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Beijing Academy of Artificial Intelligence 851

2016-30/0360/en_head.json.gz/5373

Dear Fellow Floridians: As we reflect on 2013 and consider the potential for 2014, it is clear that Florida is at a turning point. Today, people across the country are more optimistic about Florida and its prospects. Last year, job growth in Florida exceeded expectations while the state’s unemployment rate, now at a 6-year low, was one of only a few in the country to rapidly decline. Our housing market has improved and the population growth Florida is well known for has begun to return. Perhaps our most exciting prospect is the renewed growth and intensity of Florida businesses, startups and industries over the past year, which has characterized Florida’s strong economic performance and helped label us as ‘ahead of the pack’ in 2013. It is through a reflection on the past that we are able to design and construct a lens from which to look out into the possibilities and opportunities for this year and beyond. It is in this spirit that I invite you to explore this special New Year’s edition of Florida’s Bottom Line. Inside, you’ll find expert insight and an outlook on Florida’s economy, finances, workforce and housing market in the year ahead. As we begin to write the next chapter of Florida’s future, we must continue to recognize that it is the collective ingenuity, perseverance and leadership of Floridians that lays the foundation for our economic future, shaping the advancement and prosperity of our great state. It is my hope that this edition of Florida’s Bottom Line will challenge you to look out at the opportunities ahead of us and equip you with the resources to do so throughout the New Year. To read the latest edition of Florida’s Bottom Line, Jeff Atwater Chief Financial Officer State of Florida News of Interest Forbes: Millenials Believe Business Can Do More Florida Trend: Finding opportunities for Florida in international trade Florida Times-Union: Crowd-funding festival to feature marketing, design experts Tampa Bay Times: Florida's unemployment rate falls to 6.2 percent Tampa Bay Business Journal: Charitable giving grows faster in Florida than rest of U.S. Florida Economic Briefs Florida’s unemployment rate falls to 6.2 percent Florida’s unemployment rate continued to drop to near its 6-year low, dropping to 6.2 percent in December, down 1.7 percentage points from a year ago. Florida’s unemployment rate was 0.5 percentage point lower than the U.S. rate and was below the national rate for the ninth consecutive month. Over the year, 192,900 (+2.6 percent) jobs have been added in the state. Florida’s consumer sentiment rises on expectations of improvement in national economic conditions Floridians were more optimistic about the economy this month, with consumer confidence rising one point in January. The increase is a due to more Florida consumers feeling confident about improvements in economic conditions over the next five years. Source: Bureau of Economic and Business Research Stay Connected Volume 11 Number 5 January 29, 2014 Message from the CFO on Florida's Bottom Line News of Interest DFS Home Email CFO Atwater Unsubscribe Legal Notices 2011 © Florida Department of Financial Services

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2016-30/0360/en_head.json.gz/5732

Business | National / World Business As companies seek tax deals, governments pay high price By LOUISE STORYThe New York Times | December 03,2012 In the end, the money that towns across America gave General Motors did not matter.When the automaker released a list of factories it was closing during bankruptcy three years ago, communities that had considered themselves GM�s business partners were among the targets.For years, mayors and governors anxious about local jobs had agreed to GM�s demands for cash rewards, free buildings, worker training and lucrative tax breaks. As late as 2007, the company was telling local officials that these sorts of incentives would �further GM�s strong relationship� with them and be a �win/win situation,� according to town council notes from one Michigan community.Yet at least 50 properties on the 2009 liquidation list were in towns and states that had awarded incentives adding up to billions in taxpayer dollars, according to data compiled by The New York Times.Some officials, desperate to keep GM, offered more. Ohio was proposing a $56 million deal to save its Moraine plant, and Wisconsin, fighting for its Janesville factory, offered $153 million.But their overtures were to no avail. GM walked away and, thanks to a federal bailout, is once again profitable. The towns have not been so fortunate, having spent scarce funds in exchange for thousands of jobs that no longer exist.One township, Ypsilanti, Mich., is suing over the automaker�s departure.�You can�t just make these promises and throw them around like they�re spare change in the drawer,� said Doug Winters, the township�s attorney.Yet across the country, companies have been doing just that. And the giveaways are adding up to a gigantic bill for taxpayers.A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains.Vermont spends at least $407 million per year on incentive programs, the investigation found, or $650 per capita, or 31 cents per dollar of state budget spending. The top incentive type used by the state was a sales tax refund, exemption or other sales tax discount, which accounted for $359 million of the spending. The manufacturing sector is the top beneficiary of the money, with $333 million going to companies in that industry, while $24.8 goes to agriculture and $1.8 million to alternative energy, the study found.The top beneficiaries of the spending in the last 15 years included Husky Injection Molding Systems, IDX Systems Corporation, King Arthur Flour, Dealer.com, Skypoint Solar, Mak Molding and Green Mountain Coffee Roasters. They received benefits from state and local governments like free job force training, property tax abatement, tax credits or refunds on the purchase of manufacturing equipment; and cash grants or loans. Vermont had one of the highest costs per capita for this type of spending, ranking sixth out of the fifty states, The Times found.The cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.�How can you even talk about rationalizing what you�re doing when you don�t even know what you�re doing?� said Timothy J. Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich.The Times analyzed more than 150,000 awards and created a database of incentive spending, which is searchable on the newspaper�s website. The survey was supplemented by interviews with more than 100 officials in government and business organizations as well as corporate executives and consultants.A portrait arises of mayors and governors who are desperate to create jobs, outmatched by multinational corporations and short on tools to fact-check what companies tell them. Many of the officials said they feared that companies would move jobs overseas if they did not get subsidies in the United States.Over the years, corporations have increasingly exploited that fear, creating a high-stakes bazaar where they pit local officials against one another to get the most lucrative packages. States compete with other states, cities compete with surrounding suburbs, and even small towns have entered the race with the goal of defeating their neighbors.While some jobs have certainly migrated overseas, many companies receiving incentives were not considering leaving the country, according to interviews and incentive data.Despite their scale, state and local incentives have barely been part of the national debate on the economic crisis. The budget negotiations under way in Washington have not addressed whether the incentives are worth the cost, even though 20 percent of state and local budgets come from federal spending. Lawmakers in Washingtonare battling over possible increases in personal taxes, while both parties have said that lower federal taxes on corporations are needed for the country to compete globally.The Times analysis shows that Texas awards more incentives, over $19 billion a year, than any other state. Alaska, West Virginia and Nebraska give up the most per resident.For many communities, the payouts add up to a substantial chunk of their overall spending, the analysis found. Oklahoma and West Virginia give up amounts equal to about one-third of their budgets, and Maine allocates nearly a fifth.In a few states, the cost of incentives is not significant. But several of them have low business taxes � or none at all � which can save companies even more money than tax credits.Far and away the most incentive money is spent on manufacturing, about $25.5 billion a year, followed by agriculture. The oil, gas and mining industries come in third, and the film business fourth. Technology is not far behind, as companies like Twitter and Facebook increasingly seek tax breaks and many localities bet on the industry�s long-term viability.Those hopes were once more focused on automakers, which for decades have pushed cities and states to set up incentive programs, blazing a trail that companies of all sorts followed. Even today, GM is the top beneficiary, public records indicate. It received at least $1.7 billion in local incentives in the last five years, followed closely by Ford and Chrysler.A spokesman for General Motors said that almost every major employer applied for incentives because they help keep companies competitive and retain or create jobs.�There are many reasons why so many Ford, Chrysler and GM plants closed over the last few decades,� said the GM spokesman, James Cain. �But these factors don�t mean that the companies and communities didn�t benefit while the plants were open, which was often for generations.�Cain cited research showing that the company received less money per job than foreign automakers operating in the United States.Questioned about incentives, officials at dozens of other large corporations said they owed it to shareholders to maximize profits. Many emphasized that they employ thousands of Americans who pay taxes and spend money in the local economy.For government officials like Bobby Hitt of South Carolina, the incentives are a good investment that will raise tax revenues in the long run.�I don�t see it as giving up anything,� said Hitt, who worked at BMW in the 1990s and helped it win $130 million from South Carolina.Today, Hitt is the state�s secretary of commerce. South Carolina recently took on a $218 million debt to assist Boeing�s expansion there and offered the company tax breaks for 10 years.Hitt, like most political officials, has a short-term mandate. It will take years to see whether the state�s bet on Boeing bears fruit.In Michigan, Gov. Rick Snyder, a Republican in his first term, has been working to eliminate most business tax credits but is bound by past awards. The state gave General Motors $779 million in credits in 2009, just a month after the company received a $50 billion federal bailout and decided to close seven plants in Michigan.GM can use the credits to offset its state tax bill for up to 20 years.�You don�t know who will take a credit or when,� said Doug Smith, a senior official at the state�s economic development agency. �We may give a credit to GM, and they might not take it for three years or 10 years or more.�One corporate executive, Donald J. Hall Jr. of Hallmark, thinks business subsidies are hurting his hometown, Kansas City, Mo., by diverting money from public education.�It�s really not creating new jobs,� Hall said. �It�s motivated by politicians who want to claim they have brought new jobs into their state.�For Hall and others in Kansas City, the futility of free-flowing incentives has been underscored by a border war between Kansas and Missouri.Soon after Kansas recruited AMC Entertainment with a $36 million award last year, the state cut its education budget by $104 million. AMC was moving only a few miles, across the border from Missouri. Workers saw little change other than in commuting times and office decor. A few months later, Missouri lured Applebee�s headquarters from Kansas.�I just shake my head every time it happens, it just gives me a sick feeling in the pit of my stomach,� said Sean O�Byrne, the vice president of the Downtown Council of Kansas City. �It sounds like I�m talking myself out of a job, but there ought to be a law against what I�m doing.�

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2016-30/0360/en_head.json.gz/6082

Resource Center Current & Past Issues eNewsletters 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 top of any article. The Role of Treasury in Corporate Compliance Compliance is front and center in most large companies, but many treasury teams are too lean to implement critical controls. By Treasury & Risk Staff June 25, 2013 • Reprints As regulations continue to evolve in jurisdictions around the world, corporate boards and senior managers are paying very close attention to compliance efforts enterprise-wide. Organizations are reviewing procedures across business units and geographic boundaries to improve visibility into their regulatory compliance and mitigate compliance risks. In this process, though, treasury departments often get short shrift. Deloitte recently published a book titled “Enterprise Compliance: The Risk Intelligent Approach.” Treasury & Risk sat down to discuss the book, and treasury’s role in enterprise compliance, with two of the firm’s thought leaders: Robert Biskup, director of forensic and dispute services, and Melissa Cameron, a Deloitte principal who specializes in treasury. Biskup previously served as the chief compliance officer for a Fortune 10 company, and Cameron served previously as a corporate treasurer and a wholesale banker. Both see the treasury function as a key, and often neglected, player in corporate compliance efforts. T&R: More than a decade after the Sarbanes-Oxley Act brought regulatory compliance to the forefront for corporate boards and management, how well are most businesses doing in the area of compliance? Robert Biskup: The past 15 years have been a very dynamic period of development in corporate compliance programs. In the pre-SOX [Sarbanes-Oxley] era, companies that weren’t in highly regulated industries, such as defense or financial services, commonly had compliance programs that consisted of a vision statement and little else. I think of that as the first generation of corporate compliance programs. Then, post-SOX, a lot of corporations started doing a good job of enhancing their vision statements; publishing robust codes of conduct; expanding their policies and procedures; and enacting everything that SOX specifically called for, including whistle-blower and incident-management programs. But despite these proactive aspects of compliance, some of the back-end aspects—around assurance, auditing, monitoring, things of that nature—were lagging. I think what we are seeing now is the unfolding of the third generation of corporate compliance programs. Companies have spent 15 years in an incubation period, filled with trial and error and experimentation. Now they have a better understanding of what the effective elements of a compliance program ought to look like. T&R: What does an effective compliance program look like? RB: Well, we could spend the better part of the day on that subject, but at a high level, we at Deloitte see an effective program as structured in three broad layers. The first layer, which we call the ‘environmental layer,’ requires an in-depth understanding of the company’s industry, geography, and emerging risk trends within the sector and locations where the company does business. The second layer we call the ‘evaluation layer.’ It includes a deep and rich analysis of risks and incorporation of enabling technologies like analytics into program and risk evaluation. And finally is the ‘execution layer,’ which consists of the tools, standards, and business processes involved in the program’s execution. [For more, see the sidebar “Key Considerations in Designing a Corporate Compliance Program,” below.] T&R: How does the treasury function fit into the broader corporate model for compliance? RB: Compliance is critical to treasury, and having a compliance-oriented mindset in the leadership of the treasury organization is especially critical. Like the bank robber Willie Sutton said when asked why he robbed banks: “Because that’s where the money is.” Companies have to have a compliance focus in treasury. Melissa Cameron: It’s interesting. When I go out and meet with companies, I generally find that their compliance programs have evolved quite substantially over the last 10 to 15 years, as Rob described—but I often feel that the treasury organization is the poor cousin in finance. Most of the companies I work with have annual revenues between $1 billion and $50 billion. They might have a few hundred people in the finance organization, but rarely do we see more than 10 people sitting in treasury. Treasury departments are now handling a very substantial portion of the balance sheet. They’re managing the liquidity of the company, dealing with business units in many countries around the world. Yet there are very few people in the organization, and the compliance infrastructure may be underinvested in relative to other areas. T&R: What kinds of control structures do you usually see, and where are the weaknesses? MC: We often see a very high reliance on dual control—for example, in initiating and transmitting a wire transfer—which means that if two people decide to collude, they’ll break through just about every treasury control the company has. We also tend to see much less reliance on segregation of duties between a front office and a back office in treasury. Companies may be lacking independence around accounting and reconciliation, compared with the initiation and execution of trades. And accounting teams may not fully recognize the role they can play in detecting breaks in controls. If they’re reconciling bank accounts on a monthly or quarterly basis, that’s a big window of opportunity for someone who wishes to commit fraud before it might be detected. Treasury departments do have much better technology in place than they had, say, 5 or 10 years ago. Still, most treasury departments face limitations, in large part because they just don’t have enough people in the department. Folks end up with more systems entitlements, or permissions, than they should have. Often they have access to both front-office and back-office functions because they’re backing each other up. The internal auditors might see a nice SOX process on a piece of paper, but the controls are actually pretty easily broken. T&R: What should companies do to tighten up treasury controls? MC: When we’re working with clients to implement treasury systems, we spend a lot of time taking them through case studies of what we’ve seen go wrong from a fraud perspective. Internal auditors need to start thinking like a crook and looking at what could go wrong, how to break the treasury controls. They can really get on top of this by proactively considering toxic combinations of duties within treasury organizations and then mapping those to the ways in which systems are entitled, including the trading portals for foreign exchange and investments, the treasury workstations, confirmation platforms, and all the other treasury systems. What are the process flows, and where are the manual breaks in automated processes that might allow someone to do something like change routing instructions for a payment? T&R: What are some of the first steps that the average company should take to start improving compliance processes in treasury? MC: One obvious step is to start doing quarterly reviews of system entitlements in all the company’s treasury and banking platforms. That doesn’t require new technology, just added vigilance. Organizations may want to create detective controls, as well. For example, if a systems administrator adds new users into treasury systems, an automated report might be sent to the treasurer, controller, or CFO. This would enable the manager to determine, “Did Joe Blogs really join the organization, or is Joe Blogs a fictitious person that was created by a systems administrator to get around dual controls?” Companies should also pay special attention to whether they transact with their counterparties through any basis other than standard settlement instructions. If they choose to transact on a basis that allows routing to be developed and executed on any trade, then they have a higher risk profile than companies that use standard settlement instructions with their financial counterparties. Businesses that are doing that need to have additional reviews, and they need to set up templates for those kinds of wiring instructions. T&R: Are the types of reviews you’re describing the domain of the audit team, or should someone within treasury be keeping an eye on these things on an ongoing basis? MC: Both are very feasible. The treasury function might verify that Joe Blogs did join the organization. Then the internal auditors might want to take a sampling of transactions to make sure, for example, that the entitlements were set up correctly and that they don’t create a toxic combination of entitlements in any treasury system. RB: If companies can also include some advanced anomaly detection and analytics within their internal audit protocols, those kinds of things can help reduce risk and strengthen overall compliance. It certainly starts with general ledger and financial transaction testing, but increasingly we’re also seeing the unstructured data universe being blended into the mix. There are some important correlations and anomalies and, as Melissa said, toxic combinations that can be uncovered through the use of techniques such as predictive analytics, where algorithms may look for X and Y as possible predictive combinations of Z. T&R: Would this type of data analytics be something a company runs to receive alerts on an ongoing basis, or is it a process that a company should undertake to see whether there are any warning signs at a particular moment in time? RB: Typically, we see a combination of both. For known schemes and anomalies, companies are going to engage in ongoing monitoring that focuses on what they know. There are steady-state programs that can be run on an ongoing basis to throw flags when possible anomalies occur. These are similar to the systems banks run in the anti-money laundering context, which detect in real time, as transactions are being processed, whether they have a suspicious element to them. However, in addition to the known world, there is the unknown world. That’s where the audit testing and the predictive analytics can be usefully employed. T&R: Is training another element of improving controls? Are there other people within finance who should be educated about red flags that might come across their desk in one form or another that could alert them to a problem in treasury? MC: Companies may want to give finance and treasury staff direction on what types of things to look for. If the treasury department is involved in accounts payable, for example, staff can look for duplicate payments, or they can pay close attention if a vendor changes the routing instructions. This is a pretty common fraud scenario: Someone creates a fictitious vendor and then makes a payment to them, and the money’s gone. Treasury can also start to be more vigilant around any small transactions on the bank statement that aren’t explained when they’re doing reconciliations. Many skimming schemes are established by people that know that if the amount is under, say, $100, no one’s going to investigate it because it’s not worth their time. Taking out just under $100 every day adds up over years and years. Treasury managers need to run a tight ship and have a skeptical mindset, rather than just a compliance mindset. They need to think, ‘We push out so much money, and it’s so easy for us to push out. What are the things that could really go wrong? Do we have the right number of people? Do we have the right segregation of duties? Do we have the right reviews, and are we making people take vacations? Are we doing everything we can to uncover fraud?’ Control mechanisms that are very well-established in the banking industry are oftentimes not in place in multinational corporations. Perhaps they should be, even if it costs a little more for the company to have this type of infrastructure in place. Because, frankly, treasuries may be dealing with billions of dollars, and it doesn’t take a lot of extra budget to add a couple people to the treasury department to improve the robustness of the controls environment. No Easy Sell for Traders Trapped in Scandanavia China Stabilizes Money Markets Department of the Treasury 185 bank accounts 131 financial services 127 treasury systems 35 fraud 16 Compliance 15 finance organization 14 real time 10 bank statement 4 Melissa Cameron 3 bank robber 2 dispute services 2

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2016-30/0360/en_head.json.gz/6727

YOU ARE HERE: LAT Home→CollectionsThe IMF's dwindling fortunesThanks to disasters of its own making, the agency is losing money and influence.April 27, 2008|Mark Weisbrot | Mark Weisbrot is co-director of the Center for Economic and Policy Research in Washington. (www.cepr.net). 'The imf is back," declared the International Monetary Fund's managing director, Dominique Strauss-Kahn, at its annual spring meeting earlier this month in Washington. And not a moment too soon either. To hear the organization's economists tell it (as they mingled in five-star hotels, long black limos and posh restaurants with bankers, businessmen and finance ministers from around the globe), they've arrived on the scene just in time to help solve the world's financial crisis.But despite the bravado, the reality is that today's IMF is not what it once was. These days, the world's most famous deficit police force is running a whopping small-country-size $400-million annual deficit of its own and is being forced into some of the same kinds of "structural adjustments" it used to impose on indebted Third World nations. In just the last four years, the IMF's total loan portfolio has shrunk from $105 billion to less than $10 billion; over half of the current portfolio consists of loans to Turkey and Pakistan. To cut costs, the agency is reducing staff and closing offices.The IMF's loss of influence is probably the most important change in the international financial system in more than half a century. Until just a few years ago, the IMF -- originally created at the Bretton Woods conference on international economic cooperation in 1944 -- was one of the most powerful financial institutions in the world and the major avenue of influence for the United States in developing countries.This wasn't so much a result of the money that it lent -- the World Bank loans much more -- but because of its position at the top of a hierarchy of official creditors. Until a few years ago, a developing-country government that did not meet IMF conditions risked being economically strangled. The World Bank, regional banks such as the Inter-American Development Bank, rich lender governments and sometimes even the private sector would withhold lending until the government reached agreement with the IMF.At the top of this powerful creditors cartel sat the U.S. Treasury Department, which holds a formal veto over many of the IMF's decisions and is an informal power within the organization that marginalizes even the other rich countries. Developing countries -- the ones that have historically borne the brunt of IMF decisions -- have little or no effective voice in the decision-making of the organization, where the majority of votes of the 185 member nations are assigned to the rich members.But the IMF lost credibility after presiding over a series of economic disasters. Latin America, for example, suffered its worst long-term growth failure in modern history under the IMF's tutelage since 1980. The IMF's "shock therapy" program in Russia vastly underestimated the time it would take to transition from a planned to a capitalist economy in the early '90s. The result was a lot of shock and no therapy, and tens of millions were pushed into poverty as the economy collapsed.The Asian financial crisis in the late 1990s was a tipping point. The IMF and the U.S. Treasury helped cause the crisis by pushing for the removal of important regulations on foreign capital flows. Then they made it worse with their policy recommendations, prompting economist Jeffrey Sachs -- now head of Columbia University's Earth Institute -- to say that "the IMF has become the Typhoid Mary of emerging markets, spreading recessions in country after country."Some of these mistakes were because of incompetence; others were driven by ideological or special interests. But the result was that developing countries began voting with their feet, piling up international reserves so that they would never have to borrow again from the IMF cartel.The IMF-supervised Argentine disaster from 1998 to 2002, which pushed the majority of Argentines below the official poverty line in a country that was previously one of the richest in the region, further sullied the fund's reputation. Argentina then defied the IMF, refused its conditions, got no international help and rapidly transformed itself into the fastest-growing economy in the hemisphere. This too was noticed.The collapse of the IMF creditors cartel has been a huge blow to U.S. influence. It was most pronounced in Latin America, where most of a region that used to be referred to as the United States' "backyard" is now governed by states that are more independent of Washington than Europe is.The problem is that poorer developing countries, especially in Africa, remain dependent on foreign aid from the IMF (and the World Bank and other sources) to fund their basic budget and import needs. This can be harmful to their development and their people. In recent years, the IMF -- insisting that such measures are necessary to hold down inflation -- has imposed conditions that limit their public spending and, according to the fund's own internal evaluation, have prevented these countries from spending aid money on urgent needs, such as healthcare and education.These countries need to join the rest of the developing world in breaking free of the IMF's policy conditions. The U.S. Congress may consider legislation that would pressure the IMF to use some of its huge gold reserves for debt cancellation and to limit the IMF's control over policy in poor countries. These would be important steps forward for the world's poor. MORE:Seizure Led to FloJo's DeathHis 104 scores make his caseRestaurant review: South Beverly GrillBrutal Murder by Teen-Age Girls Adds to Britons' ShockComaneci Confirms Suicide Attempt, Magazine SaysAdvertisement FROM THE ARCHIVESIMF to Sign Loan Pact Due to Key Indonesia ReformsJuly 31, 2000Copyright 2016 Los Angeles TimesTerms of Service|Privacy Policy|Index by Date|Index by Keyword

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2016-30/0360/en_head.json.gz/6987

President's Remarks on the Economy to Small Business Owners The East Room Video (Real) Audio Fact Sheet: Over 1.5 Million Jobs Created Since August with 10 Straight Months of Job Gains In Focus: Jobs and Economy THE PRESIDENT: Thank you all very much. Please be seated. Thanks for coming. (Laughter.) I am glad you're here. We're here today to talk about the economic security of our fellow citizens. One of my most important jobs is to help create an environment in which the entrepreneurial spirit flourishes, because I believe that the fact that America is a heaven for the entrepreneur is one of the real strengths of our country. I know that when the entrepreneur feels confident, when the small business owner invests, it's more likely people will be able to find a job. I'm interested in people working. I want people being able to go to work and coming home, saying, I'm doing my duty as a mom or a dad to put food on the table; or I've got an opportunity to set aside hard-earned money for my child's education. That's what I'm interested in. And one way to do that is to make sure the small business part of our economy is vibrant, strong, energized and confident. And I think it is. (Applause.) The economy of the United States has been through a lot. If you really think about it, it's pretty remarkable to be able to stand up and say to you that our economy is strong and getting stronger, that we're witnessing steady, consistent growth. After all, we've been through a recession, a national emergency, a war, corporate scandals. We've got an economy which is changing. The nature of the job base is changing. And all that means it's been a difficult period of time. Yet we're strong, we're getting stronger. We're witnessing steady growth, steady growth. And that's important. We don't need boom or bust type growth, we want just steady, consistent growth, so that our fellow citizens will be able to find a job, and so that the small business sector will feel confident about expanding. I was pleased to see that consumer confidence is at a two-year high. That's an indication that the economy is strong, and getting better. When people are confident, they tend to be a part of the decision-making process amongst millions of deciders that say the future is going to be better. I've just met with some small business owners. I'm going to introduce them here in a second. They're confident. The first thing I listened for was, do they have confidence in their voices. Were they saying to me, gosh, I'm confident enough to make investment. That's what you listen for if you're somebody trying to be able to report to the economy about the nature of our economy. To a person, to a business, they were saying, you bet; I'm confident about the future of the country, therefore I'm going to invest more -- which I'm going to talk a little bit about here in a second. Real after-tax incomes are up 11 percent since December of 2000. To me, that's a vital statistic. Real after-tax incomes -- that means that the amount of money in somebody's wallet is increasing. That's what we want to hear, isn't it; particularly is you're somebody who has got a wallet. (Laughter.) It's a good sign when people are working and keeping more of their own money. That's what we want. (Applause.) Home ownership rates are at an all-time high. That's an important statistic, particularly if you believe the more people that own something, the better off our society is. That's what I believe. We want more people owning their own small business, we want more people owning their own home. See, when somebody owns their own home, they can say, this is my property, welcome to my home. They don't say, welcome to the government's home, they say, welcome to my home, which is an important part of not only consumer confidence, but it's an important part of making sure people have a interest in the future of our country. If you own something, you want to make sure government makes the right decision so you can continue to own it. And we've got -- home ownership rate is at an all-time high. And a particularly important part of that statistic is minority home ownership rates are at an all-time high. See, we not only want -- (applause.) When I'm talking about ownership, I'm talking about ownership for all people, not just -- not just a certain type of person. We want ownership to be a part of every neighborhood. And it's happening in America. It's really what makes us such a wonderful country, isn't it -- when people from all walks of life can say, I own something. And this administration will continue to make sure the ownership society, or the ability for people to own their own business or home, remains strong and vibrant. Manufacturers are reporting increased activity more than any time in 20 years. We've had concern in the country about whether or not the manufacturing sector would remain vibrant and strong, and the reports are that the activity is as good as it's been over the past 20 years. That's a pretty good sign, isn't it? I was told today, reminded today that the Purchasing Managers Index is now above 60 for its eighth straight month. That doesn't mean anything unless you're somebody who follows all the numbers that comes out of Washington. But what it does mean is it confirms the notion that manufacturing activity is as good as it's been in 20 years. And that's very positive. Today we got a new job report out. The jobs increased by 112,000 in June, which means we've had a total of 1.5 million new jobs since last August. (Applause.) To me, that shows the steady growth. It's one thing to be reporting the GDP numbers are up; it's another thing to be able to say more Americans are working. And that's what we want. We want people going to work. We want people to -- we want people to be able to come home and say, boy, how was work; it was great. (Laughter.) I enjoy working. I met two good workers from North Carolina here today. I'm about to introduce the owners of their company. But they were here; they said, we're working and feeling good about it. And that's really good news for our economy. I want to thank you all for coming. I appreciate -- I can see a lot of members of my administration here. I don't want to try to go through them all, except for Secretary Evans, the Secretary of Commerce. He's doing a fantastic job of running a very important Cabinet office of my government. But thank you all for being here. I see a lot of familiar faces. I see a lot of entrepreneurs, I see a lot of people who represent entrepreneurs here in Washington. You're doing a fine job of helping the United States Congress understand the proper role of government is to encourage investment, encourage business formation. And that's why the tax relief package we passed was so important, particularly in the face of a recession, and in the face of an emergency. It came at the right time. And I want to thank the people here who worked with us to convince Congress to trust the people with their own money. That's really what the debate was about, wasn't it? Who do you want to spend your own money? Obviously, the government needs to spend some of it to make sure we've got a military and make sure we fulfill certain functions. But at this point in our economic history, it made sense to let you have your own money to spend so that the economy would grow. We based a lot of our decision-making on the knowledge that if you have more money in your pocket, if there's more after-tax pay in your pocket, you'll demand additional goods and services. And when you do so in a market economy, if it's functioning properly, somebody will produce the goods or services. And when that happens, it kind of stabilizes the job base, and then, eventually, allows for more people to go back to work. And that's what we're seeing. And that's what we're seeing. Much of the job growth -- the stimulus package was aimed at small businesses, because we knew that 70 percent of new jobs are created by small businesses. We were aware of that. And so, therefore, when we went to Congress, we said, as you reduce the tax burden on the American people, make sure you understand the effect that tax reductions can have on the decision-makers who hire most of the new people -- that would be your small business owner. A vital part of our package was to encourage investment in the small business sector of our country, and it's paying off. See, when the small business owners of America feel confident and feel comfortable in investing in plant and equipment, or in new services, it stimulates a vibrant part of our economy. That's what happens. The cornerstone of our policy, if the truth be known, was to trust individuals with their own money and to encourage the small business sector to grow so people could find work. (Applause.) And we did so in two specific ways. One, we encouraged investment by allowing for accelerated depreciation. That basically is a fancy word for saying, if you buy a plant or equipment or new computer programs, it will really cost you less because you're able to deduct it faster from your income. That's an important part of encouraging people to make investment decisions. The other thing was, is that we reduced all taxes. You see, our theory was if you pay taxes, you ought to get a tax relief, not if you're a certain -- in a certain bracket you get tax relief. If you're going to have tax relief, the best, most fairest way to have tax relief is to say, everybody gets tax relief, not just a few people. And that's what we did. Here in Washington, you know, there tends to be class warfare. It says only certain people get tax relief, or if you're labeled "the rich" you don't get tax relief. Our view was, all tax relief was the fairest way to do it. And all tax relief -- the theory of giving everybody tax relief who paid taxes was especially beneficial to the small business owners, because most small businesses pay tax at the individual income tax rate. See, most small businesses structure their companies as what they call Sub-chapter S companies -- you work for a Sub-chapter S company -- or sole proprietorships. And therefore, when you reduce individual income taxes, you're reducing income taxes on small businesses, as well. And the more money a small business has in their treasury, the more likely it is they're going to be able to expand and hire, presuming they've got a good product. Now, government can't make you have a good product. (Laughter.) We can't say to you, gosh, we'll help you align what you supply with demand. You've got to figure that out yourself. That's not the role of government. (Laughter and applause.) But once you figure it out, once you've figured out how to meet demand in the marketplace, we can provide incentives to encourage you to expand. And that's what we've done. And that's why the economy is steady and strong. I'm telling you, people are going back to work because the small businesses sector of America is strong and vibrant and confident. (Applause.) Ed Kostenski is with us. There he is. Ed, stand up and be recognized. Thank you. (Applause.) He is from Jacksonville, Florida. I said -- and by the way, he's got a business called Nationwide Equipment. I said, did you start this business? He said, yes, at my kitchen table. It sounds pretty American to me, doesn't it? (Laughter.) You know how many small businesses have been started at the kitchen table or in their garage? Thousands. By, by the way, people from all walks of life, too. Ed is one who did that. He's got an S corporation -- S corp, which means that when he sees the -- all rates get reduced, he's really saying -- the Congress wisely reduced the taxes on my business. That's an important part of encouraging Ed to move on. By the way, he said that his -- the tax relief we passed in '01 helped him stay in business. And he is -- not only is he in business, he's adding employees this year. He's added 14 this year; he'll hire another six before the year is out. (Applause.) He's excited about his business. If you don't believe me, just go ask him after the meeting. (Laughter.) He's moving used Caterpillars overseas. He buys them, refurbishes them and finds a market and sells them, which means we'd better not have trade barriers. I mean, when you hear people talk about open trade, fair trade and free trade, think about Ed. He's able to sell machines. There's a need for them. He's able to compete globally, even though he is a small business owner. A lot of small businesses benefit because our government has decided to open markets, as opposed to close markets. It's an important part, by the way, of making sure America is a good place to do business is to be confident in our ability to compete, so long as the playing fields are fair across the world, which we'll make them fair. That's part of my job. Ed's job is to meet demand. My job is to make sure he's got the ability to do so with free and fair trade. He will invest $300,000 this year. That's a lot of money for a small business. One of the reasons he says he'll do so is because the tax savings on that investment will be about $50,000. See, that's what -- when you hear me talk about incentives, that's what the tax relief plan does. It says, Ed, invest $300,000 and you'll save $50,000 from what you normally would have. It's called an incentive. And our American citizens have got to understand the connection between investment and jobs. When Ed invests $300,000 to build a warehouse and a painting facility, somebody has got to come and build the warehouse, somebody has got to manufacture the material for the warehouse, somebody is going to provide the new painting equipment for the painting facility. Investment equals jobs. When somebody invests, like Ed, somebody has to provide the goods that he needs. And when somebody provides the goods he needs, somebody is working to provide the good he needs. And that's how this economy works. He says, "With that money I don't send back to the IRS, I can expand right here." (Laughter.) Those are his words. (Applause.) What Ed is saying is what a lot of people around the country tell me is, I can spend my money far wiser than the federal government can. And I appreciate that spirit and that attitude. That's why the tax relief we passed was so important. The Maxwells are here -- Joan and Owen Maxwell. You two know them. See, they're the boss. (Applause.) No, those aren't the Maxwells. The Maxwells are over here. There they are. Thanks for coming. They're from Edenton, North Carolina. They've got their own boat manufacturing company. I asked them how the fishing was off the coast of North Carolina. (Laughter.) They manufacture center console boats. That's a pretty neat little business, isn't it? And they said their business is good. As a matter of fact, they're wisely trying to pre-sell their inventories. That's a smart idea. Demand is up for their boats, I suspect because they produce a good-quality boat at a reasonable price. If you make a lousy-quality boat at a high price, no one's going to buy them. (Laughter.) So they're good business people. They've added 20 workers in the last six months. They're expanding their business. (Applause.) They're going to invest $750,000 this year in molds for their boat-building business. Somebody has got to make the molds. There's some worker making the molds that they're buying. And the tax relief plan we passed will save them $100,000 on that investment. You see, there's a connection between good tax policy and decision-making. They're more likely to purchase $750,000 worth of molds when they realize they have $100,000 worth of saving in so doing. And that's why it's important for our citizens to be able to draw the connection between tax relief and decision-making that leads to more jobs. One of the interesting things the Maxwells have done -- and I really appreciate this -- is that they have teamed up with a local community college to devise a course to train them for people coming into their industry -- the boat manufacturing industry. That's a wise, wise use of a very important community asset, which is the community colleges. I've met some people in North Carolina who, because of the changing economy, had to go from the textile industry to the health care industry. A lot of people in North Carolina used to work for textiles and are looking for new work. And, wisely, the health care industry has used the community college system to train people for really good jobs, by the way. Now, the person is going to have to want to be trained. But the community college and the local businesses have to provide the curriculum. Government, by the way, helps pay the salary in a lot of cases. And it's a wise use of taxpayers' money, and it's a wise use of local taxpayers' money, to provide training for people so they can find One of the real bottlenecks we're going to have in America, as our economy changes and continues to grow, is whether or not the worker is going to have the skills necessary to fill the jobs of the 21st century. One of the real challenges to make sure that America is the best place to do business in the world so people will be able to continue to find work is to make sure our education system functions well. And one way to make it function well is for the federal government to work with community colleges and local businesses to devise curriculum to train people for the jobs which actually exist. And I want to thank the Maxwells for being a part of this kind of practical move in education all across the country. Joan says, "There are a lot of opportunities where people can use these skills. We're literally building our work force for the future here." That's the way we think in the administration. We're thinking about the future. We're thinking about how to make sure that the momentum that we have developed in the economy not only stays strong in the immediate years, but how is it going to look 10 years from now. So we've got to start planning for the future. We've got to understand the decisions we're making today are going to make it more likely that the small business sector, the entrepreneurial spirit of America will remain very strong tomorrow. And part of that is to make sure the education system not only teaches our youngsters how to read, write, add and subtract now, before it is too late, but it's also to make sure that our community colleges are able to put curriculum in place to train people for jobs which will So I want to thank the Maxwells for being here. I appreciate your spirit, and thank you for hiring people. (Applause.) We've got -- John Biagas is with us. John, thank you for coming. Newport News, Virginia. (Applause.) Newport News, Virginia. John purchased his business in 1997. He took a gamble and said, I'm going to buy the business from the previous owner. I think he said they might have had a million dollars' worth of sales in 1997 -- they're over $14 million now. That's pretty good growth, isn't it, in a five-year period of time? This entrepreneur has taken a business that had a pretty good sales base, but he's expanded it 15 times in five years. I can't wait to see what you look like five years from now, John. (Laughter.) By the way, it won't be very good if they raise taxes on you. See, one of the things -- if John is thinking about what his business will look like five years from now, I can predict to him if we run up the taxes on sub-chapter S corporations by raising, for example, the top rate, his business isn't going to look quite as good as it would if -- when we keep taxes low. John is an S corp. In other words, all the talk about running up the top rate affects his business. When you hear them in Washington saying we're going to run up the top rate, just remember this is a tax on small businesses. And you don't want to tax small businesses, because small businesses are providing the economic momentum necessary for us to have created 1.5 million jobs since August. We want that job creation to continue to go on. Raising taxes will make it more likely somebody won't be able to find a job. You know why? Because it affects businesses like John's, that's why. When you start taking money out of John's coffers, it means he's less likely to expand. He is a full service electrical and general contractor. That's his job. He hired eight people in the last two months. He wants to hire eight to 10 more this year. That's positive. (Applause.) I think we're beginning to see a trend here. (Laughter.) Small businesses are hiring -- eight people here, 10 people there -- but it adds up, because there's millions of small businesses all across America. Small business is the cornerstone of the great American enterprise system. Not only that, it's the cornerstone of a hopeful country, isn't it -- the kind of country you have where John, who was one of 14 raised in Lake Charles, Louisiana -- the youngest of 14, I might add -- can go to the family reunion, which I suspect is quite large -- (laughter) -- and says, by the way, my business is doing pretty darn good. It's a great American story, isn't it, where somebody who has a dream and is willing to work to realize a dream is able to do so. Our job is to make sure those dreams stay alive, the dreams stay alive. He'll save $60,000 in taxes this year on $350,000 of investment in new trucks. When you hear the investment numbers in small businesses, it is heartening, because, I repeat, when people invest, they create jobs. That's how jobs are created. John says, "The cash we're able to keep in the business helps a lot. It helps us look forward to the future." That's what he said. That's what you want to hear. You want to hear your CEO of a small business saying, it helps me look forward to the future. You don't want people saying, oh, gosh, life is going to be miserable because when we've been able to come through tough times. You want to say, I'm looking forward. Good policy in Washington always looks forward, not backwards. I'm going to talk about some things we can do to make sure, as John and others look forward, the environment is encouraging and conducive to economic investment. I just told you one, and that is to make sure the education system functions well. If you're a -- somebody trying to hire people, and you see that the education system is working well, you'll be able to look forward with confidence, because you know you'll be able to fulfill your workers needs. You can't look forward if you're worried about finding somebody to meet a skill that you need. Joan Thompson is with us. She was talking about the level of worker -- the skill level of the worker she needs. She's an owner in a -- thank you, Joan -- she's an owner in a -- (applause) -- part-owner of the Minnesota Wire and Cable Company in St. Paul, Minnesota. I say, part-owner, she's got nine other family members who own a piece of the MS. THOMPSON: Nine children and both parents -- THE PRESIDENT: Yes, 11 people, 11 owners. (Laughter and applause.) Family-owned business, it's got a nice ring to it, doesn't it, and it's got an American ring to it. There's a lot of family-owned businesses around our country. And one of the real difficulties for family-owned businesses is the fact that we tax a family's assets twice because of the death tax. It's important that Congress understand what the death tax does to capital formation and the ability for the small business sector to invest. The -- and I say you tax it twice -- when the Minnesota Wire and Cable Company makes a profit, it gets taxed. And I suspect you pay property taxes at the local level, as well, and state taxes. And then when the -- mom and dad move on, in many cases, that asset will be taxed again. And therefore, if the asset is liquid, some people have to sell their business. You can't pass it on. I believe you ought to be able to pass your business on to whomever you choose without the federal government being in between you and the -- and those who -- those who you designate to own the company. (Applause.) And so Congress, by the way, needs to hear from small business owners and farmers and ranchers, and to tell Congress to complete the task we started. We put the death tax on the way to extinction. Unfortunately, I think it's 2011 it pops up again. That's going to make the year 2010 an interesting year for estate planners. (Laughter.) How do you want to handle this one, you know -- (laughter.) I think I'll go ahead and keep on living. (Laughter.) They just need to make the repeal of the death tax a permanent part of the tax code. It will be a major part of the simplification of the tax code, too. I understand it takes up about 30 percent of the tax code, which is a real thick book. And it just doesn't -- to me, it's bad policy. And it's bad policy for the Thompson family and a lot of other small business owners around America. Joan's business is a custom design -- custom wire and cable assembly business. They've got customers with defense contractors, and particularly health care. She likes to say, we're a part of the -- we're part of the armies of healers that are all across the country. We're helping people save lives. That's kind of a neat way to frame your business, isn't it? And it's going well. They've added 14 workers this year; tax savings of about $80,000 on $600,000 worth of investment. I said, what are you going to invest in? She said, robotics. It's pretty interesting to hear a small business say, robotics. I don't know whether small businesses were saying they were investing in robotics 20 years ago or not, but I bet they are over the next 20 years, if the incentives are properly structured, if small businesses are encouraged to invest, if the tax structure is such that it will make it easier for them to survive, by making sure government doesn't take too much of their money. She also invests in C&C machines. Everybody knows what they are. (Laughter.) Somebody is making it. (Laughter.) Somebody is a part of the manufacturing process that is making the C&C machine. In other words, there is a C&C machine maker -- (laughter) -- that is employing And that's how it works. That's how the economy works. I've asked these four small business owners to come and see us, because I want to share with you a couple of things. Let me tell you what she said. She said, "The savings on the tax side gave us the confidence to launch another division in our small business." We're talking about investment in America. Investment equals jobs, and people are now confident to make investment, because of good tax policy. The role of the government is to create a sense of confidence by doing some smart things. In other words, the more money people have of their own money the more confident they'll be, particularly as this economy picks up steam. These are great stories, and I appreciate you all coming and letting us talk about your stories. They're uniquely American stories. (Applause.) And as we look forward with confidence, we want to make sure that we make good decisions. There's a couple of good decisions we need to make. One is, a bad decision would be to raise taxes on the American people. And some of the tax relief is set to expire. And if Congress doesn't make it permanent, that's called a tax increase. And they will be tagged with raising taxes on the American people. They should not raise taxes. We need good, consistent tax policy. If you're a small business owner, you want there to be a constant in your life when it comes to planning. You've got too much to worry about markets, your customer base, and you need to have certainty in the tax code. And the Congress needs to know that. And raising taxes creates uncertainty and will make it difficult for small business owners to plan and invest. Secondly, health care costs are on the rise, and that makes it difficult for employer and employee. We must not allow the federal government to run our health care system in America. What we must do is to put good policy and plan in place, which will connect the patient-doctor relationship and give people choices and decision-making powers in the marketplace. That's why I'm such a strong backer of health savings accounts. These can be tailored for small businesses. I would urge every small business in America to look at a health savings account. It's a good way to help control costs, and it's a good way to provide benefits for your workers. We need association health plans -- (applause) -- which will allow -- small businesses will be able to share risk, and big business are able to get pretty good buys in health care because they're got a lot of employees. They can spread risk across a large number of employees. Small businesses don't have that same ability, unless government allows them to share risk across jurisdictional boundaries. And that's what association health plans do. We need tort reform in America. (Applause.) Small businesses are threatened by -- if you ask people what affects there confidence in the future, they'll tell you, when they see junk lawsuits or have junk lawsuits filed against them. It threatens their existence, it makes it very difficult for people to plan with confidence. And, let's face it, our society is too litigious. There's too many lawsuits, a lot of them frivolous and junk lawsuits. And there is a role for the federal government in this. We need to have class action reform. We need to have asbestos reform. Congress needs to get these bills passed and to my desk. We need medical liability reform, as well, at the federal level. You see, junk and frivolous lawsuits cause docs to practice defensive medicine. And defensive medicine basically means I'm going to prescribe more procedure than needed, so that when I get in a court of law, I'll be able to defend myself. And that runs up the cost of medicine, which hurts the patients and it hurts the federal government, because the federal government pays a lot of money for health care in Medicare and Medicaid and our veterans' benefits. And our budgets are affected by frivolous and junk lawsuits here at the federal level. Therefore, I think it is a federal problem that does require a federal solution. And we proposed such a solution. The House of Representatives passed it. It got stuck in the Senate, because the trial lawyers are powerful in the Senate; that's why. And for the sake of small business growth and for the sake of having a good economy in the future, we need to convince the United States Senate to pass meaningful and real tort reform. It's an important part -- (applause.) And, finally, if you're a small business owner, you need to know that you're going to have reliable and affordable sources of energy. There's a lot of concern about the manufacturing sector in America, and there should be. But a manufacturing sector has got a real problem if there are disruptions of energy supply, spikes in energy prices and doesn't have reliable electricity. So my administration recognized this early on. We knew that if we were dependent upon foreign sources of energy it would create not only an economic security risk, but a national security risk. And so we ways to increase conservation. We promoted new technologies that will come into play in the out-years that will make us less reliable upon foreign sources of energy. We recognized that we can explore for energy in environmentally-friendly ways that we couldn't 20 years ago. We promoted new electricity reliability standards. We've done a lot of things. And we proposed it to the United States Congress, and, of course, it's stuck -- they're playing politics with the national energy But if we're interested in making sure people can find work in America, if we want to be the best place to do business, if we want the entrepreneurial spirit to remain strong, we've got to develop an energy policy that makes us less dependent on foreign sources of energy. I've told you Ed relies upon trade. He's moving used Cats, used John Deere, and used Case equipment overseas. He said, when you look at it, you can't tell it's used, though, because he's got such good workers. (Laughter.) They take a used piece of equipment and re-do it, make it look like new, make it run like new, and sell it -- like old. (Laughter.) And as he said, I am a small business guy utilizing free trade. America must reject economic isolationism if we're going to be a confident, growing nation. Listen, we're good at things. Look at old Ed, he's good at something. (Laughter.) All he needs is a chance to sell it. And if we fall into trade wars because of politics, we will be doing a disservice to the entrepreneur in America. We're good at growing things. Our farmers ought to be selling soybeans everywhere in the world, And that's what we're trying to make sure other countries hear this -- hear the philosophy of this administration. We're opening up our markets -- open up yours. That's what we're telling them. See, we know what's good for consumers, when people have more choice. If you're a consumer in America and you've got more goods to choose from, you're going to get better quality at a better price. That's how it works. And so we've said -- not only have I said, but other Presidents have said, Presidents before me have said, for the good -- for the good of the American consumer, sell us your goods and services here in America. And now you've got an administration who is saying, since we do that for you, you open up your markets. I told Evans and Zoellick, when we need to get tough with foreign nations that shut us out, get tough, because all we're interested in is a level playing field. That's what we want. We want our people treated fairly. (Applause.) You'll hear people say, well, the best way to deal with this is to find out ways not to trade fairly, it's to isolate us. That would be terrible for small businesses. And so this administration is confident in America because we're confident in Americans. We know we can -- we're really good. We're really good at building things and growing things and selling things. And I intend to make sure that they have a good chance to do so, for the sake of American workers. This economy of ours is steady and strong; it's steady and strong. It's steady and strong, which means people are going back to work -- 1.5 million jobs since last August. That is steady growth. (Applause.) And it's steady and strong because the American entrepreneur is strong and capable and willing to take risk. The entrepreneur is employing more people. The entrepreneur is investing. And the role of government is to promote good policy that encourages the American entrepreneur. And the other thing about the entrepreneurial spirit that is so wonderful about our country, is it doesn't matter whether you're the fourth generation to own your business, or you're a first-generation American -- either way, you've got the opportunity to say, this is my business; I own it, I'm going to nurture it and grow it and, therefore, help others to find work. That's the cornerstone of the Bush economic policy. And it's working. I'm glad you all are here. God bless your efforts, and may God continue to bless our country.

