. Equities and alternative assets combined returned 8.3% for the HBOS final pension scheme, according to the bank's 2010 annual report. In its interim financial results for the first half of this year, HBOS also noted that the main equity market risks were evident in its life assurance companies and staff pension schemes. "Credit spread risk arises in the life assurance companies, pension schemes and banking businesses," it said. "Equity market movements and changes in credit spreads impact the group's results." | 金融 |
2016-30/0359/en_head.json.gz/1801 | "Entering a New Regulatory Era Under the Final Volcker Rule"
Heather Cruz, Maureen A. Donley, Michael Dorum, Andrew Faulkner, Christopher Gandia, Stacy Kanter, Laura Kaufmann Belkhayat | Skadden, Arps, Slate, Meagher & Flom LLP
In December 2013, five U.S. financial regulatory agencies adopted final regulations to implement the Volcker Rule. As expressed in the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Volcker Rule generally prohibits banking entities from engaging in proprietary trading, but permits certain types of proprietary trading activities — including underwriting, market making and risk-mitigating hedging. The Volcker Rule also prohibits banking entities from making substantial investments in, and conducting certain other activities with respect to, private equity funds and hedge funds. The Volcker Rule represents an effort to separate the “social safety net” afforded by the Federal Reserve’s discount window (which provides short-term, low-interest loans to banking institutions to cover shortages of liquidity) from risks incurred by financial institutions through their own short-term investments.
For up-to-date, detailed discussions about the topics covered here, as well as more on the Volcker Rule, please click here.
The Volcker Rule is intended to prevent the type of proprietary trading that poses significant risks to a banking entity and the financial system while allowing the banking entity to continue to provide services, including underwriting and market making, that are considered essential commercial banking functions. The actions that banking entities and their regulators will take in 2014 as they adapt to life under the final rule will begin to reveal answers to the following key questions:
In a dynamic and rapidly evolving trading environment, will the final rule provide market participants and regulators with the interpretive tools necessary to distinguish permitted underwriting, market making and hedging from prohibited proprietary trading?
Will the final rule impose costs on banking entities that will impair the efficiency of the market for financial services?
Will the final rule create distortions and imbalances in the supply of and demand for financial instruments? Will the final rule increase the cost and decrease the availability of credit?
In 2014, each financial institution subject to the Volcker Rule must begin the interpretive and administrative work necessary to bring its trading practices into conformity with the rule and to implement the internal compliance systems the rule requires. Foreign financial institutions also must assess their global operations, in light of the extraterritorial reach of the final rule, to ensure they either comply with the prohibition on proprietary trading or with the specific standards set forth in the final rule with respect to the locus of the decision makers in a purchase or sale of financial instruments and the other extraterritorial requirements of the final rule. Additionally, institutions will face uncertainty as to the range of potential interpretations that each agency may adopt as it applies and enforces the final rule. This uncertainty is magnified by the complexity, ambiguity and subjectivity of the rule’s provisions and the discretion that the final rule provides regulators. During the coming year, observers will attempt to ascertain whether the rule will chill the market-making activities and other essential services and functions it intends to permit and, thus, drive up the cost of capital in the U.S. financial markets.
Aspects of the final rule may be challenged in 2014; moreover, legislative and regulatory initiatives may affect its application. Since the release of the final rule in December, the following potential sources of change have emerged:
The American Bankers Association filed a lawsuit to block portions of the final rule that treat debt interests in collateralized debt obligations of trust-preferred securities as ownership interests in a covered fund. In response to the lawsuit, the regulators have issued an amendment to the final rule, which permits banking entities to retain interests in certain collateralized debt obligations backed primarily by trust preferred securities.
The chairman of the House Financial Services Committee and the chairwoman of the Financial Institutions Subcommittee introduced legislation to allow ownership of covered funds “predominantly” backed by trust-preferred securities held prior to the release of the final rule. Senate Republicans have introduced broader legislation that would allow ownership of debt securities issued by collateralized loan obligations prior to the adoption of the final rule. Senators Manchin and Wicker have introduced legislation that would allow institutions with total consolidated assets below $50 billion to retain ownership of collateralized loan obligations where the “primary purpose” was to be a vehicle for trust preferred securities and the investment was made prior to the adoption of the final rule. All of the legislative proposals are broader than the amendment to the final rule. Other similar proposals may be introduced in the coming weeks.
A recent letter from the chairman of the House Financial Services Committee to the chairwoman of the SEC asserted that the absence of cost-benefit analysis from the rulemaking process violates federal law. As noted in the letter, the courts have supported challenges to other regulations issued under Dodd-Frank on the grounds that the rulemaking process was “arbitrary and capricious” due to insufficient analysis of the economic consequences.
Reports in the media indicate that the European Union plans to implement its own ban on proprietary trading, bringing the EU’s approach to regulation of its largest financial institutions more into congruence with the Volcker Rule. This represents a departure from previous expectations that the EU would, rather than imposing any such ban, follow some EU national governments in requiring financial institutions to “ring-fence” their proprietary trading and other investment banking activities into a separate business unit or subsidiary.2
Subject to certain exclusions, the final rule applies to the following types of entities and their affiliates or subsidiaries:
any FDIC-insured depository institution;
any company that controls an FDIC-insured depository institution; and
any company that is treated as a bank holding company under the International Banking Act of 1978.
Although the compliance and reporting obligations mandated by the final rule are scaled to the size of the regulated entity, the fundamental prohibitions apply to banking entities of any size. The final rule does not address how the restrictions might apply to nonbank entities designated as systemically important financial institutions (SIFIs). The preamble to the final rule notes that two of the three companies currently designated as nonbank SIFIs are affiliated with insured depository institutions and are, therefore, covered by the final rule as banking entities. The regulatory agencies are continuing to consider whether the remaining nonbank SIFI engages in activity subject to the final rule and what requirements may apply.
Prohibited Proprietary Trading
The final rule prohibits banking entities from engaging in proprietary trading, subject to certain exceptions. For these purposes, proprietary trading means “engaging as principal for the trading account of the banking entity in any purchase or sale of one or more financial instruments.” A trading account is generally an account used for short-term trading activities. The final rule includes a rebuttable presumption that purchases or sales of a financial instrument are for the trading account of the institution if held for fewer than 60 days or if the banking entity substantially transfers the risk of a financial instrument within 60 days of the purchase or sale.
The final rule permits banking entities to pursue the following permitted activities:
underwriting and market making-related activities,
certain risk-mitigating hedging activities,
trading on behalf of customers,
trading by a regulated insurance company and its affiliates for the general account of the insurance company,
trading in certain domestic and foreign government obligations (in order to support markets in those obligations), and
trading activities of foreign banking entities.
None of the foregoing activities is permitted if it involves a material conflict of interest, results in a material exposure by the banking entity to a high-risk asset or a high-risk trading strategy, or poses a threat to the safety and soundness of the banking entity or to the financial stability of the United States. Under the final rule, banking entities engaged in permitted activities, including underwriting, market making and risk-mitigating hedging, must establish internal compliance programs that contain reasonably designed written policies and procedures, internal controls, analysis and independent testing. These heightened compliance program requirements will force significant and expensive changes in the structure and operations of the regulated entities. The cost of these changes may be mitigated, however, to the extent that the final rule allows internal policies and procedures to be tailored to different markets and asset classes based on characteristics such as liquidity.
A detailed discussion of the final rule's prohibition on proprietary trading is available here.
Private Equity Funds and Hedge Funds
The Volcker Rule generally prohibits banking entities from making investments in “covered funds.” The final rule defines a covered fund to include:
an issuer that would be an investment company as defined in the Investment Company Act of 1940 but for Section 3(c)(1) or Section 3(c)(7) thereof;
any commodity pool for which the commodity pool operator has claimed an exemption under CFTC Rule 4.7 or a commodity pool that is substantively similar; and
foreign funds sponsored or owned, directly or indirectly, by a U.S. banking entity (except foreign public funds).
Although the final rule expands the statutory definition of a covered fund by including commodity pools, it (unlike the original proposal) covers only those commodity pools that are offered privately to investors who meet a heightened sophistication standard — much like traditional hedge funds or private equity funds.
The final rule excludes certain categories of entities from the definition of covered fund. Entities that are specifically excluded include wholly owned subsidiaries, joint ventures, acquisition vehicles, foreign pension funds, insurance company separate accounts, bank-owned life insurance funds, certain loan securitization entities, qualifying asset-backed commercial paper conduits, qualifying covered bonds, small business investment companies and public welfare investment funds, registered investment companies and business development companies, and funds exempt or excluded from the Investment Company Act of 1940 that rely on an exemption or exclusion other than Section 3(c)(1) or Section 3(c)(7).