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Community banks hold up through recession Cornerstone reports positive earnings in second quarter By Chloé Morrison - Published on August 5, 2011 Cornerstone Community Bank reported positive earnings for the second consecutive quarter of 2011 and industry insiders said that most local banks haven’t been hurt badly by the recent recession. “In the Tennessee area, community banks have fared reasonably well during the financial crisis,” Executive Vice President and Chief Economist with the Independent Community Bankers of America Paul Merski said. “They have an advantage. They known their customers. They know how to judge the credit worthiness of their business and local customers.” Cornerstone officials Wednesday reported an 8.6 percent increase in income, compared with the first six months of 2010. The bank also fully funded its loan loss provision at the beginning of the year and has not been required to make any material provision to loan loss allowance during 2011. Officials also reported decreased operating expense, which allowed Cornerstone to offset reduced loan income compared to 2010. “The Bank is definitely moving in the right direction,” Cornerstone President Frank Hughes said in a prepared statement. “I am extremely pleased with the progress we have achieved in strengthening the bank’s capital position and improving asset quality, which will help us progress to a more conservative banking model and a higher return for investors.” Cornerstone’s nonperforming loans also decreased. On June 30, 2011 the bank’s non-performing loans were about $7.2 million or 2.68 percent of total loans, compared to about $13 million or 4.09 percent the same day in 2010. A non-performing loan means that the borrower isn't keeping the loan payments current, and if a bank has a large amount of non-performing loans, it makes them more reluctant to give more loans. Another community bank, FSG, is scheduled to release its earnings report August 16, President and COO Gene Coffman said in an email. At the end of April, FSG announced that Coffman would take over the bank. At that time, FSG had not made money in the last nine quarters — not reporting a profit since the third quarter of 2008. But area FSG customer Owen Seaton said he gets great service from the bank and isn't worried about its financial situation. "I think their issues are behind them," he said via Twitter. "I feel it is important to have banking ties to the city." Merski said the financial success of some community banks depends on the focus of the bank’s portfolio. “Banks with a more diversified portfolio have been faring very well,” he said. Recent Posts Weekend top five Trivia: Where in Chattanooga is Charlie? AAA predicts decrease in Memorial Day travel Local VW employees build 250,000th Passat Rep. Scott DesJarlais fined for affairs with patients Weekend top five Lifestyle Trivia: Where in Chattanooga is Charlie? AAA predicts decrease in Memorial Day travel Nooga.com

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6306.0 - Employee Earnings and Hours, Australia, May 2010 Quality Declaration Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/01/2011 SummaryDownloadsExplanatory NotesRelated InformationPast & Future Releases Page tools: Summary of Findings Main Features About this Release History of Changes One in ten employees earn $1,856 or more per week (Media Release) NOTES ABOUT THIS PUBLICATION This publication contains estimates obtained from a sample survey of employers conducted in respect of May 2010. The survey is designed to provide statistics on the composition and distribution of employee earnings and hours paid for and how their pay is set. CHANGES IN THIS ISSUE This publication presents estimates of numbers of employees by method of setting pay, and differs from previous publications which presented estimates of proportions of employees by methods of setting pay. See the notes on these estimates in paragraphs 29 and 30 of the Explanatory Notes. Information about the proportions of employees covered by national and state jurisdictions for pay setting are no longer published but can be provided on request. See paragraphs 26 to 28 of the Explanatory Notes. Tables of standard errors are not presented in this publication, but are available in the accompanying electronic data release (data cubes 3 to 7). For information on sampling error refer to the Technical Note. NOTES ON ESTIMATES The Survey of Employee Earnings and Hours was not designed as a time series so caution should be exercised when comparing estimates presented in this publication with estimates from previous surveys. Care should be taken in the interpretation and use of estimates of numbers of employees presented in this publication. Although the Survey of Employee Earnings and Hours can provide estimates of the number of employees, it is not designed specifically for this purpose. Users are directed to Labour Force, Australia (cat. no. 6202.0) as the primary source of official ABS statistics of employment. For more information see paragraphs 29 and 30 of the Explanatory Notes. Care should be taken when comparing estimates of average weekly earnings in this publication with those published quarterly in Average Weekly Earnings, Australia (cat. no. 6302.0) because of differences in the earnings concept being measured, methodological differences between the two surveys and differences in the two samples used. For more information see paragraph 32 of the Explanatory Notes. ABS DATA AVAILABLE ON REQUEST In addition to the information contained in this publication, a range of unpublished data is available on request. For more information refer to the Appendix. For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Amanda Baile on Perth (08) 9360 5305. This page last updated 22 January 2015

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Business Development Links www.iba.gov.au Indigenous Business Australia (IBA) is a progressive, commercially focused organisation that promotes and encourages self-management, self-sufficiency and economic independence for Aboriginal and Torres Strait Islander peoples. www.icn.org.au Industry Capacity Network is an Australian New Zealand wide network that assists businesses to maximise the opportunities that arise from purchasing requirements for Government and the private sector. www.manyrivers.org.au Many Rivers Microfinance Limited (Many Rivers) is a not-for-profit organisation that supports aspiring business owners with microenterprise development support and access to finance in order to see the potential of people and communities realised. www.projectconnect.com.au Project Connect helps suppliers identify procurement opportunities and provides buyers with information on suppliers capacity. www.austmine.com.au Austmine is an Australian mining equipment and service export Association which promotes the expertise of its membership to the international community. www.supplynation.org.au Supply Nation (formerly AIMSC, The Australian Indigenous Minority Supplier Council) is the Australian leader in supplier diversity, established in 2009 to connect our membership of Australia's leading brands and government with Indigenous businesses across the country. Aboriginal Enterprises in Mining, Exploration and Energy Ltd | ABN 56 130 663 973 | © 2013

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Contact CBN Visit CBN Website Link to CBN.com Related Links Remembering 9/11 Recommended Books and Videos Suggested Teaching Sheets For more info about Hannah, visit her bio page. E-mail Hannah! Reflections at Ground Zero By Hannah Goodwyn CBN.com Producer CBN.com – Seven years ago, the surreal video millions saw on the news was devastating, yet distant for many Americans. But to some, the September 11th attack was an event forever etched in their hearts because a loved one was killed. Out of respect for those who died and those they left behind, I went to the fifth-year anniversary ceremony held at Ground Zero in 2006. What I saw there is forever etched in my memory and on my heart. With our flag at half mast, mourners gazed through a metal fence at the site where only the frame of one of the towers still stood in the shape of a cross. Photographs memorializing the loss of precious life and how New York’s finest responded hung near the World Trade Center train station. Police officers from New South Wales marched into the site to pay tribute, and a young woman stood amongst thousands softly playing “Amazing Grace” on her flute. Friends and families wore homemade T-shirts bearing the picture of their lost loved one. Walking around the fenced pit where the 110-story twin towers once stood, I saw many things, many people. I’ll never forget one middle-aged woman who passed by me. With tears flowing freely down her cheeks, she took deliberate steps facing forward, not looking to the site that represented such loss. I felt ill, like someone had taken my breath away. A part of her pain rubbed off on me. Moments later, when she was long gone, off to her office somewhere in Manhattan’s financial district, my mind flooded with questions. What happened to her that day? Which of the thousands dead did she mourn for? That’s when it really hit me. She was just on her daily commute to work. Thousands of visitors were walking by a tomb that she was forced to reckon with every weekday morning and evening as she went home. We were faced with the reality of such a loss at the fifth anniversary, but she had to endure revisiting the horrors again and again. Soon, the sounds of bagpipes and drums filled the empty space of the square-shaped hole in lower Manhattan when the ceremony began that Monday morning in 2006. Moments of silence quieted the city block at the first hit, the second, at the first tower falling, and when the second crumbled down. A familiar, assuring voice that comforted New York and spoke to the world took the microphone. Former mayor Rudolph Giuliani in a somber tone said, we should remember “those who innocently went to work that day, and the brave souls that went in after them.” For hours, the victims’ family members spoke each name. All those in earshot of the loud speakers heard the news that one of the victims was now a grandfather. Fiancées called out the name of their love lost. A heartbroken wife says she’ll never forget her husband, one of a group of New York City firefighters they call the "Seven in Heaven." After a name was spoken, I repeated it to engrain it in my mind so I wouldn’t forget the loss everyone suffered. I couldn’t hold back the tears from my eyes. The saltiness of my cry left a bitter taste in my mouth and heart. How could people deal with such pain? How could they possibly go on? That’s when my cry became, "God help these people. Be their life-giving source when they are too weak to take another breath." It’s been seven years and most are moving on with their lives. But there is still pain, hurt, confusion, and grief. It will take time for families to heal. In the meantime, as Christians, we should continue to pray. Honor those who died by remembering there was a face, distinct beloved personality, precious life to each name uttered at Ground Zero. Hannah Goodwyn serves as a producer for LivingTheLife.com and CBN.com. She also writes for these sites. For more articles and info, visit Hannah's bio page. E-mail me!

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Helpless, as the world gambles your money away By Bob Greene, CNN Contributor Traders do business on the floor of the New York Stock Exchange. STORY HIGHLIGHTSBob Greene says as leaders scuffled over debt deal, Merck was announcing layoffsHe says workers' lives to be upended because Merck drug losing patent protectionHe says our economy is a financial casino where others gamble with our fateGreene: Money doesn't feel real anymore; other people outside our lives control ours Editor's note: CNN Contributor Bob Greene is a bestselling author whose books include "Late Edition: A Love Story" and "Once Upon a Town: The Miracle of the North Platte Canteen." (CNN) -- How do dry economic numbers translate into real human pain? Here's one way. Almost lost in the wall-to-wall news coverage of the battle in Washington over the debt ceiling and the convulsions of the stock market was this item: Merck & Co., the huge pharmaceutical manufacturer, announced that it will be eliminating up to 13,000 jobs through the end of the year 2015. This is in addition to 17,000 job cuts that were previously announced. That's thousands of families who will newly be cast adrift. The Wall Street Journal explained that "35% to 40% of the new work-force reductions will be in the U.S., while Merck will continue to hire new employees in 'growth areas,' including emerging markets such as China." And why will those thousands of families be thrust into uncertainty and, perhaps, despair, in an economy where jobs are so scarce? Is it because Merck has been losing money? Apparently not. The Journal noted that "For the quarter, Merck reported a profit of $2.02 billion, or 65 cents a share, up from $752 million, or 24 cents a share, a year earlier. Revenue increased 7% to $12.15 billion." So what is the reason that the thousands of families will feel the floor drop out from beneath them? Is there something the workers did wrong? No. The thousands of people are being cut loose in large part because a big-selling prescription asthma medication is about to lose its patent protection, and become available for generic formulation by other manufacturers. Forces the employees had nothing to do with are costing them their livelihoods and sense of security. That helplessness against unseen economic forces is a familiar feeling these days, and it's dangerous for the country. It is what lay just beneath the surface of the national anger during the fight over the debt ceiling, and the fears about the market plunge. Sometimes it seems as if we are all trapped in some big casino where the lights are garish and the noise is bright and constant. Yet in a real casino -- in Las Vegas, in Atlantic City, aboard all those so-called riverboats around the country -- no one is required to play. The people risking their money do so by their own choice; if you stay away from the place, you can't lose. The casino that is the worldwide economic market offers no such comfort. Even if you don't own a single share of stock, you can be wiped out by rolls of the dice taken by others, and by the devastating ripples that follow. We are supposed to regard money at face value. "Sound as a dollar," and all that. But increasingly, money is beginning to feel like something ephemeral and illusory, a series of glowing, dancing shapes on countless computer screens in brokerage offices and investment-bank headquarters. In an essay here in the CNN Opinion section during the debt debate in Congress, Yale Law School professor Jack M. Balkin made a novel suggestion for resolving the problem at hand: Simply have the secretary of the Treasury order that two platinum coins, each with a face value of a trillion dollars, be minted. Instantly, the U.S. would have an extra $2 trillion to pay down the debt, just like that. The idea didn't seem much more outlandish than the thought that the country was, in fact, $14 trillion in debt. Is money real, or not? Our grandparents and great-grandparents who went through the Great Depression learned that what seems substantial and solid one day can be gone the next, without them having done a thing to bring on the disaster. In the recent HBO movie "Too Big to Fail," based on the bestselling book by Andrew Ross Sorkin, there is a moment when one of the major characters makes the observation that there likely isn't a bank in the world that has enough money -- actual cash money -- in its vaults to pay all of its depositors. This, in the story, is taken as a given by the powerful men at the apex of the economic pyramid: the heads of the investment banks and the top officials at the U.S. Treasury and the Federal Reserve. Money as a theory; money as a symbolic piece on a game board upon which only those behind closed doors in rarefied offices are privileged enough to seriously play. The newspaper Financial Times reported last week just before the market dive and the downgrading by Standard & Poor's of the United States' credit rating: "Investors worldwide sold out of equities amid widespread worries of stalling global growth. ... Bond yields in Germany, the U.S. and the U.K. fell to record lows whilst their Italian and Spanish counterparts climbed to euro-era highs. ... The Swiss franc surged the most in at least two years, to a fresh high against the euro and a new peak against the dollar." All of that esoterica seems to have nothing, and everything, to do with citizens here in the U.S. who hope against hope that somehow, there will soon be jobs that allow them to begin providing properly for their families again. The chaplain of the U.S. Senate, retired Navy Adm. Barry C. Black, appeared to understand the enormity of all this. He opened a session of the Senate during the rancorous debt debate with this extraordinary prayer of invocation directed at the members: "Lord, help them to comprehend the global repercussions of some poor decisions, and the irreversibility of some tragic consequences. Quicken their ears to hear, their eyes to see, their hearts to believe and their wills to obey you. Before it is too late." The question is: Was it already too late? The opinions expressed in this commentary are solely those of Bob Greene.

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No. 04/233 Angola and the IMF Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. Modify your profile Press Release: Statement by IMF Deputy Managing Director, Mr. Takatoshi Kato, Upon the Conclusion of His Visit to Angola IMF Deputy Managing Director Mr. Takatoshi Kato made the following statement upon the conclusion of his visit to Angola: "This is my first visit to Angola and I would like to express my appreciation to President Jose Eduardo dos Santos and the Angolan authorities for their warm welcome. I have had a productive exchange of views with the President, Deputy Prime Minister Jaime, Minister of Finance de Morais, and Governor Mauricio of the National Bank of Angola. I have also had the pleasure of meeting with Mr. Samakuva, the President of UNITA, and Mr. Vicente, the President of Sonangol, as well as with representatives of the church, academic, business and diplomatic communities. "This morning, I was heartened to experience at first hand the spirited work with sweet children and orphans of Father Caballelo and his helpers at the Arnaldo Jansen Center. With the devotion of such people, and skillful management of the economy, the recovery of Angola should be swift and secure. "In my meeting with the President, I welcomed the gains that Angola has made in recent years. In particular, peace has now been secured and—due to the strong efforts on the economic management team—the public finances are improving and inflation is on the decline. That said, I also noted that the task ahead is to fully exploit the enormous opportunities for development, stemming from Angola's major resources, including notably—its people, its mineral wealth including oil and diamonds, and its agricultural potential. The President reaffirmed his desire to see macroeconomic stabilization take hold as well as a strengthening of dialogue with the IMF and with Angola's development partners. "In my discussions with the economic management team I focused on how the IMF can deepen this dialogue, I reiterated that the IMF stands ready to work with Angola to secure an environment of high-quality growth and low inflation. Such an environment is necessary to reduce poverty and make progress towards the Millennium Development Goals. I also noted that there are two areas where—in the immediate period ahead—we would need to work jointly to achieve progress. "First, on economic management, I urged the authorities to be ambitious in their efforts to stabilize the economy. I stressed that the substantial progress in reducing inflation over the last year, and the beneficial effects of the high oil prices on the fiscal accounts, provided an excellent opportunity to get inflation down to single-digit levels quickly. This would provide immediate help to the poor, and establish a sound basis for sustained economic stability and recovery. It would, however, demand fiscal discipline. With the advent of peace there would be room for significantly higher pro-poor spending, while making adequate provisions for spending on reconstruction within the overall budget envelope. In discussions about the forthcoming budget, I emphasized that fiscal deficits had to be brought down to low levels, even assuming that oil prices fall back to their long-term levels, to ease the burden on monetary policy and to provide room for private sector growth. In addition, I look foward to the leadership of the Central Bank in moving forcefully to eliminate its operating deficits and support the disinflation process. "Second, the government needs to build upon recent advances to meet the President's objective that scarce resources are used in the best possible manner for the people of Angola who have borne immense sacrifices during the last two decades. This will involve further efforts to enhance transparency in the government's budget and central bank operations, including the management of oil resources. "My interlocutors and I shared the same objectives. While the road ahead will invariably involve difficult choices, I look forward to rapid advances towards economic stability and effective use of resources. It is my firm hope that—with adequate will and effort—we will be in a position to conclude discussions on a staff monitored program within the next few months. The successful implementation of such a program is a prerequisite for Angola to access IMF resources."

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Your location: Home > Fast Start Finance At the Conference of the Parties (COP15) held in December 2009 in Copenhagen developed countries pledged to provide new and additional resources, including forestry and investments, approaching USD 30 billion for the period 2010 - 2012 and with balanced allocation between mitigation and adaptation. This collective commitment has come to be known as "Fast-start Finance" (FSF). Following up on this pledge, the COP in Cancun, in December 2010, took note of this collective commitment by developed country Parties and reaffirmed that funding for adaptation will be prioritized for the most vulnerable developing countries, such as the least developed countries, small island developing States and Africa. Further, the COP invited developed country Parties to submit information on the resources provided to achieve this goal, including ways in which developing country Parties access these resources by May 2011, 2012 and 2013. At COP 17 Parties welcomed the fast-start finance provided by developed countries as part of their collective commitment to provide new and additional resources approaching USD 30 billion for the period 2010–2012, and noted the information provided by developed country Parties on the fast-start finance they have provided and urged them to continue to enhance the transparency of their reporting on the fulfillment of their fast-start finance commitments. Fast-start Finance Module This module comprises of information submitted in 2011, 2012, and 2013 by developed country Parties in relation to the implementation of their FSF commitments. The module allows users to search information of contributing countries , as well as on recipient countries. It also allows users to search for information on specific projects and programme, recipient countries/regions activities, and channels of resources whenever they are provided in the FSF submissions. The data presented in this module has been extracted from the FSF submissions and related updates provided by developed country Parties and every effort has been made to ensure accuracy and consistency of the information presented. Users may wish to read the full reports and visit the country websites for more detailed and comprehensive information on the implementation of FSF.

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Jim von Riesemann – Director, Investor Relations Lewis Hay – Chairman and Chief Executive Officer Armando Pimental – Chief Financial Officer James Robo – President and Chief Operating Officer Armando Olivera – President & Chief Executive Officer, Florida Power & Light Co. Daniel Eggers - Credit Suisse Leslie Rich - Columbia Management Greg Gordon - Morgan Stanley Steve Fleishman – Merrill Lynch Kit Konolige - Soleil Securities Paul Patterson - Glenrock Associates Edward Heyn - Catapult Jim von Riesemann Good morning, everyone, and welcome to our third quarter 2009 earnings conference call. Lew Hay, FPL Group's Chairman and Chief Executive Officer, will provide an overview of FPL Group's performance, recent accomplishments, long-term goals and industry observations. Lou will be followed by Armando Pimental, our Chief Financial Officer, who will discuss the specifics of our financial results. Also joining us this morning are Jim Robo, President and Chief Executive Officer of FPL Group, and Armando Olivera, President and CEO of Florida Power and Light. Following our prepared remarks our senior management team will be available to take your questions. We will be making statements during this call that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Certain key assumptions on which our financial outlook and wind generation outlook are based are highlighted in the appendix to the accompanying presentation. Actual results could differ materially from our forward-looking statements if any of these key assumptions are incorrect or because of other factors discussed in today's earnings press release, in the comments made during this conference call, in the Risk Factors section of the accompanying presentation, or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found in the Investors section of our website, www.FPLGroup.com. We do not undertake any duty to update any forward-looking statements. Please note also that today's presentation includes references to adjusted earnings, which is a non-GAAP financial measure. You should refer to the information contained in the slides accompanying this presentation for definitional information and reconciliations of the non-GAAP measure to the closest GAAP financial measure. And now I would like to turn the call over to Lew Hay. Lewis Hay Okay, Jim. Thank you very much, and good morning, everyone. I'm joining you this morning from DeSoto County, Florida. Now, this is not where I ordinarily do earnings calls, but today is not an ordinary day. In just a couple of hours we will be commissioning our DeSoto Next General Solar Energy Center, which is the largest photovoltaic solar power plant in the United States. As you may have heard, we will be joined by a special guest to commission the plant, President Barack Obama. And there's more good news. President Obama will formally announce that the U.S. Department of Energy has chosen our Energy Smart Florida smart grid [inaudible], which we announced back in April, to be among the first in the nation to receive major federal smart grid funding support. This $200 million award further demonstrates the leading role that we at FPL are taking in making our network among the smartest, cleanest and most efficient in the nation. We applaud President Obama's leadership in building a new energy economy for the 21st century. The actions announced today combined with previous support from the administration for renewable energy will drive a dramatic expansion of clean, renewable energy nationwide. The FPL Group has long been the nation's leader in wind and solar power, and the president's visit today should leave no doubt about the administration's commitment to renewable energy as the centerpiece of the nation's energy strategy. You've heard me say it before and I'll say it again: We need a dramatic expansion of renewable energy to help pull our economy out of recession, to strengthen our energy security, and to address the very real threat of climate change. The White House understands that we need the right policy framework in place to make this vision a reality. It will take a price on carbon dioxide, it will take a national renewable energy standard, and it will take an expanded transmission system. When I had lunch with the president and several other CEOs earlier this month, I came away more convinced than ever that he is committed to action on all three. With that, let me turn to the company's performance. I'm pleased to report that despite some continuing challenges, FPL Group had another strong quarter. On a combined basis our adjusted earnings per share grew approximately 10% this quarter when compared to the prior year quarter. Our basic earnings story has remained fairly constant over the last two years. NextEra Energy Resources, our competitive energy subsidiary that leads the nation in wind and solar power, continues to grow adjusted earnings and earnings per share while FPL remains challenged by the economic downturn in Florida. Of course, one of the most significant developments for FPL during the quarter has been our rate proceeding before the Florida Public Service Commission. In my mind there are two distinct elements associated with this. First, are the technical hearings. These were completed last week, and we believe the commission now has everything it needs to render a decision. Despite these proceedings taking far longer than originally contemplated, overall we believe the hearings have gone fairly well. FPL has a good story to tell, and our witnesses were well prepared. FPL has the lowest typical residential bill of all 54 utilities in the state of Florida, and under our proposal those bills will decline by about 9% or $9 per month for the typical customer next year. FPL has a clean and efficient generation fleet that is one of the cleanest in the nation with the best fuel efficiency among large utilities. FPL also has the biggest energy efficiency program in the country, and the company's service reliability is in the top quartile of industry performance. Unfortunately, the substantive part of the story has almost been completely overshadowed by a series of public attacks by our opponents. They have tried to focus the public debate on the roughly 30% base rate increase as opposed to the 9% decrease in customer bills. And they have attacked the Florida Public Service Commission and its staff, including allegations that upon formal investigation were proven to be untrue or were blown out of proportion. Nonetheless, these have affected public perceptions. FPL has taken steps to better communicate the real story, but we need to do better and we will. While the base rate proceedings captured a significant amount of attention during the quarter, we continued to execute on our plan for a cleaner and more efficient, safe and reliable electric system to serve our customers in Florida. Not only are we commissioning our 25 megawatt DeSoto solar site today, but we're making good progress on the other two solar sites we are building in Florida. Our 75 megawatt solar thermal power plant at the Martin site is on schedule, with a projected commercial operation date of November 2010. At the Kennedy Space Center we have completed a 1 megawatt array for use by NASA, and we are on schedule with our 10 megawatt Space Coast Next Generation Energy Center. Combined, these three plants will produce 110 megawatts of solar power, making Florida second overall in the nation in solar energy production. In addition, they have created more than 5,000 direct and indirect jobs in Florida. As a reminder, our solar projects are not part of our rate case proceeding. During the quarter we also completed construction of West County Energy Center Unit 1, a 1,220 megawatt combined cycle natural gas unit in Palm Beach County. We expect an identical second unit to come online in the fourth quarter. Based on this schedule, both units will qualify for the generation base rate adjustment or GBRA under our current rate agreement. A third identical unit in the San Pablo Park is also under construction, with an expected commercial operation date in mid 2011. At NextEra Energy Resources we had another strong quarter, with adjusted EPS growing approximately 21% year-over-year; however, these results fell short of our original expectations, primarily as a result of unfavorable market conditions for our fossil power plants in Texas and a poor wind resource relative to normal expectations. The principal drivers of growth were the company's investments in new wind energy projects and strong performance from retail operations as well as our wholesale marketing and trading business. For all of 2009, we are on track to build 985 megawatts of wind energy. This does not include approximately 185 megawatts of recently completed wind projects that we have an agreement to acquire from Babcock & Brown. This acquisition will further our clean energy leadership and is consistent with our strategy to profitability grow our wind portfolio. In addition to wind development, NextEra Energy - I'm still having trouble with this name - NextEra Energy Resources is also working on several solar investment development opportunities. We believe that solar, with continuing public policy support, has the potential for significant growth in the United States, and we're excited that the pace of discussion around solar seems to be accelerating. We recently signed an agreement with Pacific Gas and Electric that, subject to California PUC approval, will deliver 250 megawatts of solar power to California customers by late 2014. Beyond wind and solar growth opportunities, I want to remind you that NextEra Energy Resources also has growth opportunities in previously announced nuclear upgrades as well as in transmission construction, especially the [inaudible] projects in Texas. In fact, we just completed a significant transmission facility in Texas this month. So we have a host of attractive opportunities going forward. Although on a consolidated basis we are comfortable with the inventory of future investment opportunities, some of the challenges that we have previously discussed continue to manifest themselves. At this time, as a result of continued weak market conditions affecting our merchant gas assets in Texas, wind resource results that continue to be below expectations, and the continuing effects of Florida economic uncertainties, we are reducing our adjusted earnings expectation for full year 2009. Our new adjusted EPS expectations for 2009 are $4.10 to $4.20. For 2010, although I'll remind you we assume normal weather in our earnings expectations, the other challenges remain, especially the uncertainties regarding economic conditions in Florida. In addition, while the amount of expected wind additions in 2010 remains the same, we are reducing our forecast of projects that will take convertible ITCs. Hence, we are reducing our 2010 adjusted expectations to $4.25 to $4.85 per share. With that, it will turn the call over to Armando Pimental before we returning for a few final remarks. Armando? Armando Pimental Thank you, Lew, and good morning, everyone. The third quarter of 2009 FPL Group's GAAP net income results were $533 million or $1.31 per share compared to $774 million or $1.92 per share during the third quarter of 2008. FPL Group's adjusted 2009 third quarter earnings and EPS were $562 million and $1.38, respectively, compared with $506 million or $1.25 per share in 2008. The difference between the GAAP results and the adjusted results this quarter is a negative mark in our non-qualifying hedge category and the exclusion of net other than temporary impairments or OTTI. Florida Power & Light's third quarter earnings contributions fell modestly relative to last year's comparable quarter. The ongoing economic challenges are impacting customer growth and usage and, hence, weather-normalized sales volumes. In just a few moments I will provide additional color on the Florida economy and how it is affecting some of the key metrics that we closely monitor. O&M expense rose $36 million versus last year's third quarter. The largest contributor to the increase was [inaudible] related to O&M, which has no affect on earnings. Also contributing to the increase in O&M were increases in medical costs and the timing of power plant outage-related expenses. From 2009 we continue to see increases in nuclear and fossil generation costs, higher employee benefits expense and higher customer service costs being the main drivers of full year base O&M growth. The PSC did not approve our proposal to build the EnergySecure pipeline as submitted and instead asked that we go back to the drawing board. We are very disappointed that despite a lengthy comprehensive and transparent process the commission effectively denied the clear need for this investment and required that the entire process start over in order to go forward. FPL had conducted an extensive evaluation of more than 60 proposals from seven different companies for both intrastate and interstate pipeline designs and found that the Florida EnergySecure line would provide the lowest cost option for FPL customers. We continue to evaluate our options in regard to this project, which would have created 7,500 jobs in Florida, including 3,500 construction jobs, as well as generated more than $400 million in additional tax revenue across 14 counties and increased the resiliency and security of Florida natural gas supply as well as diversifying the source of Florida's gas supply. Let's turn to a review of the factors underpinning FPL's results. Third quarter 2009 earnings at Florida Power & Light were $306 million, down from $314 million a year ago. The corresponding earnings per share contribution was $0.75 this year versus $0.78 in 2008. The Florida economy is sending mixed messages. Some of the metrics we follow appear to be moderating, as you'll see in a minute, but that doesn't mean they're getting better per se. Rather, those metrics are just not as bad as they have been. Let's now turn to the four graphs on the accompanying slide, starting with the two on the top. The upper left-hand graph shows sequential changes in our quarterly customer accounts. While there's an element of apples-oranges comparison given the seasonal nature of our Florida customer base, the point from this graph is that year-over-year comparisons are still negative. It's just not as bad as last year. For the third quarter of 2009 we had about 9,000 fewer customers than we did in last year's comparable quarter. The table in the upper right-hand corner of this slide shows a change in retail kilowatt sales versus last year's comparable quarter. Overall, retail kilowatt hour sales grew by 0.4% during the quarter due primarily to higher weather-related usage. Weather-related usage growth was 2.6%, helping the quarterly earnings comparisons by approximately $0.04 per share. The weather impacts relative to normal were about the same. For the year-to-date, the weather impact has been $0.06 per share above normal and $0.04 per share higher than last year's comparable period. Non-weather-related or underlying usage growth remains under pressure given the economic conditions. Our analysis of the customer and usage trends among our revenue classes support our view that the downturn is primarily residential and small commercial focused. The state's unemployment rate, currently at 11% at the end of September, continues to climb. At the end of June, the comparable rate was 10.6%. This unemployment figure is now the highest its been since 1975, when the state started tracking employment figures monthly. The graph in the lower left-hand corner of the page shows inactive and low-usage customers, which we believe depict the level of empty homes in our service territory. Since year end 2007 the number of inactive accounts has increased by about 72,500 to approximately 317,000. This figure is higher by approximately 4,000 since the end of the second quarter of 2009. And finally let me put some color on that chart in the lower right-hand corner which looks at existing home and condo sales for the state of Florida. The message here continues to be positive as the data show that the number of units sold on a rolling 12-month basis may be forming a bit of a bottom; however, as I just discussed, we aren't yet seeing those additional home sales have a significant impact on our inactive or low-usage customer numbers. In sum, the general economic environment remains challenging. Although we are encouraged by reports of economic activity picking up in other areas of the country, we are not yet seeing many positive signs in Florida. The tables shown here summarize the earnings driver for Florida Power & Light for the just-completed quarter. In total the quarterly comparison declined by $0.03 per share, driven primarily as a result of the continued downward pressure on the underlying sales volumes and the absence of certain favorable tax items. The rate adjustment for placing West County Unit 1 into service in August that Lew mentioned at the outset of the call was a partial offset to the tune of $0.03 per share. Let me briefly address our pending rate proceeding at Florida Power & Light. As many of you know, we are well into the regulatory proceedings governing our base rate request. Broadly speaking, our rate request is straightforward. We have asked for an appropriate level of rate relief that will allow us to continue to provide the same level of service that our customers have come to expect of us, allow us to plan accordingly for the future by continuing to invest at fair returns and efficient generation, and allow us a capital structure that keeps our cost of debt low, provides ample liquidity to fund new investments, hedges our fuel costs, and supports hurricane restorations if needed. In the past, sound regulation has provided the foundation for effective execution of our strategy, resulting in significant benefits to our customers through superior reliability and efficiency, low capital costs, and a strong financial position ultimately leading to low bills. Over the years, that has worked extremely well for our customers through five key areas, namely, $3 billion in fuel savings since 2002 through infrastructure investments, system reliability that is 47% better than the national average, stellar customer service as evidenced by five consecutive years as a recipient of the prestigious ServiceOne award, declining SOx, NOx, and CO2 emissions rates, top performance and operating efficiency, and we have avoided the need to build 12 power plants. Our customers have the lowest typical residential bill in the state and below the national average. In fact, compared to the typical average monthly bill in Florida, our customers save in excess of $305 per year on their electricity bills, all this while operating one of the cleanest utilities in the nation from an emissions profile. Later this morning the Florida Public Service Commission will begin considering a request to delay the rate proceeding further until one new commission appointee can be seated in January 2010. We do not know how the commission will rule. A delay would likely push a final commission decision out to March of 2010. Absent any change in the scheduling, the staff recommendation and the revenue requirements and allowed return is scheduled for December 7th, with a commission decision currently slated for a special agenda meeting on December 21st. Let me now turn to NextEra Energy Resources, where adjusted earnings per share improved by 21% year-over-year. The growth in NextEra Energy Resources' earnings contribution was driven by new investments in wind and better performance at our retail operations as well as our wholesale marketing and trading business. This was partially offset by the financial performance of our Texas gas assets. Our 2009 wind development program continues to make progress. We have all of the planned 985 megawatts of new projects either under construction or in operation. During the third quarter we announced an agreement to acquire 185 megawatts of recently wind projects from Babcock & Brown for approximately $352 million. We expect to close this transaction by the end of the year following the receipt of ally regulatory approvals. For 2010 we have hedged nearly 93% of the expected equivalent gross margin for NextEra Energy Resources and our existing assets. The equivalent figure for 2011 is approximately 92%. For the third quarter of 2009 NextEra Energy Resources GAAP earnings were $233 million or $0.57 per share compared with $483 million or $1.20 per share in the prior period results. Adjusted earnings for the same periods, which exclude the effect of non-qualifying hedges and net OTTI were $262 million compared to $215 million. The equivalent adjusted earnings per share contributions were $0.64 and $0.53, respectively. NextEra Energy Resources third quarter adjusted EPS increased $0.11 from last year's comparable quarter. New investments contributed $0.10 per share incrementally driven by approximately 1,180 megawatts of new wind relative to last year's third quarter. Approximately $0.06 per share of this $0.10 improvement can be attributed to our decision to utilize convertible investment tax credits this year on 685 megawatts of wind build. The existing portfolio was flat relative to a year ago, with several puts and takes across our existing wind, merchant and contracted portfolios. Contributions from the existing wind portfolio declined $0.02 relative to last year. The lower comparative contributions were driven by higher curtailments and to a lesser degree the expiration of some production tax credits. This was partially offset by better comparative contributions from wind resource, although it should be noted that the wind resource for both this year's and last year's quarters were well below expectations. Our existing merchant fleet produced mixed results. Contributions from the NEPOOL portfolio improved $0.01 per share incrementally, but financial performance from our Texas gas-fired facilities fell $0.02 per share relative to a year ago. Virtually all of this is the result of market conditions. Meanwhile, our retail business in Texas, which is included as part of our existing business on this slide, added about $0.04 per share incrementally given favorable margins. The remaining contributions from the existing merchant fleet amounted to negative $0.02 per share, but there is nothing notable in any one category worth calling out. Operationally, the generation fleet, including the wind plants, continues to perform very well, and in fact it's having one of the best years in terms of forced outage rates, nuclear performance and safety ratings. Wholesale marketing and trading activities increased by $0.03 per share as certain market conditions were beneficial to this business. As we've indicated before, quarterly results from this segment will often be higher or lower than we expect based on a number of factors, including market volatility and opportunities. On a full year basis for 2009, our non-asset-based business segment will be slightly higher than in past years given the strong performance at Jackson, our retail operations, and our wholesale marketing and trading activities. We earned $0.01 per share from the sale to a utility of a wind project that we developed and constructed on their behalf and for which we will continue to provide ongoing operating services. All other factors netted to a loss of $0.03 per share. Of this, $0.01 is attributable to higher interest expenses and $0.01 to corporate G&A associated with the growth in the asset base. Although we were pleased with the $0.11 year-over-year improvement in NextEra Energy Resources' quarterly earnings per share contributions, the financial performance did not meet our internal expectations. Two factors primarily drive this: the Texas merchant gas fleet and the wind resource. Let me explain a bit further. On the former, contributions from the Texas gas fleet were approximately $24 million or $0.06 per share below our quarterly expectations. Both spark spreads and ancillary revenues were much lower than we expected. As for the latter, as I mentioned a moment ago, the wind resource in the third quarter was well below normal or roughly $0.06 per share below our expectations. Due to the positive weather effects in other parts of the NextEra Energy Resources portfolio, total weather effects below normal were approximately $0.04 per share for the quarter. For the year, the poor wind resource has reduced per share results by nearly $0.13. As you might expect, we spend a significant amount of time analyzing wind metrics both before and after we invest in a project. While we believe our forecasting methods are rigorous and reliable over time, wind resource variability in the short term can lead to variances in earnings. This effect is greater as our wind fleet continues to grow. For example, given our 6,374 megawatts of wind, as of December 2008 a plus or minus 2% difference on the wind resource compared to forecast would mean plus or minus $0.03 to $0.04 per share annually given the size of our portfolio. It is important to understand that we forecast wind resource based on actual observed wind speeds over long-term periods. In the appendix you'll see that the wind resource was only 87% of expected output for the just-completed third quarter and 92% for the first nine months of 2009. Given the poor wind resource we have experienced both this quarter and for the year-to-date period compared to normal, I thought I would provide a little more color into this important aspect of our business, specifically, our wind forecasting capabilities and the natural variability of the wind resource. Over the last six years, we have invested heavily in our internal wind forecasting capabilities, and we believe we are an industry leader in this area. You can think of our wind analytical capabilities in four interrelated phases - prospecting for good wind project sites, forecasting long-term average wind speeds and corresponding energy production, wind farm design and layout, and lastly, short-term forecasting for production planning and scheduling purposes. We covered much of this previously with you at our investor conference in March 2008. Our wind forecasts are typically based on 15 to 45 years of meteorological data, including wind speeds at various elevations, barometric pressure and temperature. This data is captured from many different sources, including on-site meteorological towers and from hundreds of local and regional weather sensors. We utilize our wind farm design and layout process to optimize the configuration of the wind site. This process includes utilizing sophisticated wind flow models and geographical information systems to determine the best wind turbine locations to maximize wind capture while minimizing downstream losses to other turbines in the wind field. Climatic systems that impact wind resource are numerous and complex. That said, it is important to understand the natural variability of wind and its resultant impact on energy production and earnings. To help understand this, on the accompanying slide we included an illustrative example of the long-term energy production for a 120 megawatt wind project. First, I will orient you with this chart. Each of the bars represents actual megawatt hour production for the third quarter, and you'll notice we have information for the last 30 years. The black line shown horizontally on the chart is the 30-year expected mean. That 30-year expected mean has been developed by us based on all of the work that I've just described. In this example you can see that it is normal for quarterly wind resource to vary by 10% to 20%. So although we are confident in our forecast models and methods, we clearly understand the variable nature of the resource. We use the mean to forecast energy production for both investment decision-making and annual financial planning processes. It is important to point out that when this project is added to a portfolio of wind projects in different regions of the country, this variability is muted. Although we are obviously disappointed with the financial impact from this variability this year, we do not see this as a longer-term trend or cause for concern. At the same time, in June to July of this year we started to see evidence of an El Nino climate event. Historically, El Nino periods have correlated with a somewhat decreased wind resource. Although normal month-to-month weather patterns dominate wind resource, the El Nino weather pattern could suggest that energy production this winter could on average be a bit below our long-term expectations. For the three weeks of October we are seeing the same pattern of below normal wind resource as we experienced in September. We have additional details in the appendix on the wind resource. We continue to believe that we will construct approximately 1,000 megawatts of new wind in 2010. As a reminder, the annual wind development pipeline expectations that we share with you exclude potential acquisitions, so our 2009 program will be closer to 1,170 megawatts, which includes our pending Babcock & Brown acquisition. At the end of the quarter our wind portfolio should be roughly 7,550 megawatts. During the second quarter call we indicated that reaching the bottom end of our goal of adding 7,000 to 9,000 megawatts during the 2008 to 2012 period would be optimistic given the combination of economic challenges the industry was facing as well as our view that the PPA market was no longer as robust as it had been. We currently plan to maintain our capacity to internally develop at least 1,500 megawatts of wind a year. How much we construct, however, will be subject to various market forces, including energy prices, transmission infrastructure expansion, continued public policy support for renewables and other compelling risk-adjusted opportunities for our investment dollars. Earlier this month we energized the Texas Clean Energy Express, a 345 kb transmission line with a rating sufficient for carrying up to 950 megawatts of capacity and one that will connect four of our West Texas wind plants to the [inaudible] South Zone, a distance of approximately 200 miles. The Texas South Zone pricing clears at a premium to the west, and we are capturing this premium currently. From the time we began construction until the line was energized was approximately 10 months while other energy constituents believed a more realistic time to construct was four to five years. The expected significant economic benefits caused our team to be focused on execution, and we were very happy with the results. This is a great example of how our breadth, depth and scope allows us to undertake projects and resolve situations that others simply can't. As I've indicated before, longer term we remain confident that our Texas wind assets possess substantial value. For some time we have been building our capability as it relates to solar energy development. Previously we have shared with you the fact that we are acquiring control of large parcels of land that we believe are in good locations for solar energy development. While our development efforts continue on approximately 1,000 megawatts of near-term solar opportunities, it does strike us that the level of interest as measured by requests for proposals or RFPs seems to be increasing. During the third quarter of 2009 we experienced a level of interest that was up tenfold over last year's third quarter for utility scale projects. And although we are mindful that RFPs do not necessarily turn into closed opportunities, we have sighted a long-term PPA agreement this quarter for a 250 megawatt project that would have a capital cost of approximately $1 billion, as Lew mentioned at the beginning of the call. The project is under permitting and must be approved by a state utility regulator. We've indicated that we would share with you more on our solar development efforts, and we are committed to do that as our development efforts accelerate. For now, the accompanying slide provides the first look into our solar development efforts at NextEra Energy Resources. As some of you know, we have scheduled an investor conference on May 3rd and 4th in South Florida. At that time we will provide the investment community with a comprehensive overview of the company which will include detailed information on all of our development efforts, including those in wind, solar, transmission and nuclear. Let me turn now to the hedging status for 2010 and 2011 and expected equivalent gross margins. This slide shows 2011, while 2010 is contained in the appendix. We believe we are well hedged in each year. The key takeaways from this slide are we are 92% hedged on expected equivalent gross margin on existing assets. Our Blythe combined cycle gas asset becomes contracted in the latter part of 2010 and so 507 megawatts move from Merchant Other Spark Spread to Contracted Other in 2011. The wind assets we expect to build in 2010 have a full year of earnings in 2011. We are not yet including any gross margin, convertible investment tax credits or revenue associated with new wind or solar projects that we would expect to construct in 2011. The Merchant NEPOOL margins are reduced because of a scheduled Seabrook outage in 2011 and lower prices. There is no scheduled outage in 2010. As a reminder, we mark-to-market current forward curves when we report our hedging position, and we utilize historical market clearing prices to estimate the ancillary service value of the portfolio. However, we do build in a small amount of judgment based on our market expectations. Our hedging strategy remains largely unchanged. We continue to take steps to minimize the risk and improve the visibility of the earnings and cash flow profile for the portfolio. For example, just this year we completed a contract for the sale of capacity from our Calhoun gas plant, and next year we expect to complete a 67-mile generation tie line connection that will allow us to sell power to Southern California Edison under a long-term contract from our Blythe plant. Regarding sensitivities, the earnings sensitivity to changes in natural gas prices on our 2010 open positions is modest. For every $1 per MMBTU change in gas prices the annualized impact is approximately $6 million in after-tax gross margin, equating to less than $0.02 per share on an after-tax basis at FPL Group. For 2011 the equivalent earnings sensitivity is $0.04 to $0.05 per share. To summarize 2009's third quarter results on an adjusted basis, FPL contributed $0.75, NextEra Energy Resources contributed $.64, and corporate and other was a negative $0.01 contribution. This is a total of $1.38 per share compared to $1.25 per share in the 2008 third quarter or a 10% increase year-over-year. Until the Florida Power & Light rate case concludes, we do not plan on releasing segment earnings guidance. With that, let me now turn the call back over to Lew for some concluding remarks. Lewis Hay Okay. Thanks, Armando. Despite our recent challenges, I continue to be optimistic that we can successfully and profitability grow our business, especially NextEra Energy Resources. While the economic conditions remain somewhat challenging, we're proud of many of our achievements. We lead the nation in wind energy development, we are making a lot of progress in solar development, we are starting to see some traction in transmission development, and our backlog of transmission projects is growing. Our retail and forward requirements businesses are doing well, and our assets are well positioned for a carbon-constrained world. Within Florida, we continue to be cautiously optimistic that we will achieve a fair outcome in the rate proceeding as we have in the past. As our economy emerges from this terrible recession, Florida should once again start growing, and FPL stands ready to support and be part of that growth. With that, I'll turn the call over to the conference moderator for questions. Thank you. Thank you. (Operator Instructions) Your first question comes from Daniel Eggers - Credit Suisse. I was wondering if you could talk a little bit, with some of the headwinds economically in Florida with some of the slowing in the pipeline for wind and timing on solar and just kind of the inevitable need to contract at a lower rate given lower commodity prices in the generation fleet, how is that affecting kind of the long-term 10% EPS growth targets and is there a point where that needs to be revisited? Okay, Dan, you mentioned a couple of things in there, but I'm going to interpret your question as really related to the last thing you mentioned, which was the 10% adjusted earnings increase year-over-year. We're not updating that 10% adjusted earnings per share increase year-over-year at this time. Our plan is to provide you and the rest of the investment community with a longer-term view of our earnings at the investor conference in May. Based on the number of the items that you mentioned - the uncertainties in the Florida economic environment and some of the other challenges that we mentioned on the call and we've talked about before - we believe it's appropriate to be conservative in the disclosure of that long-term guidance at this point. Having said that, we understand how important long-term guidance is to investors, and we're not at the point where we are just not going to provide that long-term guidance in the future. Depending on what happens in the first quarter with all of the things that you just mentioned, our plan is to provide new guidance at the investor conference as opposed to fourth quarter earnings or first quarter earnings. And I guess just from a wind development, solar development perspective, RFP activity sounds good in solar. What is the receptivity to people signing long-term PPAs both for wind and solar today? It seems like that's been a bottleneck for most of this year. Is that showing signs of changing at this point? Actually, I want to choose my words carefully, but it's better than what it was last time I spoke about it on the wind side. Clearly, the number of folks that were interested in signing on longer-term PPAs, I'd say, was a smaller batch earlier this year than it is now. We've signed quite a number of long-term PPAs this year. Some of those PPAs actually contracted wind that we had constructed last year but at the end of the year we did not have long-term PPAs. So I would say it's a little better. I wouldn't say that certainly it's where it was in 2007 or earlier in 2008, but the number of RFPs for wind, we're comfortable with. We've got either long-term PPAs or good visibility into signing all of our approximately 1,000 megawatts of construction in 2009 except for maybe 150 megawatts or so. So about that much might be open at year end, but even on those I'd say that we have a warmer and fuzzier feeling today than we did three to four months ago. I'm sorry, I meant to also say something on solar, Dan. You also asked about solar. You know, we're quite excited about the agreement that we've signed with PG&E. We're quite excited about the project and the prospects that we've got with solar development. There is just a significant amount of RFP activity that we're seeing this year that we weren't seeing just a year ago. You know, we've been talking about solar development for quite a long period of time, and we at this company, as you might expect, we try not to toot our horn too much before we actually have something in the ground. And even now we debated whether it was the right time to provide some details on our development portfolio and our pipeline, but we agreed that it was. We agreed that we're doing some good things here, that activity's picking up, and that now would be the right time at least to provide some details on our pipeline. But we feel pretty good about our prospects. Now, having said that, solar's still expensive. It's going to continue to require some significant public policy support in order to make that a viable energy alternative in the future. Daniel Eggers - Credit Suisse Why do you guys assume that ITC contribution in 2010 is coming down? Is it the nature of the projects or some other issue or two? No, it's really the projects. We have, as you might expect, when we line up our projects for 2010 or 2011, if we say we're going to build approximately 1,000 megawatts you should assume that we have a lot more than 1,000 megawatts sitting in our portfolio that's ready to build in 2010. We continue to get wind data on those projects. We continue to understand where permits may be moving faster than others; where it might be a better economic situation to do that. As I mentioned in the first quarter call, we're just not going to blindly do one or the other. I mean, we're going to look at the economics of each of the sites and decide on an economic basis the right thing to do. So as projects moved around, we decided that for 2010 it would be a better move to take less convertible ITC. Operator Your next question comes from Leslie Rich - Columbia Management. As you think about capital spending at the utility level, how might those forecasts change if the regulatory outcome is not as optimistic as what you'd asked for? Clearly, the gas pipeline project won't go forward unless you get approval to spend for that. What level of spending could be dialed back if the rate case outcome is not in line with what you believe to be a good return on invested capital option? Leslie, it's a good question. I hate to speculate on what the outcome might be, and I certainly don't want to do that. But I do think it's important for all of us to realize - we certainly do realize here - that an outcome from the rate case that's not constructive certainly could have ramifications on our future investments, significant ramifications on the number of jobs that could be created in Florida as a result of those investments, and the amount of tax revenue that goes along with those construction jobs and investments. At this point, West County Energy Center No. 3 is under construction and expected to be built in 2011. Our Riviera and Canaveral plants have been approved by the PSC. Our Canaveral plant actually at this point doesn't need siting approval, and we expect the same decision on our Riviera plant. So those are clearly on the board. Our nuclear upgrades continue at both Turkey Point and St. Lucie. But I don't want to sit back and say that no matter what the outcome that we will continue on the same path that we're on today. I think there could be some significant changes to what we have if we don't get a constructive outcome. Your next question comes from Greg Gordon - Morgan Stanley. Greg Gordon - Morgan Stanley Pardon me if I didn't hear the details earlier, but you did say that you were [break in audio] less convertible ITC in '10 than you're taking in '09. Did you quantify that number? Greg, I'm going to answer the question I think you asked. You're breaking up a little bit. I think you asked are we taking less convertible ITC in 2010 than 2009? Yes. And could you quantify that number? Oh, okay. Right now the convertible ITC that we have in earnings through the end of the third quarter for 2009 is 685 megawatts. What we have in 2010 in our earnings expectations is 800 megawatts. What I will say is that it is more likely than not that that 685 megawatts that we have for 2009 could increase up to around the 800 megawatt level. We didn't do that as of the third quarter because we're continuing to look at the projects. Obviously, there's no juice, if you will, if you're not sure about a project to do it before the project is COD. But it's more likely than not at this point that we will end 2009 with about 800 megawatts of convertible CITC taken, which is about the same that we have 2010. Greg Gordon - Morgan Stanley Okay, so your new forecast assumes that up to 800 megawatts in '09 and about the same amount in '10? Yes. Again, I'm having trouble hearing you; you're breaking up. But I think the question was the 2009 earnings expectation that we gave assumed 800 megawatts. If that is your question, the answer is yes. Greg Gordon - Morgan Stanley I'm sorry, Armando. Can you hear me now? You're still breaking up. I don't know why, Greg. Was that the question? Greg Gordon - Morgan Stanley [Inaudible] Okay. Greg Gordon - Morgan Stanley Sorry about the connection. My second question is: Regarding your 2011 gross margin guidance [inaudible], why have you chosen not to include any new gross margin from additional projects when you do have a pipeline of 1,000 to 1,500 megawatts in terms of aspiration? Okay, I got that question. You're still breaking up, but I got that one. It's the same thing we did last year. The first time that we provided the 2010 gross margin guidance we did not provide a number dealing with the amount of new projects that we believed we would construct in 2010. The first time that we gave investors that number was actually the fourth quarter, so the end of January call. We're considering doing the same thing this year. As I mentioned in the second quarter call and now on the third quarter call, there's a little bit more uncertainty, so we just thought we'd follow the pattern that we did last year and not initially provide that in the 2011 gross margin table. Greg Gordon - Morgan Stanley Okay, but clearly earnings will be up in 2011 assuming you build some of those projects. Armando Pimental Yes. I mean, look, I don't want to keep anybody in the dark. If we build what's in our plan for 2011 and you include the wind and some of the solar that's in our plan and the convertible ITC that we believe that we'd be entitled to, you're looking at a gross margin somewhere between $275 and $350 million, but that's a wide range. And now that I said it everybody wrote it down so I might as well have just given it, but I didn't do it because I want to wait a quarter and be more comfortable with our plans for 2011. Operator Your next question comes from Steve Fleishman – Merrill Lynch. One of the reasons you mentioned for the 2010 guidance reduction was uncertainty about the economic conditions in Florida. Is that a statement that it may be hard to achieve essentially the sales forecast that's embedded in your rate filing no matter what the outcome of the rate filing is or is that statement more a reflection of just the uncertainty over the actual rate outcome. It's the former, Steve. Just a little bit of detail. In the third quarter the University of Florida, which is what the commission uses and what we use to estimate population in Florida, came out with a new population forecast which was lower than the previous population forecast. If you do nothing other than plug that information into the rate case forecast that we've provided, that'd be a reduction of approximately $0.02 in 2010. I also mentioned in my prepared remarks that the lower usage that we're seeing in Florida was primarily residential as well as small commercial. We've started seeing some reductions in small commercial usage that we hadn't seen at the end of the second quarter. So if you kind of take that out, if you plug that into the forecast, that's also a potential reduction of $0.02 to $0.04. Steve Fleishman - Merrill Lynch One other separate question on your comment in the quarter on wind curtailments were higher. Could you explain exactly what that is and why those are going up? That's where your plants are available to run but they're actually not able to [sell in]? That's right, Steve. And the issue continued to be in Texas. Obviously, that issue's going to be helped by the new transmission line that we just built, but that's a situation where at times the wind's really blowing well although, as I indicated, the third quarter was kind of tough on wind resource. But when the wind's blowing well you've got some issues with too much power trying to move from west to north in Texas, and you've got some constraint. Your next question comes from Kit Konolige - Soleil Securities. I was wondering if you could give us a little color on the economics of the new transmission line in Texas? Kit, since I have the ability to interpret your question, I am going to answer it this way. The way we looked at the economics of that transmission line was obviously there's some construction cost associated with the transmission line, but that cost, the goodness, if you will, is the price difference between what you can get in West Texas and what you can get in South Texas. There's also goodness associated with the other assets associated in West Texas, right? Steve Fleishman just asked about constraint. If you have less constraint in Texas that means the other assets that you have in Texas are going to do better than they would have otherwise done because you've taken up to a maximum of 950 megawatts out of that. So we had to take a look at our entire portfolio - what's the betterment of the assets that we have in the west, what's the betterment of the assets that we're actually now moving from the west to the south, and the construction cost of the line and the long-term value of having that line, which is absolutely critical to the Texas plans. And when we put all that together we're quite satisfied with the economic results of what we've done. Obviously, that would seem to imply that that holds even though the market pricing in Texas is under pressure these days? Yes. On the whole, the market pricing in Texas, I would agree. That's one of the things that I pointed out and one of the issues that we had with our Texas gas assets. I'm sorry; I just lost my train of thought for a second, Kit. Looking at this specific transmission, though, we've got to look at the differences between the west and the south, and we've got to take a look at the benefit of moving that power to our other assets. Although there is pressure on prices in Texas, when you put all that together, our Texas wind assets today overall - not just the ones that were moving power to the south - are in a much better position than they were in the second quarter. Your point also touches on the fact that - just so everybody's aware - our Texas wind assets, those wind assets are essentially hedged in the short term and folks should recognize that. Armando Olivera Hello, can you guys hear me? This is Armando Olivera. Yes. Armando Olivera I'd like to go back to Steve Fleishman's question for just a second. When we talk about the outlook for Florida and what we see on the horizon for next year, Armando's absolutely right. Our confidence level on what's going to happen in the economy next year, we're not sure what's going to happen with customer growth or usage in really both the residential and the commercial segment. But I think it's also fair to say that there's a lot of uncertainty around the rate case and what the rate case outcome will look like, and that certainly factors into our thinking about next year. Your next question comes from Paul Patterson - Glenrock Associates. Just to sort of follow up on that to sort of understand it, so basically part of the outlook in Florida is associated with the economy, but also you guys maybe are thinking that there might be a little bit more risk, I guess, associated with the rate case than you guys previous felt before? Is that what I should gather from that comment? Look, we don't want to make any specific remarks on the proceeding that's currently in place. And there's a vote later on this morning or this afternoon regarding whether the commission's going to finish up this year or whether it's going to push a decision off on our proceeding and Progress's proceeding until the first quarter of next year. So I don't want to speculate on the rate case. Armando's comments were just an acknowledgment that, look, there's tough economic uncertainties going on in Florida, and part of that is the fact that a rate case always has uncertainties. And we acknowledge that this rate case has some uncertainties in it, and he and I just want to make you aware of that. I don't want to press you on that. What I'm trying to get a sense of is that when we're looking at the decline in earnings guidance, particularly for 2010, going to next year it looks to me like when I'm looking at Slide 25 and I'm looking at the hedged amounts, there seems to be a decrease in the expected margins that were hedged quarter-over-quarter, particularly in Texas, for instance, as sort of a clear example on the higher end of the range. What is it about the hedging that caused that amount to be lower in 2010 than we saw for the previous quarter? Armando Pimental Actually, a couple of things, right? Let me just talk about 2010 for a minute, and then I'll talk about maybe Texas for a little bit more. If you look at the top end of our range before, which was about $5.05, the top end of our range now is about $4.85. I mean, this is how I think about it. This is how I think about that $0.20 reduction. You've got $0.06, $0.07, $0.08 in there relating to our Texas gas assets, and if you look at the chart that you were just referring to you'll notice that we reduced our gross margin on those gas assets by $40 or $45 million, so when you do that after tax and you divide it by the number of shares that we have outstanding that gets to be about $0.07 or $0.08. Lower convertible ITC, those 200 megawatts lower than what we were estimating in the second quarter, that's about $0.04 to $0.05. The new population forecast that I mentioned before in Florida, that's about $0.02. Lower commercial usage, that trend - commercial and other usage - if that trend were to continue that's somewhere between $0.02 and $0.04. We've also seen some pressure, not only we, other companies as well, from the state budgetary issues that states are facing, and they're using tactics to try to raise additional revenue by changing some of the ways that they're looking at taxing corporations. That cost us about $0.02 to $0.03 this year. That might continue next year, so that's about another $0.02 to $0.03. You get somewhere around $0.20, a little over $0.20 from $5.05 to $4.85. That's how I get there. Now your question also talked about Texas gas assets specifically. There's a number of things for us to take a look at there. When we reviewed our 2010 guidance for the third quarter we took a hard look at ancillary revenue that we expected to receive in Texas. Clearly, it's down this year from what we had expected to receive - just the second quarter. That's one of the reasons that we're changing 2009 guidance. We've been able to enjoy some fuel basis issues out at those gas plants. That's starting to dry up. We're not sure that's going to come back. We've reduced 2010 for most of those fuel basis gains that we had seen in the past. I mentioned in my prepared remarks that we do mark the forwards, but we do include some estimate in there regarding what we expect the market to do next year. And a great example of that is if we see day ahead pricing clearing at a premium to forward pricing for the following year we often build that into future periods because our assumption would be that it would repeat itself and we would see higher spot prices than forward prices, and we reduced that quite a bit in 2010. That doesn't mean that we don't have a little bit of that left in there. So that's the Texas story. More specifically, if I take a look at our Texas numbers for July, they were okay. They weren't great, but some of the weather, historically hot weather in the summer, drives up spreads for the entire summer, we didn't see that in the late summer in Texas. So all of that put together was one of the factors that reduced 2009, and that's how it affected 2010. Just one last comment: As I've said before, we're certainly not happy that ancillary revenue is down at our gas plants in Texas, but one of the reasons that [inaudible] retail business is up $0.04 quarter-over-quarter is because they didn't have to pay the ancillary cost to our gas assets and other gas assets. So that's probably a much longer answer than what you wanted, but that's how I look at it. Okay. And then just the $0.40 difference on the bottom end of the thing, I mean, not that you have to go to that much detail, but why is there such a bigger delta on the lower end of the range than on the top end of the range? Primarily variability in the things that I've already mentioned, including other uncertainties that we have, including those that Armando pointed to. Your last question comes from Edward Heyn - Catapult. I just had a quick question on when we look at the 2011 gross margin. I know that you're excluding the wind build incrementally in that, but it seems like the margin excluding that is actually slightly down relative to the 2010, and I was wondering if you could maybe just point to, when we're thinking about the 2011, although you're waiting until May to give us some more detail, what kind of drivers should we think about for growth both on the regulatory side and on the NextEra side? Ted, I think, you know, as I look at the detail I have in front of me, it doesn't include the 2011 assets, but we've also got a Seabrook outage in 2011 that we don't have in 2010. You don't have the side-by-side - I do - but if you look at 2010 merchant NEPOOL weather and 2011 merchant NEPOOL weather, there's about $55 million or so related to the Seabrook outage and a little bit lower prices in NEPOOL. That's the biggest drop, if you will, besides the new assets. Let me just kind of look here and see if there's any other big, significant changes. That's really the biggest one that I've got. Edward Heyn - Catapult So when we're thinking about '11 we have these gross margins, you're going to have the impact of Seabrook, there's going to be the gross margin from the wind that you kind of laid out at least in your comments. And then on the regulated side should we expect growth from '10 to '11 or is that all dependent on what sort of clauses and treatment you get in the rate case or is there an expectation that that segment of the business is going to be growing as well from '10 to '11? Ted, I tried to address that earlier. We're not going to be providing any segment guidance or more detail on Florida Power & Light, as I indicated in my prepared remarks, until the rate case is settled. Great, everyone. Thank you for joining us today on this conference call. We look forward to catching up with you later. And, ladies and gentlemen, that does conclude today's conference. We thank you for your participation. About this article:ExpandTagged: TranscriptsError in this transcript? Let us know.Contact us to add your company to our coverage or use transcripts in your business.Learn more about Seeking Alpha transcripts here.Search TranscriptThis transcriptFindAll transcriptsFindCompare To:All FPL-OLD TranscriptsTop Authors|RSS Feeds|Sitemap|About Us|Contact UsTerms of Use|Privacy|Xignite quote data|© 2016 Seeking Alpha

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Startup Basics Get the Job SMB Solutions Veterans' Efforts Saluted at Small Business Administration By Ned Smith, BusinessNewsDaily Senior Writer November 10, 2012 05:41 am EST . / Credit: Saluting veteran image via Shutterstock Every day is Veterans Day at the Small Business Administration (SBA). Each year, the agency salutes tens of thousands of the nation's veterans by supporting them through entrepreneurial training and mentoring, access to capital and business development opportunities through government contracts. Veterans are a natural constituency for the SBA, the agency says. Nearly 10 percent of small businesses nationwide are owned by veterans. Collectively, these businesses employ almost 6 million Americans and generate more than $1 trillion in receipts. In addition, veterans are 45 percent more likely than those without active-duty military experience to be self-employed. Many of the SBA support programs are designed to capitalize on the leadership and management skills veterans acquire during their service. This year, for example, the SBA partnered with the Department of Veterans Affairs and the Department of Defense to develop a national entrepreneurship training program for transitioning service members. Called Operation Boots to Business, the program was piloted with all four branches of the services this summer and fall and will be rolled out nationally next year to provide exposure to entrepreneurship training to all 250,000 service members who transition into civilian life each year. This year, the SBA also helped pump more than $4 billion into the nation's small business economy by backing more than 3,200 loans for 2,800 veteran-owned small businesses through its flagship 7(a) and 504 loan programs, including $118 million through the Patriot Express Loan program. The Patriot Express Loans feature one of SBA's fastest turnaround times for loan approval and an enhanced guaranty and interest rate on loans up to $500,000 to small businesses owned by veterans, reservists and their spouses. The loans can be used for most business purposes, including startup, expansion, equipment purchases, working capital, inventory or business-occupied real-estate purchases. This year also marked the fifth consecutive year of increases in the contracts made available to veteran-owned small businesses through the Service-Disabled Veteran-Owned Small Business Procurement Program, jumping 2.65 percent to $11.2 billion in fiscal year 2011. "Around Veterans Day, our thoughts turn to the men and women who are currently serving in the Armed Forces, as well as to all veterans who have made sacrifices and served our country over the years," said SBA Administrator Karen Mills. "When you consider the leadership and management skills our veterans develop while on active and reserve duty, it's no wonder we see so many of them choose the path of small business ownership." Reach BusinessNewsDaily senior writer Ned Smith at [email protected]. Follow him on Twitter @nedbsmith.We're also on Facebook & Google+. Ned Smith Ned was senior writer at Sweeney Vesty, an international consulting firm, and was Vice President of communications for iQuest Analytics. Before that, he has been a web editor and managed the Internet and intranet sites for Citizens Communications. He began his journalism career as a police reporter with the Roanoke (Va.) Times, and was managing editor of American Way magazine and senior editor of Us. He was a Captain in the U.S. Air Force and has a masters in journalism from the University of Arizona. For Veterans, Next Battle is Finding a Job The Best 100 Companies for Vets The Best Metro Areas in US for Veterans Lead Your Team Find A Solution