Despite the ban on investments in covered funds, however, the final rule allows banking entities to continue to sponsor and invest in covered funds, subject to certain exemptions. These “permitted funds exemptions” allow banking entities to provide covered funds with seed capital. They also allow for de minimis investments generally of no greater than 3 percent of the value of the fund and, across the institution’s investments in all covered funds, of no greater than 3 percent of the institution’s tier 1 capital.
Impact on Securitizations
The Dodd-Frank Act provides that the Volcker Rule should not be construed to limit or restrict the ability of a banking entity to securitize loans, but the definition of covered fund in the final rule is broad enough to encompass many securitization transactions. The final rule excludes certain types of securitizations, but it will nonetheless have a significant impact on certain active segments of the securitization market, particularly collateralized loan obligations (CLOs) and asset-backed commercial paper (ABCP) conduits. Sponsors may be able to structure new CLOs and ABCP conduits and other securitizations of financial assets to take advantage of the exclusions provided under the Volcker Rule for loan securitizations, qualifying ABCP conduits and wholly owned subsidiaries of banking entities. Certain existing securitization entities, however, will be considered covered funds under the final rule. Banking entities will generally not be permitted to hold ownership interests in covered funds after the extended conformance period ends in July 2015 (subject to any further extension).
The broad reach of the covered fund definition forces banking entities to consider whether any securitization entity that they organize or in which they invest will be viewed as a covered fund. If so, they must examine whether they have an ownership interest in the covered fund, act as a sponsor with respect to the covered fund or have other relationships with the covered fund, including market-making activities, that may now be limited or prohibited. Ownership interest is broadly defined to include not only equity interests but also traditional debt securities that have rights to participate in the removal or replacement of an investment manager for a covered fund, which includes debt securities issued by most CLOs.
A detailed discussion of the final rule’s impact on securitizations is available here.
Compliance and Reporting Requirements
The final rule imposes a number of compliance and procedural requirements on banking entities. It applies increasingly stringent and comprehensive compliance requirements to banking entities that are larger and more heavily involved in covered activities.
The most rigorous compliance requirements apply to banking entities with at least $50 billion in total consolidated assets (or $50 billion in U.S. assets in the case of non-U.S. banking entities), as well as banking entities with significant trading assets. These institutions must implement a “six pillar” compliance program and meet “enhanced” standards for compliance, which include a requirement that the chief executive officer provide an annual attestation, in writing, to the appropriate regulator that the banking entity employs a compliance program reasonably designed to achieve compliance with the final rule.
Beginning on June 30, 2014, banking entities with $50 billion or more in worldwide trading assets and liabilities (excluding certain U.S. government obligations) will be required to report specified quantitative metrics regarding their trading activities to the applicable agency. That threshold is reduced to $25 billion on April 30, 2016, and to $10 billion on December 31, 2016.
Expected Developments
In 2014, participants in the financial services industry will begin to bear the burden of interpreting and operating within the new regulatory environment created by the Volcker Rule. The agencies charged with administering the rule will similarly be forced to confront the interpretive and practical challenges it presents. The courts also may be called upon to interpret various aspects of the rule. The interactions to come among the financial industry, the regulators and the courts, as each develops its understanding of and approach to the final rule, will begin to reveal the full extent of its impact.
1 http://www.federalreserve.gov/newsevents/press/bcreg/20131210a.htm.
2 See The Vickers Report: The UK Proposal to ‘Ring-Fence’ Banking Operations, available at http://www.skadden.com/sites/default/files/publications/Skadden_2012_Insights_Financial_Regulation_0.pdf.
* This article appeared in the firm's sixth annual edition of Insights on January 16, 2014.
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2016-30/0359/en_head.json.gz/2307 | dansk Deutsch español Français italiano Nederlands norsk português suomeksi svenska NADCO Celebrates the Signing of the Small Business Jobs Act and the SBA 504 Loan Program Enhancements Included
from National Association of Development Companies (NADCO)
MCLEAN, Va., Sept. 29 /PRNewswire-USNewswire/ -- In a ceremony at the White House Monday, President Barack Obama signed H.R. 5297, the Small Business Jobs and Credit Act of 2010 into law. On the podium with the President were a number of small business owners who personally benefitted from SBA loans along with several key people involved in crafting and passing the legislation. SBA Administrator, Karen Mills, Secretary of the Treasury, Tim Geithner, Senator Mary Landrieu, Chair of the Senate Committee on Small Business and Entrepreneurship and Melissa Bean from the House Committee on Small Business were among the group that joined the President for the ceremony. President Obama pointed out, "Government can't guarantee success, but it can knock down barriers to success, like the lack of affordable credit." He went on to say, "We're going to make more loans available to small businesses. Right now, there is a waiting list for SBA loans more than 1,400 names long. These are people who are ready to hire and expand, who've been approved by their banks, but who've been waiting for this legislation to pass. Well, when I sign this bill, their wait will be over."
America's Certified Development Companies (CDCs), the economic development companies that provide SBA 504 loans to small businesses, can breathe a collective sigh of relief now that H.R. 5297 is law. Many of their small business clients were eagerly awaiting the passage of this key legislation so they could proceed with their projects.
SBA 504 loans provide long-term, government-guaranteed financing that assists small businesses purchase, construct or renovate commercial real estate. They are also used to purchase long-term capital assets like expensive equipment and machinery. Now, many more small business owners across the country qualify to receive SBA 504 loans. NADCO President, Chris Crawford, who was in the audience for the signing ceremony remarked, "The signing of this important bill represents the realization of a legislative effort that began more than two years ago for the CDC industry. We are extremely grateful for the leadership of Senator Mary Landrieu, Chair of the Senate Small Business Committee. She pressed very hard for this legislation and she never gave up." He continued by saying, "We also wish to acknowledge the efforts of Senator Olympia Snowe, Ranking Member of the Committee on Small Business and Entrepreneurship, and Speaker of the House Nancy Pelosi. Their support was instrumental in securing the enhancements we now have in the SBA 504 loan program." Many more companies are now eligible for SBA 504 loans. The size of small businesses that qualify was increased. Those businesses having a tangible net worth of $15 million and 2-year average net income after Federal income tax of $5 million are now eligible. Additionally, the maximum loan size was permanently increased to a range of $5 to $5.5 million. Of special importance to small businesses that are struggling with existing high-interest loans or up-coming loan balloon payoffs, the SBA 504 loan program can now be used to refinance existing debt at lower rates for longer terms.
There was also $505 million included in the legislation to continue fee relief on SBA 504 loans through the end of 2010. This fee waiver was first enacted in February 2009 as part of the American Recovery and Reinvestment Recovery Act (ARRA), and the new funds will allow borrowers who applied for SBA 504 loans under the ARRA program to save thousands of dollars in loan fees. Small businesses will be the direct beneficiaries of this legislation but the big winner will be the American economy since all SBA 504 loan recipients are adding jobs in their communities. Since 1986 the Certified Development Company industry has provided nearly $60 billion worth of financing to over 123,700 American small businesses resulting in the creation or retention of over 2.2 million jobs. Contact a Certified Development Company to discuss the program or visit the NADCO website at www.nadco.org for additional information.
About the National Association of Development Companies (NADCO):
Created in 1981, the National Association of Development Companies is the trade association for America's Certified Development Companies (CDCs). Certified by the U.S. Small Business Administration, CDCs are community-based economic development organizations that serve their local communities and states, and are dedicated to the promotion of small business expansion and job creation through SBA's 504 Loan Program. In addition to the 504 program, many CDCs also provide small businesses with access to other Federal, state and local economic development loan programs. These programs provide both long and short term funding for borrowers. For more information, please call (703) 748-2575 or visit www.nadco.org.
SOURCE National Association of Development Companies (NADCO) RELATED LINKS
http://www.nadco.org
Preview: Commercial Real Estate Financing Available Soon Through SBA 504 Loan Program
Preview: Many More Small Businesses Now Eligible for Long-Term Financing With SBA 504 Loans
'504 Loan Refinancing Regulations Released for June...
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2016-30/0359/en_head.json.gz/2577 | Sanpaolo IMI, Banca Intesa to create Italy's largest bank - Taipei Times
Sanpaolo IMI, Banca Intesa to create Italy's largest bank
AFP , ROME
Italy's second-largest and third-largest banks, Banca Intesa and Sanpaolo IMI, agreed on Saturday to a merger which would see their new entity form the country's biggest bank and rank sixth in Europe.In separate meetings, the boards of Milan-based Intesa and Sanpaolo IMI of Turin agreed to the merger, the banks said in a joint statement. The new bank will have 13 million customers and more than 6,000 outlets and will be based in Turin.Intesa's president Giovanni Bazoli said the merger, "favorably received by all national and international commentators, offers a strong signal of vitality" of the Italian economy.The merger would create a bank valued at more than 66 billion euros (US$84 billion), just ahead of the current Italian number one, UniCredit.Under the deal, shares would be exchanged at a rate of 3.115 Intesa shares per Sanpaolo IMI share. The banks said they hope the merger will cause savings worth US$1.3 billion by 2009.The deal will now have to be approved by the companies' shareholders before the end of the year, the sources added. A shareholders' meeting is planned for December, directors of both banks told journalists after the meeting.Before that it will have to be submitted to competition authorities and the central bank. According to the Italian news agency ANSA contacts have already been made and should be formalized next week. The authorities have 60 days to give an opinion.Some major shareholders have already backed the merger, including the French bank Credit Agricole which has an 18-percent stake in Intesa and a large share of voting power in a key group of Indesa shareholders.The new bank would have 6,200 branches and 13 million clients in Italy, with assets worth 510 billion euros.
Press comment here foresees the merger as signalling a sweeping consolidation drive in the Italian banking sector.Italian Prime Minister Romano Prodi has also given enthusiastic backing to the proposal, stressing that Italy needed "several strong banks" that could promote its interests on foreign markets. | 金融 |
2016-30/0359/en_head.json.gz/2598 | Renewed protests against Sir Stuart Rose's dual role at Marks & Spencer
By Yvette Essen
Marks & Spencer's decision to appoint Sir Stuart Rose as executive chairman and chief executive has come under fire from the Local Authority Pension Fund Forum. The body, which represents 48 pension funds with combined assets of over £95bn and owns around 2pc of the retailer, said it thought Sir Stuart had done a good job but that too much power was in his hands. It is opposed to him potentially holding both positions for up to three years, saying the company has failed to justify why it needs to ignore corporate guidance. In a letter to Marks & Spencer's current chairman, Lord Burns, LAPFF has threatened to call for the roles to be separated at next year's annual general meeting. "The forum is concerned that the current situation has the potential to set an unhelpful precedent for the market as a whole," wrote chairman Ian Greenwood. "If a blue chip company such as M&S announces its intention to breach a fundamental governance principle for three years, what message does this send?"
Comment: M&S may need to look abroad again for next chief More on retail Mr Greenwood told The Daily Telegraph that a separate chairman and chief executive are needed to "counterbalance each other". He added the company has also made Sir Stuart a too important individual. "What happens if he decides to leave or is poorly? If that happened, then the company would be up the creek. I just think it is extremely dangerous."A spokesman for Marks & Spencer said the LAPFF is "entitled to is view but the combined code is a set of guidelines, not rules". He added: "The board has stated its reasons and Stuart's re-election was backed by shareholders at the AGM earlier this month".The retailer says Sir Stuart is the best person to steer the company through a difficult economic environment.Mr Greenwood said LAPFF was only bringing the matter up now after meeting its members last week.He said depending on Marks & Spencer's response, he would be seeking support from other shareholders to back a motion against Sir Stuart's re-election to both posts next year.
Markets » | 金融 |
2016-30/0359/en_head.json.gz/2696 | This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the bottom of any article. From the October 2013 issue of Investment Advisor • Subscribe! September 30, 2013
Room to Grow: How Advisors’ Approach to Women Might Hurt Their Business Advisors need to reach out to women to grow their practices, but their methods leave something to be desired
Since word got out on the street that women are the demographic du jour, financial advisory firms, large and small, have been making a dedicated and concerted—aggressive, even—effort to cultivate a female clientele.
This is great news, according to experts like Kathleen Kingsbury, founder of coaching firm KBK Wealth Connection and the author of books like “How to Give Financial Advice to Women: Attracting and Retaining High-Net-Worth Female Clients” and the just-published “How to Give Financial Advice to Couples: Essential Skills for Balancing High-Net-Worth Clients’ Needs.”
Women were more or less overlooked for decades by a largely male-dominated industry. Now the dynamics have changed and women are not only achieving professional success and increased independent economic power, but are also increasingly becoming the primary breadwinners for their families. It is clear that financial planners have no choice but to reach out to women if they want to expand their practices.
However, that outreach, in Kingsbury’s view, leaves much to be desired. Not only is it too overarching and one-dimensional, viewing women as, well, just women, it doesn’t really help those firms that want to have deep, long-lasting relationships with a female client base.
“Women control the majority of wealth today so many firms are reaching out and developing content specifically for women and training their sales force on how to do business with women. Though the approach is well-intended, it feels as though financial planning firms are simply hunting women like they are deer,” she said. “The industry doesn’t really get what that feels like for women and that it needs to change.”
Rather than viewing women as one homogenous group and tracking them down simply because they’re the flavor of the day, Kingsbury believes financial planners need to come up with a more nuanced approach to attract women, one that seeks to understand the many differences among them and approach them as individuals as opposed to a mere demographic group.
“Financial planning firms must now have a different relationship with women,” she said. “They must be able to market to them differently by thinking of them in many different ways and in different dimensions.”
A stay-at-home woman, for instance, who supported her wealth-creating husband during his career and now wants financial planning advice in order to help her grandchildren, will require a different service from a young executive who wants to start a business, just as a widow will be very different from a single mom in her 30s. Firms that want to succeed with women really need to think about them as individuals with different situations in life and different character and personality traits.
One could argue that just as the women’s market needs segmentation, so too does the male market. To a certain degree, “we should also be understanding men in the same, multi-dimensional way,” said Eleanor Blayney, a financial planner and consumer advocate for the CFP Board.
However, “I would argue that if we look at the changes that have taken place in women’s lives over the past 50 years, and given that today, we are still facing the legacy of those changes, the approach to women needs to be particularly sensitive,” Blayney said. “The reality is that women have suffered from stereotypes, both with respect to financial planning and in the financial planning profession itself. Realizing that these stereotypes still exist and how they have affected our approach to women is extremely important in coming up with a new, more empathetic and sensitive approach.”
Both Blayney and Kingsbury believe that financial advisors and firms should be working toward adopting more client-centric approaches that look at women as investors like any other, with their own financial goals to accomplish.
After all, pointed out Myra Rothfeld, chief marketing officer for Genworth Wealth Management, women today do hold 50% of the wealth in America, “so we can debate whether 50% is really even a niche market anymore.”
“In our view, every individual investor, whether a male or a female, has unique needs when it comes to financial planning,” Rothfeld said. “Each person is starting from a different point in terms of self-confidence, experience, point of view, although their financial goals—planning for retirement, securing financial futures for their families and so on—may be the same.”
Understanding women as individuals, then, means being able to cultivate the kind of deep, enduring advisor-client relationships that women value. Research has shown that women, because they’re still relatively new to financial planning, are less confident about how to do things right. Kingsbury believes advisors and financial planning firms should not only leverage the behavioral research that has been done on women’s attitudes to finance, but go out and work the terrain, so to speak, in order to really get to know different kinds of women, who they are and what they want.
“My advice to advisors is to think things through thoroughly, do the legwork and get out there and meet women,” she said. “What that does is part of being female and gives women a sense of self-worth.”
Advisors can put together focus groups made up of women, Kingsbury suggested, to get feedback on whether their approaches are working or not. She urged advisors to think about tailoring their approach to women on a regional basis: “The events you host in Boston should be different from the ones you host in Texas or Nebraska,” she said. “I even have had advisors ask their ideal female clients to go through their waiting room and ask them what they’d change by way of décor to be more appealing to women, because women notice details.”
More Than a Niche
Large companies like Prudential Financial may have an edge over other firms when it comes to reaching out to women because for more than a decade, the company has been conducting behavioral studies that offer a keen view of who women are and what they want.
“We have gained a great deal of insight into how women think, feel and behave with respect to financial planning with these studies,” said Pat Brzowzoski, director of diversity for Prudential’s women’s strategy. “By and large, the problem today is still that the women’s market is viewed as just one market, and our studies have shown us that there’s a real need for segmentation and viewing women not just as a single entity, but as a diversified group made up of many different entities.”
Prudential also places a great deal of importance on educating its sales force on the different niches within the women’s market by using the insight gathered from various studies.
“We’re able to really give our sales force the information and tools they need to hone in on different segments of the women’s market and understand the different demographics within the broader women’s market,” she said. “It’s an advantage to be able to give our sales force that kind of insight, and it allows for a far better, more targeted and effective outreach to women as they continue to become more important financial decision makers.”
Although many believe that women favor female financial advisors over male advisors, the research in this area has yielded conflicting results. All the same, female advisors do believe that it is important to increase their presence in the profession.
To that end, the CFP Board launched a targeted effort in May to draw more women into the financial planning profession, which included the creation of the Women’s Initiative Advisory Panel, chaired by Nancy Kistner, managing director and wealth planning solutions market director at U.S. Trust, Bank of America Private Wealth Management.