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Press Release:IMF Managing Director Dominique Strauss-Kahn Sees Renewed Stability But Remains Cautious About Global Economic Recovery, Notes Need For Continued Policy ActionsSeptember 4, 2009 Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. Modify your profile Beyond the Crisis: Sustainable Growth and a Stable International Monetary System, Speech by Dominique Strauss-Kahn, Managing Director of the International Monetary Fund Speech by Dominique Strauss-Kahn, Managing Director of the International Monetary Fund At the Sixth Annual Bundesbank Lecture Berlin, September 4, 2009 It is a great pleasure to be here today, speaking to this eminent audience at such a pivotal time in global economic and financial affairs. I will begin with a few words on the economic outlook, before addressing three key issues that arise when we think about moving beyond the crisis. The global economy appears to be emerging at last from the worst economic downturn in our lifetimes. Several advanced economies, including France and Germany, have already returned to growth, and emerging economies are recovering even more strongly. However, I expect this recovery to be relatively sluggish. In the advanced economies, it is still largely driven by policy stimulus and restocking, with underlying private demand remaining weak. The outlook for the emerging economies is considerably better, though the pace of recovery in advanced trading partners remains a risk. Given the fragility of the recovery, there are risks that it could stall—though thankfully these risks appear to be receding. Premature exit from accommodative monetary and fiscal policies is a principal concern. In addition, problems in the financial sector could persist or even intensify further, particularly if efforts to restore banks to health are not completed. Let me also add that international coordination of exit strategies will be just as important, if not more important, than the very good coordination we have seen already in response to the crisis. Looking ahead, I am concerned about the third phase of this crisis following on the heels of the financial and economic phases—namely high unemployment. We expect unemployment to continue rising through next year, as economic growth falls short of potential. And a jobless recovery remains a risk. Having so many people out of work has significant economic costs, ranging from lower private demand to a decline in potential growth if structural unemployment rises. The social consequences are potentially even more worrisome. For these reasons, I believe that policy makers should err on the side of caution as they decide when to exit from their crisis response policies. Having said this, I do think the time is right for policymakers to develop their exit strategies—because failure to clarify and formulate these plans will risk undermining confidence and the recovery process itself. In my remarks today, I want to focus on three questions related to the global economy’s transition beyond the crisis. • First, what will be the new sources of growth? • Second, are we addressing problems in the financial sector with sufficient urgency? • And third, how can the stability of the international monetary system be improved? Of course, there are other issues. One of the most important is probably what needs to be done to support the low-income countries. I will address this point in detail in a separate speech this month. I. What Will Sustain the Recovery in the Coming Years? Let me now turn to the first of my three points: what is needed to sustain global growth in the coming years. A. Demand-side issues Let me begin with the fundamental question at hand, namely what the sources of growth will be in the coming years. At the national level, the baton will eventually need to be passed from the public to the private sector as crisis response policies are unwound. However, as I will discuss in more detail later, the time to exit from stimulus measures will depend to a large extent on the recovery of private sector demand. At the global level, weaker demand in some economies will need to be offset by stronger foreign demand in other countries. In fact, dramatic changes in global demand are already taking place. For example, household saving in the U.S. has risen to 5 percent of disposable income, from about zero a few years ago. This, combined with weaker investment, has reduced the U.S. current account deficit dramatically. Similar changes are taking place in other current-account deficit countries. These developments are in line with what the Fund had been asking for many years already. Our assessment was that the very high current account deficits that some countries had been running were unsustainable in the medium term, given rising concerns about foreign indebtedness. Indeed, the need for rebalancing underpinned the IMF-sponsored Multilateral Consultations on Global Imbalances that took place in 2006/07. The policy imperatives for achieving a sustainable rebalancing of global demand will be familiar to many of you. • In advanced economies, rapid progress toward fixing the financial system is essential to support productivity and growth. • In emerging Asia (notably China), structural efforts that boost domestic spending, such as improving access to credit for households and small-scale business, should be accelerated. Stronger social security systems and higher spending on education and health would also help reduce precautionary saving. • Also in emerging Asia and oil exporters, public investment spending (concentrated on infrastructure and also on “green” initiatives) would boost domestic demand. • More flexible exchange rate management in some countries would be a valuable policy complement, increasing demand for imports in current-account surplus countries and encouraging a shift in resources from tradable to non-tradable sectors. Global rebalancing of demand could also have important implications for investment and innovation. With consumers in emerging markets playing a bigger role, the composition of global production is likely to change. For example, we could see demand for high-technology goods decline. This makes it all the more important for policy makers to accelerate reforms that reduce barriers to competition and thus support innovation. B. Supply-side issues Allow me to turn now to some important supply-side issues more generally. History suggests that the financial crisis may inflict long-term damage on the supply capacity of the economy. The sharp fall in investment may lower effective capital, and job losses may be translating into higher structural unemployment. Reforms that boost productivity have therefore taken on renewed importance. Labor market reforms, including those that increase labor market flexibility and support job search and training, can facilitate the redeployment of workers from crisis-hit sectors to other, more vibrant parts of the economy. Product market reforms—particularly in services—could create new jobs and boost productivity. Financial sector reforms would also boost efficiency (even though financial sectors are likely to shrink in advanced economies). Here in Europe, I would urge leaders to recommit themselves to the Lisbon agenda. Reforms under this program had already helped raise employment across the continent before the financial crisis erupted. But for many EU economies (including Germany), there is still room for improvement in service sector productivity. Reducing regulatory constraints would be a good step in this direction. Efforts to boost the “green” economy could also play a role. A number of countries have already undertaken “green” stimulus measures—for example, to improve energy efficiency—that are helping to sustain aggregate demand and employment. These measures could also have powerful induced effects on technological innovation. Advances in “green” technology could even become the microprocessor revolution of tomorrow—while at the same time helping address global climate change. C. Exit policies As I said earlier, I see a real danger that policy makers may jeopardize the recovery by exiting from crisis measures too soon. Having said this, the time is right for policy makers to formulate their exit strategies. Addressing concerns about fiscal sustainability—and hence macroeconomic stability—is of the first order of importance. The advanced economies are currently on an unsustainable path, with the average public debt-to-GDP ratio set to rise to 115 percent of GDP by 2014. Significant fiscal adjustment will therefore be essential to ensure debt sustainability. Given the scale of the problem, plans for achieving this adjustment are needed now to anchor market expectations and contain long-term interest rates. The most important step is to contain pension and health care costs. Indeed, in the advanced economies the net present value of future spending due to aging is more than 10 times the fiscal cost of the crisis. While cost-cutting reforms in this area may be politically difficult, they are essential to ensure fiscal sustainability. In some countries, reforming spending beyond education and health may also be necessary, while tax reform may be critical in others. Turning to central banks, they will face challenging decisions of when and how to tighten policy. I do not see this as an immediate concern, since inflation is unlikely to reemerge until the recovery is firmly underway. However, exiting will require difficult decisions, complicated further by the complex technical and operational problems posed by the enormous expansion of central bank balance sheets. For example, unwinding the unconventional measures taken by central banks (such as term lending facilities) will affect monetary conditions. Therefore, to anchor inflation expectations securely, central banks will need to be exceptionally clear in communicating their assessment of price pressures—as well as their view of conditions in the financial markets. Central banks may also face challenges to their independence. Political pressures to “inflate the debt away” could emerge. These must be resisted, given the serious and potentially long-lasting costs of inflation. In addition, concerns about potential capital losses from expanded balance sheets could distract central banks from focusing on price stability and supporting economic recovery. Governments must therefore provide assurances that they will back up their central bank’s capital. Finally, let me repeat how important it is to continue supporting demand until the recovery has firmly taken hold. Unwinding the stimulus too soon runs a real risk of derailing the recovery, with potentially significant implications for growth and unemployment. Therefore, exit policies should only be launched once there are clear indications that the recovery has taken hold and that unemployment is set to decline. II. Reform of the Financial Sector I turn now to my second question, which focuses on the financial sector. With the one-year anniversary of the Lehman Brothers’ collapse just around the corner, it’s a good time to take stock of the progress made so far in reforming the financial sector—and of what still needs to be done. A. Crisis response measures I am heartened by the stabilization of financial markets that has taken place over the last year. Credit and equity markets have rebounded. Bank liquidity is plentiful, thanks to central bank provisions, and wholesale money markets have reopened. Capital markets are showing renewed signs of life, and are contributing to the recovery of financial institutions. But I still see serious downside risks to financial stability. Mounting delinquencies mean banks remain under strain, with developments in the commercial real estate sector of particular concern. Private securitization markets are still impaired. And households and the financial sector continue to deleverage. I also worry that the improvement in financial markets is leading to complacency in dealing with remaining and difficult problems in the banking system. I see several areas where progress in restoring financial stability must be accelerated: • A comprehensive diagnosis of banking systems remains extremely important, especially given that non-performing loans may increase over the coming months. • Launching asset-management programs is also critical. This is needed not only to deal with assets already on bank books, but also to offset the impact of rising non-performing loans. • And formal policy coordination across countries must be strengthened. This will become particularly important as countries begin to design their exit strategies. I urge policy makers to remain focused on completing this crisis-response agenda. Not doing so raises serious concerns that systemic risks could re-emerge in the global financial system, with clear knock-on effects for economic growth. Greater clarity in communicating policy intentions to the public is also essential to shore up confidence. B. Regulatory reform Let me now look beyond crisis response measures, and to the regulatory reforms needed to create a safer and more stable financial sector. The good news is that there is broad-based agreement on the principal lessons of the financial crisis, namely that regulation and supervision must do a better job of mitigating systemic risks. Preventive measures are needed to reduce the likelihood of crises. These include widening the regulatory perimeter and making it more flexible; increasing the amount and quality of bank capital and the liquidity buffers they carry; allowing prudential frameworks to play a greater stabilizing role over the business cycle; and intensifying the regulation and supervision of systemically important institutions. Measures to improve crisis management are also critical, and include addressing difficult cross-border resolution issues. The bad news, however, is that the reform effort is not proceeding as quickly as is necessary to address the problems raised by the crisis. To be sure, this is no simple task: reforms must be sufficiently forward-looking to anticipate tomorrow’s problems, yet not so restrictive that they stifle innovation and growth in the financial sector. Some progress has already been made on strengthening microprudential regulation. For example, the Basel Committee has made recommendations for strengthening the regulatory capital framework. But more work is needed here. In particular, a key lesson of the financial crisis is that capital requirements cannot be lenient. They must therefore not only be increased, but also made more variable in order to prevent excessive risk taking. Development of an operational framework for macroprudential supervision remains work in progress. There is broad agreement on the needed components for such a system: procyclicality of regulation must be dampened, and systemically important financial institutions must be supervised better. However, methodological issues have posed challenges to international agreement on new regulations. Addressing cross-border resolution issues remains one of the greatest challenges. We must keep pressing ahead—for in the absence of an agreement for how to solve conflicts across borders, the risk of national interests being put ahead of the greater global good increases significantly. We must also act decisively to promote the reform of compensation policies in the financial industry. The risk-taking culture that has been the hallmark of major financial firms—with generous bonuses rewarding high short-term profits, and insufficient regard for longer-term risks—contributed to problems of procyclicality and hence was an important factor in the crisis. And I worry that as the financial sector emerges from crisis, a “business as usual” mentality may prevent serious progress from being made. The international community must stand together to make meaningful progress in this area. This will help overcome governments’ concerns about the potential loss of competitiveness if only a few countries adjust their compensation policies. I expect that more traction on this issue may emerge following this weekend’s G-20 Finance Ministers’ meeting in London. C. The IMF’s Role in Financial Sector Reform What is the Fund’s role in regulatory reform? At the outset, let me be clear that we are not a global financial regulator—nor do we aspire to be! That is the responsibility of national regulatory and supervisory agencies. Having said this, we do take very seriously our responsibility to support national and multilateral efforts to strengthen financial regulation. Besides contributing to the formulation of new regulations and providing technical assistance in this area, our key mandate is surveillance of the financial sector. We are therefore stepping up our monitoring of the adoption and implementation of new standards and regulatory changes. This is in line with the G-20’s request that our monitoring include the evolving framework of macroprudential supervision. III. Bolstering the Stability of the International Monetary System Turning to my third question, let me now share some thoughts with you on the international monetary system. By this, I mean the broad set of rules and institutions that govern international payments. In the wake of the financial crisis, concerns about the current system have once again emerged. Critics have noted that the role of the U.S. dollar may have been seriously undermined by the United States’ economic and financial problems. In particular, they worry that its large fiscal imbalances present serious risks to the value of the dollar, and hence of disorderly adjustment. I note, however, that the U.S. dollar actually strengthened during the crisis. In my view, this reflects the dollar’s status as an unrivaled safe haven asset. The question about what shape the international monetary system should take is an important one, and one of the oldest in international finance. As early as the 1940s, John Maynard Keynes proposed the creation of a super-sovereign currency, the so-called “bancor”. More recent proposals call for the creation of a new world reserve currency, possibly based on the SDR—the composite currency issued by the IMF. Another possibility, and perhaps the least unlikely alternative, is for a multi-reserve currency system to emerge, with currencies like the euro, the yen, and even the renminbi serving as co-equal anchors. It is my sense that this question will be decided over the coming decade, rather than the coming months, based as much on political considerations as economic ones. As the global economy evolves, we are likely to see new currencies rise in stature and international usage, leading perhaps to a system with several co-equal anchor currencies. The international community may even decide that the creation and promotion of a new reserve currency is what would be best, though this would of course require a significant step-up in global policy coordination. It is my view that the current international monetary system, despite its problems, is working better than is often said. It proved resilient during the recent crisis, and near-term concerns about the dollar can be eased with appropriate policy actions from the U.S. authorities. Indeed, durably anchoring the fiscal, monetary and financial regulatory policies of the main reserve issuer would go a long way towards stabilizing the international monetary system. But I believe it could be made even more resilient if countries’ appetite for self-insurance—and hence their demand for reserves—could be reduced. This demand, which is expected to rise further in the wake of the crisis, is at the heart of a recurring source of instability of the IMS: it makes it considerably more challenging for the main reserve issuer to achieve fiscal and external balance while providing sufficient safe assets to the rest of the world. (Economists refer to this as the “Triffin dilemma”.) Moreover, large stockpiles of foreign reserves breed uncertainty since the management of these assets could be driven by non-market considerations. Because self-insurance is costly, reducing the demand for reserves would also deliver dividends to individual countries. By investing in foreign reserves rather than in their own economies, countries with large reserve stockpiles have missed out on potentially high-return domestic investments, like education and infrastructure. I see various ways to reduce the need for self-insurance. At the country level, sound economic policies clearly can reduce the need for insurance over time as policy credibility is enhanced and confidence in currencies is strengthened. At the global level, we should seek ways to reduce the impact of volatile capital flows and hence their potential to disrupt financial systems. Third-party insurance should in theory be the most efficient alternative, but pricing uncertainties and significant counterparty risks have prevented the emergence of a market for this. Borrowing from a global or regional reserves pool, or through access to a lender of last resort, is in practice the most likely alternative. Indeed, in recognition of the need to strengthen systemic insurance mechanisms, the international community has taken steps to strengthen the Fund’s role. At its April summit, G-20 leaders called for a near tripling of our lending resources to $750 billion, and over the past year a number of steps have been taken to reform and expand the Fund’s lending facilities. I believe that the IMF could do even more to support the international monetary system in the future: • The procedures related to accessing our short-term Flexible Credit Line and other lending facilities could be modified to make this form of insurance more predictable. • SDR allocations could be made more responsive to global developments and flexible to country circumstances. • The Fund’s resource base (or insurance pool) could be increased further. Even after its recent tripling, it is still smaller as a share of global GDP—and even smaller as a share of global capital flows—than it was when the Fund was created. IV. Concluding Thoughts In my remarks today, my goal was to focus our attention on some of the key questions that relate to the global economy’s transition beyond the crisis. While global growth appears to have turned the corner, we should not forget that so far, this has been mainly due to massive policy support. And while it is right—and in fact policy makers’ responsibility—to start formulating exit policies now, they should by no means be implemented until there are clear signs that the recovery is firmly underway. In particular, given the high and lasting cost of unemployment, policy makers should err on the side of caution rather than jeopardize the recovery. We are definitely making progress towards creating a safer and more stable financial system—but much remains to be done. In particular, capital requirements need to be strengthened, so that they are not only larger, but also reflect better the riskiness of bank activities. And on compensation policy, we need to align bankers’ incentives much better with longer-term performance than with short-term profits. Finally, let me close with a renewed call for international policy coordination—and express my support for Minister Steinbrueck’s recent remarks on this issue. The crisis has shown that international policy coordination is an essential part of a crisis response. Thanks to concerted and forceful policy actions, the world’s policy makers were able to keep this once-in-a-lifetime crisis from becoming a full-blown depression. The crisis also demonstrated the irreplaceable role of the multilateral institutions. Whether in support of the international policy response, or as providers of financing, they have played a critical role in the global response to the crisis. Looking ahead, they must remain at the center of reshaping the international financial system. Thank you for your kind attention. I would be happy to take some of your questions.

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Casey to Head Global Products for American Century Investments Industry veteran Glen Casey joins American Century Glen Casey KANSAS CITY, Mo. (PRWEB) American Century Investments has named Glen Casey senior vice president and global head of products, a newly created position. Casey will lead global product strategy, management and development for all investment disciplines and across all distribution channels. He reports to American Century Chief Marketing Officer Mark Killen. “Glen is a seasoned leader with significant global product expertise,” said Killen. “Delivering enhanced products consistent with evolving client preferences is a strategic priority for our firm. It is my great pleasure to have him join us, as I believe Glen and his product team will be key to meeting our clients’ needs.” Casey joined American Century from Goldman Sachs Asset Management, where he worked for 17 years, most recently as head of product and portfolio strategy, U.S. third-party distribution. Prior to that, he held roles within Goldman Sachs’ investment management division, including director of strategic lead management and cross selling, as well as senior product and strategic planning roles for IMD Asia and U.S. third-party distribution. Previously, he served in senior consulting and analysis roles for Cerulli Associates and Fidelity Investments. Casey earned a Bachelor of Science degree in accounting from Bentley College, Waltham, Mass. He holds a Master of Science degree in finance from Boston College. About American Century Investments American Century Investments is a leading privately-held investment management firm, committed to delivering superior investment performance and building long-term client relationships since its founding in 1958. Serving investment professionals, institutions, corporations and individual investors, American Century Investments offers a variety of actively managed investment disciplines through an array of products including mutual funds, institutional separate accounts, commingled trusts and sub-advisory accounts. The company's 1,300 employees serve clients from offices in New York; London; Hong Kong; Mountain View, Calif.; and Kansas City, Mo. Jonathan S. Thomas is president and chief executive officer and Victor Zhang and David MacEwen serve as co-chief investment officers. Through its ownership structure, more than 40 percent of American Century Investments' profits support research to help find cures for diseases including cancer, diabetes and dementia. For more information about American Century, visit http://www.americancentury.com. You should consider a fund’s investment objectives, risks, and charges expenses carefully before you invest. The fund’s prospectus or summary prospectus, which can be obtained by visiting americancentury.com contains this and other information about the fund, and should be read carefully before investing. American Century Investment Services, Inc., Distributor. ### Laura Kouri American Century Investments +1 (816) 340-4710 American Century Investments Media Line American Century Investments logoAmerican Century Investments logo

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P.O. Box 930 Everett, WA 98206 The cash register rings its last sale SHARE: By Anne D'InnocenzioAssociated Press Published: Saturday, March 23, 2013, 12:01 a.m. advertisement | your ad here NEW YORK -- Ka-ching! The cash register may be on its final sale.Stores across the country are ditching the old-fashioned, clunky machines and having salespeople -- and even shoppers themselves -- ring up sales on smartphones and tablet computers.Barneys New York, a luxury retailer, this year plans to use iPads or iPod Touch devices for credit and debit card purchases in seven of its nearly two dozen regular-price stores. Urban Outfitters, a teen clothing chain, ordered its last traditional register last fall and plans to go completely mobile one day. And Wal-Mart, the world's largest retailer, is testing a "Scan & Go" app that lets customers scan their items as they shop."The traditional cash register is heading toward obsolescence," said Danielle Vitale, chief operating officer of Barneys New York. That the cash register is getting the boot is no surprise. The writing has been on the wall for a long time for the iconic machine, which was created in the late 1800s. The register was essential in nearly every retail location by 1915, but it now seems outdated in a world in which smartphones and tablets increasingly are replacing everything from books to ATMs to cameras.Stores like smartphones and tablets because they take up less floor space than registers and free up cashiers to help customers instead of being tethered to one spot. They also are cheaper: For instance, Apple Inc.'s iPads with accessories like credit card readers can cost a store $1,500, compared with $4,000 for a register. And Americans increasingly want the same speedy service in physical stores that they get from shopping online. "Consumers want the retailer to bring the register to them," said Lori Schafer, executive adviser at SAS Institute Inc., which creates software for major retailers. J.C. Penney, a mid-price department-store chain, said the response by customers has been great since it started rolling out iPod Touch devices late last year in its 1,100 stores. The goal is to have one in the hands of every salesperson by May. The company said that about a quarter of purchases at its stores nationwide now come from an iPod Touch. ksOn a recent Thursday afternoon at a Penney store in the Manhattan borough of New York City, Debbie Guastella, 55, marveled after a saleswoman rang up three shirts she was buying on an iPod Touch."I think it's great," said Guastella, who lives in Huntington, N.Y. "The faster the better."It's been a long fall for the cash register, which innovated retail as we know it. The first register was invented following the Civil War by a little known saloon owner. Before then, most store owners were in the dark about whether or not they were making a profit, and many suffered since it was easy for sales clerks to steal from the cash drawer unnoticed. But by 1915, cash registers were ubiquitous in stores across the country, with more than 1.5 million sold by then.More recently, stores have been looking for ways to modernize checkout. Since 2003, self-checkout areas that enable customers to scan and bag their own merchandise have become commonplace in grocery and other stores. But recently, there's been a push to go further.As a result, companies that make traditional cash registers are racing to come up with new solutions. NCR Corp., formerly known as the National Cash Register Co., was the first to manufacturer the cash register on a large scale. Last year, the company that also makes ATMS, self-service checkout machines and airport check-in kiosks, launched a program that merges its software with the iPad. This allows store clerks to detach the iPad from the keyboard at the counter and use it as a mobile checkout device"Retailers have more flexibility and more opportunities to change the shopping experience," said Mark Self, NCR's vice president of retail solutions marketing. Stores themselves also are taking their cues from the success of Apple. The nation's most profitable retailer moved to mobile checkout in all of its stores in 2007. In 2011, Apple began allowing shoppers to check out their purchases using their iPhones. Take upscale handbag maker Coach, which is using iPod Touch devices at half of its 189 factory outlet stores. The company also is testing them in a handful of its 350 regular stores. The move has enabled Coach to start slimming down its registers to the size of small podiums, freeing up space on walls to build shelves to showcase more product, said Francine Della Badia, Coach's executive vice president of merchandising. Della Badia, who says the additional space will be used for new shoe salons and other purposes, said most importantly, the mobile devices allow store staff to build "a more intimate connection with the customer."Some retailers have decided to go completely mobile. Urban Outfitters, which operates more than 400 stores under its namesake brand, Anthropologie and Free People, announced in late September that all sales eventually will be rung up on iPods and iPads on swivels located at counters. The company didn't give a timeframe for when it would go completely mobile. Urban Outfitters had given iPod Touch devices to its sales staff two years ago and the move has been very well received by shoppers, said Calvin Hollinger, the company's chief information officer in his address to investors.Nordstrom, an upscale department-store chain that's considered within the retail industry to be the gold standard in customer service, also plans to get rid of registers altogether.The company handed out iPod Touch devices to its staff at its 117 department stores nationwide in 2011. And by late last year, it did the same for its 110 Nordstrom Rack stores that sell lower-priced merchandise. Nordstrom, which already has removed some of the registers at its Rack stores, said it aims to phase out registers by next year.Colin Johnson, a Nordstrom spokeswoman, said it's too early to draw any conclusions on how mobile checkout has influenced buying, but the company is learning about which technologies work best. "We see the future as essentially mobile," Johnson said. "We don't see departments in our store as being defined by a big clunky cash register." Not every retailer is quick to ditch registers, though. After all, there are still logistics to figure out. For instance, most retailers don't accept cash payments on mobile devices. But if they start to do so, where will they put the cash that would normally go into a register?Additionally, sales staff walking around stores armed with mobile devices could turn off shoppers who would prefer to be left alone in aisles. Richard Robins, a 67-year-old semi-retired investment fund manager from Redonda Beach, Calif., says he would like the convenience of mobile checkout but wouldn't want to be pressured from a sales clerk while he's in the aisle."I don't want to be hustled," he said.To guard against making customers uncomfortable, some retailers including Penney are training their salespeople on when to approach shoppers -- and when not to. For its part, Wal-Mart is putting checkout in the hands of the shoppers themselves.The retailer is testing its "Scan & Go" app, which can be used on Apple devices such as iPads, in more than 200 of its more than 4,000 stores nationwide. The app, which is aimed at reducing long checkout lines, requires that shoppers pay at self-checkout areas. So as it tests the app, Wal-Mart also is expanding the number of self-checkout areas in its stores."Our goal is to give choices to all of our customers however they want to shop," said Gibu Thomas, senior vice president of mobile and digital initiatives at Wal-Mart's global e-commerce division."

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Free trade agreement between the EU and CanadaPress release 223/2013 21 October 2013On 18 October 2013, EU and Canada reached a political agreement on concluding an ambitious free trade agreement. Negotiations on the Comprehensive Economic and Trade Agreement (CETA) between the EU, its Members States and Canada have continued since their launch in 2009. Honing of the agreement details will continue before it can be given final approval.The agreement will foster economic growth and employment on both sides of the Atlantic. It is expected to increase two-way bilateral trade in goods and services by 23% or EUR 26 billion and boost the EU gross national product by approximately EUR 12 billion a year. The economic impacts of the agreement will become clearer once the final text of the agreement has been formulated.“This solution demonstrates the EU's ability to negotiate. The agreement may also have a positive impact on the negotiations conducted between the EU and the United States,” says Minister for European Affairs and Foreign Trade Alexander Stubb.The agreement is expected to significantly lower the level of tariffs in bilateral trade between the contracting parties and create new market access opportunities in services and investment. In public procurement market, Canada will open access to European companies to engage in tenders at a regional level to a larger extent than it has done with any other agreement partner.Finnish exports to Canada amounted to approximately EUR 596 million in 2012, representing one per cent of our overall exports. Finnish exports to Canada consist of, for example, oil products, machinery, equipment and motor vehicles. The value of goods imported from Canada to Finland, on the other hand, totalled EUR 346 million, which is 0.6 per cent of our overall imports. The imported products include ore, coal, motor vehicles, and aircraft.In the future, negotiations will continue on the closer details of the agreement. Once these technical discussions are over, the parties will initialise the agreement. Decisions on signing the agreement and concluding it will become topical at a later date, and they will be made on the basis of the Commission proposals. In addition to the approval of all EU Member States, the agreement requires also the approval of the European Parliament.Additional information: Lauri Tierala, Special Adviser to the Minister, tel. +358 295 351 778; Jukka Pesola, Head of Trade Policy Unit; and Mary-Anne Nojonen, Commercial Counsellor, tel. +358 295 351 494 This documentsuomiIn other languagessvenska

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Page Content Statement by Mr. Supachai Panitchpakdi, Secretary-General of UNCTAD 19th General Meeting of Shareholders of the African Export-Import BankBeijing, China10 Jul 2012South South Cooperation Under Conditions of Dynamic Disequilibrium in the Global Economy: Opportunities and Challenges Excellencies, ladies and gentleman Let me begin by thanking the African ExIM Bank, and in particular its President Jean Louis Ekra, for the invitation to address this important meeting. Mr Ekra has helped foster a strong relationship between our two institutions and it was a pleasure to host him in his capacity as honourary President of the Global Network of Eximbanks and Development Finance Institutions at its 7th annual meeting just before the opening of the UNCTAD XIII quadrennial conference in April. UNCTAD supported the creation of G-NEXID in 2006, and cooperation between the organization and G-NEXID was formalized with the signing of a memorandum of understanding in September 2011.The network is for me a clear example of the benefits to be achieved from closer south south cooperation. Let me secondly commend the conference organizers for choosing to host this meeting in Beijing. The growing economic ties, including through trade and investment flows, between China and Africa are part of a changing global economic landscape which holds out real promise of a better future for us all. China is already Africa's leading trade partner and volumes are rising. The organisers have also taken an important step by linking South South cooperation to the opportunities and challenges of todays dynamic but unstable global economy. The discussion of south south cooperation often restricted to a debate about aid flows and effectiveness, and while that remains an important debate, I believe that the wider context is where we need to be directing our thinking about south south cooperation and it is where I will focus my remarks today. My message on south south cooperation can best be summed up as one of cautious optimism. The developing worlds resilience to, and rebound from, the recent financial crisis certainly marks an important break with the past and holds out the hope, long held by UNCTAD, that an emerging South can bring about a more balanced and stable world economy. However, caution is warranted given that the shift in wealth has been uneven to date, with large differences among regions and countries, and because vulnerabilities remain. Even the much heralded BRICS are in reality a very diverse group of countries and experiences. Moreover, many emerging economies remain dependent on the advanced economies and vulnerable to changes in policy and conditions there, as we are now seeing with the damaging contagion from the Eurozone debt crisis. If this assessment is correct then it is crucial that policy makers across the South are not lulled in to a false sense of complacency by recent trends and that the South South agenda does not heed the siren calls of a return to "business as usual" coming from some of the leading multilateral economic institutions. Colleagues, ladies and gentlemen Global economic conditions in general, and those in the advanced economies in particular, have historically always had a significant influence on growth, trade and investment prospects in the developing world. The asymmetric nature of that relationship was demonstrated in the early 1980s when policy changes in the advanced countries triggered a sharp slowdown in much of the South, accompanied by a deeply damaging debt crisis and followed by a "lost decade" (or more) of development in many countries. Along with repeated financial shocks and crises which lasted through the late 1990s, the developing world, with the exception of East Asia, fell further behind the North during this period. Since the new millennium, however, we have witnessed a very strong economic performance across all regions in the South. During 2003-08, the average growth of developing countries exceeded that of advanced economies by some 5 percentage points, compared to around one point in the 1980s and 1990s. One of the strongest growth surges occurred in Sub Saharan Africa, holding out hope that this region could finally begin to enjoy the benefits of a globalising world. Growth gaps widened during 2008-11 as most developing countries proved quite resilient to the financial crisis triggered by the collapse of Lehman Brothers in September 2008, while advanced countries experienced a deep recession and a very sluggish recovery. This growth divergence has widely been interpreted as the South "decoupling" from the North and the start of a process of rapidly narrowing income gaps across the world economy. Projecting recent trends into the future suggests, on some estimates, that over the next fifty years the global economy will have 'converged'; that is, the relevant countries in the South will not only dominate the global economy in terms of absolute trade and production figures, but many will have closed the income gap with countries in the North. This convergence narrative is often presented as a vindication of the market-friendly policy agenda promoted over the past 30 years by international financial institutions and through bilateral development agencies. The policy message is clear, the challenge for the BRICS and other developing countries is to continue with "business as usual" by adopting sound macroeconomic policies, rapidly opening up to global firms and market forces, pursuing good governance and investing in human capital. At the same time, with strong growth predicted for the emerging countries in to the future, there have been growing calls from development partners, which have become louder since the financial crisis, for these countries to assume much more responsibility for managing the world economy, easing the burden on the cash strapped North. What I would like to suggest to you this morning is that this is not a persuasive narrative. In part that is because it myopically ignores the damage that was done to developing countries in the 1980s and 90s by the same policies which are now deemed the only sure-fired basis for their future success. In part, because the evidence does not show the desynchronisation of cycles between developing and advanced economies on which the decoupling hypothesis rests. But it is also because the success stories of the last decade have not actually followed the economic recipe that the adherents of "business as usual" are now looking to promote under the narrative of the rising South. This last point raises what in my mind are the key questions from the recent period of accelerating Southern growth, namely whether there has been a durable shift in the trend growth of the South relative to the North, if so what has caused it and if not what can be done to put it on firmer foundations? To answer these questions we need to acknowledge a certain paradox in the recent globalisation experience. The paradox of the last decade is that the victims of the debt crisis of the 1980s, which in many respects marked the start of what in UNCTAD we have called finance-driven globalization (FDG), have become the winners of the debt fuelled growth which has driven FDG since the millennium. This pattern of growth, which originated in the advanced economies, generated a highly favourable global economic environment for developing countries in terms of export opportunities, capital flows and commodity prices. Developing country exports grew very quickly at something like twice the pace of those from advanced countries with a concomitant rise in their share of world trade. From the early years of the 2000s, low interest rates and rapid expansion of liquidity in the US, Europe and Japan also triggered a boom in capital flows to developing economies. There was at the same time a surge in FDI flows by TNCs looking to cut their costs by spreading production chains more widely including to many more host developing countries. Some countries also enjoyed a surge in workers' remittances during these years, which exceeded 3 per cent of GDP in India and reached double-digit figures in some smaller countries. Commodity prices rose strongly, in some cases thanks in part to rapid growth in some emerging economies, but also because of the financialization of commodity markets. This confluence of favourable external trends was unprecedented in the post Second World War era and it would be surprising if it did not register in improving growth figures in the South. Indeed, on some estimates, at least one-third of pre-crisis growth in China, for example, was due to exports, mostly to advanced economies, and the ratio is even higher for some smaller Asian export-led economies; Latin America would not have seen much growth had terms-of-trade, dollar interest rates and capital flows remained at the levels of the late 1990s: and as UNCTAD research has shown much the same can be said for growth in Sub Saharan Africa. But there is a further paradox of FDG that needs to be introduced here. Namely that the big winners in the developing world have been those countries that resisted financial and capital account liberalization - indeed the Washington policy consensus more generally - and deployed a range of creative and heterodox policy initiatives to help break the constraints on sustained growth and better manage their integration in to the global economy. These successful economies, of which China is the most prominent, have also built industrial capacity in the context of strong regional growth dynamics, including through managed trade and FDI. In all these cases industrial policy, rather than purely market forces, has been crucial to their being able to take advantage of the scale economies and other benefits that external integration can bring. The big challenge is, of course, what happens next now that debt fuelled Northern growth has come to its predictable and unhappy end? Much will of course depend on how the advanced countries approach this challenge. In UNCTAD we are particularly worried about the resort in may countries to austerity measures; our own research on the damage from such an approach in developing countries tells us that this is unlikely to be a healthy economic solution for rich countries either. The financial crisis in 2008 also led to a deterioration in all the areas that had previously supported expansion in developing economies. Markets for Southern exports contracted, capital flows were reversed and commodity prices declined sharply. Growth rates across the developing world dropped as a result, in some cases quite significantly. However, a number of these economies, including some of the largest, showed resilience to these shocks and were able to rebound quickly, particularly where a strong countercyclical response was made possible by favourable payments, reserves and fiscal positions built up during the preceding expansion. As a result, the growth impulse in some leading Southern economies shifted to domestic demand, including in countries which had previously been strongly export-led. China has, of course, played a key role here, launching a massive stimulus package in infrastructure and property investment. Because of its high commodity intensity, this investment-led growth has given an even stronger boost to commodity prices than did pre-crisis export-led growth thereby supporting growth recovery in other developing regions. At the same time, short-term capital inflows surged back in to the South following sharp cuts in interest rates and quantitative easing in developed economies in response to the crisis. These flows helped to ease a growing payments constraint in several major emerging economies including India, Brazil, Turkey and South Africa. However, these flows also widened deficits by leading to currency appreciations, which in some cases have been very sharp. Domestic demand-led recoveries in the South have now come to an end, and at the same time the economic situation in many advanced economies has become more challenging with growth slowing again in most and with some already back in recession. As a result the downside risks for developing countries are once again mounting. While the failure of the advanced economies to manage their own imbalances represents the biggest immediate threat to growth in the South, the underlying challenges remain the systemic tensions arising from FDG. Despite the scale of the 2008 financial crisis and a good deal of subsequent talk about not letting it happen again, there has since been a quite shocking failure to reform the international financial system. There is still no effective multilateral surveillance to bring discipline and responsible behaviour on the part of reserve-issuing countries. Despite all the talk of a Keynesian revival the adjustment to shocks still falls on debtor economies with no pressure on surplus countries to make required changes. The IMF has abandoned parts of its economic orthodoxy and begun to discuss ways to better manage capital inflows, including capital controls as a last resort and temporary measure. However, the Fund has paid little attention to policies in source countries, including measures to stem speculative outflows, multilateral financial resources to support countercyclical measures remain woefully inadequate and a sovereign debt work out mechanism remains a distant possibility. Instead, muddling through and ad hoc arrangements, involving the IMF and selected countries and other agencies, remain the order of the day. The never again mantra has turned in to the when next prediction! Developing countries, as much as advanced countries, have an interest in a stable financial system that is in the business of providing security for people's savings and mobilizing resources for productive activities, including international trade. Reforms are urgently needed to regulate institutions that have become too big to fail, to replace unruly and procyclical flows with predictable long-term financing, to regain stability in currency markets and to support expansionary macroeconomic adjustments. Another downside risk for many developing countries is commodity price instability. This is not just about oil prices driven by geopolitical uncertainties and speculation. Even a moderate slowdown in China, towards 7% per cent, could bring an end to the boom in a broad range of commodities and if advanced countries enter recession the impact will be significant on some countries. This could be further amplified by a rapid exit of investors and traders in commodity derivatives. We may not know with certainty the extent of instability caused by commodity speculators and whether they create autonomous movements independent of real supply and demand shocks. But two pieces of evidence show the destabilizing impact of derivative trading. First, there is increased synchronization of price movements of commodities with different supply and demand characteristics. Second, there is evidence of cumulative movements, bandwagon behaviour among derivative trades, particularly during the commodity boom-bust cycle in the second half of 2008. Controlling these activities is also key to a more stable global economy. Recent growth figures for developing countries have already begun to raise concerns that these risks are becoming a reality. Most international forecasting agencies are busy revising down their growth forecasts for different regions and for the global economy as a whole. At the same time hope of another coordinated international response, along the lines which followed the financial meltdown in 2008, are looking less and less likely, not only because national policy makers have less room for manoeuvre this time around but also because trust in the multilateral system appears to be dissipating, witness the state of the Doha negotiations and the Rio plus 20 process. A pressing issue, therefore, is how to situate South South cooperation against this backdrop of an unstable and fragile world economy? From my remarks I think it is clear that developing countries face two interdependent challenges which call for a wide-ranging rethinking of their development policies and strategies including with respect to south south cooperation. First, in the immediate future, they face the risk of a significant drop in their GDP growth rates. The slowdown could be quite severe if Europe falls into a deep recession bringing down US growth rates which, in any event, are likely to be weak and unstable. Second, over the medium term, developing countries cannot return to the kind of rapid growth they enjoyed during the debt-fuelled global expansion of the last decade, even if the advanced economies could recover fully. Talk of new growth poles in the South needs to be approached more cautiously than has been the case so far. Neither the structural changes nor the market conditions of the past decade or so have advanced to the point where the South is self sustaining let alone an independent engine of global growth. The growth of south south ties over the past decade has been impressive and can provide some resilience in the face of a slowdown in the North. Between 1996 and 2009 the developing country share of global trade rose from 18 to 29 per cent, with South-South trade growing at an average of 12 per cent per year, 50 per cent faster than North-South trade. It now accounts for around 20 per cent of global trade, and over half of all developing-country trade. Over this same period the share of developing countries in inward FDI flows has 38 to 43 per cent of the total and South-South foreign direct investment (FDI) has also been growing rapidly, at around 20 per cent per annum over this same period, and now accounts for 10 per cent of total FDI flows, with as much as one third of flows to developing countries coming from other developing countries. Finally, while high-income countries remain the main source of remittances for developing countries, migration between developing countries is now larger than from developing countries to OECD countries. However, it is important to recognise that these growing south south ties have often been dependent on Northern markets and firms, in the context for example of global supply chains, so it is important not to exaggerate their independent nature. As a consequence, efforts to extend and strengthen these ties should not be divorced from the wider policy challenge to build productive capacity and expand domestic markets in the South. As such South-South integration and cooperation (SSIC) is still work in progress. One possible model in making further progress is the flying geese paradigm associated with successful East Asian development. The emergence of similar models elsewhere cannot, however, be taken for granted, nor that their development impact will simply replicate that of East Asia. Still, this experience does suggest that, with proper policies, South South cooperation can play an important role in fostering inclusive development through closer trade and investment ties. Realistically, China is probably the only emerging economy which can offset the damage of stagnation in the North on its own economy and generate strong countervailing impulses for other developing economies. However, at present, the size of its consumer market barely reaches 20 per cent of that in the US, even though China's GDP is around 40 per cent of the US GDP. This is because of exceptionally low share of household income in GDP and a very high household savings rate. Moreover, because of their low import content, total (direct and indirect) imports for consumption in China do not reach 10 per cent of those in the US. Therefore, in order to provide a large market for other developing economies, China needs not only to raise the share of household income in GDP and reduce precautionary savings, but also to increase the import content of consumption. China is also the only major developing country capable of helping other countries to reduce their dependence on financial markets in advanced economies. The country is expected to continue to run a current account surplus in the foreseeable future although, as it sets about on its own rebalancing agenda, this will be lower than it was during the subprime expansion. A longstanding challenge of south south integration and cooperation is whether or not there are sufficient financial resources available in stronger developing economies to support growth and development in the weaker ones. In recent years, growing surpluses in some dynamic developing economies certainly raise the possibility that these could be recycled to other parts of the South in support of their growth and development. The Bank of the South in Latin America and the recently discussed BRICs Bank are possible models in this respect. UNCTAD has also raised the possibility of using Sovereign Wealth Funds in the South to help finance long-term investment projects in the least developed countries. The design of such mechanisms is not an easy task -- witness their absence in the Eurozone area for example - however their further consideration is certainly merited and points to more constructive discussions of mutual needs and challenges in the South. In the longer term, while the policy challenges facing growth poles in the South vary, for many they are linked, one way or another, to maintaining a virtuous circle between capital accumulation, structural change, productivity growth and rising domestic demand. One of the encouraging features of the recent growth surge in the South, has been the pick up of investment rates in Latin America and Africa after decades of decline and stagnation. However, levels remain well below what is needed to ensure inclusive and sustained growth and the situation with public investment remains particularly worrying. Moreover, the pace of industrial development, indeed of economic diversification in general, has so far remained sluggish in most of these economies. Consequently, commodity exporters in Latin America, and also in Africa, still have little control over the key determinants of their economic performance (capital flows and commodity prices), and their main policy challenge continues to be how to break out of this limitation and gain greater growth autonomy. Accessing the right kind of development finance remains an issue but ultimately they will need to reduce their dependence on foreign capital, whether from China or from the advanced economies, by strengthening domestic resource mobilisation. In this respect, it should be noted that although the highest income earners in Latin America capture a much greater proportion of national income than those in Asia, they save and invest a much lower proportion of their incomes, and as mentioned earlier, this may have been somewhat aggravated by recent bubbles in commodity and capital markets. Low investment and high dependence on foreign capital are challenges that need to be addressed, not only in commodity exporters, but also in some exporters of manufactures facing what has been called the "middle-income trap", because without adequate investment it remains difficult to shift the structure of production towards high-productivity and more supply- and demand-dynamic sectors. As has been seen in Southeast Asia in recent years, a high rate of savings does not always translate into an equally high level of investment and, as seen in India, a high level of aggregate investment does not necessarily translate into rapid manufacturing growth. Moreover, in these economies a heavy reliance on foreign direct investment has not generated the local entrepreneurial base needed to move further up the development ladder. If developing countries are going to continue to grow rapidly, additional efforts have also to be made to avoid rising domestic and balance of payments deficits. In part that will come with the successful diversification of their production structures. But such developments will not happen spontaneously. It requires new infrastructure, and access to markets and technology, which will be costly, especially in the light of the imperative to raise real wages and domestic demand. In this respect, the examination of successful growth experiences in the South and sharing the policies which have sustained them can assist ongoing efforts to introduce domestic and international policy reforms and supportive institutional arrangements, overcome the threats from unregulated financial arrangements, address the disproportionate vulnerability to shocks in the South, and ensure inclusive growth within and between countries. These reflections indicate that the way forward for the South depends on the internalisation of the drivers of growth in order to secure self-sustaining economic expansion, the achievement of greater autonomy for countries to determine their own development trajectory, and the implementation of sustainable, strategic and inclusive development policies. For practical reasons, SSIC is most likely to contribute to this by building on what in UNCTAD we have been calling developmental regionalism. After several disappointments and false starts, there are signs that regional integration is gaining renewed support across the developing world. The initiatives include attempts to forge greater consistency around trade and investment policies in Africa and Latin America, as well as the creation of regional production networks in Asia. These developments point to more measured alternative to premature trade liberalisation, unregulated global capital flows and a race to the bottom of global value chains. Developmental regionalism should harness regional trade, investment and capital flows to building productive capacity and strengthening productive integration among neighbouring economies. Although these modalities of integration ultimately depend on the decisions of firms, rather than governments, national industrial policies can support this process, and coordination and harmonization of such policies can help make integration more effective. Indeed, industrial policy as I suggested earlier with reference to the flying geese model is likely to play a much more prominent role in charting the future course of more inclusive and sustainable development across the South. Formal regional cooperation is not a precondition for de facto integration, but larger and more inclusive gains will likely require a dynamic interaction between the two. At first, such cooperation will tend to focus on technical issues (trade barriers, standards etc.), but as production and trade systems become more integrated among neighbouring countries, the need for coordination and collaboration will grow. The expansion of regional trade has added impetus to discussions on regional monetary and financial cooperation. Indeed, with the gaps referred to earlier in the multilateral system such cooperation has gained ground in recent years. Monetary and financial cooperation covers a wide spectrum from simple trade-related payment initiatives to more complicated liquidity provisioning development finance schemes and ultimately monetary union. However, there is no recipe, mandatory sequence or ideal timing when it comes to such arrangements, and distinct initiatives are likely to emerge according to the degree of integration and the political economy of each region. The development scenario I have been trying to present to you is very different from the narrative of automatic convergence that I suggested at the beginning of my presentation has become part of conventional wisdom surrounding the recent Rise of the South. It includes targets for government expenditure and public and private investment to facilitate a more equitable distribution of income and improved employment prospects, reasonably stable real exchange rates and the promotion of regional trade areas in developing regions, selective incentives and support for exports of commodities, manufactures and services by countries that lack a sufficient export base, and global cooperation in the management of commodity markets, including energy resources and markets, to achieve price stability and reduce the dependence on fossil fuels. Because the imbalances I have been describing operate both at a national and at a global level, their resolution depends on coordinated national as well as global policy initiatives. In my report to UNCTAD XIII I have talked about the need for a Global New Deal and while I do not have time to elaborate on that here I believe this provides the kind of framework around which a combination of reflationary, regulatory and redistribution measures can together help to "lift all boats" and to bring greater stability to the global economy. By way of concluding let me reiterate that south south cooperation is still very much work in progress but that it provides a hopeful sign that the recent strong growth performance of the south can, this time around, persist and spread and that the global imbalances that have in the past held back development can be better addressed. As such I have tried to suggest in my remarks that SSC should not be narrowly defined in relation to the aid discourse but rather conceived as part of a wider discussion of building more inclusive and sustainable development paths that breaks with business as usual. In that respect it should be seen as part of a wider reform agenda encompassing the regional and global levels. Thank you for your attention