Currently, only 23% of CFP professionals are women. “I’m very optimistic about this venture, and I believe our profession is totally committed to bringing more women on board,” said Blayney. “I’m hearing from men and women all over the country that this is the right thing to do, so I believe the time has come and the momentum will only build up.”
We invite you to read all the articles and opinions in Investment Advisor's special report on Women in Wealth Management.
Please enable JavaScript to view the comments powered by Disqus. By Savita Iyer-Ahrestani
CFP Board
Eleanor Blayney
Women in Wealth Management
Nancy Kistner
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2016-30/0359/en_head.json.gz/2722 | » LUKEWARM RESPONSE
Damac raises $348m in London share sale
Dubai, December 3, 2013
Dubai's Damac said it raised $348 million from its London share offer on Tuesday, a lukewarm response to the first share sale by a Dubai property firm since the emirate's real estate crash four years ago.
The luxury housing firm, which describes its new villa project as the Beverly Hills of Dubai, had hoped to take advantage of a renewed interest in Dubai's property market aided by an overall recovery in the emirate's economy.
However, the company originally aimed to raise $500 million in London with the sale of global depositary receipts (GDRs). The deal size was later reduced to $400 million last week and the final price was fixed at $12.25, at the bottom of the price range.
The Dubai developer sold 28.39 million shares, valuing the firm at $2.65 billion, it said in a bourse filing.
Property prices in Dubai plunged over 50 per cent during the crash as a bubble burst, but the real estate market has staged a recovery and residential prices have rebounded over 20 percent, aided by growth in Dubai's trade and tourism sectors.
Damac's offering could increase to $400 million if a greenshoe or over-allotment option for an extra 15 per cent of the offer size is exercised, the statement added. Should this option be activated, 15 per cent of the company would be listed.
The company and the selling shareholders have committed to a lock-up period of one year from admission.
Citigroup and Deutsche Bank are joint bookrunners for Damac's offer, with the investment banking arm of Saudi Arabia's Samba Financial Group and VTB Capital acting as co-lead managers.
London has seen a revival in IPO activity this year as confidence has returned on the back of booming equity markets, with more firms going public there by mid-November than in the same period of any year since 2007, according to Thomson Reuters data.
However, the stock market rally has stalled in recent weeks, and that has affected IPOs. Italian freight-forwarding company Savino del Bene extended its Milan share sale process on Monday, while Austrian packaging group Constantia Flexibles cancelled a planned stock market debut after investor demand fell short of expectations.
Shares in the last company to have floated in London, Just Retirement, closed on Monday at 2 pounds per share, having never closed above its November 12 initial public offer price of 2.25 pounds.-Reuters
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2016-30/0359/en_head.json.gz/2911 | IPOs go bow-wow in 2000
Pets.com seemed like a sure thing when it went public in February. By December, only the sock puppet was left.
By Cecily Barnes
| December 28, 2000 -- 00:00 GMT (16:00 PST)
| Topic: Start-Ups
Among the dozens of dot-com flameouts, one company epitomizes the IPO market in 2000: Pets.com.
The online pet store seemed to have everything going for it early this year when it sold shares to the public, including financial backing by e-tail giant Amazon.com; a simple, easy-to-remember Web address; successful branding campaign built around a sock puppet dog, including a TV campaign in which $2.6 million was spent to advertise during the Super Bowl; and timing, considering it was going public when the Nasdaq and IPO market were nearing a crescendo. Pets.com was able to launch its IPO in February, raising about $82 million by selling 7.5 million shares at $11 each. The stock later climbed as high as $14. Then the wheels fell off as the Nasdaq tanked, the IPO market imploded, and Pets.com investors realized that it's difficult to make a profit selling chew toys and dog food online. A mere nine months after its stock market debut, Pets.com folded, and its assets such as the domain name and the rights to the puppet were sold. By mid-December, it held the distinction of being the worst-performing IPO of 2000. "In the final analysis, the only thing you really had equity in is the sock puppet," said Randall Roth, an analyst with the IPO Plus Aftermarket Fund. "It's the one thing in that company's remains that had any staying power." For seasoned investors who had nervously questioned how profitless companies often lacking tangible products could climb to such high valuations in the IPO market, the year 2000 answered their queries: They could not, or at least not for long. Last year, executives and investors focused on revenue growth and market share as a means of determining value, particularly among e-tailers. The year 2000 saw the return of a more conservative standard--a shift that occurred almost overnight and blindsided many unprepared investors. Profitability, or at least a clear path to it, and seasoned management returned as important benchmarks for companies going public. Internet companies that were postponing their break-even dates, sometimes indefinitely, were harshly punished, with newly public dot-coms suffering the brunt of the sustained market drubbing. Although the year's 451 IPOs posted average first-day gains of about 55 percent, the vast majority tumbled by year's end to an average loss of 15 percent from the offering price, according to Thomson Financial Securities Data.
"Even well-received IPOs were finding themselves doing an about-face not too long after going public," said Mark Dicioccio, managing director of Lehman Brothers. By comparison, the average IPO in 1999 had a first-day gain of 66 percent and ended the year up a stunning 194 percent. All told, just 6 percent of this year's deals are trading up 100 percent from their IPO offering price, compared with 46 percent at the end of 1999. The week of April 10, when the Nasdaq composite index lost 19 percent of its value, served as the catalyst for the downturn in the IPO market. David Menlow, president of the IPO Financial Network, described the correction as "more deeply damaging to the marketplace than any other phase of the new issues market in the last decade." The pessimism spread well beyond the e-tailing, content, and Net sectors, enveloping even such Wall Street darlings as optical networking, semiconductor, and telecommunications equipment. As Dicioccio describes it, the momentum investing that drove many IPOs to dizzying heights also worked against them. "Everyone had become very enamored with the optical-networking companies," Dicioccio explained. "An institution could say, 'OK, I'm buying this whole sector.' Later in the year that same psychology (worked) in the other direction." Investors disenchanted with a sector sold not just one company but the whole lot. In reaction, IPOs--by definition a risky proposition--slid along with their more established counterparts. As for 2001, analysts expect the new year to pick up where this one ended--a medium to light calendar of offerings marked by strength in select infrastructure companies. Dicioccio said that when he goes and meets with prospective companies nowadays, they are much more interested in hearing about alternative financing options to an IPO. "A year ago, it was very myopic. Everyone wanted to go public. It was, 'We're going public; do you want to take us public?'" Dicioccio said. "This correction has made management teams more aware of the risk of being a public company. They think more about all of their alternatives."
BoomApp launches AR system for video for consumers to shop through TV programs
Uber attempts to raise doubt around taxi definition in GST legal case | 金融 |
2016-30/0359/en_head.json.gz/2943 | JPMorgan Equity Index Fund(OEICX)C ASELECT Loading...
OverviewPerformanceFees and Investment MinimumsPortfolioManagementDocumentsDisclaimer ObjectiveThe Fund seeks investment results that correspond to the aggregate price and dividend performance of securities in the Standard & Poor's 500 Composite Stock Price Index (S&P 500 Index).Strategy/Investment processInvests mainly in stocks included in the S&P 500 Index.May invest in stock index futures.Seeks to track the performance of the S&P 500 Index.