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Online merchants keep chipping away at brick-and-mortar retailers LinkedIn Google+ Ahead of what's supposed to be a pretty heavy snowstorm, this will be quick: Times are tough for traditional retailers, and they're not likely to get any easier as Internet shopping becomes more popular, according to this treatise by a retail expert that includes a comment from Daniel Hurwitz, president and CEO of DDR Corp.The author, Jeff Jordan, is a partner at venture capital firm Andreessen Horowitz who previously served as president and CEO of OpenTable, which he took public in 2009. Before OpenTable, he was president of PayPal, so he understands the retail landscape.America, he states flatly, “has too many malls.”“I believe we're seeing clear signs that the e-commerce revolution is seriously impacting commercial real estate,” Mr. Jordan writes. (These weak figures for 2012 holiday sales support the claim.)“Online retailers are relentlessly gaining share in many retail categories, and offline players are fighting for progressively smaller pieces of the retail pie,” he says. Mall and shopping center stalwarts “are closing stores by the thousands, and there are few large physical chains opening stores to take their place,” Mr. Jordan writes. “Yet the quantity of commercial real estate targeting retail continues to grow, albeit slowly. Rapidly declining demand for real estate amid growing supply is a recipe for financial disaster.”He performs an analysis of the National Retail Federation's list of the Top 100 retailers in 2012, focusing on merchandise retailers that would likely be located in malls (removing grocery, drug, restaurant and online retailers). Mr. Jordan focused on three measures of retailer health: total sales growth, comp store sales growth and number of stores.“The analysis doesn't paint a very pretty picture regarding the health of the leading physical retailers in the United States,” Mr. Jordan writes. “Total sales growth is mixed and is negative for 20% of the sample. Comp store sales growth — arguably the key measure of retailer health— is also mixed and a quarter of the sample is negative. And note that many of these sales results include the retailers' online segments, so the picture for their physical stores is even worse.”On a positive note, he says most real estate professionals “understand that profound changes are afoot” and are trying to change the retail mix at their shopping centers and to downsize in smart ways.Among those real estate pros is Mr. Hurwitz, who observes, “I don't think we're overbuilt. I think we're under-demolished.” Just a day after Christmas, I feel like a Grinch pointing to this CNNMoney.com list of the worst-performing Fortune 500 stocks of 2012, which includes Cleveland-based Cliffs Natural Resources Inc.Cliffs ranked No. 6 on the list, with the stock down 50% as of Dec. 21.“In the first quarter, higher mining and transportation costs contributed to a decline in earnings, despite a boost in revenue,” the website notes. “The story hadn't improved much by the third quarter, when the company announced another round of miserable profits: $85 million for the quarter, down from $601 million the year before.”In November, Goldman Sachs analysts downgraded the stock from hold to sell, and shares went down 12% in a single day, according to CNNMoney.com.“Goldman analysts also noted that the company had repeatedly failed to hit its internal financial targets, and the chances that they'll start hitting those targets any time soon aren't particularly good,” according to the story. “A month later, Goldman issued a further warning about the firm's competition: China's ore producers could ratchet up production by 30% in 2013.” So maybe this lighthearted ranking will keep you in the holiday spirit.TheAtlanticCities.com highlights a report from the Martin Prosperity Institute that rated and ranked U.S. metro areas primed for "converting the Grinch," or, as the site puts it “real-life Whovilles with demographic characteristics that could turn even the strongest-willed holiday-merriment-haters into jolly good fellows.”To create the "Grinch Conversion Index," the institute considered seven key community characteristics, based on elements of the Dr. Seuss story. Among them were population density ("greater amount of merry people within an area"); costume rental stores per capita ("the Grinch can get his Santa disguise"); selected retail outlets per capita ("more presents for the Grinch to steal and eventually return"); musicians, singers, music directors and composers per capita ("to first annoy, then touch the Grinch's heart with singing"); and night-time light ("to draw the Grinch's attention").By these (admittedly, probably nonsensical) standards, Trenton, N.J., took the top spot as the most likely city to convert a Grinch. Most of the top 10 are clustered in the northeastern part of the United States, and Cleveland is tied for fifth with New York City.You also can follow me on Twitter for more news about business and Northeast Ohio.

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Credit Report Complaints Highlight Errors Fred O. Williams Lifestyle and Budget CreditCards.com One out of five people who complained about their credit report said it contains information that does not even belong to them, according to newly released figures. The Consumer Financial Protection Bureau on May 31 released detailed records of 6,736 complaints about credit reports, which it began collecting in October 2012. Problems with the reporting of account status -- which could include late payments or accounts being in collections -- led the list of problems, with 26% of complaints. 21% of people complained their report contained information that simply wasn't theirs. Overall, complaints about some form of incorrect information made up 66% of the total gripes. Among other problems: 15% took issue with the reporting company's investigation of a dispute; 11% were unable to get their credit report or score; 6% said their credit report had been used improperly. The addition of credit reports was part of a broader update of the consumer protection bureau's complaint database. The update also added grievances about money transfers, plus a previously unavailable state-by-state breakdown of complaints. Tips for Maintaining a Good Credit Score Biggest Credit Score Killers to Avoid "This data puts valuable information in the hands of consumers to help them understand what is happening in their states," said Richard Cordray, director of the CFPB, the federal agency that acts as a consumer financial watchdog. "And by adding credit reporting and money transfer issues to the Consumer Complaint Database, we are making these important markets more transparent and accountable to all consumers." The newly published data showed that the large credit bureaus had different complaint profiles. Experian had the most gripes, with 2,596, followed by Equifax with 2,279 and TransUnion with 1,635. The companies' responses to complaints also varied widely. Equifax was most likely to resolve a problem with some form of concession or relief to the consumer, either monetary or nonmonetary, at 55%. TransUnion followed with 24% and Experian at 1.4%. Experian reported a relatively high 18% of its responses as "in progress." Each of the large credit bureaus has files on roughly 200 million Americans, according to the Consumer Data Industry Association. The CFPB complaint data reflects a small fraction of total credit reports, but provides a breakdown of specific problems that consumers are having, and tracks the issues by company. "It's an opportunity to look at what consumers are saying," said Norm Magnuson, vice president for public affairs of the association, which represents the interests of the credit reporting agencies. Complaints often result from information that is supplied by a lender or other reporting entity, Magnuson said. In addition, while errors should be corrected, he said, not all errors have enough of an effect on a person's credit to influence their credit score, or their chances of being granted a loan. Errors on credit reports have been under a magnifying glass since the Federal Trade Commission in February found that one in five American consumers has a material error on their report from one of the three large bureaus. The CFPB complaint data, which now includes 113,000 records, also encompasses gripes about credit cards. In February, an analysis by CreditCards.com showed credit card complaints by ZIP code. The newly available geographic analysis adds to that picture, showing that the top states for credit card complaints, on a per capita basis, are the District of Columbia, Delaware, Maryland, New York and New Jersey. See related: FTC: 1 in 5 Americans has a mistake in credit report

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Smart Solutions: Looking To Latin America Jul 16,2008 by Brian Selzer OCEAN CITY – If you want to understand Latin America’s quiet but dramatic turnaround, look no farther than Brazil, where surging commodities prices and savvy fiscal policy have driven a newfound prosperity mirrored throughout most of the region. Newly minted as a net creditor, Brazil is enjoying its second straight year of 5% GDP growth and recently received a coveted Standard & Poor’s investment-grade rating on its sovereign overseas debt. It is even planning its own sovereign wealth fund to help see to the ongoing health of its currency. But Brazil is by no means the region’s only success story. In fact, the MSCI Emerging Markets Latin America Index of regional stocks has risen eightfold since September 2002. These are impressive developments in a part of the world that has often been historically marked by economic volatility. The question for U.S. investors is, can Latin America continue to provide investors with opportunities for solid growth? According to Felipe Illanes, Merrill Lynch Lead Economist for Latin America, the answer is yes. But Illanes warns that investors must be selective — not all Latin American economies hold the same potential. Today, Latin America produces almost half of the world’s soybean crop, 40% of its global copper supply and almost 10% of crude oil worldwide, according to the Yale Center for the Study of Globalization. With commodity prices doubling since mid-2002, as measured by the Reuters/Jefferies CRB Index of 19 commodities, countries in Latin America have been among the clear beneficiaries. “With the rise in oil prices,” says Illanes, “we’ve also seen the region’s main oil exporters — Mexico, Venezuela and Ecuador — benefit. Then you have the world’s leading copper producers, Peru and Chile, flourishing from rises in the demand and price for the metal. And more recently, Brazil and Argentina, the region’s main producers of grains such as soy and wheat, have reaped the rewards from increases there as well.” But what happens in the event of a U.S. slowdown? Historically, Latin America’s fortunes have been strongly tied to the U.S. That is changing, says Illanes, because many Latin American countries maintain growth prospects independent of U.S. economic cycles. Driving that growth are globalization and strong fiscal decision-making. Rapid changes in the global marketplace, particularly in Asia, have made many economies in Latin America less reliant on already declining exports to the United States. Underscoring the point, Brazilian and Argentinean soy exports to China have skyrocketed—from $360 million in 1999 to $3.6 billion in 2004, according to the Yale Center for the Study of Globalization. China also imports nearly 50% of its copper from Chile and Peru. At the same time, many Latin American governments are making prudent use of their windfalls. “By and large, these countries chose not to spend the bonanza they’re receiving from higher commodity prices,” says Illanes. “Instead, they have built stronger external balance sheets through buybacks of external debt and accumulations of foreign exchange reserves. These efforts should give many Latin American economies greater cushions to resist softening demand from the U.S.” They will also enjoy greater protection in the event that commodities markets weaken. Consumers in Latin America share their governments’ preference for saving, notes Richard Bernstein, Merrill Lynch Chief Investment Strategist. “Our Research Investment Committee has discussed many times the long-term investment opportunities that exist based on non-U.S. households’ higher savings rates,” he says. Bernstein believes the financial sector could have significant potential for growth during the next decade by managing and leveraging that pool of savings, especially by offering credit products such as mortgages, auto loans and credit cards. When choosing where to invest in Latin America today, Illanes favors three countries: Brazil, Chile and Peru. In the case of Brazil, Illanes forecasts 2008 GDP growth of 4.6%. Chile’s estimated 2008 GDP growth stands at 4.2%. In copper-rich Peru, Illanes anticipates 2008 GDP growth of 7%. “Peru’s strong fiscal moves —including the attainment of a fiscal surplus — have led to a coveted ‘investment grade’ sanctioning of its foreign currency debt by Fitch,” says Illanes. “Moreover, Peru has secured a free-trade agreement with the U.S., which will help it expand its base for diversifying exports beyond metals.” Although there are still bound to be stumbles in Latin America’s emerging markets, the region is enjoying both increasing stability and the development of a true consumer class. Each of these trends presents opportunities for risk-tolerant investors. While globally minded investors continue looking east to Asia and west to Europe, it may make a lot of sense to look south as well. (A Merrill Lynch Senior Financial Advisor. She can be reached at 410-213-8520.)

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République populaire de ChineFinancial institutions and instruments: tax challenges and solutions Financial institutions and instruments: tax challenges and solutions Opening Remarks by Angel Gurría, OECD Secretary-General, delivered at the ITD Global Conference Beijing, 26 October 2009 Ladies and Gentlemen, distinguished Ministers, It is a great pleasure for me to join Vice Premier Li Keqiang and Minister Xie Xuren in welcoming you on behalf of the International Tax Dialogue (ITD) to this high level conference. I would like to extend my warmest thanks to the Government of China for hosting the conference and for the splendid facilities they have provided for us. I also welcome Ministers, senior officials and delegates representing over 75 countries, eight international organisations and the various universities and enterprises present this morning. This is a truly global conference, addressing an issue of global significance as we look beyond the current crisis to rebuild a sustainable and vibrant financial sector for the future. It is a timely meeting, and an appropriate topic for the International Tax Dialogue. Globalisation requires strengthened international co-operation on taxation. And taxation is essential to finance public services, infrastructure development and poverty reduction in rich and poor countries alike. The IMF, OECD and World Bank established the International Tax Dialogue in 2002 as a means of sharing experiences and facilitating technical discussions among tax administration and policy officials. I am delighted that this initiative has flourished in the past few years. We now have the European Commission, the Inter-American Development Bank and the UK Department for International Development as full partners in the ITD, and we look forward to the UN joining us. I am also very pleased to have the support of the Asian Development Bank for this conference. I know that President Kuroda has always had a strong interest in this policy area. But let me start by putting this event in a broader context of global co-operation. We all know the bad news – the unprecedented financial and economic crisis of the last year or so. Despite the recent stabilisation and growing confidence in financial markets, the human and social cost of the crisis will continue to increase in the coming months. And we have only started putting in place the policies, the regulations and the control systems that we need to make sure that a crisis like this never happens again. The good news here is that global co-operation is growing, both in intensity and in quality/ We find a growing demand for international dialogue, and stronger political will by major economies, to work together to address common challenges. The G20 is giving a new impetus to global efforts towards policy coherence and convergence. And it is doing this with a broad and significant inclusion of interests and perspectives from developing as well as developed economies. We in the OECD and other international organisations active in the ITD network, continue to address crucial areas of the international agenda, ranging from corporate governance to competition, financial education, pensions or investment. Taxation must clearly be a part of this intensifying global dialogue, as is already the case in the field of tax compliance. I am thinking especially of the recent expansion and strengthening of the Global Forum on Transparency and Exchange of Information and the ending of the era of banking secrecy, allowing countries to fully enforce their tax laws and protect their tax base. Since April, over 100 tax information exchange agreements have been signed and over 60 tax treaties have been negotiated or renegotiated to incorporate the now globally endorsed OECD tax transparency standards. But the tax dialogue has to extend beyond compliance. Tax influences virtually every financial and economic decision, and has a crucial role to play in supporting a stronger, cleaner and fairer economy. That means we should be looking at tax policy and its administration alongside other structural policies to strengthen financial markets, and to ensure that taxation does not introduce distortions and does not promote excessive risk taking or leverage. But we face a major challenge here. We all agree on the fundamental principle of minimising distortions by maintaining a broad, stable, and transparent tax base. But applying this in the area of financial sector taxation is easier said than done, and the consequences of getting it wrong are severe. Let me offer a few observations on the nature of this challenge, and how we might rise to it. First, the contribution of the financial sector to the economy is very significant, yet the global mobility of profits from financial services means it is a fragile plank in the overall tax base. Financial services are a vital source of growth and support for productive activity in developing and developed countries alike, and taxation must be applied even-handedly and with a light touch if it is not to choke off those benefits. We have an opportunity over the next three days to consider how tax policies and cross-country co ordination of tax compliance measures might help to secure tax revenues from the financial sector on a level playing field basis. Second, while tax may not have been a primary cause of the financial crisis, it has to be part of the solution. We in the OECD, like in the IMF and in other organisations, have been asking whether the tax treatment of financial instruments, of housing, of executive remuneration may have contributed in some way to financial instability. These are difficult issues, and the conclusions are not clear cut, but we have an opportunity in this conference to share views and experiences. Last but not least, innovation in the financial sector creates particular challenges for tax policy makers and administrators, but also offers unique opportunities. Financial innovation has shifted traditional and longstanding boundaries in taxation, such as differences between debt and equity, income and capital or income from capital and income from labour. This is a challenge for tax policy, and for tax administrators. It is their job to control aggressive tax planning around these boundaries which can undermine revenues. But also to reassess whether the traditional tax boundaries make sense – whether financial market innovations are in fact a catalyst for changes in tax policy which would reduce distortion and be easier to administer. As we engage in these issues over the next three days, I cannot conceive of a more appropriate place to do that today than here in China. [As Minister Xie Xuren explained], the development of China’s financial system has played, and will continue to play, a crucial part in building China’s remarkable growth and helping to spread that growth within China. So our conference comes at the right time and at the right place. Ministers, Ladies and gentlemen, I want once again to thank our hosts for welcoming us to Beijing. I hope that by the end of the conference we will – together – have developed a better sense of how the International Tax Dialogue can best support our shared policy goals. We hope this conference will make a great contribution to tax policy and tax education in each of your countries. Each of the organisations present in the International Tax Dialogue is proud to have you here to discuss how the global tax system can support and promote a healthy financial environment. I wish you a successful conference. International Tax Dialogue (ITD) Global Conference Press Release 2009 Also AvailableEgalement disponible(s)

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TIAA-CREF - Homework for Teachers: Their Investment Plans Plan Sponsors Homework for Teachers: Their Investment Plans The New York TimesPublished on March 7, 2012By FRAN HAWTHORNE WHEN Dan Otter started teaching in 1992, an insurance agent walked into his fourth-grade classroom in Southern California after school to try to sell him an annuity. That was hardly unusual. Back then, people who worked in many schools, church offices and other nonprofit institutions could set up retirement accounts in almost any financial vehicle they could find. Their employers offered little guidance, and local insurance agents wooed teachers in the lunchroom with pizza and sandwiches. In 2009, however, new federal regulations required employers to be more directly involved in running these programs, known as 403(b) plans for the section of the tax code authorizing them. To make that task easier, the nonprofit institutions began culling the numbers of managers and using more widely available mutual funds. Today, the streamlined 403(b)’s look more like the private sector’s 401(k) retirement plans, with employees putting part of their paychecks into individual accounts, sometimes with matching amounts from the employer, and choosing investments. Still, important differences remain. Workers in the nonprofit sector cannot simply follow the advice in the ubiquitous “how to invest your 401(k)” books and articles because many of them also have pensions, annuities or other retirement investments. If your 403(b) is undergoing renovation, “it’s a good opportunity to assess your position and your long-term goals,” said Bruce Corcoran, vice president for institutional sales and services for the K-12 educational market for the money management firm TIAA-CREF. Mr. Otter did just that. He rejected the annuity pitch and later co-founded a Web site, 403bwise.com, that provides advice on these plans. Total 403(b) assets are about $750 billion, according to the financial research firm Cerulli Associates, less than one-fourth the amount of 401(k) plans. The largest segment is higher education, followed by health care, K-12 school systems, charitable organizations and religious and other institutions. The first change that employees will probably notice when their plans reorganize is a drastic reduction in the number of companies allowed to pitch services. At the Los Angeles Unified School District, for instance, that number has shrunk to 27, from 127, said Alan Warhaftig, who teaches English and algebra and is on the school board’s retirement investment advisory committee. That does not necessarily mean fewer investment choices, experts say. “What’s lost is a lot of redundancy,” said John Ragnoni, executive vice president for tax-exempt markets at Fidelity Investments. “The investment lineup still covers the complete spectrum of what a participant would want.” And it has become common for managers to allow access to one another’s products. Moreover, new choices and services are often added, including lower-cost mutual funds and target-date funds — premixed portfolios based on the investor’s age. In a survey of 80 403(b) plans published in January by the consulting firm Aon Hewitt, 72 percent offered target-date funds, 67 percent provided online tools to help employees make investment decisions and 62 percent were “very likely to perform a comprehensive review of fund offerings” this year. Mr. Corcoran and others say the newer funds’ fees are typically about 1 percent of assets, which is half or less than those of traditional annuities. That leaves employees trying to figure out what to do with the annuities. Annuities often charge surrender fees for withdrawals, typically 1 to 2 percent of assets but sometimes up to 8 percent. A percentage of holdings can generally be withdrawn without charge each year for a rolling period — perhaps 10 percent annually over 10 years. Participants need someone like a financial adviser to sit down with them, said Marina Edwards, a Chicago-based senior retirement consultant at Towers Watson. It may also be worth a penalty to switch to a lower-cost mutual fund. “If you’re paying two points higher, then a 2 percent surrender charge isn’t a problem,” said Mr. Warfhig in Los Angeles. When employers do make significant changes, employees will usually get one to six months of advance notice. The investment choices and online advice may sound a lot like the world of a 401(k) in the private sector. The key difference, however, is that most people with 403(b)s can also look forward to a traditional defined-benefit pension, even if many states are trying to reduce the amounts. Those in the corporate world probably cannot. Of the respondents in Aon Hewitt’s 403(b) survey, 73 percent also provided a pension plan. In a survey by the firm of 500 private companies, 60 percent offered both a pension and a 401(k). Experts say that a pension’s steady income can play a role equivalent to that of bonds in a 401(k) or 403(b). Thus, Mr. Ragnoni of Fidelity said, “we generally can use that to say there could be more allocation to stocks,” depending on other factors like age and medical expenses. The material is for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons. Please note that investing involves risk, and past performance does not guarantee future results. You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call 877-518-9161, or go to www.tiaa-cref.org for a current prospectus that contains this and other information. Please read the prospectus carefully before investing. TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products. TIAA-CREF NEWS ARCHIVE By Date By Category Contact Us General questions or comments: 800 842-2252 (Available 24 hours) Follow us on Twitter Connect on LinkedIn Visit the Contact Us page for more options. Other TIAA-CREF Resources TIAA-CREF Institute TIAA-CREF en español iPhone App: Savings Simplifier © 2014 and prior years, Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), New York, NY 10017

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Raymond W. McDaniel, Jr. Chairman and CEO Raymond W. McDaniel, Jr. is Chairman and Chief Executive Officer of Moody's Corporation. In this role, Mr. McDaniel is responsible for all activities of the corporation and its two operating divisions: Moody's Investors Service, the credit rating agency; and Moody's Analytics. Mr. McDaniel has held a variety of positions since joining the firm in 1987. He was named President of Moody's Investors Service in November 2001. He was promoted to Executive Vice President of the corporation and was elected to its board of directors in April 2003. Mr. McDaniel was appointed Chief Operating Officer of Moody's Corporation in January 2004, and was named President of the corporation in October 2004. He assumed responsibility as Chairman and Chief Executive Officer in April 2005. During his tenure, Mr. McDaniel has helped lead the company to record levels of financial performance and implemented important enhancements to Moody's ratings practices. Some of these initiatives include growing the core ratings and research business globally, implementing international expansion and new products, and improving professional practices in the ratings business by enhancing credit policies, rating committee processes, and credit research capabilities. In his earlier days with the firm, Mr. McDaniel served as Senior Managing Director for Global Ratings & Research. He was Managing Director for International, with responsibility for designing and managing regional expansion in Asia, Europe and the Americas. Mr. McDaniel also served as Managing Director for Moody's Europe, based in London. In that capacity, he was responsible for managing all business and rating activities for Moody's in the region. He began his Moody's career as a Senior Analyst in the Asset Securitization department in New York. Mr. McDaniel holds a J.D. from Emory University School of Law and a B.A. in political science from Colgate University. He was admitted to the Bar of the State of New York in 1984, and is a member of the board of directors of John Wiley & Sons, Inc. and the National Council on Economic Education. http://www.sec.gov/spotlight/cra-oversight-roundtable/bios/mcdaniel.htm

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Capuano and Cleaver: Municipal Bonds to be Rated with Fairness Washington, DC — Today, Senior House Financial Services Committee members Reps. Michael Capuano (D-MA) and Emanuel Cleaver (D-MO) made the following statements after Moody's Investor Service yesterday changed the way municipal bonds are rated. Previously, Moody's and others rated municipal securities, which historically have had extremely low default rates, on a different scale. As a result, this had the effect of driving up the costs to cities and states. Financial Services Committee Chairman Barney Frank and Reps. Capuano and Cleaver pushed for legislation to end this unfair treatment and to ensure that municipal government bonds are rated based on their ability to repay the debt and their historical default. This legislation was included in the comprehensive Wall Street Reform and Consumer Protection Act that the House passed in December. Senator Dodd also included similar language in the bill he unveiled this week. Capuano and Cleaver are both former mayors, and they have direct knowledge of this unfair treatment. Cleaver and Capuano also called on other rating agencies to eliminate the dual rating system. "For years municipalities across the country have been forced to pay billions of taxpayer dollars to insure bonds that have nearly no chance of defaulting. I'm pleased to see the industry step up to the plate and make these needed changes to the way they rate cities," stated Congressman Mike Capuano. "In the last 50 years, only one city has ever defaulted on a municipal bond. These general obligation bonds not only carry the full faith and credit of the municipality and its taxpayers, they are used to improve our communities — investing in schools, infrastructure and public works. I am pleased to see that Moody's has recognized these are solid investments, backed by the good people in cities and towns across the country who are 99.99 percent responsible in their repayment. I urge the other credit rating agencies to change their unfair credit rating structure which has cost taxpayers millions if not billions," said Congressman Emanuel Cleaver, II. Contact: Alison M. Mills 617-621-6208 (Capuano) Steve Adamske (202) 225-7141 (House Financial Services Committee) Elizabeth Esfahani (202) 226-3314 (House Financial Services Committee)

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RAWBANK Adopts IBM Smarter Computing Solution to Drive Business Growth and Expansion Largest private bank in Democratic Republic of Congo reports improved service delivery, enhanced security and energy savings with new core banking systems KINSHASA, Democratic Republic of Congo, Nov. 20, 2012 /PRNewswire/ -- RAWBANK, the largest private bank in the Democratic Republic of Congo (DRC), has turned to IBM (NYSE:IBM) to help transform its core banking systems as it seeks to grow its customer base in the largely un-banked Central African country.(Photo: http://photos.prnewswire.com/prnh/20121120/NY16628) (Logo: http://photos.prnewswire.com/prnh/20090416/IBMLOGO) RAWBANK has deployed a mix of IBM software and hardware that enables the bank to extend the range of products and services offered to its clients, significantly enhance client satisfaction, increase its banking application performance and enhance security processes, and cut energy consumption costs by 20 percent. The IBM solution has provided the technology architecture and flexibility that the bank is utilizing to provide a suite of new products including Internet banking, mobile banking, SMS banking and several card-based solutions to service a wider set of customers.For example, RAWBANK clients can now receive a text notification on their mobile phone every time their account is credited or debited. This is a valuable service for citizens in a country where transportation across the vast land mass is difficult, and access to the Internet remains relatively low. Also, the bank has introduced prepaid cards that enable small businesses and individuals without a long credit history to securely pay bills and procure goods without carrying around cash.The engagement with IBM is part of the bank's strategy to deliver new services that meet the needs of the largely unbanked population in DRC. Currently, there are only about 2 million banking customers in the DRC out of an estimated population of 65 million."This implementation has allowed us to reach new customers while extending increased security options and improved client satisfaction to our existing customers," said Thierry Taeymans, RAWBANK Chief Executive Officer. "In spite of infrastructure challenges in the DRC, this technology allows us to serve our clients faster, with significantly reduced waiting time, and launch a 24 hour customer service hotline."Two months after implementing the IBM solution, RAWBANK has been able to serve twice as many customers at its branches, as customer information is more readily available. With a goal of opening 10 new branches by the end of this year, RAWBANK is equipped to scale up its operations and offer better services to its customers."Core banking systems are at the heart of driving greater levels of customer service, flexibility and efficiency in today's banking industry," said Jean-Christophe Knoertzer, IBM Central East and West Africa General Manager. "By modernizing its core systems, RAWBANK is well-positioned to meet the growing market of banking customers in Africa. The IBM solution provides a flexible foundational architecture that can adapt quickly and scale as the bank's business changes in response to new customer requirements." CIO, CTO & Developer Resources RAWBANK joins more than 25 banks across Africa that are working with IBM to drive growth of the financial services sector. IBM is rapidly extending its capabilities to a growing number of clients across the continent where it now has an active presence in over 20 countries.IBM outperformed a number of local and international competitors including HP and Microsoft to win the opportunity to power RAWBANK's customer acquisition drive, providing the bank with IBM Blade Center HS22 and PS700 servers. RAWBANK has also been using IBM's Informix software for its database and information management. The deal was signed in July, 2012 and was facilitated by the local business partner, Infoset.Over the last year, IBM has also closed a number of pivotal deals in the region as clients in the financial, government, telecommunications, oil and gas sectors seek solutions to help them drive business transformation, optimize operational efficiency and support organizational growth.IBM Smarter ComputingTo learn more about how businesses are harnessing the value of Smarter Computing, please read more at: www.ibm.com/smarter-computing/us/en/To read more how IBM is supporting RAWBANK to extend the range of products and services offered to its clients, please go to: www.ibm.com/press/us/en/pressrelease/39461.wssAbout IBMFor more information about IBM, visit: http://www.ibm.com/ContactsVera RosauerIBM External Relations (Africa)Tel: +254-737-537-030Email: [email protected]Leslie J Monreal-FeilIBM External Relations (USA)+1-561-862-3074Email: [email protected]Svetlana StavrevaIBM External Relations (STG - Growth Markets Unit)+43-121-145-4083Email: [email protected]SOURCE IBM Published November 20, 2012 – Reads 711 Copyright © 2012 SYS-CON Media, Inc. — All Rights Reserved.

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​​​​​​​ News 25 November 2011UNCTAD’s investment policy advice welcomed in Mozambique On 11 November, at a workshop in Maputo, UNCTAD discussed the main findings and recommendations of its draft Investment Policy Review (IPR) of Mozambique with Government officials and other stakeholders.03 May 11 - Guatemala has high potential for attracting investment, UNCTAD policy review findsGuatemala can aspire to become a hub for foreign direct investment (FDI) but should take steps to strengthen governance and the performance of public institutions to help it reach that potential, according to recommendations put forward in the UNCTAD inv04 May 11 - UNCTAD cites improvements achieved by countries in investment policies, steps taken to clarify and simplify government rulesEthiopia and the United Republic of Tanzania have made significant progress in improving their investment climates based on recommendations issued in 2002, the Secretary-General of UNCTAD said Tuesday afternoon. In addition, Rwanda, Viet Nam, Argentina, 14 Dec 10 - UNCTAD investment policy review highlights huge investment potential of Sierra LeoneSince the end of civil war in 2002, Sierra Leone has achieved political stability and embarked upon a comprehensive reform programme to re-establish conditions for economic and social development, notably through increased levels of foreign direct invest27 Apr 10 - Investment policy reviews of Belarus and El SalvadorThe intergovernmental presentations were held of UNCTAD Investment Policy Reviews (IPRs) of Belarus and El Salvador, with representatives of those governments discussing the developmental benefits of foreign direct investment (FDI) and pledging to undert21 -

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Inside Africa Ancient African coins that could change history of Australia By Teo Kermeliotis, for CNN Kilwa -- full name Kilwa Kisiwani -- is a former city-state that rose to become one of the most dominant trading centers on the coast of East Africa in the 13th and 14th century. Kilwa was situated on an island off the coast of modern-day southern Tanzania. The city was founded in the late 10th century but was nearly destroyed by the Portuguese in 1505. Thereafter, it started declining before eventually being abandoned. During its heyday, the island city was a major trading point for gold and ivory from Africa's interior and pottery, porcelains and other goods from the Far East. Five Kilwa coins, believed to date back to the 1100s, were discovered in the Wessel Islands, near Australia's Northern Territory. Pictured, Mission Bay, Elcho Island, Wessel Islands, at Cadell Strait. "From the 1100s to the 1300s, Kilwa was the most prominent port in the entire east African coast, bigger than Mombasa, Zanzibar and Mogadishu," says professor Ian McIntosh. Today, the city is covered by the standing remains that survived of the ancient city, including several mosques, a Portuguese fort and the famed Husuni Kubwa palace. The Great Mosque of Kilwa Kisiwani is the oldest standing mosque on the East African coast, according to UNESCO, which declared the city a World Heritage Site in 1981. The mosque's great domes, some of which were decorated with porcelain from China, dates from the 13th century. The standing ruins of Kilwa Wessel Islands African coins dating back to 1100s found in remote part of Australia Coins were minted in powerful African city state of Kilwa, in modern-day Tanzania Australian professor leading an expedition to discover how they got there (CNN) -- Can a handful of ancient copper coins from a once-opulent but now abandoned corner of East Africa change what we know about Australian history? A team of researchers is on a mission to find out. With its glittering wealth, busy harbor and coral stone buildings, the island of Kilwa rose to become the premier commercial post of coastal East Africa around the 1300s, controlling much of the Indian Ocean trade with the continent's hinterland. Situated in present-day southern Tanzania, during its heyday Kilwa hosted traders from as far away as China, who would exchange gold, ivory and iron from southern Africa's interior for Arabian pottery and Indian textiles as well as perfumes, porcelains and spices from the Far East. But the Kilwa sultanate's heyday came to a crashing end in the early 1500s with the arrival of the Portuguese who sacked the city in their bid to dominate the trade routes between eastern Africa and India. Kilwa map. Click to expand From then on, Kilwa never managed to recover its greatness. With its trading network gradually eclipsing, the once flourishing city started to decline in importance. It was eventually deserted in the 19th century, its crumbling, UNESCO-protected ruins offering today a glimpse of its glorious past. But interest in this nearly forgotten East African city has resurfaced lately thanks to the mystery surrounding a remarkable discovery thousands of miles away, in a long-abandoned, remote chain of small islands near Australia's Northern Territory. Astonishing discovery Back in 1944, an Australian soldier named Maurie Isenberg was assigned to one of the uninhabited but strategically positioned Wessel Islands to man a radar station. One day, whilst fishing on the beach during his spare time, he discovered nine coins buried in the sand. Isenberg stored them in a tin until 1979, when he wondered if they might be worth something and sent them to be identified. Four of the coins were found to belong to the Dutch East India Company, with one of them being from the late 17th century. But the rest of them were identified as originating from Kilwa, believed to date back to the 1100s. The sultanate started minting its own currency in the 11th century. Read this: The dark history of Bunce Island A Kilwa coin.BRITISH MUSEUM "It's a very fascinating discovery," says Ian McIntosh, an Indiana University-Purdue University Indianapolis anthropologist. "Kilwa coins have only ever been found outside of the Kilwa region on two occasions," he explains. "A single coin was found in the ruins of great Zimbabwe and one coin was found in the Arabian Peninsula, in what is now Oman, but nowhere else. And yet, here is this handful of them in northern Australia, this is the astonishing thing." Re-write history? According to history textbooks, Aboriginal explorers arrived in Australia from Asia at least 60,000 years ago. The first European widely known to have set foot on the continent was Dutch navigator Willem Janszoon in 1606, more than 160 years before captain James Cook arrived at Australia's south-eastern coast to claim the territory for the British empire. So how did the five coins from distant Kilwa wind up in the isolated Wessel Islands? Was a shipwreck involved? Could it be that the Portuguese, who had looted Kilwa in 1505, reached the Australian shores with coins from East Africa in their possession? Or was it that Kilwan sailors, renowned as expert navigators all across the sea route between China and Africa, were hired by traders from the Far East to navigate their dhows? "If we find something then we'll prepare for a more detailed and focused exploration in specific areas."Ian McIntosh, professor These are the kind of questions that McIntosh now hopes to answer as he bids to unravel the mystery of how the coins, which are currently stored in Sydney's Powerhouse Museum, were found in this part of the world. "We have five separate hypotheses we're looking to test about how these coins got there, each one quite different from the other," says McIntosh. On July 15, he will lead an eight-member team of archaeologists, historians and scientists to the area where Isenberg discovered the coins. Read this: African roots of the human family tree "This is an initial survey; if we find something then we'll prepare for a more detailed and focused exploration in specific areas," says the Australian professor. "We are interested in a more accurate portrayal of Australian history that is currently allowed in textbooks." Ian McIntosh pointing to the general area where the coins were found.IAN MCINTOSH The team will embark on its quest for answers equipped with a nearly 70-year-old map on which Isenberg had marked with an X the spot where he found the coins. McIntosh, who was sent the map before Isenberg's death in 1991, says he first tried to mount an expedition to the Wessel Islands in the early 1990s but at the time he'd failed to gather funding. "In 1992 there was a very limited interest for such a venture," he says. "But we maintained an interest in the Kilwa connection because it was such a famous place in its day -- from the 1100s to the 1300s it was the most prominent port in the entire east African coast, bigger than Mombasa, Zanzibar and Mogadishu." "If you bought these coins in a shop in Kilwa, you could probably get them for a few dollars," says McIntosh. "But in northern Australia, these are priceless in terms of their historical value." Part of complete coverage on Inside Africa 11 ways to see Africa from the air updated 10:57 AM EST, Thu November 6, 2014 Vintage helicopters, ziplines, private flying safaris offer new, spectacular views of wildlife and rugged terrain. Uganda clerics: Is gay OK? updated 11:04 AM EDT, Thu October 16, 2014 Photojournalist Daniella Zalcman asked Uganda's religious leaders their views on homosexuality. Their answers might surprise you. The last kings of Africa updated 8:06 AM EDT, Mon October 27, 2014 In Africa, royalty is an endangered species. Meet the man on a mission to photograph the last remaining kings and queens. Portraits of Ebola survivors updated 6:35 AM EDT, Thu October 23, 2014 Getty photographer John Moore captured the spirit of those who survived the epidemic This dinosaur ate sharks for breakfast updated 1:26 PM EDT, Fri October 3, 2014 Nazis, bomb raids, and a mysterious man with a mustache. The search for the spinosaurus reads like a spy novel. Hero rats sniff out landmines updated 10:23 AM EDT, Fri September 26, 2014 Can a rat be a hero? It can if it saves lives. Meet the giant rats that sniff out landmines and TB In Africa, royalty is an endangered species. Meet the man on a mission to photograph the last remaining kings and queens. Eco schools take over Africa updated 7:10 AM EDT, Thu September 18, 2014 Can state-of-the art schools in rural Africa rescue the environment? One charity is betting on it. Rhinos on a plane updated 12:20 PM EDT, Fri September 12, 2014 To save the rhinos, one charity is moving them out of South Africa, where poaching is at an all time high. Africa's dying species updated 11:42 AM EDT, Tue April 15, 2014 Many of Africa's animals are facing extinction. Is it too late for them? Our interactive looks at the many challenges to survival. Nature's mysterious 'fairy circles' updated 12:35 PM EDT, Fri June 13, 2014 No one knows what causes "fairy circles" in Namibia's desert. A new study, however, may have solved the mystery. Africa's dying glaciers The 'African Alps' are melting, and it may be too late. Now may be your last chance to see the snow-capped Rwenzori Mountains. Can this insect cure world hunger? updated 10:38 AM EDT, Tue August 5, 2014 One company thinks so. They're investing in insect farms in Ghana and Kenya. Could bugs build an industry and curb malnutrition? Souks, sea and surf Morocco is famous for its historic cities and rugged landscape. But it's becoming known as a surfer's paradise. Savannah from a bird's-eye view updated 5:27 AM EST, Thu March 6, 2014 A photographer took to an ultra-light aircraft to capture Botswana's savannah from above. The results are amazing. Africa's most exciting architects updated 6:16 AM EDT, Tue May 27, 2014 A new wave of African architects are creating remarkable buildings in the continent, and beyond. Alien site, ancient monument or ... A huge spiral in the Sahara had Google Earth users baffled by what it could be. So what exactly is it? See more Inside Africa Each week Inside Africa highlights the true diversity of the continent as seen through the mediums of art, music, travel and literature.

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Remarks by Governor Mark W. Olson Before the Annual Conference of the Central Bank of Chile The Importance of Market Structure It is a great pleasure for me to participate in this interesting and thought-provoking conference, and I wish to begin by thanking Carlos Massad and the Central Bank of Chile for inviting me to attend. My remarks today will address, from my perspective as a policymaker, a former banker, and a former adviser to the Congress, some of the issues that were raised in this morning's session and that will be discussed in this afternoon's presentations. Specifically, I would like to comment on some of the potential implications of the U.S. banking sector's changing structure for competition in the context of the Board's supervision and antitrust responsibilities. I will also discuss the deposit insurance system, which is administered through the Federal Deposit Insurance Corporation (FDIC) and the allocation of credit, with a focus on loans to small businesses. As everyone here is fully aware, changes in market structure can have profound effects in each of these areas. By changes in market structure, I will refer primarily to changes in the number, size, charter, and other characteristics of firms on the supply side of banking and nonbanking markets brought about by the ongoing consolidation of the banking and financial services industry. However, the demand side of markets is also clearly relevant, and when necessary, I will include demand characteristics in my discussion. The issues to which I refer are not new nor unique to the United States but, rather, have existed for many years and transcend national boundaries. In fact, the consolidation of banks and other types of financial institutions is one of the most notable features of the international financial landscape over the past decade or more. In recognition of the importance of financial consolidation, its potential impact on market structure, and its potential implications for public policy concerns, the Finance Ministers and central bank governors of the G-10 nations in late 1999 asked their deputies to study financial consolidation and its potential effects. My colleague, Roger Ferguson, directed this study, which was published in early 2001. Today, I would like to use some of the findings of the study as my starting point for addressing the issues I mentioned a few moments ago. Because the study was international in scope it will allow me to put some of my comments on the United States into a global context. Competition In the United States and many other countries, a common concern is the potential for banking and financial consolidation to change the structure of banking markets in ways that reduce competition and thus harm consumers. The fact that the Federal Reserve has significant responsibility for enforcing antitrust laws in banking ensures that this issue has received considerable attention at the Fed. Consolidation in the U.S. banking industry has occurred on a massive scale. In 1934, the year federal deposit insurance was implemented in the United States, the total number of bank charters was greater than 14,000. A similar number of chartered institutions were still functioning when the consolidation wave began in 1986. Today the number is just less than 8,000, a reduction of 43 percent. That consolidation, however, has not caused a diminution of competition for consumers or small businesses. For many reasons, including the rise of nonbank providers for many bank and bank-like services and the increased use of electronic banking, consolidation in the United States has generally been accompanied by heightened competition. Still, in my view, ignoring the significance of market structure and its implications for competition would be a mistake. This was certainly the conclusion of the G-10 study. For example, the study found that, in the United States and the other nations included in the study, the markets for a number of key bank products--such as retail deposits and small business loans--appeared to be primarily local. Local, in this context was defined as a market that can be approximated geographically by such concepts as metropolitan areas and rural counties in the United States, and provinces and cantons in some other nations. On the demand side, studies in the United States indicate that both households and small businesses procure key components of their banking services overwhelmingly from suppliers located within a few miles of themselves. It is still not common for these consumers to deal with institutions that can be reached only by telephone or the Internet. On the supply side, the number of banking offices in most developed countries, including the United States, continues to increase, despite a consolidation process that has reduced the number of independent banking organizations. In the United States, for example, although the number of bank charters has declined 43 percent over the past fifteen years, the number of bank branches has increased 47 percent (from 44,392 to more than 65,600). This increase suggests that firms continue to feel the need for a local presence to compete for the business of customers. Of course, banks have many products for which the markets are not local in the way that I have defined the term. For example, markets for products such as large corporate loans, bond and equity underwriting, and credit cards are generally national or international in scope. Even products such as mortgages for single-family homes, which tend to be originated locally in the United States, are funded, serviced, and traded as securitized assets in national markets. But the evidence continues to indicate that the structure of a properly defined market, regardless of whether its geographic scope is local, national, or international, makes a difference. Studies in the United States, Italy, and Switzerland find that substantial increases in market concentration have the potential to cause a reduction in deposit interest rates or an increase in loan interest rates. In both research and policy analysis in the United States, the supply structure of banking markets has been measured by the shares of, say, the top three or five firms, and an indicator of overall structure, using a measure of concentration known as the Herfindahl-Hirschman Index. At the antitrust policy level, in the United States we use screens based on such measures to determine if a proposed merger has the potential to adversely affect consumers. There are indications, however, that our banking system's ongoing evolution may be making these traditional measures less reliable as indicators of the degree of competition in a given market. I would like to report the results of some interesting research that the Board staff has been doing in this area. In three recent studies, members of the Board staff have analyzed the possible effects of aspects of market structure not considered in more traditional research. These studies strongly reinforce the importance of local markets for antitrust analysis of certain financial products, especially retail deposits and small business loans.1 But they also suggest that the current focus of U.S. antitrust analysis on the traditional measures of local market concentration that I mentioned earlier, to the exclusion of other structural measures, is perhaps becoming less appropriate. Specifically, the relative market presence of banks that operate in multiple markets and the market share of large banks may also be significant. Supervision and Administration of the Safety Net A critical issue addressed by the G-10 study was whether ongoing changes in banking system structure in the studied nations were affecting the risk of individual institutions or, more important, the level of systemic risk in the overall banking industry. The study concluded that, for both types of risk, the effects of changes in market structure were unclear. With regard to the risk of an individual institution, the study came to the intuitively appealing conclusion that the evaluation of individual firm risk must be done case by case no matter what the market structure. The one area in which consolidation seems likely to reduce single institution risk is diversification gains, although even here the possible outcomes are complex. For example, diversification gains seem likely to occur from consolidation across regions of a given nation and from combinations across national borders. In the United States, there is some evidence that diversification gains have generally resulted from the expansion of interstate banking. Bankers in the United States well remember the mid-1980s, when our nation was hit with systemic weaknesses in both the agriculture and the energy segments of the economy. Throughout the Plains states and extending to the Southwest, these sector weaknesses led to significant bank failures. It is not a coincidence that many states affected by these bank failures responded by dropping their prohibition on interstate bank ownership and prospectively allowing for greater diversification of these banks. Consolidation of banks in the United States has not been uniformly consistent with management or shareholder expectations, however. The strategic justification for mergers typically takes one of two forms--either to consolidate presence in an existing market or to enter a new market. Consolidation within an existing market is typically expected to achieve greater efficiency through significant consolidation of operations. Mergers to enter new markets provide fewer opportunities to achieve these efficiencies. Not uncommonly, a consolidated bank, particularly when entering a new market, does not achieve the cost saving or efficiency gains initially expected. As a result, some mergers actually increase operational or reputational risk of the consolidated institution. In part because the net effect of consolidation on the risk of an individual firm must be assessed case by case, the net effect of consolidation on systemic risk is also uncertain. The G-10 study, however, concluded that, if a large and complex banking organization becomes impaired, then consolidation and any attendant organizational complexity may increase the probability that the workout, or wind-down, of such an organization would be difficult and could be disorderly. Because such firms are the ones most likely to be associated with systemic risk, this aspect of consolidation has probably increased the chances that a wind-down could have broad economic implications. These conclusions regarding individual firm and systemic risk reinforce the need for central banks and other financial regulators to prudently administer the safety net extended to depository institutions--a central topic of this conference. The precise meaning of prudence is complex, and it includes interrelated concerns such as the need to intervene promptly in failing institutions, the necessity of carefully administering the lender of last resort function, the willingness to let insolvent institutions die, the insistence on the maintenance of adequate capital, the need for supervision that focuses hard on risk measurement and management, and the encouraging of market discipline through putting stockholders, managers, and uninsured creditors truly at risk. One aspect of such prudence in the United States concerns the administration of the deposit insurance system. Of the sixty-eight deposit insurance systems evaluated by the International Monetary Fund in a 1999 worldwide study, the U.S. system is the oldest. Created in 1933, the Federal Deposit Insurance Corporation (FDIC) began insuring deposits for approved banks in January 1934. In its original form, the FDIC was a model of clarity regarding its mission and function. Its mission was to insure the deposits of small-dollar savers up to $2,500. Its function was essentially to be a paying agent for insured depositors in the event of a bank failure. At that time, it was only an insurer, it had no supervisory or regulatory authority. The original construct lasted only one year. The following year, the Congress amended the charter to give the FDIC supervisory authority and doubled the amount of coverage to $5,000. For the next forty-five years, the changes in deposit insurance were subtle. But these subtle changes had significant public policy implications. Insurance coverage was increased in several stages, but it remained relatively stable in constant dollar terms until 1980. Of greater long-term significance was the FDIC's practice of resolving bank failures of that era by arranging mergers of failed banks; by doing so it instituted a de facto policy of effectively insuring 100 percent of all deposits. This practice did not receive careful scrutiny during the period, and the public policy implications of 100 percent coverage remained unnoticed. The public policy implications finally received attention after the failure of the Continental Illinois Bank in 1984 and the subsequent decision to hold all depositors harmless. In the volatile 1980s, the public policy issues implicit in that policy--"moral hazard," "too big to fail," and expansion of the "safety net"--became unavoidable and needed to be addressed. Through a series of legislative initiatives, from 1989 to 1999 the Congress addressed, in varying degrees, each of the issues. Not only the banking industry and the FDIC insurance fund faced public policy issues in that decade. The savings and loan industry and its insurer, the Federal Savings and Loan Insurance Corporation (FSLIC), were under even more severe pressure. With a loan portfolio consisting largely of fixed-rate mortgages, the thrift industry came under extraordinary duration-risk pressures in the late 1970s and early 1980s, when inflation drove deposit rates into a double-digit range and maturities on deposit instruments dropped from more than four years to less than one year on new savings deposits. The thrift regulators responded by allowing and, at times, encouraging mergers, many with little or no tangible capital. As a result, when real estate loans went sour a few years later, the savings and loan industry did not have the capital strength to withstand the strain. Eventually, the Congress was compelled to step in and recapitalize the underfunded FSLIC fund and, at the same time, move its administration to the FDIC. Current FDIC Chairman Donald Powell, like his predecessor, has offered a number of proposals to reform the current FDIC law. The extent to which the FDIC is in need of fundamental updating can best be described through the following examples. A well-managed, well-capitalized bank with $1 billion in deposits can have its annual premium for deposit insurance range from a low of zero to a high of $2.3 million, entirely on the basis of the overall level of the FDIC fund. In other words, that range bears no relationship to the risk profile of the individual institution. As a second example, a newly chartered insured institution--say, a bank affiliate of a securities firm--could grow very rapidly by aggressively marketing insured deposit products and, because of the accumulated premiums of long-time institutions, could enjoy a free ride by paying no deposit insurance premiums in times when the insurance fund is above its mandated threshold of 1.25 percent of total insured deposits. Yet several fast-growing, free-riding institutions could trigger premium increases for the entire industry by altering the ratio of the fund's level to total industry deposits. Adding to the need to address fundamental change to the FDIC statute is the arbitrary nature of the 1.25 percent designated reserve ratio, the maintenance of which can trigger wide premium swings. The ratio was the product of political expediency when written into the law a decade ago and has now assumed relevance far exceeding its value. All in all, the current deposit insurance system has a number of aspects that one would never observe in the private sector and that need to be reformed. Indeed, most parties to the deposit insurance issue agree on the need to provide the FDIC with greater flexibility in setting premiums, to eliminate the free-rider provision, and to encourage increased risk-based assessment of premiums. The Federal Reserve Board of Governors of the Federal Reserve System endorsed these proposed changes. My final observations on deposit insurance reform concern the most controversial part of the current debate in the United States: whether to raise the deposit insurance limit. As many of you know, my fellow Board members and I oppose an increase in, or an indexing of, the current $100,000 deposit insurance ceiling. In our judgment, increased coverage would be unlikely to add in any measurable way to the stability of the banking system. Macroeconomic policy and other elements of the federal safety net for depository institutions, including the still-significant level of deposit insurance, continue to be effective deterrents against bank runs. Moreover, that household depositors would benefit from an increase in coverage is not apparent. According to our periodic surveys of consumer finances, most U.S. household depositors have balances well below the current insurance limit, and those who have larger balances appear to have been adept at achieving the level of deposit insurance coverage they desire by opening multiple accounts. Such spreading of asset holdings is perfectly consistent with the counsel always given to investors to diversify their assets--be they stocks, bonds, mutual funds, or certificates of deposit--across different issuers. Some small banks argue that they need increased deposit insurance coverage to compete effectively with their larger and more diversified cousins. An analysis of small bank performance does not support that claim. For example, since the mid-1990s, smaller banks' assets and uninsured deposits, adjusted for the effects of mergers, have expanded at twice the pace of those at the largest banks. Throughout the 1990s, small banks' return on equity was well maintained, and the viability of small banks is evidenced further by the fact that more than 1,350 new banks were chartered over the past decade in the United States, virtually all of them small institutions. With few, if any, benefits, raising the ceiling would risk incurring substantial net costs by expanding the safety net, increasing the government subsidy to banking, encouraging moral hazard, and reducing the incentive for market discipline. Supply of Credit to Small Business I now turn to my final topic for today--possible implications of the changing structure of the U.S. banking sector for the supply of credit to small businesses. In the United States and many other countries, consolidation in the banking industry has involved large numbers of small banks. As a net result of mergers, failures, and new entry, the number of commercial banks in the United States with total assets under $100 million (in 1994 dollars) fell from a little more than 8,800 in 1990 to not quite 4,800 at the end of 2001. Although, as I have indicated, these small banks have generally been doing quite well, some observers have expressed concern that such changes in the structure of the banking industry may adversely affect the availability of credit to small businesses. Given the importance of small businesses to all of our economies, the supply of credit to such firms deserves serious attention. For this reason, the effect of consolidation on small business lending was a focus of the G-10 study. It has continued to be a topic of research by Board staff, and I am pleased to see that it is the subject of papers presented at this conference. Concern about the effects of consolidation on the supply of credit to small businesses is predicated on the view that the larger banks resulting from consolidation may restructure their portfolios by discontinuing credit relationships with smaller borrowers and expanding lending to larger borrowers. To the extent that the credit relationship between a bank and a small business is characterized by a relatively high level of specialized knowledge by the bank about its customer, small firms could face difficulties in finding credit from other sources. Early statistical studies of the effect of bank consolidation on small business lending provided some support to the concerns I have just summarized, as early studies suggested that banks reduce the percentage of their portfolio invested in small businesses after consolidation. However, subsequent research has allayed some of these fears, at least in the United States. Importantly, more recent research has recognized that what is relevant is what effect of changes in market structure have on the total availability of credit to small borrowers and whether such changes are associated with more accurate pricing of risk. In the United States, studies that have examined the effect of mergers and acquisitions on small business lending by other banks in the same local markets have found that other banks and new bank entrants tend to offset any reduction in the supply of credit to small businesses by the consolidating banks. In addition, a recent study by Board staff and others suggests that earlier conclusions regarding the behavior of larger banks may need some qualification.2 This study finds that the creation of large banks may not significantly reduce lending to small businesses. Evidence is beginning to emerge that technological change, such as the use of credit-scoring models for small business loans, may serve to expand the supply of credit to small businesses.3 In any event, the remaining uncertainties suggest to me that this topic will be a fertile one for all of us in the coming years. I would like to close my remarks by returning to where I began. It is a great pleasure for me to participate in this conference, and once again I thank our hosts for their invitation to me and for their generous hospitality. The topics we are discussing are important, and I hope that I have contributed to our understanding of some of the relevant issues. Footnotes 1. Berger, Allen N., Richard J. Rosen, and Gregory F. Udell, "The Effect of Market Size Structure on Competition: The Case of Small Business Lending," FEDS Working Paper 2001-63, Board of Governors of the Federal Reserve System, 2001; Hannan, Timothy H., and Robin A. Prager, "The Competitive Implications of Multi-market Bank Branching," FEDS Working Paper 2001-43, Board of Governors of the Federal Reserve System, 2001; and Heitfield, Erik, and Robin A. Prager, "The Geographic Scope of Retail Deposit Markets," FEDS Working Paper 2002-49, Board of Governors of the Federal Reserve System, 2002. Return to text 2. Berger, Rosen, and Udell (2001). Return to text 3. See Allen N. Berger, W. Scott Frame, and Nathan H. Miller, "Credit Scoring and the Availability, Price, and Risk of Small Business Credit," FEDS Working Paper 2002-26, Board of Governors of the Federal Reserve System, 2002.Return to text Home | News and events Accessibility | Last update: December 13, 2002

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Executive Director, Financial Accounting Standards Advisory Council FASB Home››ABOUT US››FASB Staff››Alicia A. Posta Alicia A. Posta, Assistant Director Executive Director, Financial Accounting Standards Advisory Council Alicia A. Posta is an assistant director of technical activities at the Financial Accounting Standards Board (FASB) and the executive director of the Financial Accounting Standards Advisory Council (FASAC). In those roles, she is involved with various technical projects, serves as the primary administrator of the FASAC’s activities, and facilitates many of the FASB’s activities with its stakeholder groups, who provide input into its decision-making processes. Prior to her promotion to an assistant technical director, Ms. Posta served as the primary administrator for the activities of FASAC (the FASB’s primary advisory group, which was formed in 1973) and other FASB standing advisory groups, including the Investor Advisory Committee (IAC), the Not-for-Profit Advisory Committee (NAC), and the Small Business Advisory Committee (SBAC). Before her involvement with the FASB advisory groups, Ms. Posta was a project manager for the FASB. Ms. Posta joined the FASB staff in May 2001 and has primarily worked on the FASB’s projects on business combinations, mergers and acquisitions by a not-for-profit organization, income taxes, and revenue recognition. Ms. Posta previously worked for Ernst & Young in Stamford, Connecticut where she was a senior auditor in the Assurance and Advisory Business Services Department. A New England native, Ms. Posta received her Bachelor’s degree in Business Administration, with a concentration in accounting, from Bryant College (now Bryant University) in Rhode Island. Ms. Posta is a CPA in the state of Connecticut.

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State: Find entrepreneurs and funds will follow for incubator at Pfizer's Groton site Published June 26. 2012 11:00AM | Updated June 27. 2012 5:40PM By Lee Howard, Day Staff Writer Groton — The head of the state's chief economic development agency said Tuesday that the state stands ready to help finance a business incubator at Pfizer Inc.'s Eastern Point Road campus if "a critical mass" of entrepreneurs can be found. Catherine Smith, commissioner of the state Department of Economic and Community Development, said during an hourlong meeting of the Pfizer Reuse Task Force Tuesday at the Mystic Marriott that her agency wants to see a specific plan for the property, including commitments from an unspecified number of start-up companies looking for laboratory space. "We're very interested in trying to figure out a higher and better use for these properties rather than let them languish or be torn down," Smith said. About a half dozen companies represented at the meeting expressed interest in forming a business incubator in one of the laboratory buildings that Pfizer has been marketing for almost a year. Pfizer has been shedding workers and real estate worldwide over the past decade, vacating its former worldwide research headquarters in New London two years ago and consolidating operations in Groton while announcing 1,100 layoffs and relocations just last year. About 40 people attended the meeting, called by the Chamber of Commerce of Eastern Connecticut in an effort to gauge the level of support for an incubator that would take advantage of scientific talent being let go by Pfizer. "We're looking to come up with a business model that works," Tony Sheridan, president and chief executive of the chamber, said. Pfizer officials attending the meeting said a decision to tear down the four buildings that are on the market for sale or lease — with space totaling nearly 1 million square feet — likely would be made by the end of the year. "There's a sense of urgency, for sure," Smith said. Rita Zangari, who heads the statewide incubation programs run by the University of Connecticut, said the smaller of the Pfizer buildings on the market would be good "follow-on space" for businesses coming out of her programs, including one at UConn's Avery Point campus. The most suitable location for a business incubator would be either Building 286, with lab and office space situated near the perimeter of Pfizer's site and easily segregated from the company's other activities, or Building 278, a mid-campus lab facility that is slightly smaller. Both spaces are under 25,000 square feet. Sally Fisher, senior director of real estate strategy for Pfizer, said the company has been marketing its vacant buildings for nearly a year without success. Among the facilities on the market is Building 118, Pfizer's former research headquarters that contains more than 750,000 square feet of space. "We have been very open to entertaining a variety of offers," Fisher said. "We have yet to strike a deal." Roger J. Tremblay of Ledyard, an artist and former Naval Underwater Systems Center engineer who hopes to start up a learning center to promote student interest in science, technology, arts and math, was among those with a desire to find incubator space. But he would have to see research-based companies moving into the Pfizer space before committing to a presence there, he said, since building a learning center would be reliant on collaborations with scientists basing their operations at the incubator. Matthew F. Dunn of Middletown, director of research operations for New Haven-based P2 Science and a former Pfizer scientist, also expressed interest in incubator space, but would consider committing to the project only if small-scale, on-site chemical manufacturing facilities were available. Pfizer, which scrapped its local manufacturing operations four years ago but still maintains some capacity to formulate experimental compounds, indicated none of its vacant buildings was set up for the operation Dunn had in mind. "We'd like to do it in Connecticut," Dunn said. Paul Pescatello, president of the pharmaceutical industry group Connecticut United for Research Excellence, promised to survey his membership to gauge the level of interest in Pfizer lab space. A subcommittee made up of interested parties will be formed to bring a plan for using the Pfizer space to the DECD, which could fund a project through its Connecticut Innovations program. Mary Anne Rooke, head of the incubator program at Avery Point, said it will be critical for whoever runs the incubator to offer services — such as business development and legal advice — that will help scientists take an idea and make it into a profitable enterprise. She and others worried about a brain drain if Pfizer scientists aren't given a reason to stay in southeastern Connecticut. "We don't want to see that happen anymore," said Smith, the state's economic development commissioner. "We will support (an incubator) if there is a local team together. We will partner with a team to do this." [email protected] Pfizer plans to demolish Groton building 'just part of the process'

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5 Years After the Crisis: What Banks Haven’t Learned Search form Business + Economy Share 5 Years After the Crisis: What Banks Haven’t Learned iStockphoto/The Fiscal Times By Suzanne McGee, The Fiscal Times Picture of the Day This week brings with it two rather bleak anniversaries. It’s been 12 years since the September 11 terrorist attacks and five years since Lehman Brothers filed for bankruptcy as part of the 2008 crisis that nearly brought the global financial system to its knees. Along with remembrance, these milestones should bring with them a sense that we have learned enough to ensure that history doesn’t repeat itself – or at least, a sense that the pain and misery is receding in the rear view mirror. In the case of the financial crisis at least, I’m not sure that we can say so. For proof, look no further than JPMorgan Chase (NYSE: JPM), which emerged from the crisis a big winner. The bank had sailed in to buy Bear Stearns and prevent its collapse in March 2008. That was hardly a public service (it gave JPMorgan a big boost in Wall Street league tables, and Dimon picked up the assets for a song, with government help), but it may also have sent the wrong message to the rest of Wall Street: that their own institutions would be too big to fail. Be that as it may, JPMorgan Chase came through the crisis relatively stronger than it had been. But take a look at some of the comments and disclosures it made only yesterday, during a presentation to the Barclays Global Financial Services Conference in New York, and it becomes clear that five years after the crisis, we have yet to put many problems behind us. And even the winners still have a lot to learn. Wall Street Remains Full of Supersize Institutions JPMorgan Chase is the biggest of these, and critics including Sheila Bair, former head of the FDIC, aren’t at all confident that any of them have a good strategy for addressing the “too big to fail” conundrum. That means that if a future risk management snafu or business misjudgment triggers the collapse of a big financial institution, we could be right back at square one. While JPMorgan Chase CFO Marianne Lake bragged about the bank’s giant market share and capital position at the Barclays conference, Bair’s broader point is that that kind of market share brings systemic risk with it, and unless and until there’s a workable “resolution” structure in place, the size of some of these institutions today is still worrying. Nor do many of Wall Street’s critics draw much comfort from the Federal Reserve’s annual stress tests – especially after the last one showed Citigroup (NYSE: C) as being more resilient than JPMorgan. “That’s just downright odd,” one analyst told me back in the spring, when those results were released. Risk Management Remains Imperfect The financial crisis was a reminder of how often Wall Street failed to ask itself the most basic kind of question – what might go wrong here? – and failed to put in place systems that would increase the odds of identifying the biggest sources of risk before they morphed into large losses and writedowns. Risk management – which, after all, isn’t a profit center but instead eats into returns on equity – still isn’t embedded in Wall Street DNA. JPMorgan Chase is a great example of that, as the London Whale trading losses reminded everyone last year. The bank’s own reports on the problematic trades displayed myriad gaps in risk management – including evidence that some of the bank’s managers manipulated internal risk models. Two of the directors who served on the bank’s risk committee stepped down in July. JPMorgan Chase just yesterday announced their replacements, both of whom have solid track records in finance and one of whom, Linda Bammann, is a banking exec with risk management expertise. But why wait five years to do this? Mistakes Continue, and Continue to Cost Money Government agencies have been busy filing suits of all kinds against Wall Street institutions, many of them related to the way mortgage securities were originated, packaged, priced and sold before the crisis. At JPMorgan Chase, the federal government and its agencies alone are conducting criminal investigations into the mortgage-backed securities operations as well as its energy-trading activities; other investigations target the London Whale losses, the bank’s credit card collections policies and activities and the way it handles mortgage foreclosures and guards against money laundering. Not all of these problems are historic in nature – the energy trading kerfuffle has surfaced only in the last year. New or old, the cost of defending against these allegations, paying fines to settle regulatory claims and providing against other penalties, is climbing. Lake, the chief financial officer, told her conference audience yesterday that an increase to the bank’s litigation reserve to address a “crescendo” of these actual and potential lawsuits will “more than offset” the $1.5 billion of consumer loan loss reserves that will be released as credit quality on the bank’s loan portfolio has improved. “We are still finalizing the number,” she said. Some Problems Never Disappear; They Just Metamorphose Back in 2008, banks were stuck with big portfolios of mortgages, and especially poor-quality “subprime” ones. They had been lending foolishly, assuming that they could always repackage those loans in such a way as to make them look appealing to someone out there. Fast forward five years and the mortgage arena once more is a problem area for banks like JPMorgan Chase. This time it isn’t a question of losses, but of revenue – or rather, a steep decline in revenues from the home lending business that the bank is likely to see as interest rates rise. Lake said yesterday that mortgage refinancing demand has fallen 60 percent from its peak in May, sooner and more rapidly than the bank had expected. Add that to competitive pressures and the time it takes to complete “taking expenses out of the system” (translation: eliminating some jobs in this part of the business) and profit margins here will be negative. At least this time, the mortgage business is likely to be only a drag on profits rather than a big question mark hanging over the future of the industry. None of these are reasons to panic or to expect a re-run of the events of 2008. What is disconcerting, however, is the limited extent to which big financial institutions have changed the way they function in the wake of their near-death experience. New regulations have been slow to emerge and have had unintended consequences; others haven’t even materialized. On the part of the banks themselves, a new mindset may be even further away today than it was in the autumn of 2008, when CEOs and CFOs were still scared silly by the narrowness of their escape from complete disaster. TOP READS FROM THE FISCAL TIMES Sanders Doubles Down on Breaking Up the Big Banks Sen. Bernie Sanders has been riding a populist crest of anti-Wall Street sentiment in his surprisingly strong challenge... As OPEC Loses Control, There’s a New Power in the Oil Market As oil prices wallow near multi-year lows, it’s becoming increasingly clear that the new cartel controlling oil prices... The 3 Biggest Winners from the Fed’s Coming Rate Hike With the Fed poised to get back into interest rate hiking mode again soon — likely this week — it's a good time to... Suzanne McGee Business journalist Suzanne McGee spent more than 13 years at The Wall Street Journal before turning to freelance writing. Author of the book Chasing Goldman Sachs, she has written for Barron’s, The Financial Times, and Institutional Investor. View the discussion thread. About UsContact UsMedia KitPrivacy PolicyTerms of Use Insightful. Informative. Indispensible.

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U.K. Finance Most Upbeat Since 1996 as Employment Jumps By Sarah Jones - Oct 6, 2013 Optimism in the U.K.’s financial industry reached a 17-year high in the third quarter as lenders, insurers and brokers hired staff at the fastest rate in six years, a Confederation of British Industry report showed. A net 53 percent of respondents said they were more optimistic about their business in the three months through September, up from 31 percent in the previous quarter, according to a survey by the CBI and PricewaterhouseCoopers LLP. That was the highest reading since 1996. Respondents who have hired staff jumped by a net 24 percent, the biggest increase since the third quarter of 2007. “This is an encouraging quarter,” Stephen Gifford, director of economics at the CBI, Britain’s biggest business lobby group, said in a statement. “Firms are expecting positive momentum to carry into the next three months, alongside a strong recovery in business volumes, which will boost profits further.” The CBI and PwC estimate the financial industry added 10,000 jobs in the third quarter and will increase employment by a further 14 percent, or 2,000 positions, in the fourth quarter. That would bring the total number of people working in financial services by the year’s end to 1.14 million, the report said. Profitability climbed for a fourth straight quarter, the survey showed. A net 26 percent of respondents said profit improved in the quarter as cost reductions helped offset a decline in revenue. That proportion is expected to grow 35 percent in the next three months as sales improve. Banks were the most upbeat among the six industry groups highlighted in the report, followed by life insurers. A net 95 percent of bank respondents said they were more optimistic, up from 64 percent in the three months through June. It’s the biggest increase since the survey started in 1989. The CBI, based in London, and PwC surveyed 99 respondents between Aug. 19 and Sept. 5. To contact the reporter on this story: Sarah Jones in London at [email protected] To contact the editor responsible for this story: Edward Evans at [email protected] ®2016 BLOOMBERG L.P. ALL RIGHTS RESERVED.