Overview widget loading ... Performance
Fund Managers Michael Loeffler Portfolio Manager
Nicholas D'Eramo Portfolio Manager
Fund Literature Quarterly Fact Sheet: Equity Index Fund (C)
Commentary: Equity Index Fund
Quarterly Certified Holdings - JPMorgan Equity Index Fund
Supplemental Data Sheet - Equity Index Fund
Load More DisclaimerPlease refer to the prospectus for additional information about cut-off times. Total return assumes reinvestment of income. The S&P 500 Index is an unmanaged index generally representative of the performance of large companies in the U.S. stock market. Index levels are in total return USD. The performance of the index does not reflect the deduction of expenses associated with a fund, such as management fees. By contrast, the performance of the Fund reflects the deduction of the fund expenses, including sales charges if applicable. An individual cannot invest directly in an index. The performance of the Lipper S&P 500 Funds Index includes expenses associated with a mutual fund, such as investment management fees. These expenses are not identical to the expenses charged by the Fund. Total return assumes reinvestment of dividends and capital gains distributions and reflects the deduction of any sales charges, where applicable. Performance may reflect the waiver of a portion of the Fund's advisory or administrative fees and/or reimbursement of certain expenses for certain periods since the inception date. If fees had not been waived and/or certain expenses were not reimbursed, performance would have been less favorable. ©2016, American Bankers Association, CUSIP Database provided by the Standard & Poor's CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. All rights reserved.The following risks could cause the fund to lose money or perform more poorly than other investments. For more complete risk information, see the prospectus. This investment attempts to track the performance of an index. If the value of securities that are heavily weighted in the index changes, it may experience greater risk of loss than would be the case if it were not fully invested in such securities.Total return assumes reinvestment of income. The top 10 holdings listed reflect only the Fund's long-term investments. Short-term investments are excluded. Holdings are subject to change. The holdings listed should not be considered recommendations to purchase or sell a particular security. Each individual security is calculated as a percentage of the aggregate market value of the securities held in the Fund and does not include the use of derivative positions, where applicable. P/E ratio: the number by which earnings per share is multiplied to estimate a stock's value. P/B ratio: the relationship between a stock's price and the book value of that stock. Beta measures a fund's volatility in comparison to the market as a whole. A beta of 1.00 indicates a fund has been exactly as volatile as the market. Sharpe ratio measures the fund's excess return compared to a risk-free investment. The higher the Sharpe ratio, the better the returns relative to the risk taken. Tracking Error: The active risk of the portfolio, which determines the annualized standard deviation of the excess returns between the portfolio and the benchmark. Alpha: The relationship between the performance of the Fund and its beta over a three-year period of time. Standard deviation/Volatility: A statistical measure of the degree to which the Fund's returns have varied from its historical average. The higher the standard deviation, the wider the range of returns from its average and the greater the historical volatility. The standard deviation is calculated over a 36-month period based on Fund's monthly returns. The standard deviation shown is based on the Fund's Class A Shares or the oldest share class, where Class A Shares are not available. R2: The percentage of a Fund's movements that result from movements in the index ranging from 0 to 100. A Fund with an R2 of 100 means that 100 percent of the Fund's movement can completely be explained by movements in the Fund's external index benchmark. EPS: Total earnings divided by the number of shares outstanding. Risk measures are calculated based upon the Funds' broad-based index as stated in the prospectus. | 金融 |
2016-30/0359/en_head.json.gz/3115 | Timothy F. Geithner
Sort Order: By TitleBy AuthorBy Copyright DateBy Date Added Results Per Page: 2550100 Stress Test
by Timothy F. Geithner
Stress Test is the story of Tim Geithner's education in financial crises. As president of the Federal Reserve Bank of New York and then as President Barack Obama's secretary of the Treasury, Timothy F. Geithner helped the United States navigate the worst financial crisis since the Great Depression, from boom to bust to rescue to recovery. In a candid, riveting, and historically illuminating memoir, he takes readers behind the scenes of the crisis, explaining the hard choices and politically unpalatable decisions he made to repair a broken financial system and prevent the collapse of the Main Street economy. This is the inside story of how a small group of policy makers--in a thick fog of uncertainty, with unimaginably high stakes--helped avoid a second depression but lost the American people doing it. Stress Test is also a valuable guide to how governments can better manage financial crises, because this one won't be the last. Stress Test reveals a side of Secretary Geithner the public has never seen, starting with his childhood as an American abroad. He recounts his early days as a young Treasury official helping to fight the international financial crises of the 1990s, then describes what he saw, what he did, and what he missed at the New York Fed before the Wall Street boom went bust. He takes readers inside the room as the crisis began, intensified, and burned out of control, discussing the most controversial episodes of his tenures at the New York Fed and the Treasury, including the rescue of Bear Stearns; the harrowing weekend when Lehman Brothers failed; the searing crucible of the AIG rescue as well as the furor over the firm's lavish bonuses; the battles inside the Obama administration over his widely criticized but ultimately successful plan to end the crisis; and the bracing fight for the most sweeping financial reforms in more than seventy years. Secretary Geithner also describes the aftershocks of the crisis, including the administration's efforts to address high unemployment, a series of brutal political battles over deficits and debt, and the drama over Europe's repeated flirtations with the economic abyss. Secretary Geithner is not a politician, but he has things to say about politics--the silliness, the nastiness, the toll it took on his family. But in the end, Stress Test is a hopeful story about public service. In this revealing memoir, Tim Geithner explains how America withstood the ultimate stress test of its political and financial systems.From the Hardcover edition. | 金融 |
2016-30/0359/en_head.json.gz/3173 | --Custody
ICI Calls for Enactment of Tax “Flow-Through” Legislation
Washington, DC, September 21, 2007 - Legislation that improves the ability of U.S. funds to attract foreign shareholders should be enacted, according to a recent ICI letter to Senate Finance Committee leaders. A similar letter was also sent to House leaders.
Most types of income received by funds (for example, dividends, interest, and short-term capital gains) historically have been treated for tax purposes as dividends upon distribution to shareholders. Such dividend treatment arises because mutual funds are corporations for tax purposes, and corporate distributions of earnings are treated as dividends (absent a special rule).
The American Jobs Creation Act of 2004 (AJCA) provided a special provision in the Internal Revenue Code concerning fund distributions attributable to interest and short-term gains. Under AJCA, a fund may elect to “flow through” to its foreign shareholders the character of these two types of income. Flow-through treatment is beneficial because interest and short-term gains received by foreign shareholders generally are exempt from U.S. withholding tax, while dividends are taxable. Absent a legislative extension, Internal Revenue Code section 871(k) will expire after 2007.
ICI Position
AJCA’s flow-through provision should be made permanent, according to remarks from ICI President and CEO Paul Schott Stevens. Stevens said that Code section 871(k) promotes tax fairness by permitting certain distributions by U.S. funds to retain their character as exempt from U.S. withholding tax when paid to foreign shareholders.
ICI believes that short extensions of the provision do not provide foreign investors with tax certainty, nor do they provide certainty to fund companies that have not yet incurred the costs required to implement this provision. | 金融 |
2016-30/0359/en_head.json.gz/3253 | Kass: The Emperor's New Clothes?
Today's markets represent a fairy tale.
In other words, fear has been driven from Wall Street. Nevertheless, in its extreme, today's markets, according to the naysayers (who see subpar and unsteady global growth, vulnerable profit margins, disappointing profits ahead and a general detachment of markets from the real economy), are a fairy tale and are more representative of Hans Christian Andersen's, "The Emperor's New Clothes." In this short tale, two weavers promise an Emperor a new suit of clothes that is invisible to those unfit for their positions, stupid or incompetent. When the Emperor parades before his subjects in his new clothes, a child cries out, "But he isn't wearing anything at all. Over history the phrase "emperor's new clothes" has become an idiom about logical fallacies -- namely, pluralistic ignorance, which is defined in Krech and Crutchfield's Theory and Problems of Social Psychology as a situation in which "no one believes, but everyone thinks that everyone believes." In the tale, everyone is ignorant as to whether the Emperor has clothes on or not but believes that everyone else is not ignorant. Sound familiar? This column originally appeared on Real Money Pro at 7:35 a.m. EDT on June 30. At the time of publication, Kass had no positions in any stocks mentioned, although holdings can change at any time.
Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.
Twitter, Tesla and SolarCity: Doug Kass' Views
Doug Kass shares his thoughts on Twitter and why he's buying SolarCity puts.
U.S. Retail Sales Did Better Than Expected in June; the Nikkei 225 Had a Great Week: Best of Kass
In highlights from this week's trading diary and posts, Kass tells us the Nikkei 225 had a great week and how June retail sales in the U.S. exceeded expectations. | 金融 |
2016-30/0359/en_head.json.gz/3414 | http://blogs.wsj.com/marketbeat/2009/02/05/four-at-four-when-half-a-million-job-losses-are-ok/
Four at Four: When Half a Million Job Losses Are OK
David Gaffen
Investors are already aware of the bad news — the expectation for a decline of more than 500,000 in nonfarm payrolls and an increase in the unemployment rate to 7.5%. In and of itself, that’s the good news. Numerous companies have made headlines this quarter with eye-popping announcements of layoffs, particularly Caterpillar and Microsoft, and the various junior indicators from earlier this week put investors on the defensive with regard to the 8:30 a.m. ET release of the jobs data. “If it’s within consensus, I don’t think it’s going to rock the boat,” says Peter Cardillo, chief market analyst at Avalon Partners. Concerns rise when the economic cycle becomes a vicious one, as consumers respond to news of layoffs by pulling back on spending, thus worsening the economic outlook. But there is only anecdotal evidence of such causation, regardless of sentiment, and if the next couple months represent the trough of the recession, investors will exhale. “We don’t necessarily think consumers are responding to new job cuts with another round of spending cuts,” says Bob Baur, chief global economist at Principal Global Investors. “Our hope is that round of cuts is going to diminish as we get into the latter part of first quarter and the second quarter.” Stocks put together quite the ride Thursday, a far cry from the days when investors would hunker down in advance of the jobs data. But worries about the solvency of major banking institutions, the government’s efforts to limit executive pay, and concerns of a heavier hand taken by the Obama Administration in resolving the banking problems wreaked havoc with financial stocks through part of the session. The outlook changed on reports that Treasury Secretary Tim Geithner was likely to detail the approach to doling out the second half of the Troubled Asset Relief Program. Shares such as Bank of America and General Electric, both of which had hit 52-week lows earlier in the session, rebounded, even though GE still finished in negative territory. “Basically the market had through that October low, and once again managed to bounce off,” says Mr. Cardillo. “What we’re seeing here is, the market is anxiously waiting to get the banking system back in shape and remove the uncertainties that surround the banking system.” Like clockwork, Bank of America CEO Ken Lewis was back for a show of confidence, buying 200,000 shares in his company’s stock for an average price of $4.79 for a price of $958,340, Dow Jones Newswires reported, citing data provider Washington Service. Last month, Mr. Lewis reported buying 200,000 shares for an average price of $5.99 each, so he’s already lost 20% on that purchase. The uncertainty surrounding the name — and the conspicuous lack of comment from the company — has not bolstered investor confidence, regardless of the share purchases.
There are other companies that, more likely than not, will need to sell shares in coming weeks, including State Street Corp., which became the 14th member of the Standard & Poor’s 500-stock index to reduce or suspend its dividend in 2009, cutting its quarterly payout to a token penny-per-share as it tries to shore up its capital base. For regulators, ratings agencies, and investors, the prevailing opinion now is that the tangible common equity ratio — which measures a company’s tangible common equity to its tangible assets — is the most important figure, because it represents just how leveraged a company is. Common shareholders are the first losers in the capital structure, and additional losses reduce a company’s flexibility. State Street, prior to its dividend suspension and announcement of a reduction in its unrealized after-tax loss on its investment portfolio (to $5.6 billion at January end from $6.3 billion at the end of December), had an exceedingly low ratio of about 1.05%, one it hopes to raise to near 5% by the end of the year. The company did not announce a capital raising — analysts expect about $3 billion in common equity at some point in the near future, which resulted in a bit of disappointment. “We can understand some investor disappointment as some might have been hoping for some combination of equity raise and asset reduction,” wrote analysts at Credit Suisse. Still, the stock gained 14% in renewed hopes that the company will accomplish its task.
As China giveth, China taketh away. Various companies and sectors rallied throughout 2006 and 2007 on the back of expectations for growth in China, or as a result of positive sentiment in a growth industry in the Asian giant. So much for that. Investors are taking a less charitable view of the personal computing space in the wake of losses at Chinese manufacturer Lenovo, which announced a 20% decline in year-over-year sales, raising questions about its ability to grab more market share outside of China. “The Lenovo news is more confirmation that selling computers is getting to be a bad business,” wrote Doug McIntyre on 24/7 Wall Street. “People and enterprises will wait months and perhaps a year to replace a machine. That could do more damage to the industry than most analysts have said.” One analyst that did say this was Mark Moskowitz, IT analyst at J.P. Morgan, who downgraded shares of Dell to underweight based on revised projections for a slowing in PC sales. Mr. Moskowitz now expects PC sales to decline by 13.5% in 2009, down from earlier estimates for a 3.7% decline in sales, as they now expect “that the enterprise PC replacement cycle could be meaningfully deferred to 2010. In such a case, we would expect Dell to be disproportionately hit.” Shares of Dell fell 3.7% Thursday. Share this:
GE's Immelt Recognizes Market Realities
Jobs Data Shrugged Off -- For Now | 金融 |
2016-30/0359/en_head.json.gz/3415 | http://blogs.wsj.com/moneybeat/2014/03/20/inside-the-madness-of-the-stock-market/
Inside the Madness of the Stock Market
Jason Zweig
BiographyJason Zweig
@jasonzweigwsj
[email protected]
One of the best cartoons about investing ever published is this one, by the artist KAL, or Kevin Kallaugher:
Kevin Kallaugher
Originally printed in the Baltimore Sun on Oct. 17, 1989, after U.S. stocks dropped 6.9% on Oct. 13, it still circulates widely on Wall Street. (“The nation’s most important financial institution” was the New York Stock Exchange.)
Remarkably, new research suggests that KAL might not just have been using his imagination to make fun of the way investors can turn on a dime for no reason whatsoever. He might also have put his finger on a psychological process that can make investors turn on a dime for a reason they’re entirely unaware of.
Hearing or seeing a word that sounds like an action can prime you into taking that action, according to “From Bye to Buy: Homophones as a Phonological Route to Priming,” to be published next month in the Journal of Consumer Research. Despite its infelicitous title, the paper may help explain, at least in small part, the mystery at the heart of KAL’s cartoon: How do contagions spread through financial markets?
The study, run by marketing professor Derick Davis at the University of Miami, exposed people to homophones (words that are pronounced the same but spelled differently) like “bye” and “buy.”
For example, participants read a short blogpost about travel in Canada that ended either with “Bye bye!” or “So long!” Then they were asked how much they would pay for a name-your-own-price dinner for two at a local restaurant.
Those who had read the version of the blogpost that ended with “Bye bye!” were willing to pay up to 55.5% more than those who read the “So long” version. Merely seeing the word “bye” apparently made them more eager to buy. That was especially true for those who had to memorize a seven-digit number beforehand – the kind of distraction that many experiments have shown can reduce the mind’s reliance on logical reasoning.
You should probably buy a few grains of salt to sprinkle onto these findings. Recently, critics have argued that related claims about “priming” or unconscious influences on behavior are fragile and difficult to replicate, while psychologist Uri Simonsohn of the University of Pennsylvania has shown that many similar studies are statistically underpowered.
Prof. Davis, who ran this study, concedes that the effects he found are small. However, he adds, the people in his experiments weren’t just college students in a lab but were recruited online from a broader cross section of the population. And, he points out, people often fail to detect the incorrect use of homophones while proofreading, because the identical sound of the wrong word puts them in mind of the right word. (Think of all the times you didn’t even notice that you typed “they’re” for “their” or “there.”)
If “people are distracted by noise, time pressure and other commotion,” says Prof. Davis, their behavior may be more easily swayed by the homophone effect. When prompted by the sound “bye,” he says, “on average across many people, a small change in ‘buying’ behavior may be possible.” Prof. Davis, emphasizing that this is a speculation, adds that “a distracted investor primed with ‘bye’ might misremember reading that the stock was rated a ‘buy.’”
KAL isn’t surprised by the research. “The notion of human behavior being influenced by outside suggested stimuli certainly makes sense,” he told me in a recent email. Almost 25 years after he drew his brilliant cartoon, he still gets requests for reprints every week, he says.
The contagious panic that KAL captured in his image was unsettling. On Oct. 13, 1989 – a Friday the 13th – the Dow closed down 190.58 points, or 6.91%. At the time, that was the second-worst point decline (after the October crash of 1987, when stocks fell 23% in a day) and the 12th-worst percentage drop on record. The crash was said to have been triggered by the collapse of takeover bids for airline stocks UAL and AMR, but nearly all the collapse came in the final hour of trading, well after the news that the takeover bids had fizzled.
The next trading day, The Wall Street Journal tried to explain the crash:
One takeover stock speculator says that with individual investors frightened away from the market, the remaining participants are mainly institutions, all with instant access to the same information, and the same ability to sell in an instant – that is, until all try to sell at once.
“If this is something that had happened over the last few weeks, nobody would have noticed,” the speculator says. “But now it just happens in an hour. The information is very quick; it’s often inaccurate; and reactions can be irrational.”
In a guest essay published in the New York Times on Oct. 29, 1989, called “Fear of a Crash Caused the Crash,” future Nobel Prize-winning economist Robert Shiller described a survey he had done of 101 market professionals the Monday and Tuesday after the tumble. Asked whether the drop was driven by “a change in the stock market fundamentals” or “psychology and emotion,” only 19% cited fundamentals; 77% blamed psychology and emotion. Shiller and his colleague William Feltus also asked the professionals if they thought the latest drop could turn into a replay of the 1987 crash; 35% thought it could, while 41% thought other investors thought so.
So, when KAL poked fun at traders overreacting to what others say, he was right on the money.
To this day, says KAL, brokers buying copies of the cartoon “inevitably” tell him, “It was so funny because it was so true.”
So if you walk into a brokerage or financial adviser’s office and you hear “Bye Bye Love” and “American Pie” and “Bye Bye Blackbird” playing on the sound system, hang on to your wallet. You may be more easily swayed than you think.