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> US Investors Support Global Wa... Sign Up for Free NewsLetter Email Address From: ENN Published June 8, 2005 12:00 AM US Investors Support Global Warming Resolution with General Motors Ford Motor Co. to Prepare Climate Risk ReportApril 4, 2005 12:00 AM ExxonMobil Faces Shareholder Resolutions on Climate ChangeMay 23, 2005 12:00 AM A Review: Investors Get Record Results Pushing Corporate Action on Climate Change In 2007October 1, 2007 06:09 PM Ford wins over critics with greenhouse pledgeApril 9, 2008 04:28 PM Today several leading U.S. institutional investors, representing more than $400 billion in invested assets, announced their support for a shareholder resolution requesting that General Motors assess and disclose its strategies for facing the significant financial risks posed by global climate change. The resolution will be voted on at the company's June 7 annual meeting. The shareholders include state treasurers and pension fund leaders from California, Connecticut and New York, as well as faith-based investors. Citing the growing prevalence of climate change regulations, rising consumer demand for lower-emitting vehicles and the high "carbon burden" of GM's vehicle fleet, the investors said they will support a resolution requesting that General Motors assess how it plans to: --Ensure competitive positioning based on emerging near- and long-term greenhouse gas regulatory scenarios at the state, regional, national and international levels.--Comply with California's greenhouse gas standards.--Significantly reduce greenhouse gas emissions from its vehicle fleets (using a 2004 baseline) by 2014 and 2024.The resolution requests that the report be prepared by a committee of independent members on the company's board of directors and that it be submitted to shareholders by September 1, 2005. The resolution was filed by the sisters of St. Dominic of Caldwell, N.J., the Connecticut Retirement Plans and Trust Funds and members of the Interfaith Center on Corporate Responsibility (ICCR). "General Motors has lost sight of a major market shift," said California State Controller Steve Westly, trustee of the CalPERS and CalSTRS pension funds that together own more than 4.2 million shares of GM stock. "Canada and the European market must meet their Kyoto targets and China has recently adopted new fuel efficiency standards that could also place GM at a competitive disadvantage. To remain successful, auto companies must address this changing global regulatory environment." "As a long-term investor and fiduciary, I encourage General Motors and its board to evaluate and report on the company's financial risks and opportunities from climate change," added Connecticut Treasurer Denise L. Nappier. "Consumers are already responding to rising fuel prices by shopping for fuel efficient automobiles. As more countries address the need to reduce carbon emissions this trend will intensify and GM's current product line will become obsolete. We are asking General Motors to look to the future and tell shareholders how it plans to address the emerging reality and thereby protect the long-term value of the company and our investment." The resolution comes as many of General Motors' leading domestic and foreign competitors are moving more aggressively to evaluate their potential financial exposure on the climate change issue and improve their overall competitive positioning. In late March, for example, the Ford Motor Co. announced that it will prepare a comprehensive report for investors examining the impacts greenhouse gas reduction regulations and other climate-related policy changes will have on its North American business over the next 5 to 10 years. This agreement with Ford resulted in the withdrawal of the same resolution sponsored by many of the same shareholders who are pressuring GM. Meanwhile, competitors such as Toyota have been successfully selling lower-emitting gasoline-electric hybrid vehicles in the U.S. for the past three years and recently announced plans to begin producing hybrids in Kentucky in 2006. Canada, California and a half-dozen states in the Northeast have all announced plans to reduce greenhouse gas emissions from vehicles sold in their regions. "Supporting this resolution sends a signal to GM and the auto industry that a business plan ensuring profitability in a carbon-constrained economy must be in place in order to assure stockholders of the long-term fiscal health of the corporation," said Sister Patricia Daly, OP, corporate responsibility representative of the Sisters of St. Dominic, a member of Interfaith Center on Corporate Responsibility, which filed the resolution. Source: CSRwire

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Fund Manager? List your fund Hedge Fund Databases UCITS CTA/MF Billion Dollar Database Special Features Specialist Fund Databases Investor Newsletter Due Diligence Services The Eurekahedge Report EQUAL WEIGHTED HEDGE FUND INDICES CBOE Volatility Long Volatility Relative Value Volatility Short Volatility Tail Risk Volatility Eurekahedge 50 Fund Size Indices Billion Dollar Funds Large (> 500m) Medium (100m - 500m) Small (< 100m) Strategy Indices CTA/Managed Futures Distressed Debt Long Short Equities Multi-Strategy Relative Value Regional Indices UCITS Fund Indices Strategy Return Map ASSET WEIGHTED HEDGE FUND INDICES Currency Hedged Indices SPECIALIST ALTERNATIVE FUND INDICES Funds of Hedge Fund Indices Long Only Absolute Return Fund Indices Islamic Fund Indices ILS Advisers Indices Investible Benchmark Indices MEBI Indices MEBI Maximum Sharpe Ratio Strategy L1 MEBI Zero Beta Strategy L1 MEBI Zero Beta Strategy L1 w/DRC Mizuho-Eurekahedge Asia Pacific Index – USD Eurekahedge Multi-Factor Risk Premia Index Methodologies Index Press Releases Manager Interviews Manager Interview Videos Fund Launches and Closures Archive Islamic Finance: From the Cayman Islands to the Middle East and Beyond March 2014 | Louise Groom and Joanna Hossack, Harneys The use of offshore companies in Islamic finance is driven by many of the same factors as in conventional banking, as tax efficiency, bankruptcy-remoteness and privacy are considerations common to most cross-border transactions. Louise Groom and Joanna Hossack write on how the Cayman Islands are in a fortunate position as the preferred jurisdiction for Islamic financing structures originating in the Middle East and the UK. Benefits of using a Cayman SPV in Islamic financing There are numerous reasons for Cayman’s popularity among Islamic investors. As a British Overseas Protectorate, Cayman is politically stable and its laws are based on the English common law system. Since English law is the preferred governing law for Islamic finance transactions (as the courts will uphold a Fatwa from a Shariah board that a contract complies with Shariah), it makes sense for the off shore element to be based on English law. Cayman law recognises the concept of a trust — a vital tool in many international structures. It has also proved flexible in response to the needs of the growing Islamic finance industry. For example, since 2007, companies have been permitted to register their names in Arabic as well as in English and in 2008, amendments were made to two statutes so as to make the regulatory regime less onerous for Sukuk. Before these amendments, there were two concerns: first, if an issuer held assets on trust for Sukukholders (as is often the case), it could have been deemed to be conducting trust business, meaning it would be required to maintain a trust licence under the Banks and Trust Companies Law; and secondly, issuers could be categorised as mutual funds, meaning they would need to be regulated under the Mutual Funds Law. As a result of the revisions, Sukuk are classed as ‘alternative financial instruments’ and these concerns have fallen away. In addition to Cayman’s tax-free status (companies are not required to pay income, capital gains, corporation or withholding taxes), companies receive an undertaking from the Cayman Islands government that such tax-free status will be maintained for a period of 20 years from incorporation, irrespective of any subsequent generally applicable law change. The period can be extended for a further 10 years if the transaction requires it. This guarantee against future tax law change is not provided by other leading off shore jurisdictions. Subject to satisfying relevant Know Your Client requirements, companies can be incorporated quickly (usually within 24 hours) and the cost of forming and maintaining them is competitive. Cayman companies also provide an appropriate level of privacy for investors, since neither the register of directors nor the share register of a company is required to be publicly filed in Cayman. Cayman is one of the largest banking centres in the world in terms of assets and has retained a rating of ‘Aa3’ from Moody’s continuously since 2000. The outlook for the rating is stable, encouraging investors to have utmost confidence in the jurisdiction. Further, there is an established and reliable stock exchange (the CSX), which has ‘recognised stock exchange’ status from the UK HM Revenue and Customs. At the time of writing, the CSX has more than 1,100 listings (including Shariah compliant funds and Sukuk) and a listed market value of US$170 billion. As one of the first off shore jurisdictions to implement an intergovernmental agreement with the USA post-FATCA, Cayman has balanced its commitment to transparency and the need to comply with international regulators with the requirements of its investors. Cayman prides itself on a high standard of professional services, with lawyers, auditors, trust companies and fund administrators familiar with complex cross-jurisdictional structures. The banks are viewed as reliable and responsive and the local infrastructure for communication is sophisticated. All of the big four accountants maintain offices in Cayman, as do Goldman Sachs, HSBC, Deutsche Bank, UBS and other leading service providers. Below, we look at the current market for Islamic finance in the Gulf and elsewhere, and explain how a Cayman entity can benefit common Islamic structures. The Islamic finance market post-credit crisis Despite recent global financial turbulence and political unrest in the Middle East, the Islamic finance industry has remained remarkably stable and is even achieving impressive growth. According to reports, the size of the industry as a whole has been increasing for seven consecutive years and is estimated to have grown by between 8-9% since 2012. Business is booming in the Gulf. Dubai, who is making a promising recovery from its 2009 difficulties, is celebrating its selection as the host of the World Expo 2020 and has stated its aim to become the world capital of Islamic finance. An hour up the road, Abu Dhabi has announced a plan for a new financial centre (much like the DIFC) and is committed to its Economic Vision 2030, a long-term plan to diversify the emirate’s economy away from oil. Also looking to diversify its economy, and in possession of huge reserves of oil and natural gas, is Qatar. At the time of writing, the central bank of Qatar is poised to issue US$6.6 billion-worth of government debt, around 50% of which is to be in the form of Sukuk. Saudi Arabia remains a very strong market for Islamic finance (the second-largest in the world, after Malaysia) and, like the UAE and Qatar, has historically used Shariah compliant structures to fund industrial and infrastructure projects. This looks set to continue with a recent announcement that Sukuk may be issued to finance a new airport in the west of the kingdom. Kuwait has an ambitious economic development plan and has in the past few years shown an appetite for significant infrastructure development. The Kuwait Investment Authority is one of the top 10 largest sovereign wealth funds in the world. As the host of AAOIFI and with a high concentration of Islamic institutions, Bahrain has always played a very important role in the Islamic finance industry. Despite a challenging few years, the economy appears to be making a recovery and an ongoing series of mergers and acquisitions of financial institutions is likely to assist the process. Oman, having previously been opposed to Islamic finance, has opened its arms to the sector since 2011 and has issued licenses to two Islamic banks as well as allowing several conventional banks to establish Islamic windows. Outside the GCC, the Islamic finance market looks set to grow even in the wake of the Arab uprisings. Libya, Tunisia and Egypt have all begun work on a regulatory framework to support Islamic finance and Morocco is preparing to issue a sovereign Sukuk. Elsewhere in Africa, Nigeria, Senegal, Gambia and Sudan have issued Sukuk and South Africa is planning to follow suit. London is a major hub for Islamic finance and English law is usually the law of choice for international Islamic finance transactions. London is one of the main listing venues for Sukuk and the London Stock Exchange plans to launch an Islamic index along the same lines as the recently-launched S&P GCC Composite Shariah Dividend Index. The UK has legislation in place to issue a sovereign Sukuk; this plan is now likely to come to fruition around the fourth quarter of 2014 and will make it the first western country to issue such a Sukuk. The role of the Cayman SPV in common Islamic finance structures Cayman companies can provide significant benefits in many different Shariah structures and the products described below can be combined and varied according to the requirements of the transaction in question. Real estate finance — Musharakah and Murabahah A Musharakah structure is a joint venture, involving two or more partners investing in an asset in order to gain a return. In a simple structure with two Cayman SPV Musharakah partners, one will be the financier, contributing cash, and the other will be the sponsor, sometimes investing cash but commonly making a contribution in kind or, in the case of a real estate development, providing the land on which the property is to be constructed. The two partners form a joint venture entity (also a Cayman SPV) and it is this company that will enter into the contracts for the purchase, management or development of the underlying asset. The shares of the joint venture SPV will be owned by the partners and the shares of the partners may be held by a Cayman trust as an additional safeguard. Profits will be passed to the partners in proportion with each one’s contribution (any losses will also be apportioned between them). Musharakah products are favoured by Islamic scholars because of their risk-sharing nature. A common variation on the Musharakah model is a Musharakah Muntanaqisah, or diminishing partnership, whereby ownership of the asset is gradually transferred from one partner to the other. Another very common structure used for real estate financings is the Murabahah. It is best described as a sale of goods with an agreed profit mark-up on the cost price. In its simplest form, it involves the purchase of an asset by the financier, who then immediately sells it on to the client, usually for a deferred payment. On top of the cost price, the client will pay the financier a pre-agreed profit margin and the cost price and profit are oft en paid in instalments over a period of time. The profit margin is usually benchmarked against a conventional index such as LIBOR. In this structure, Cayman SPVs are also commonly used to reduce liability and provide tax efficiency. Asset finance — Ijarah An Ijarah is similar to a leasing structure. The owner of an asset transfers the right to use (or benefit from the use of) an asset for a specific rent and for a specific period. The subject of the lease must be valuable, quantifiable and identifiable, so aircraft and vessels are ideal subjects for Ijarah financings. In an Ijarah aircraft financing, a financier purchases the aircraft on the client’s behalf and then leases the right to use the aircraft to the client in exchange for regular rental payments (with profit benchmarked against LIBOR). A Cayman SPV can provide a great deal of protection for the financier in this instance, as the financier, as lessor, will otherwise remain the legal owner of the aircraft and will therefore be liable for any losses resulting from such ownership. To diminish the risk for the financier, the parties can establish a Cayman SPV to act as legal owner and lessor. The client might also establish a Cayman SPV to act as lessee and operator of the aircraft. The Ijarah model is flexible, as it can be created as a forward lease to finance assets that have not yet been constructed. Project finance — Istisnah/Ijarah An Istisnah agreement is a procurement or manufacturing contract to deliver an asset, often for a deferred (but fixed) sale price. Title is transferred to the procurer at the end of the construction period. In a project financing, a parallel Istisnah or an Istisnah/Ijarah model may be used. In every permutation of this type of financing, it is common to use Cayman SPVs to procure, finance and lease the underlying asset. In a parallel Istisnah financing of a factory, the client will commission the financier to deliver the factory for a deferred set price. The financier will ‘on-commission’ and pay a contractor to build and deliver the factory for a lower set price. Once the factory is built, title to it will pass to the financier, from which it will pass to the client. The client pays the deferred sale price to the financier, whose profit is the difference between the price it has paid the contractor and the price it receives from the client. The prices and timeframes are fixed at the outset of a parallel Istisnah, so this model is often not flexible enough for a long-term project financing. An alternative is to combine the parallel Istisnah with an Ijarah, so that, once completed, only part of the factory is transferred to the client and the financier retains a portion. This portion is then leased to the client using an Ijarah agreement (which is able to incorporate a floating profit rate). Capital markets — Sukuk Sukuk are instruments or certificates which represent an ownership interest in an underlying asset. Unlike in the case of conventional asset-backed securities, the underlying asset must be a tangible, profit-generating asset and cannot be a financial asset such as a loan receivable. The diagram below shows an example of the structure of a sovereign infrastructure project, using a Sukuk Istisnah model with an Ijarah between the issuer and the project company (both of which are Cayman SPVs): Chart: The structure of a sovereign infrastructure project, using a Sukuk Al Istisnah model with an Ijarah between the issuer and the project company (both of which are Cayman SPVs) Click on the image for enlarged preview 1. The issuer issues Sukuk to the investors in return for their investment proceeds. 2. The state enters into a concession agreement with the issuer to develop the project. 3. The issuer uses the proceeds of the issuance to procure the construction of the project with a contractor under an Istisnah agreement. 4. Once constructed, title to the project passes to the issuer. 5. The issuer enters into an Ijarah with the project company to lease and operate the project. 6. The project company pays rent to the issuer, which is passed up as pro??t to the Sukukholders. 7. On maturity of the Sukuk, or on an event of default, the project company usually has an obligation to purchase the assets from the issuer, so as to enable the issuer to repay the Sukukholders. Shariah scholars require the obligor and the issuer to deal at arm’s length, so the issuer is typically owned by a trust. A Cayman STAR trust (falling under the Special Trusts (Alternative Regime) (STAR) Law 1997) is a commonly-used vehicle, due to its flexibility. With a STAR trust as its owner, the issuer is also bankruptcy-remote and will not appear on the balance sheet of any party to the transaction. An additional layer of protection can be achieved by appointing a local trust company as trustee of the STAR trust. The trust company can also provide independent directors, company secretarial services and a registered office for the issuer. Conclusion As the Islamic finance industry continues to grow and be welcomed into new jurisdictions, it follows that the products and techniques on offer will evolve. The emphasis in Shariah on justice and publicly-beneficial activity is beginning to attract the interest of non-muslim investors and in the future we may see a stronger emphasis on socially responsible finance, such as environmentally-friendly projects, microfinancing and crowd funding. It is important for off shore jurisdictions and their service providers to remain open to such developments and to maintain their expertise and appetite, so that investors will continue to see them as vital components in the process. Cayman has proved itself to be an adaptable and receptive jurisdiction and looks set to continue as the jurisdiction of choice for Islamic investors in the Middle East and beyond. Louise Groom is a partner and Joanna Hossack is an associate at Harneys. This article first appeared in Islamic Finance News (5 March 2014, Volume 11, Issue 9, Page 27 - 29). For more information, please visit www.islamicfinancenews.com I came across this article in Eurekahedge's monthly newsletter which you may be interested in: http://www.eurekahedge.com/NewsAndEvents/News/1205/Islamic_Finance_From_the_Cayman_Islands_to_the_Middle_East_and_Beyond Please enter your contact details to download the report. Already registered? Sign in here. Download © Copyright 2016 Eurekahedge Pte Ltd.

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Sanlam hits UK property market Johannesburg - Financial services group Sanlam [JSE:SLM] has entered into an international joint venture to form a new Isle of Man-based European property investment advisory and management company. Sanlam said on Friday the new company - called Exclusive Holdings - was a partnership with the Mertech and Attventure Groups in South Africa and Salt Properties on the Isle of Man. This brings to four the number of international deals concluded by Sanlam International Investment Partners in the past 18 months, the company said in a statement. Hendrik Pfaff, managing director of Sanlam International Investment Partners, said the partnership was in line with the Sanlam Group's strategic objective of expanding its global asset management footprint through direct investment in specialist investment management businesses in specific regions. "Notwithstanding its inherent attractions, the European property market is particularly attractive right now because of the quality of direct property investment opportunities that are available to investors," Pfaff said. Investors were now able to acquire top quality properties with top quality tenants as a result of the current market dislocation, he said. This applied especially to investors who were not constrained by the distress in the traditional credit funding markets and who were in a position to hold the assets through the current cycle, he said. The new company would focus on commercial property in the UK, Switzerland and Germany. - Sapa

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Yahoo needs to be bolder, analyst says Mayer praised for back-to-back beats, but stock gives up some gains SAN FRANCISCO (MarketWatch) — Yahoo Inc. is not about to regain its once-dominant position as an Internet powerhouse, but Monday’s report points to a Web portal capable of steady, if not spectacular, growth. Best of MarketWatch Here's the one other story that you can't afford to miss today That’s great news for the new chief executive, Marissa Mayer, who has scored back-to-back beats after two quarters of solid results, though one analyst argues that it’s time for Yahoo YHOO, +1.36% to show more initiative. The lingering doubts were underscored by Yahoo’s stock decline Tuesday, as shares slipped 3% to close at $19.70, despite that company’s fourth-quarter financials beating estimates late Monday. Yahoo, in fact, put out a weaker-than-expected revenue outlook for 2013, but some analysts appeared to accept the company’s explanation that it faces headwinds in the coming year, including the closure of its Korean operations. “There are a lot of reasonable explanations here,” RBC Capital analyst Mark Mahaney wrote. High-tech home technologies (3:05) Kelli Grant reviews the latest and greatest high-tech home amenities from the Consumer Electronics Show. (Photo: Whirlpool) Still, he echoed the sentiment of most analysts, saying: “Of course, the ‘Yahoo turnaround story’ wasn’t going to be proven in one quarter. If it occurs, we envision a year or longer transition. … We believe new CEO Marissa Mayer is taking the right approach in focusing on product innovation while also returning cash to shareholders — a rare combination in this sector.” Yahoo said the company bought back $1.5 billion worth of shares in the fourth quarter. “This marks significant progress toward the $3 billion of additional capital return that we announced in September,” Mayer commented on a call with analysts. She also pointed out that Yahoo in 2012 posted its first revenue gain in four years. The company continues to struggle in a critical area, display advertising. Yahoo revenues slipped year over year in that category. But the company made up for that with stronger-than-expected growth in search ads. Reuters CEO Marissa Mayer Past investor worries about Mayer’s leadership also appear to have dissipated. She had rattled Wall Street after Yahoo announced that she was reviewing the company’s strategy, including a plan to return a big chunk of the proceeds from the sale of its shares in Alibaba to shareholders. That triggered speculation that Mayer was considering big acquisitions. But that view has changed. “People feel that Marissa is not going to squander the cash,” BGC Partners analyst Colin Gillis told MarketWatch last week. Still, some analysts wonder about Yahoo’s position in a fast-changing market dominated by robust competitors led by Google Inc., Facebook Inc. and others. Pacific Crest Securities analyst Evan Wilson wrote: “We are still waiting for something bold from Yahoo.” Despite the headwinds, he said, the company’s guidance for 2013 doesn’t point to a bold game plan. “We would describe Yahoo’s new strategy as doing what it was doing before, but better and more mobile. This continues to feel less than bold and not the type of direction that we expect to yield vastly different results.” He added: “If Yahoo was on the verge of something dramatic and bold, we think we would have had much different 2013 guidance.” Benjamin Pimentel is a MarketWatch reporter based in San Francisco. Follow him on Twitter @BenPimentel.

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Search: The Web India Abroad NewslettersSign up today!Mobile DownloadsText 67333Article Tools Home > Business > SpecialGold: Your 'loss-proof' investmentN J Yasaswy | August 17, 2007 Gold is the life belt for all seasons, especially the dangerous ones.--Timothy GreenGold and silver have been sought and prized since prehistoric times. They have also been both a cause of war and a medium of exchange.Gold has traditionally been the standard by which the value of anything is assessed; it has also been a universally accepted medium of exchange. Silver does not lag far behind in the history of global trade. In fact, till the nineteenth century silver was actually more widely employed than gold as the standard of value.The Indians' faith in God and gold dates back to the Vedic times; they worshipped both. Historian Pliny complained that her Indian trade drained ancient Rome's bullion resources. Indian merchants always demanded payment in silver during the times of the East India Company; so much silver was exported from London that East India Company teetered on the brink of financial disaster.According to the World Gold Council Report, India stands today as the world's largest single market for gold consumption. In developing countries, people have often trusted gold as a better investment than bonds and stocks, particularly because historically these acted as a good hedge against inflation. In that sense these metals have been more attractive than bank deposits or gilt-edged securities.Why people buy goldDespite recent hiccups, gold remains an important and popular investment for many reasons:In many countries gold continues to be an integral part of social and religious customs, besides being the basic form of saving. This continues to be exceptionally true in India, which is the world's largest consumer of gold. Shakespeare called it 'the saint-seducing gold'.Superstition about the healing powers of gold persists. Ayurvedic medicine in India recommends gold powder and pills for many ailments.Gold is indestructible. It does not tarnish and is also not corroded by acid - except by a mixture of nitric and hydrochloric acids.Gold has aesthetic appeal. Its beauty recommends above all other metals for ornament making.Finally, gold is scam-free. So far, there have been no Mundra-type or Mehta-type scams in gold.Thus, the lure of this yellow metal continues.On the other hand, it is interesting to note that apart from its aesthetic appeal gold has no intrinsic value. You cannot eat it, drink it, or even smell it. This aspect of gold compelled Henry Ford, the founder of Ford Motors, to conclude that 'gold is the most useless thing in the world'.The returns from goldDuring the 1950s, gold appreciated only marginally; from Rs 99 per 10 gms in 1950 to Rs 111 per gms in 1960. During the next decade, from 1960-70, it moved up to Rs 184.Between 1970 and 1980 came the massive rise from Rs 184 to Rs 1,330.During the 1980s, it moved up another 240 per cent. The trend of gold prices in India in the last few years is given in Table 1 which reveals that between 1950 and 2007 gold appreciated 95-fold, an annual compound rate of return of 8.32 per cent.Gold prices in IndiaMarch endGold priceper 10 gm(Rs) 1925181930181935301940361945621950991955791960111196571 March endGold price per 10 gm(Rs) 1970184197554019801,33019852,13019903,20019954,65819965,71319974,75019984,050 March endGold priceper 10 gm(Rs) 19994,22020004,39520014,41020025,03020035,26020046,00520056,16520068,21020079,500How to buy goldGold Deposit SchemeIntroduced in 1999, this scheme is managed by SBI [Get Quote]. Individuals, HUFs, trusts and companies can deposit a minimum of 200 gm of gold with no upper limit, in exchange for gold bonds carrying a tax-free interest of 3 to 4 per cent depending upon the tenure of the bond ranging from 3 to 7 years.Furthermore, these bonds are free from wealth tax and capital gains tax. The principal can be collected back in gold or cash at the investor's option.Buying gold bars and coinsYou can now also buy gold coins or bars/biscuits from various authorised banks and dealers. So, if you too are touched by the yellow fever, well, you could satisfy fascination by keeping some gold coins and bars with you.Incidentally, don't be mistaken into thinking that buying ornaments is the same as investing in gold. In practice, gold converted into ornaments is rarely sold. Thus, though gold ornaments are a liquid asset their sale usually entails a heavy loss. The making charges are a total write-off. Then, too, your jeweller may take undue advantage of your predicament and buy back the ornaments at a discount.Gold exchange-traded fundsThe modern international method of investing in gold is via gold mutual funds. India should soon be catching p in this area.In his Union Budget for 2005-06, Finance Minister P Chidambaram had proposed that Securities and Exchange Board of India should permit mutual funds to introduce Gold Exchange Traded Funds (Gold ETFs) with gold as the underlying asset.According to the Budget proposals, the scheme would enable households to buy and sell gold in units for as little as Rs 100 and such units could be traded in the same manner as units of mutual funds.Gold Exchange Traded Funds are a relatively recent phenomenon even in the American market where the first Gold ETF--StreetTracks Gold--made its debut in the New York Stock Exchange in November 2004. Each unit of the StreetTracks Gold ETF represents one-tenth an ounce of gold.In Gold Exchange Traded Fund, the underlying asset is exclusively gold bullion, and not a basket of stocks as is the case of equity ETFs. Gold ETFs are shares or units of gold that are owned by investors and are fully backed by gold bullion bars held by a custodian.Like other ETFs, they are traded on a stock exchange.Gold ETFs will allow investors to buy gold in small increments. In the global market, one unit represents one-tenth of an ounce fine gold (1 oz-28.35 grams). If an investor in the fund holds 100 units, the fund must have physical gold worth 10 ozs.The value of the unit will move in accordance with the price of gold. Just like mutual funds, the value per unit will be the total value of the gold held, divided by the number of units, minus the expenses of the fund. Gold ETFs, like any share, can be traded and bought by the investors through their stockbrokers.They can be used for speculating in the short-term for betting on the price of gold, or it can be used for long-term investing. Just like the ETFs, Gold ETFs can be open-ended funds or closed ended funds.In India, the ETF structure may be particularly suitable for a gold fund because of the unavailability of a highly liquid, organized market for gold or gold-backed securities.Tax implicationsSince there is no income as such from holding gold, there is no liability of income tax. But bullion and jewellery are subject to capital gains tax and wealth tax, without any exemptions whatsoever.While determining the value of gold ornaments for the purpose of wealth tax, making charges should be ignored, unless the ornaments are studded with precious stones. The value of gold contained in the ornaments can be reduced by 15 to 20 per cent because the dealer invariably deducts 15 per cent of the ruling rate of standard gold when ornaments are sold in the open market.The prospects for goldMany contemporary investors forget that when gold price went up during the late 1970s, the metal was just trying to catch up with prices of other things, which had already gone up.In 1970, when the price of gold was $35 an ounce (due to the gold standard then followed in usa), it was unquestionably undervalued. When gold hit $850 an ounce in January 1980 it was again, unquestionably, overvalued.If the increase in gold price had kept the same pace in 1980s and 1990s as it did in 1970s, it would have become $20,000 an ounce by 2000. With a number of Central Banks selling off huge chunks of their gold reserves, the international price of gold has come down in the last few years.Timothy Green, a well-known gold expert, reminds us of a historical truth: 'The great strength of gold throughout history has not been that you make money by holding it, but rather you do not lose. That ought to remain its best credential'.A research study on gold established a remarkable consistency in the purchasing power of gold over four centuries. Its purchasing power in the mid-twentieth century was found to be nearly the same as in the middle of the seventeenth century.You can safely invest in gold. But take care to keep your jewellery in bank lockers. You can also raise loans on gold for your other portfolio investments. If the Indian economy continues to be liberalised and unshackled fast, several new options may emerge for investors to invest in gold bars, gold coins, gold funds, gold mining companies and gold options.It will also lead to the eventual equalisation of domestic and international prices.N J Yasaswy is a Founder-Governor of the Institute of Chartered Financial Analysts of India and ICFAI Business School and has written several books on finance and investments.Excerpt from Personal Investment & Tax Planning Yearbook: FY 2007-08Author: N J YasaswyPrice: Rs 235/- Published by (C) All rights reserved

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JPMorgan Intrepid International Fund(JFTAX)A CINSTITUTIONALR2R6SELECT Loading... OverviewPerformanceFees and Investment MinimumsPortfolioManagementDocumentsDisclaimer ObjectiveThe Fund seeks to maximize long-term capital growth by investing primarily in equity securities in developed markets outside the U.S.Strategy/Investment processInvests primarily in equity securities of companies from developed countries other than the United States and may invest to a limited extent in emerging markets issuers.Utilizes multifactor model to screen for companies possessing attractive growth and/or value characteristics.Employs disciplined portfolio construction process to control for sector and industry weights and other factor exposures Overview widget loading ... Performance Fund Managers Sandeep Bhargava Portfolio Manager Zenah Shuhaiber Portfolio Manager Fund Literature Quarterly Fact Sheet: Intrepid International Fund (A) Commentary: Intrepid International Fund Supplemental Data Sheet - Intrepid International Fund Uncertified Portfolio Holdings - Intrepid International Fund Load More DisclaimerPlease refer to the prospectus for additional information about cut-off times. Total return assumes reinvestment of income. The MSCI EAFE (Europe, Australia, Far East) Index (net of foreign withholding taxes) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The performance of the index does not reflect the deduction of expenses associated with a fund, such as investment management fees. By contrast, the performance of the Fund reflects the deduction of the fund expenses, including sales charges if applicable. Total return figures assume the reinvestment of dividends. The dividend is reinvested after deduction of withholding tax, applying the maximum rate to nonresident individual investors who do not benefit from double taxation treaties. An individual cannot invest directly in an index. The performance of the Lipper International Multi-Cap Core 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. An individual cannot invest directly in an index. 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.©2016, Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Morningstar Rating™ metrics are calculated monthly by subtracting 90-day Treasury return from the fund's load-adjusted return and adjusting for risk. Stars are awarded as follows: top 10% of funds, 5 stars; next 22.5%, 4 stars; next 35%, 3 stars; next 22.5%, 2 stars; bottom 10%, 1 star. Morningstar Ratings are based on 3, 5 and 10 year metrics. Different share classes may have different ratings.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. International investing has a greater degree of risk and increased volatility due to political and economic instability of some overseas markets. Changes in currency exchange rates and different accounting and taxation policies outside the U.S. can affect returns.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.

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> Martin Wolf's Exchange Home Tools Tools › About Us Topics Portfolio FT clippings Alerts hub Email briefings MBA rankings FT Lexicon Mobile Currency converter ePaper Executive jobs FT press cuttings Social Media hub Economic calendar UK World Companies Markets Global Economy Lex Comment Management Personal Finance Life & Arts Monthly Archives: January 2012 From FT.com Guide to Davos 2012: Confronting follies What do eurozone leaders want most at the meeting of the World Economic Forum? To cease being viewed as the source of global economic threats and return to being a source of economic solutions. It is far more fun – let alone more dignified – to lecture others on their faults than to be lectured on one’s own. It is even more humiliating when those lectures are thoroughly deserved. Unfortunately for the eurozone, there is no chance that its policymakers will escape blame in Davos. They will argue that they are on the way to a resolution. Alas, the more percipient of them, as well as their peers from around the world, know they are not. Their visit to the Swiss mountains will be a discomforting experience. The eurozone is almost universally regarded as the source of the pre-eminent threat of an economic meltdown. The risk is that both banks and sovereigns could default, probably triggering – or triggered by – a partial or complete break-up of the eurozone. Such a wreck may still be regarded as unlikely, but it is no longer inconceivable. From FT.com Seven ways to fix the system’s flaws Three years ago, when the worst financial and economic crisis since the 1930s gripped the global economy, the Financial Times published a series on “the future of capitalism”. Now, after a feeble recovery in the high-income countries, it has run a series on “capitalism in crisis”. Things seem to be worse. How is this to be explained? Yet another year of living dangerously What can we see in the world economy in 2012? Risks galore, is the answer. The debt crisis of the high-income countries is already four and a half years old. Yet it shows no sign of abating, particularly in the eurozone. While emerging and developing countries are in reasonably robust condition, they would be vulnerable to an intensification of the crisis, which could hit them via several channels: trade, finance and remittances. Many countries – both high-income and developing – are in a weaker condition than they were in 2008 and would, accordingly, find it harder to respond effectively. The delicate balance of fixing the eurozone Jan 09 2012 18:50 | Share Share this on Twitter Facebook Google+ LinkedIn StumbleUpon Reddit AP/Bernd Kammerer In the most recent post, I discussed the fullest analysis yet by Hans-Werner Sinn (together with Timo Wollmershäuser), president of the Ifo Institute in Munich, of the role of the European System of Central Banks in funding the balance of payments imbalances inside the eurozone. While this post elicited many interesting comments, none, I believe, invalidated Professor Sinn’s basic thesis, which is that monetary financing of the balance of payments (ie the current account deficit, plus net private capital flows) is large, growing and decisive in sustaining imbalances inside the eurozone. Prof Sinn’s work has attracted much controversy. But this is not, in my view, because it is fundamentally wrong (although I think he did initially exaggerate the problems created for managing money and credit in Germany itself), but because it reveals what many policymakers and observers would like to conceal. Read more Martin Wolf Exchange About Martin On this blog, I will open the discussion of a topic that I am thinking about. My aim will be to elicit views of readers. I will give my own response to the question I have raised, before posting the next issue for discussion. Martin Wolf is chief economics commentator at the Financial Times, London. He was awarded the CBE (Commander of the British Empire) in 2000 “for services to financial journalism”. Mr Wolf is an honorary fellow of Nuffield College and of Corpus Christi College, Oxford. He is also an honorary professor at the University of Nottingham. He has been a forum fellow at the annual meeting of the World Economic Forum in Davos since 1999 and a member of its International Media Council since 2006. Martin was made a Doctor of Letters, honoris causa, by Nottingham University in July 2006 and a Doctor of Science (Economics) of London University, honoris causa, by the London School of Economics in December 2006. He was joint winner of the 2009 award for columns in “giant newspapers” at the 15th annual Best in Business Journalism competition of The Society of American Business Editors and Writers and won the 32nd Ischia International Journalism Prize in 2012. Martin's most recent publications are Why Globalization Works and Fixing Global Finance. Contact [email protected] with any feedback about Martin Wolf's Exchange. Martin Wolf's columnsElites must respond to populist rageAn end to facile optimism on the futureWhy leaving will make most people unhappyHow Europe should respond to BrexitSummer reading 2016: EconomicsArchive Feb »January 2012

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Do young people believe in stocks? Millennials are more cautious about investing in the market than their parents. But they are also more knowledgeable about what to do with their money. By Schuyler Velasco, Staff writer / Michaele Bradford Courtesy of Michaele Bradford View photo When she was young, Michaele Bradford thought that the world of investing was a fun, cheery place – a sort of playground for your piggy bank.With good reason. Her grandparents bought her a mutual fund while she was still in elementary school. It came through USAA, a big financial services firm, which provided a monthly newsletter specifically for its young customers. "It had a column called 'Ask Kurt,' where you could ask an investment banker at USAA anything you wanted," she recalls. "I still have the response Kurt sent me when I asked him what companies were in my mutual fund. So they kind of spoiled me." Recommended:Top 5 bull markets since 1929 The 2008-09 market crash and deep recession became a smelling salt to her about investing. Ms. Bradford, now in her late 20s, suffered a severe setback with her finances, as did others of her generation. Not only did her modest portfolio plummet, she also lost her job and had to liquidate two retirement accounts to survive."There's a 15 percent tax penalty, but I was unemployed for six months and I needed it," she says. "It was like $1,000." Since then, Bradford, who graduated from college in 2007, has found work as a case manager at a Detroit-area homeless shelter – and, reassuringly for Wall Street, restarted a 401(k).Millennials represent a key demographic for Wall Street. If the events of the past six years have soured them on stock investing, then they won't provide the growth for the next generation of mutual funds or the cash that will help drive the stock market forward.For now, Millennials seem more conservative about investing than some generations in the past. Surveys show many young adults are cautious and less trusting in the financial industry than their predecessors – but also more knowledgeable about what to do with their money.This is perhaps understandable. Unemployment among people ages 18 to 29 was 11.7 percent in March, compared with 7.7 percent for the nation as a whole. Saddled with more than $1 trillion in student debt, this generation is also delaying buying houses and cars in greater numbers than ever before. Many young people have also been influenced by the experience of their parents, which has acted as both a cautionary tale and a goad. Take the Tillmans."My parents lost a fair amount in the stock market and it really scared them," says Corrin Tillman, who graduated in 2008 and has a 2-year-old. "We wanted to start early; we're concerned about becoming part of that 'sandwich generation' you're always hearing about, taking care of both our parents and a daughter. Happy to do it, but we want to be prepared from all angles." She and her husband have retirement savings and a 529 college plan for their daughter. They hope to amass about $100,000 by the time she turns 18. Soliciting the services of a financial planner is not a high priority."We're both really comfortable doing Internet research, using things like Money magazine," Ms. Tillman says. "With the amount of info out there, I really don't feel like we need a professional."The Tillmans mirror the values of their generation. According to a survey of 1,000 "high income, tech savvy" people released by Accenture in February, 43 percent of investors ages 21 to 30 characterized themselves as "conservative," compared with 31 percent of baby boomers. Young investors are also starting their retirement savings as soon as they can, aided in part by automatic 401(k) enrollment by many employers. And they are four times more likely to do their own research before acting on the advice of a financial planner than boomers were."They really do have a true 'buy and hold' approach to long-term investing," says Michael Liersch, director of behavioral finance at Merrill Lynch Wealth Management in New York.The Tillmans have opted for a leave-it-alone strategy indicative of a generation that will be in the market for a long time: Their daughter's 529 gets more conservative as she gets closer to college, and they don't reshuffle their holdings regularly. "I used to check [the portfolio] a lot, but it was a little disappointing, and the experts say to set it and forget it," Ms. Tillman says.Bradford follows a similar approach. "I listen to the banks on this matter when they say, 'Be patient. Don't freak out. That's the nature of the market.' " Top 5 bull markets since 1929 Dow at 15,000: What the stock market is telling us Why Charles Larsen will be staying out of the market One couple's rationale for getting into the market More from: Business 20 indigenous foods historically and culturally important to North America How cheap oil changes the world Japan's economy in recession (+video) Government shutdown halts FDA food inspections. Should you worry? (+video) View all Business

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Kidd partners with Rand to expand business Richard Lee | The Old Greenwich operator of a national call service company has partnered with Rand Capital in an equity financing deal for the business. Rand is working with Kidd & Co., in $3 million in equity financing for Teleservices Solutions Holdings, which operates as iPacesetters, a 1,600-seat customer contact center specializing in customer acquisition and retention for selected industries. It operates in seven states and at two international sites. Kidd acquired iPacesetters in 2004, as part of its focus on strategy-led investments in the lower end of the middle market, where it works to improve a company. Kidd traces its roots to 1976 when William Kidd made his first private equity investment. Today, Kidd & Co. is the private investment arm of the Kidd Family Office, engaged in sponsoring private equity transactions in the lower middle market. "We have been longtime investors in the business, and are very pleased to welcome Rand Capital as a fellow investor," said Kidd, founding partner, in a statement. "We continue to see opportunities to significantly grow the business, both organically and via acquisition." iPacesetters was founded more than 25 years ago and is a point of customer contact across many industries, including cable and broadband, telecom and wireless, home and office security, financial services, energy and utilities and health care. "The vision we have had for the company has been to continue to excel in assisting select industries in providing superior levels of customer engagement," said Gerry DeBiasi, partner of Kidd & Co., and executive chairman of iPacesetters, in a statement. "This has provided our client base with market leading lead generation, appointment setting, acquisition and retention services to their customers. The new capital will continue to expand our foothold in this dynamic marketplace." Headqurtered in Buffalo, N.Y., Rand Capital is a business development company traded on the Nasdaq under the ticker symbol RAND. It provides capital and managerial expertise to small- and medium-sized private companies primarily located in the Northeast. "As a leading sales organization, they (iPacesetters) bring measurable growth and increase in positive outcomes for their clients," said Rand President Allen Grum, in a statement. Family offices rely on a staff of advisers to make investments in businesses and often play a role in leading them, according to Angelo Robles, founder and CEO of the 250-member Family Office Association in Greenwich. "It may include a prior investment banker," he said, adding that many wealthy families who operate family offices might have garnered their wealth by starting and running a business. "It (investing) may take them back to their roots. They may have founded a company that made them a lot of money. It may be a little feel-good thing."