Looming Friction Between U.K. Government And BOE
Grading Yellen: 'It Was a Poor Performance' | 金融 |
2016-30/0359/en_head.json.gz/3498 | Petaquilla Minerals Ltd. Enters US$140 Million Loan Facility
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/31/12 -- Petaquilla Minerals Ltd. ("Petaquilla" or the "Company") (TSX:PTQ)(OTCBB:PTQMF)(FRANKFURT:P7Z) announces that it has received and accepted an indicative term sheet for a loan facility from Red Kite Mine Finance Trust I (the "Lender") whereby the Lender has offered to provide the Company with a loan facility for an aggregate US$140,0000,000 (the "Loan") for the development, construction and working capital requirements of Petaquilla's projects in Panama and Iberia. Closing of the Loan facility, which is expected to occur on or about January 15, 2013, is subject to customary due diligence, regulatory approvals and final legal documentation reflecting the terms of the term sheet. An initial tranche of US$90,000,000 will be available to the Company upon closing, with the subsequent US$50,000,000 to be released based on technical milestones, namely updated National Instrument 43-101 resource estimates on either of the Company's two projects, Panama or Spain. With the initial US$90,000,000, the Company will be able to, among other items, proceed with the payout of its existing gold and silver prepayment contracts and convertible loan with Deutsche Bank AG ("DB"), London Branch, effectively freeing an average of 1,500 gold ounces monthly, or approximately US$30,000,000 annual cash flow currently committed to such contracts. The DB payout will also free Petaquilla's infrastructure division, Panama Desarrollo de Infraestructuras, S.A. ("PDI"), for spin-out to the shareholders during the first quarter of calendar 2013.
The net proceeds from the Loan, in addition to the additional annual cash flows resulting from the payout of the gold and silver prepayment contracts, will allow the Company to bring the Lomero-Poyatos project to its initial on-site production by mid-2014. The Loan will mature five years from closing with the option to extend for a further one year, subject to the Company meeting certain milestones, and will permit early repayment without penalty. The Loan will bear interest at a base interest rate of the 3 month US$ LIBOR rate ("L"), subject to a minimum of 1%, plus an interest rate margin of L+750 basis points on the first US$90,000,000 of principal and L+850 basis points on the last US$50,000,000 of principal. Interest and principal shall be payable on a semi-annual basis with the first principal repayment due 18 months after closing of the Loan.
The Loan will be a secured obligation and its security will rank first to all existing indebtedness of the Company. The loan facility will be fully and unconditionally guaranteed, on a joint and several basis, by the Company's existing and future subsidiaries and secured by all current and future assets of Petaquilla and its subsidiaries. PDI will be included as a guarantor until it is spun-off by Petaquilla.
Pursuant to the terms of the indicative term sheet, the Loan will be complemented by a gold off-take agreement and a copper, zinc and lead off-take agreement, each valid for seven years, covering the production of the Company's projects in Panama and Spain and based on a discount of US$5.00 applicable to each troy ounce of gold sold by the Company. The transaction is subject to originating fees which, combined with the implicit cost of the off-take terms, represent an all-in cost of the facility of 10.3%. No warrants are to be issued in connection with the transaction.
About Petaquilla Minerals Ltd. - Petaquilla is a growing, diversified gold producer committed to maximizing shareholder value through a strategy of efficient production, targeted exploration and select acquisitions. The Company operates a surface gold processing plant at its Molejon Gold Project, located in the south central area of Panama-a region known historically for gold content. In addition, the Company has exploration operations at its wholly-owned Lomero-Poyatos project located in the northeast part of the Spanish/Portuguese (Iberian) Pyrite Belt and several other exploration licenses in Iberia.
Disclaimer. Certain statements in this press release constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, potentials, future events or performance (often, but not always, using words or phrases such as "believes", "expects" "plans", "estimates" or "intends" or stating that certain actions, events or results "may", "could", "would", "might", "will" or "are projected to" be taken or achieved) are not statements of historical fact, but are forward-looking statements.
Forward-looking statements relate to, among other things, the estimation of mineral resources and the realization of mineral resource estimates; all aspects of the development and future operation and production of the Molejon gold mine and the development of other deposits; the outcome and timing of decisions with respect to whether and how to proceed with such development and production; the timing and outcome of any such development and production; estimates of future capital expenditures; estimates of permitting time lines; statements and information regarding future feasibility studies and their results; production forecasts; future transactions; future metal prices; the ability to achieve additional growth; future production costs; future financial performance, including the ability to increase cash flow and profits; future financing requirements; and mine development plans.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates and assumptions of the Company contained or incorporated by reference in this news release, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein as well as: there being no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, power disruptions, political change, protests by native or environmental groups, damage to equipment or otherwise; permitting, development, operations, expansion and acquisitions at the Molejon gold mine and other deposits being consistent with the Company's current expectations; prices for gold and silver and costs of labour and supplies being consistent with expectations; and the accuracy of the Company's current mineral reserve and mineral resource estimates.
A variety of inherent risks, uncertainties and other factors, many of which are beyond the Company's control and may be known or unknown, affect the operations, performance and results of the Company and its business, and could cause actual events or results to differ materially from estimated or anticipated events or results expressed or implied by forward looking statements. Some of these risks, uncertainties and factors include fluctuations in the price of gold and silver; the need to recalculate estimates of resources based on actual production experience; the failure to achieve production estimates; variations in the grade of ore mined; variations in the cost of operations; the availability of qualified personnel; the Company's ability to obtain and maintain all necessary regulatory approvals and licenses; the Company's ability to use cyanide in its mining operations; risks generally associated with mineral exploration and development, including the Company's ability to develop its deposits; the Company's ability to acquire and develop mineral properties and to successfully integrate such acquisitions; the Company's ability to obtain financing when required on terms that are acceptable to the Company; challenges to the Company's interests in its property and mineral rights; and current, pending and proposed legislative or regulatory developments or changes in political, social or economic conditions in the countries in which the Company operates; and general economic conditions worldwide.
Forward-looking statements speak only as at the date of this document. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions and, except as required by law, the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. Readers are cautioned not to put undue reliance on forward-looking statements.
On behalf of the Board of Directors of PETAQUILLA MINERALS LTD.
Joao C. Manuel, Chief Executive Officer
NO STOCK EXCHANGE HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.
Petaquilla Minerals Ltd.
Joao C. Manuel
(604) 694-0021 or Toll Free: 1-877-694-0021
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2016-30/0359/en_head.json.gz/4240 | Home » Taxation
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Follow > Click here to add Foreign CompaniesSubsidiaries as an alertClick here to remove the Foreign CompaniesSubsidiaries alertDisable alert for Foreign CompaniesSubsidiaries, Click here to add Moroccan government as an alertClick here to remove the Moroccan government alertDisable alert for Moroccan government, Click here to add OECD as an alertClick here to remove the OECD alertDisable alert for OECD The Moroccan taxation system consists of direct and indirect taxes. Indirect taxes provide a greater source of tax revenue than the direct taxes. The system is statutory-based and has been recently updated in part with effect from 1/1/1996 by the Investment Charter (Law No. 18/95). There is virtually no case law on taxation, and tax-issues hardly come before the courts. In general, the tax authorities do not issue advance rulings on taxation matters. Taxation of CompaniesMoroccan corporations are subject to a unitary tax system. The corporate tax (impet sur les societes or IS) rate has been reduced to 35 percent in 1996. Corporations are taxed under a special tax regime, which covers limited liability companies, limited partnerships by shares, general and limited partnerships in which at least one partner is a corporate entity, civil companies, branches of foreign corporations, public sector companies having profit-oriented activity and joint ventures having business-oriented activity. General partnerships and limited partnerships in which all partners are individuals may elect to be taxed under the corporate tax regime. The same applies to joint ventures in which all parties are individuals. Foreign corporations are subject to taxation on income arising in Morocco if they have or are deemed to have a permanent establishment in Morocco. Taxation of corporations is the same irrespective of ownership, and foreign owned corporations are essentially regarded as Moroccan corporations insofar as they are incorporated in Morocco. The corporate tax regime is based upon territoriality. Net profits earned by foreign subsidiaries and establishments of Moroccan companies are not taxable until profits are actually repatriated and distributed to shareholders. Taxable income is based on receipts and accruals from products delivered, services rendered and work carried out and accepted by customers. Interest, royalties, income and service fees are subject to corporate income tax at the rate of 36 percent. Dividends received by corporate shareholders from taxable entities incorporated in Morocco are not taxable. This exemption does not apply, however, to foreign investment income, which is taxed after deducting foreign withholding taxes. Morocco exempts certain types of income from corporate taxation. The first is income derived from agriculture which is exempt until the year 2020. The second concerns income of companies set up in the Western Sahara. There are also specific tax incentives exempting some companies from corporate tax for specified periods. In addition, Moroccan corporations can distribute tax free dividend of common- stock pro rata to all common-stock shareholders. All expenses incurred for the purpose of the business are normally deductible, including salaries and wages, depreciation, rent and representation expenses. Only 75 percent of the amount paid for purchases of raw materials and products, start-up expenses, donations and other general expenses equal to or exceeding MD 10,000 are deductible, unless the payment is made by a non-assignable crossed check, bank transfer or bill of exchange. Except for the corporate tax (IS), taxes are deductible. Expenses incurred outside Morocco by a foreign company having permanent activity in Morocco require adequate justification and documentation before they may be deducted. Losses may be carried forward and deducted from taxable profit for a period of four years. A minimum amount of corporate tax is payable by companies other than foreign companies (cotisation minimale or CM), irrespective of the company's profits or losses. The CM is based on turnover, income from interest, subsidies, bonuses or donations received. The CM is levied at a rate of 0.5 percent of income, and is not payable by companies during their first thirty-six months of operation. Registration FeesMorocco imposes a registration fee at a fixed rate of 0.50 percent on the forming or increasing of company capital. This rate is reduced to 0.25 percent for deeds of partnership or capital increase of investment banks and companies the main purpose of which is either stocks and shares management or application for other companies on joint account. Subsidiaries of Foreign CompaniesSubsidiaries set up in Morocco by foreign companies are treated as local companies, independent of their foreign parent-company for legal and taxation purposes. Inter-company transactions must be on an arm's length basis. Expenses must be incurred in the furthering of the subsidiary's objectives and not those of its parent-company. Dividends paid to non-resident shareholders are subject to a 15 percent withholding tax. Interest, royalties and service or management fees paid to non-residents are subject to a 10 percent withholding tax. These rates may be reduced or waived under prevention of double taxation treaties. National Solidarity LevyCompanies subject to corporate tax must pay a levy called National Solidarity Levy (PSN). The base used to asses this levy is equal to the base chosen for the assessment of corporate tax, and it is calculated by applying a 10 percent rate to the amount of the corporate tax. If a company is fully exempt from corporate tax, PSN has to be paid in an amount of 25 percent to a theoretical corporate tax. The PSN cannot be less than MD 1,500 for a yearly turnover of less than MD 1,000,000 and not less than MD 3,000 for a turnover of more than MD 1,000,000. Capital Gains TaxMorocco instituted a tax on the proceeds from stocks and company's shares and comparable income (TPT), distributed by companies based in Morocco and paying taxes on corporations. The tax of 15 percent is collected at the source and applies to: * Dividends; * Capital interest; * Profit percentages; * Special allowances or the payment of fees and other compensations allotted to members of the board of directors (except for the fraction of these compensations considered as salary and subject to personal income tax -IGR); * Sums levied on profits to repay capital produced to stockholders or to buy over stocks; * Beneficiary/founder's shares; * Surpluses from winding up augmented by reserves built up over at least ten years ago; * Profits made in Morocco by establishments whose home office is located abroad, as these profits are made available to such companies abroad. Taxation of IndividualsIndividuals, regardless of nationality or activity, who have their habitual residence in Morocco are subject to a personal income tax (impet general sur le revenue or IGR) on their worldwide income on a progressive scale between 13 and 44 percent. Individuals not having their habitual residence in Morocco are subject to tax only on Moroccan-source income. Habitual residence status is established by reference to one of the following: (1) place of permanent abode; (2) center of economic interest; and (3) duration of stay in the country exceeding 183 days within any period of 365 days. The issue of double taxation is partially addressed by tax treaties or unilateral relief in the form of tax credit. Generally speaking, there are no concessions for foreign nationals working in Morocco, but the cost of home travel is exempt from tax every two years, and a substantial reduction in tax on pensions received from other countries is granted. In addition to employment income, tax is levied on professional and business activities, investments and rent. All compensation paid to employees is taxable, including salaries and wages, allowances, pensions, annuities, reimbursement of taxes and all benefits derived from employment. Taxable benefits include the furnishing of an automobile for the employee's private use, housing benefits and profit sharing or retirement plans paid by foreign companies. An individual taxpayer can deduct from taxable income any necessary traveling and entertainment expenses, provided they are incurred in the performance of that individual's duties, and are justified by the nature of the profession. Other Taxes Value Added TaxThe Value Added Tax (VAT) is a non-cumulative tax levied at each stage of the production and distribution cycle. Thus, suppliers of goods and services must add VAT to their net prices. Where the purchaser is also liable for VAT, input VAT may be offset against output VAT. The standard VAT rate is 19 percent and applies to all suppliers of goods and services, except those taxed at other rates or those who are exempt. A reduced rate of 7 percent applies to specific items such as banking and credit services, leasing, gas, water and electricity. A reduced rate of 14 percent applies to building and construction activities and to the transport and the hotel industries. Two types of exemptions from VAT are provided. The first is an exemption with credit, equivalent to the zero tax concept, which applies to exports, agricultural material and equipment and fishing equipment. The second is an exemption without credit, i.e., the seller receives no credit for input VAT paid. This exemption applies to basic foodstuffs, newspapers and international transport services. Business TaxA business tax, or patente, is levied on individuals and enterprises that habitually carry out business in Morocco. The tax consists of a tax on the rental value of business premises (rented or owned) and a fixed amount depending on the size and nature of the business. The tax rates range from 5 percent to 30 percent and pro rata reimbursements are granted for businesses which commence or cease activities during the tax year. Patent TaxThe Patent Tax is to be paid by individuals involved in commercial activities who are not exempted by special decree (dahir). The tax includes a proportional tax which averages 10 percent of the rental value of industrial establishments and a variable tax which depends on the number and kind of pieces of equipment owned by the business entity. Stamp Duty/Notarial TaxCorporate stocks, founder's shares and bonds issued by companies are free from both stamp duty and formalities. A notarial tax is imposed based on the capital stock, in the amount of 1 percent for stock up to MD 5,000, 0.5 percent from MD 5,000 to 10,000 and 0.2 percent for over MD 10.000. Urban Property Tax and Municipal TaxOwners of real estate are subject to urban property tax on the rental value of the property. The same applies to owners of machines and appliances that are integral parts of the establishment producing goods or services. The general urban property tax rate is 13.5 percent of the rental value. It is 3 percent for lots and 4 percent for structures and fittings as well as for machines and appliances. The tenants of rented property are subject to a municipal tax on the value of the property. The rate is 10 percent of the normal rental value of the buildings located within the urban areas and 6 percent of the normal value on peripheral zones of urban communes. Tax on InterestTax is imposed on individual or corporate residents in respect of interest earned on bonds and other loan securities, fixed and current account deposits, loans and advances, and various loans conducted through banks or financial institutions. Customs DutiesAll goods and services may be imported; Goods deemed to have a negative impact on national production, however, may require an import license. Most products imported are subject to import duties, the rates of which vary between 2.5 percent and 10 percent for equipment, materials, spare parts and accessories. Some materials and products, however, are exempted, especially those imported under the investment charter, imported under customs economic systems and those using renewable energies. Value added tax is also payable on goods imported into Morocco. Import Tax LevyThe Import Tax Levy (PFI) is imposed on imported commodities at a fixed rate of 15 percent. It is reduced or eliminated, however, as follows: * A rate of 12.5 percent for pharmaceuticals or raw materials used in the manufacturing of pharmaceuticals; * Exemption for the import of material subject to customs duties; * Exemption for enterprises which engage in research activities involving mineral substances; * Exemption for materials using renewable energies; * Exemption for fertilizer products; * Exemption for certain antibiotic medical products. There is also a para-fiscal tax of 0.25 percent that applies to imported commodities. Treaties for the Prevention of Double TaxationSince a Moroccan resident is taxed on worldwide income, the Moroccan tax system provides relief from foreign taxes paid on such worldwide income by means of a foreign tax credit. This foreign tax credit cannot exceed the Moroccan tax otherwise payable in respect of the foreign-source income. The Moroccan government is eager to encourage foreign investment. This is reflected by the territoriality principle for taxation applicable to corporations mentioned above. In addition, Morocco has concluded about seventeen treaties for the prevention of double taxation, mainly with developed countries. Morocco's list of treaty-partners include Belgium, Canada, France, Germany, Italy, Luxembourg, the Netherlands, Norway, Romania, Spain, Sweden, Tunisia, the United Kingdom and the United States. Most of the tax treaties are based on the OECD model and do not contain specific anti-abuse provisions. Reduced withholding tax rates vary from one treaty to another, and in the case of the treaty with Sweden, the rate is zero. Of special interest is the treaty with France which offers advantages involving self-employed foreigners and payments for technical assistance and contracts (e.g., imported supplies). © 2000 Mena Report (www.menareport.com)
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