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Debt ceiling: 8 things you need to know but wish you didn't by Jeanne Sahadi @CNNMoney October 1, 2013: 11:20 AM ET Why should you care about the debt ceiling? Honestly, you shouldn't have to. Problem is Congress has turned the debate over raising it into a national drama. And if lawmakers don't bring that drama to a speedy and smart end, all bets are off for the economy and markets. That means Americans' savings, loans and general economic well-being could be collateral damage. Oh fine, so what's the debt ceiling again? It's a cap set by Congress on how much the federal government may have in outstanding debt. The cap applies to debt owed to the public (i.e., anyone who buys U.S. bonds) plus debt owed to federal government trust funds such as those for Social Security and Medicare. Congress has always set some kind of limit on national debt, but the first modern version of it was set in 1917. Today it's set at $16.699 trillion. How often has Congress raised the debt ceiling? So often. On average, more than once a year. Since 1940, lawmakers have effectively approved 79 increases. Sometimes they've raised it by small amounts, other times by large amounts. And sometimes they've raised it "temporarily" with provisions for a "snap-back" to a lower level. Shutdown and debt ceiling loom large Is it true that raising the debt ceiling gives Congress a "license to spend more"? No. Raising the debt ceiling simply lets Treasury borrow the money it needs to pay all U.S. bills and other legal obligations in full and on time. Those bills are for services already performed and entitlement benefits already approved by Congress. So raising the debt ceiling is more like a license to continue paying what the country owes. And the obligations are incurred because of countless decisions made by lawmakers from both parties over the years. So, why does Congress even bother with a limit? In theory, setting a debt ceiling is supposed to help Congress control spending. In reality it doesn't. Not meaningfully anyway, although there have been times when the debate has yielded some fiscal restraint. (Related: Debt ceiling cash crunch: Millions won't get paid) The problem is the decision to raise the borrowing limit is usually divorced from lawmakers' legislative decisions that will necessitate future debt limit hikes. It would be much better, budget experts say, to authorize debt limit increases at the same time that Congress passes bills to raise spending or cut taxes, both of which can add to deficits. What's holding up Congress this time? Supporting a debt ceiling increase is always a tough vote for politicians, since their opponents will be sure to label them fiscally irresponsible. And it's a tough vote because the minority party often tries to extract concessions from the majority in exchange for their support. Many Republicans today are insisting that any increase in the debt ceiling be tied to spending cuts, a host of unrelated matters like the Keystone pipeline and, among some conservatives, the defunding and delay of Obamacare. Meanwhile, President Obama and Democrats want a "clean" increase and insist they won't negotiate. Wait ... is this the same fight they're having over a government shutdown? No. But it's easy to confuse the two because they're happening at the same time. The government shut down because Congress couldn't agree to fund the government before the fiscal year started on Tuesday. And Republicans have been making similar demands to what they are making over the debt ceiling. But here's the key difference: Shutting the government down is aggravating and a waste of time -- and could reduce economic growth if it goes on too long. But that's nothing compared to the risks posed if Congress doesn't raise the debt ceiling soon. So what happens if Congress doesn't raise it in time? No one knows for sure because that's never happened before. But the going assumption is that no good will come of it. Treasury would not be allowed to borrow money. And that's a problem since the government borrows to make up the difference between what it spends and what it takes in. (Related: Treasury says it will have less cash to pay bills than expected) Practically that means at some point this fall -- the updated estimate is late October to early November -- the Treasury will no longer be able to pay all the country's bills, benefits and other obligations in full and on time. What then? That's a good question with no clear answer. Treasury may try to pay some bills and delay others, or delay all bills due on a given day until it has enough revenue in hand to pay all of them. Most experts think the Treasury would do all it could to prioritize interest payments on the debt, lest the United States default on its bonds, which would likely send markets plunging and interest rates soaring. But it's not clear how investors will respond if Treasury makes interest payments but ends up delaying payments to government contractors, federal workers, taxpayers due refunds, veterans, seniors and anyone else to whom the federal government has a legal obligation. Economically it could be disastrous if the standoff lasts for more than a couple of days. "Federal employees, contractors, program beneficiaries, businesses and state and local governments would find themselves suddenly short of expected cash, causing a ripple effect through the economy," Donald Marron, a former Congressional Budget Office director, told lawmakers. To say nothing of the fact that the United States' reputation as "money-good" would be damaged. CNNMoney (New York) First published September 27, 2013: 11:37 AM ET Comments Social Surge - What's Trending

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Advertisement Home > News > Ocwen Financial Corp. displays survival of the fittest Ocwen Financial Corp. displays survival of the fittest Tracy Heath | NREI EMAIL Comments 0 Advertisement In the evolution of almost anything, there always seems to be a stage where the evolving subject develops items or makes use of other items which help them perform some task better. Man, for instance, made tools to make hunting, eating, building and pretty much everything else a little easier. So does this mean the evolution of a financial services firm would involve a process of developing useful tools in order to survive successfully? Well, it does in the case of West Palm Beach, Fla.-based Ocwen Financial Corp. This commercial real estate financial services firm, which specializes in high-risk, nonperforming mortgages and loans, has put its efforts into developing faster, easier technology. "The mortgage and real estate industries have placed little emphasis on technology," says John Erbey, chairman of Ocwen Technology Xchange Inc. "And they're business which we believe can benefit greatly by technology." One way Ocwen has invested in technology is with its acquisition of two high-tech firms, Amos Inc. and DTS Communications Inc. Amos Inc., which provides residential loan servicing and origination software, was acquired in fourth quarter 1997, and DTS, which provides electronic commerce tools, was acquired in January of this year. Combining these two firms with its own default management and loss mitigation group, Ocwen formed Ocwen Technology Xchange Inc., a subsidiary designed to provide real estate and mortgage-related software. Now Ocwen has a client-server, PC-based system through Amos, which provides real-time data to the employee's desktop, and with the DTS purchase, it enables any lender or real estate professional to order, manage and track everything that is needed to close a real estate deal. However, adds Erbey: "What distinguishes DTS from the rest of the market is that it is able to connect with any other database or application that is available. The significance of that is that users of those services and service providers don't have to invest a lot of money into software and hardware to take advantage of the DTS system." Of course, if you've read any articles about technology in real estate recently, you know that this embrace of technology is not quite the norm. And this is not the only difference between Ocwen other real estate firms. Ocwen's business philosophy has been to focus on nontraditional assets such as underperforming loans and mortgages. "We think that competition for trophy assets is so intense that it drives returns to the point that the margins don't compensate you for the losses that could incur if and when there is a downturn," says Jordan Paul, executive vice president, Commercial Real Estate. "Conversely, we have found that the discounts that are available for assets with perceived risks provide an excellent risk-adjusted return if you have the expertise to identify and address the problems." As a result of this philosophy, Ocwen has developed an entire array of businesses that play to its strengths. Included in these businesses are the commercial loan acquisitions, commercial fee for service, distressed property acquisitions, subordinate CMBS, and renovation and mezzanine lending groups. The commercial loan acquisitions business purchases nonperforming and subperforming real estate loans which it special services as a principal using Ocwen's asset management group. Because Ocwen is vertically integrated and works as a combination of money partner and real estate partner, there is a high level of commitment to its loan acquisition franchise. "This keeps money from falling between the cracks," says Christian Bezick, senior vice president, Large Commercial Discount Loans. "Ocwen underwrites its large commercial portfolio acquisitions on an asset-by-asset basis, with efficient and sophisticated acquisition models rather than making broad portfolio assumptions as many people do in the industry. The strength of our systems are demonstrated by the fact that we have purchased over $2 billion worth of distressed commercial loans during the past four years and have not lost a cent of principal in any of those transactions." About 18 months ago, Ocwen began offering its asset managing services to third parties through its Commercial Fee for Service group. "We have a significant portfolio of third-party business that we manage that comes through public structures such as CMBS and liquidating trusts," adds Bezick. In the Mezzanine and Renovation Lending group, there are two divisions: the large commercial business, which deals with loans ranging from $5 million to $50 million, and the small commercial business, which provides loans in the range of $400,000 to $5 million. "The development of our lending program for large commercial real estate was driven by the evolution of our core business competencies," says Richard Bosworth, vice president-Real Estate Lending. "Back in 1994, we realized there was a void within the capital markets to fund the readaptive use and turnaround of distressed real estate, so we evolved from our loan acquisition and asset management group into the actual structuring and origination of new loans for complex real estate projects." The small commercial lending program can basically be broken down into three components: a permanent program; the Ocwen Advantage program, designed to appeal to borrowers whose credit is not quite worthy but the underlying collateral and debt service coverage warrant the loan; and the Gateway Loan program, which is an interim or bridge loan for properties going through repairs or renovations. "The overlap with (the large commercial) group would be the fact that once again we are not a conduit lender on paper, but rather a lender to fallout from conduit programs," says Thomas McCarthy, vice president-Small Commercial Finance."What we're finding is that there is a lot of people falling out from traditional financing, and very frequently we are the net to catch them." The next step for Ocwen after developing a lending program and being a buyer of loans and mortgages was to become a property owner; therefore, it developed its own REIT, Ocwen Asset Investment Corp. (OAC). "Before forming our REIT, we had experience in owning, repositioning and selling more than 500 commercial properties between the large and small commercial businesses, and that gave us a lot of confidence to move forward with our equity program," says Gregory Breskin, vice president-REIT Investments. "The next natural step was to move further out into the ownership structure." The REIT pursues very much the same kind of opportunities as the lending program - distressed opportunities that need redevelopment or repositioning - but the REIT will be a principal owner or a joint venture partner. Formed in May 1997, OAC, a hybrid REIT, focuses on two primary asset classes: real estate acquisitions and subordinate mortgage-backed securities. "These are two products that balance each other very well from an income standpoint," says Paul. "If you had a REIT that did nothing but buy (underperforming) properties that would have a dilutive impact on near-term earnings. We balance it with the subordinate securities, which offers relatively high current returns." The last incarnation of Ocwen's adaptability is its investment and development in a new restaurant concept, The Player's Grill. This concept was licensed to the National Football Players Association and Orlando, Fla.-based Millennium Entertainment Group, and it will play to the convention-, leisure- and individual-business traveller. On June 18, Ocwen and partners opened their first restaurant in Orlando. "I think that the important thing that this illustrates is that we are open to ideas," says Paul. "We really consider ourselves as an 'out-of-the- box' real estate investor." Print Please Log In or Register to post comments. Advertisement Related ArticlesSurvival of the fittest Where are they now? Survival of the Fittest Can retail lending survive today's cutthroat market? Making Real Estate Finance More Professional Advertisement The Latest in News Colony Capital’s Thomas Barrack Extolls Trump’s Virtues at Republican National Convention

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As most remember, some REITs were forced to cut common stock dividends as part of a painful but necessary cash flow strategy. Most of these actions were necessitated by sudden and substantial declines in free cash flow resulting from recession-induced contractions in property cash flows and per-share cash flow dilution caused by the issuances of additional equity. Industry-wide, the dividend cuts were painful. Despite the huge and painful decline in REIT shares during 2007 and 2008, REITs rebounded sharply in 2009, 2010, and 2011. REIT performance takes on special significance for income-oriented investors, such as retirees, because a steady income source prevents the erosion of purchasing power. It was interesting talking with many institutional investors at REIT World as they seemed to be more interested in the concept of total returns (growth) than the more boring subject of dividends (income). In fact, the feeling seemed to be resonating that I was from another planet and there was a language barrier that was preventing me to communicate… Men Are from Mars, Women Are from Venus In the popular book, Men Are from Mars, Women Are from Venus, written by American author and relationship counselor John Gray, the central metaphor of the book stresses the fact that most of common relationship problems between men and women are a result of fundamental differences between the genders. The best-selling book (sold more than 7 million copies) is pitched as an eponymous metaphor in which men and women are from distinct planets and that each gender is acclimated to its own planet's society and customs, but not those of the other. Gray's book has become a "popular paradigm" for problems in relationships and it has spawned infomercials, audiotapes and videotapes, weekend seminars, and even theme vacations. But what about the investment world? The Investment World and the Retirement World It's not so much that men and women are from different planets, as that - if this is anything to go by - investors are. As mentioned above, dividends are the "holy grail" for retirees and accordingly, they place an extremely high value on income paying stocks. Alternatively, institutional investors are more interested in the total returns and index fund-based performance metrics. It is clear that demand for high quality dividend income is become harder and harder to find - especially retirees searching for stocks that provide both durable income and strong growth. Although the investment universe is scattered with hundreds of alternatives, the dividend investor must carefully scout the list of filtered opportunities until he or she finds a company worth owning. This involves consideration of the company's industry - its current competitive position within that industry - and the "economic moat" around the company; that is, a sustainable competitive advantage that helps preserve long-term pricing power and profitability. Realty Income: These are the Voyages of the Starship, The Monthly Dividend Company This introductory text was spoken at the beginning of many Star Trek television episodes and films: Space: The final frontierThese are the voyages of the Starship, EnterpriseIts 5 year missionTo explore strange new worldsTo seek out new life and new civilizationsTo boldly go where no man has gone before Realty Income Corporation (NYSE:O) has ventured far away from where most REITs have never been before. The 43 year-old REIT, based in Escondido, has built a sound "margin of safety" (don't worry, I will discuss O's value below) by delivering one of the most diversified portfolios in REIT-dom. With 2,828 single tenant properties in 49 states, the triple-net landlord has grown its well-balanced flagship into a beacon REIT consisting of 144 different tenants and 44 different industries. A few weeks ago, I wrote an article, Checking 'Under The Hood' Of The Great Repeatable Dividend Machine, in which I summarized the stalwart REIT's most recent financial results as follows: There is nothing more enjoyable than watching the "great repeatable dividend machine" spit out monthly checks, especially since the power of compounding is the secret ingredient that helps you sleep well at night! Last week Realty Income declared the 509th consecutive common stock monthly dividend. The dividend amount of $0.1514375 per share, representing an annualized amount of $1.81725 per share, is payable on December 17, 2012 to shareholders of record as of December 3, 2012. To date Realty Income has declared 509 consecutive common stock monthly dividends throughout its 43-year operating history and increased the dividend 68 times since Realty Income's listing on the New York Stock Exchange in 1994. Is There a Margin of Safety? In his million-selling classic The Intelligent Investor (Published by Harper & Row in 1949), Ben Graham wonders what his reply would be if he were to distill the essence of sound investing into a single phrase. In response to the self-directed challenge, Graham writes three words all in caps: "MARGIN OF SAFETY." As such, even when selecting sound securities, one needs some kind of buffer to protect against market fluctuations. That buffer is the margin of safety - the difference between the real or intrinsic value of the business underlying the security and the price assigned to that security at the moment. As Graham defined it, the margin of safety constitutes a favorable difference between price on the one hand and indicated or appraised value on the other. In recent times, several Seeking Alpha readers have asked me to recommend an entry price for Realty Income, and during the past weeks, the price for the stock has dropped from around $41.55 (Oct. 16th) to a market price of $38.40. The current market cap is $5.12 billion with a dividend yield of 4.73%. My first response (regarding valuation) is that the intrinsic value of the underlying business cannot be gleaned from a stock chart. Determining that value through a methodical analysis of the security is the central task of the Graham-inspired value process. A defensible intrinsic value deduced from a reasonable and dispassionate assessment of the facts enables one to determine the presence and size of the margin of safety. As Graham wrote, A stock does not become a sound investment merely because it can be bought at close to its asset value. Indeed much of the power of the "margin of safety" concept lies in its wide applicability. It is something of an "all purpose" risk minimization tool with which one can proceed with a fair degree of certainty that, regardless of day-to-day price fluctuations, one's principal is likely to be secure. First, it is important to recognize the underlying business of Realty Income as Graham believed that to be an essential element to the irreducible core of value investing. What is the owner orientation? As Walter Schloss (did not attend college and a notable disciple of Benjamin Graham) explained: Try to establish the value of the company. Remember that a share of stock represents a part of a business and is not just a piece of paper. Most of my background and experience in commercial real estate has been in or around triple net investments. In fact, many years ago I developed (ground up) facilities for many companies like Advance Auto Parts (NYSE:AAP), O'Reilly Automotive (NASDAQ:ORLY), Dollar Tree (NASDAQ:DLTR), Family Dollar (NYSE:FDO), and Dollar General (NYSE:DG). Of course, I also built facilities for companies that failed like Blockbuster Video, Hollywood Video, Econo Lube n' Tune, and Goody's (now owned by Sage Stores). With over 25 years of net-lease experience, I consider the standalone triple-net sector to be one of the safest real estate categories. Unlike many of the other sectors, standalone investments enjoys contractual long-term leases that usually provide for rental increases and to a certain degree, higher appreciation. Conversely, the biggest risk for the sector is the "all or one" proposition so maintaining strong occupancy levels and leasing to high caliber tenants is a must. Generally speaking, that is referred to as managing portfolio level risk. By surveying the list of vetted investment opportunities, investors (like Graham) look at the businesses behind the companies as a prospective buyer would of the whole business. For example, Realty Income owns facilities leased to AMC Theatres, L.A. Fitness, B.J.'s Wholesale, Family Dollar, and The Pantry. When analyzing Realty Income, investors should consider the "Grahamian" approach of looking at the stock in relation to all of its individual businesses. Graham looked at the businesses behind the securities as a prospective buyer would of the whole business. Only once he ascertained that did he look at the current price to determine what course of action would be the most advantageous. The margin of safety is the essence of value investing because it is the metric by which hazardous speculations are segregated from bona fide investment opportunities. Stripped to the essence, as prominent value investor and Columbia finance Professor Joel Greenblatt framed the (margin of safety) concept in a 2011 Barron's interview, It's about figuring out what something is worth, and then paying a lot less for it. Now, as most know, Realty Income recently announced the merger of the smaller ($1.754 billion) triple-net REIT, American Realty Capital Trust (NASDAQ:ARCT). The deal, which is still subject to shareholder approval and is expected to close by the first quarter of next year, will create the world's largest net-lease real estate investment trust and the 18th-largest publicly traded REIT. The combined company will have a $7.6 billion market capitalization and an enterprise value of around $11.4 billion, a size that makes it a candidate for inclusion in the S&P 500. Most analysts that I met with last week believe that the merger will close and that means that Realty Income's portfolio, with around 19% investment grade tenants (based on revenue), will jump to around 36% (investment grade) when the acquisition closes. Note that ARCT shares have declined since the announcement (ARCT closed at $11.07). Utilizing data below, I prepared my own NAV model utilizing information obtained from the latest 10-Q. Also you can see that I used the latest net income data and annualized with a run rate of approximately $437 million. I then placed the assets into two buckets: investment grade (20%) and non-investment grade (80%). (Note: I should have included a third bucket of shadow rated or just below investment grade; however, the shorter version should be close). My conclusive results for Realty Income's NAV is $24.46 per share. Now, I then decided to include the proposed (or expected) merger-related details. Accordingly, I conclude that the forward price of Realty Income is $31.08 per share. I think it is important to note that ARCT is being acquired as a stock ($46 mill. New shares) and mortgage assumption ($526 mill) deal and the cap rate is around 5.9%. As you may recall, I wrote an article, The Conundrum Of Triple Net Lease Valuation, a while back regarding Realty Income's valuation in which I explained that the company's "high multiple equates to being the 'low cost producer' and that means higher profits and higher margins." Simply put, Realty Income has the advantage of scale and accordingly, there are considerable efficiencies that make the proposed merger extraordinarily valuable (disgruntled ARCT shareholders: read this again because this is the most important benefit that you need to remember). So as you can see, the merged NAV is $31.08 per share - a 27% increase in value… interesting stuff! Mr. Market and Planet O The parable of "Mr. Market" has helped transform many investors' perceptions of the stock market from a strictly computational paradigm to one on which psychology plays a prominent role. As Graham wrote in 1949: Imagine that in some private business you own a small share that cost you $1,000. One of your partners, named Mr. Market, is very obliging indeed. Every day he tells you what he thinks your interest is worth and furthermore offers either to buy you out or to sell you an additional interest on that basis. Sometimes his idea of value appears plausible and justified by business developments and prospects as you know them. Often, on the other hand, Mr. Market lets his enthusiasm or his fears run away with him, and the value he proposes seems to you little short of silly. When asked what keeps most individual investors from succeeding, Graham had a concise answer: The primary cause of failure is that they pay too much attention to what the stock market is doing currently. Now, let's bring this all down to planet Earth There is a reason that individual investors differ from institutional investors and there is also a reason that men are different than women. Clearly, the differences also abound for dividend investors and growth investors. At the end of the day, all of these pairs can survive and actually benefit from the paramount activities that make them uniquely successful. For me - a dividend investor and REIT proponent - I believe dividends are extremely critical and Ben Graham believed (in The Intelligent Investor) the same: One of the most persuasive tests of high-quality is an uninterrupted record of dividend payments going back over many years. We think that a record of continuous dividend payments for the last 20 years or more is an important plus factor in the company's quality rating. To me, the biggest value in owning shares in Realty Income is the fact that you receive monthly dividends of 4.73% (as of Nov. 16) and the underlying business model (2,828 single-tenant properties in 49 states) makes for a highly sustainable income platform. The risk-adjusted dividend (for Realty Income) offers a compelling alternative of full liquidity - just 180 basis points less than an underlying net lease property (i.e. a CVS paying 6.5%). As an income investor, I look especially hard at the risk associated with one stand alone asset compared with 2,828 stand alone assets. Remember dividend investors, risk is a function of both price (Grahamian type discount) and other factors such as tenant credit, diversification, size, access to capital and management expertise. The market's appreciation and pricing of risk "ebbs and flows" depending on current expectations. Is Mr. Market happy or sad? It's evident that the market pricing does not include an adequate appreciation of risks until things go wrong... Then all it appreciates is risk. The market seems remarkably sanguine about risk right now. Spreads between the cap rates on investment grade vs. non-investment grade tenants are quite tight given the economic risks of a double dip, low interest rates, the deficit, fiscal cliff etc. Wouldn't you rather buy risk protection today at the expense of a few basis points of additional yield? Realty Income - Planet O - is a stalwart REIT that deserves attention in any retirement portfolio and, regardless of Mr. Market's feelings today or tomorrow, I see value in the company's durability and repeatability - especially its dividend. For I speak the language of the dividend investor and Realty Income's remarkable record - based on decades of consistency is what separates "the best from the rest." As Warren Buffett said, The business owners approach is so fundamental that, unless it's ingrained as part of your basic philosophy, you're going to get in trouble in life when you do investments. Peer Dividend Stocks include (NYSE:PG), (NYSE:CL), (NYSE:KO), and (NYSE:JNJ) Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have 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: Dividends & Income, REITs, Financial, REIT - Retail, Alternative Investing, Editors' PicksProblem 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

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Emanuel Derman has a fantastic two-line blog entry on the SEC/Goldman affair, which I can’t really help but quote in full: The architects of the bailout have been trying to cure insolvency by treating it as illiquidity. The SEC may be trying to cure unethical behavior by treating it as illegality. This is also known as “how people behave when the only tool they have is a hammer”. Central banks can inject liquidity much more easily than finance ministries can spend money. And the lawyered-up SEC, if it finds a deal it considers odious, will go to great lengths to find a way in which that deal is illegal. Once they’ve done that, Goldman’s lawyers at Sullivan & Cromwell will go to equally great lengths and start quoting City of Monroe Employees Ret. System v. Bridgestone Corp, along with lots of other prior cases, in support of their argument. I don’t doubt for a minute that Goldman’s (NYSE:GS) behavior was more unethical than it was illegal. Goldmanites never stop talking about how they always put clients first, but because the U.S. has a rules-based rather than a principles-based regulatory system, that’s not an explicit regulatory requirement. One thing that the SEC has already done, in filing its complaint and making it public, is reveal that at least one banker — “Fab” Fabrice Tourre — does not fit that conception at all. Rather than treat every client with the utmost respect and transparency, he favored the sponsor of the Abacus deal, John Paulson, who was paying Goldman $15 million to put it together. And he blithely talked about a 0-9% equity tranche in emails to ACA, when no such tranche even existed. Here’s the cunning thing about the SEC filing: They could settle with Goldman for $1 tomorrow, and Goldman’s reputation would still be tarnished for years to come. Here’s Allan Sloan: I don’t much care about the legality of what Goldman allegedly did, because something doesn’t have to be illegal to be wrong. And almost everything about the Abacus 2007-AC1 “synthetic collateralized debt obligation” deal was wrong… The SEC case seems more than a little weak legally, but tars Goldman as amoral at best, immoral at worst. It will take years for Goldman to erase the stain to its reputation, if it ever does. If I were a betting man, I’d put money on Goldman prevailing in court, should the SEC charges go to trial. But in the court of public opinion, Goldman has already lost. And given the current state of things, that’s the court that matters. This helps to explain why Goldman leads off its public self-defense by characterizing this deal as “a single transaction in the face of an extensive record”; general counsel Greg Palm said something very similar on the conference call today. Everybody at Goldman is hyper-aware of the degree to which a single mistake can ruin a bank’s reputation, and also of the degree to which that reputation is singlehandedly responsible for bringing enormous amounts of money into the bank. If you’re a journalist, no matter how good you are, you get better if you start working for the NYT or WSJ: your calls are returned that much more quickly, you’re that much more likely to be chosen as the outlet for leaks, and so on. Similarly, if you’re a banker, you get better on your first day working for Goldman Sachs. Your calls get returned, you get better access to clients, and so on and so forth. The revelations in the SEC’s suit will hurt Goldman’s revenues, and Goldman wants to signal to the markets that they’re not at all typical of how it normally does business — while at the same time maintaining that they’re not even well-grounded in the first place. It also helps explain why the SEC didn’t give Goldman the opportunity to settle the charges. The real damage to Goldman has already been done, and is much greater than any fine it might end up having to pay the SEC. (Which won’t be large, given that the firm lost money on the trade.) It’s an interesting case of the SEC using its rules-based structure to impose damages on firms who violate a hypothetical principles-based regime. It’s not what the SEC is necessarily meant to do, but that doesn’t mean it isn’t extremely effective. About this article:ExpandProblem 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

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Tetragon Financial Group Master Fund Limited Announces Tender Offer to Purchase $150,000,000 of Tetragon Financial Group Limited ("TFG") Non-Voting Shares LONDON, November 5, 2012 /PRNewswire/ --TFG and its subsidiary, the Tetragon Financial Group Master Fund Limited (the "Master Fund") today announced the commencement of a tender offer (the "Offer") to purchase a portion of the outstanding non-voting shares of TFG for a maximum aggregate payment of $150,000,000 in cash. The Offer, which was initially announced by TFG on October 29, 2012, will be conducted as a "modified Dutch auction" with shareholders able to tender their TFG non-voting shares at prices ranging from $9.25 up to and including $10.65 per share (in increments of $0.10). The Offer is expected to expire at 5:30 CET on December 4, 2012, unless terminated earlier. Deutsche Bank AG, London Branch ("Deutsche Bank") will act as dealer manager for the Offer and KAS BANK N.V. will act as tender agent for the Offer.Eligible shareholders will be able to indicate how many TFG non-voting shares and at what price or prices within the specified range they wish to tender. Based on the number of shares tendered and the prices specified by the tendering shareholders, Deutsche Bank will determine the lowest price per share within the range that will enable the Master Fund to purchase $150,000,000 in value of TFG non-voting shares, or a lower amount if the Offer is not fully subscribed. All shares purchased by the Master Fund in the Offer will be purchased at the same price. The determined purchase price, as well as the proration factor (if applicable) is expected to be announced on or about December 10, 2012, and TFG expects the purchase of shares in the Offer would be settled promptly thereafter.The Offer is not conditioned upon the receipt of any minimum number of shares being tendered.This release is for informational purposes only and is neither an offer to buy nor the solicitation of an offer to sell any shares of TFG. The full details of the tender offer, including complete instructions on how to tender shares, are included in the offer to purchase which is available on TFG's website (http://www.tetragoninv.com).Shareholders should read carefully the offer to purchase because it contains important information. Shareholders may obtain electronic copies of this document free of charge by calling the dealer manager for the Offer, Deutsche Bank, at +44 207 54 75393. Shareholders are urged to read these materials carefully prior to making any decision with respect to the Offer.About TFG CIO, CTO & Developer Resources TFG is a Guernsey closed-ended investment company traded on NYSE Euronext in Amsterdam under the ticker symbol "TFG". TFG currently invests primarily through long-term funding vehicles such as collateralized loan obligations in selected securitized asset classes and aims to provide stable returns to investors across various credit, equity, interest rate and real estate cycles. TFG maintains two key business segments: an investment portfolio and an asset-management platform. TFG invests its capital through the Master Fund.Forward-Looking StatementsThis press release contains forward-looking statements. These forward-looking statements include all matters that are not historical facts. These forward-looking statements are made based upon TFG and the Master Fund's expectations and beliefs concerning future events impacting TFG and therefore involve a number of risks and uncertainties. Forward-looking statements are not guarantees of future performance, and TFG's actual results of operations, financial condition and liquidity may differ materially and adversely from the forward-looking statements contained in this press release. Forward-looking statements speak only as of the day they are made and TFG does not undertake to update its forward-looking statements unless required by law.This release does not contain or constitute an offer to sell or a solicitation of an offer to purchase securities in the United States or any other jurisdiction. The securities of TFG have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act"), as amended, and may not be offered or sold in the United States or to U.S. persons unless they are registered under applicable law or exempt from registration. TFG does not intend to register any portion of its securities in the United States or to conduct a public offer of securities in the United States. In addition, TFG has not been and will not be registered under the US Investment Company Act of 1940, and investors will not be entitled to the benefits of such Act. TFG is registered in the public register of the Netherlands Authority for the Financial Markets under Section 1:107 of the Financial Markets Supervision Act ("FMSA") as a collective investment scheme from a designated country. This release constitutes regulated information ("gereglementeerde informatie") within the meaning of Section 1:1 of the FMSA.ContactsDeutsche Bank: Raymond Daamen (+44-207-54-75393)SOURCE Tetragon Financial Group Limited Published November 5, 2012 – Reads 292 Copyright © 2012 SYS-CON Media, Inc. — All Rights Reserved.

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Human Capital & Careers Option Passes Tough to Complete With "repricing" programs for underwater stock options decidedly unpopular among shareholders, companies are tiptoeing toward decisions on whether to pursue them. David McCann November 13, 2008 | CFO.com | US share After the Internet bubble burst in the early 2000s, some 450 U.S. public companies offered programs allowing employees to exchange underwater stock options for something that had value — usually either new options with a strike price at current fair value, a smaller number of shares of restricted stock, or cash. But don’t expect the same level of activity now, even though the overall stock market is in just as bad shape, if not worse. The restive climate among shareholders and their advisory services likely will produce mostly “no” votes on proposals for so-called repricings, compensation attorneys and consultants say. Recommended Stories: Levin Takes Aim at Stock Option Deductions Report: Economy Roils Executive-Pay Moves S&P 500: Tight Times Demand Restricted Shares “In the last downturn the advisers and attorneys were coming up with all sorts of new ways to reprice options, because clients were demanding it,” said Jim Scanella, a Watson Wyatt consultant. “It’s the exact opposite now.” That’s not to say there won’t be any repricings. This year there were about 55 through October, mostly at smaller companies, Scanella said, citing a Watson Wyatt database. “There’s some activity, but it’s certainly far less culturally acceptable than [it used to be],” he noted. Most companies, he added, are just looking around to see what everyone else is doing. Sean Feller, a partner in the compensation and benefits practice at Gibson Dunn & Crutcher, agreed. With companies now starting to think about what proposals to include in 2009 proxies, he’s getting a lot of requests from clients asking about their choices with regard to underwater options. “I think everyone is still trying to figure out where things are going and markets are heading before they take action,” he said. “But they’re definitely concerned about how to keep incentivizing employees.” Most companies that propose repricings will make executive officers ineligible, in a bid to overcome institutional investors’ current distaste for the exchange programs, Feller said. However, there were some notable exceptions to that among 2008 repricings. An analysis by White & Case highlighted eight companies with annual revenue greater than $1 billion that completed option exchanges in 2008. Four of them — Builders FirstSource, R.H. Donnelly, Isle of Capri Casinos, and MGM Mirage — allowed executive officers to participate. Isle of Capri even let directors in on the repricing. “There is a growing trend to include executive officers in repricings,” said Colin Diamond, a partner in the securities practice at White & Case. “It reflects the reality that they often hold a large number of underwater options and that the goals of many exchange programs would be frustrated by excluding them.” Five of the eight companies — M.D.C. Holdings, Builders FirstSource, Toll Brothers, VMware, and UTStarcom — exchanged underwater options for new options at lower strike prices. Typically in such cases, companies grant a smaller number of options than were included in the original programs, or extend the vesting term, or both. Isle of Capri exchanged options for restricted stock or, in the case of employees that would receive have receive less than 1,000 shares of stock, for cash. MGM Mirage also switched from options to restricted stock, and R.H. Donnelly shifted from options to stock appreciation rights. In a recent study of 61 companies that completed repricings since 2005, Aon Consulting said that 46 percent of them exchanged options for options, 49 percent went to restricted stock or restricted stock units, and 5 percent paid cash in lieu of the worthless options (with the amount often determined by an option valuation formula such as Black-Scholes). Which type of program is selected depends on numerous factors that vary from company to company. But Mark Poerio, co-chair of the executive compensation and benefits group at Paul, Hastings, Janofsky, & Walker, registered a strong preference for restricted stock, in part to guard against the possibility that newly granted options may dive underwater just as the old ones did. “When an executive is sitting there holding something that has no value, it becomes a morale problem and a retention problem,” Poerio said. “If your stock price goes from $5 to $4, with restricted stock it’s still worth $4.” On the other hand, Diamond suggested that switching from options to restricted stock awards can create a perception that the company does not anticipate share-price growth in the near term. Meanwhile, it remains to be seen whether replacement awards adhere to the trend toward more award grants being performance-based. Few have so far, but Poerio said he expects to see more of it in 2009. “If that’s what happens, we might have something that shareholders can live with,” he said. 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Canada National Sites About us> Policymakers warned of persistent risks as accountancy bodies publish five-year ‘health check’ of the global economic recovery Global 21 Jul 2014 Five years of the global economic recovery A recovery which is confined to the financial sector is not sustainable and policymakers need to start asking hard questions about what’s really underlying this in terms of consumer spending, business investment and leverage —Manos Schizas, senior economic analyst, ACCA Threats to long term economic stability remain as countries recover from the global economic crisis, according to a five year review of finance professionals’ economic insights. Any recovery may also be limited to just a few “islands of financial stability”, report author Manos Schizas, Senior Economic Analyst at ACCA (the Association of Chartered Certified Accountants), has warned. This is one of a number of worrying conclusions, based on a five year review of the ACCA/IMA Global Economic Conditions Survey, the largest economic survey of professional accountants in the world. The two bodies claim that the financial crisis and global recession have now fragmented into multiple unresolved issues - including damaged bank and government balance sheets, unconventional economic policies, political polarisation and geopolitical tensions. These are, by and, large, still present five years on, despite a growing ‘recovery consensus.’ In particular, the review highlights how, since mid-2012, business confidence gains have been much stronger in the financial sector than among the world’s SMEs and large corporates. While conceding the benefits of stronger banks on business investment, it warns of a growing imbalance fuelled primarily by central banks. Manos Schizas said: 'A recovery which is confined to the financial sector is not sustainable and policymakers need to start asking hard questions about what’s really underlying this in terms of consumer spending, business investment and leverage.' The two bodies have also called on policymakers to take stock of the impact of unconventional monetary policy by OECD countries – particularly the unintended spill-overs into emerging markets. 'Emerging markets in Asia and Africa have had to contend with damaging flows of ‘hot money’ as a result of policies over which they had no choice. Institutionally, they are also much worse equipped to deal with the fallout than the countries that set the flows in motion,” said Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy. The report, compiled from data created by 40,000 responses over five years, also raises questions about whether inflation really is dead at the global level, noting that it never really fell in Africa and the Middle East, while in Asia-Pacific input prices have rebounded since late 2012. Even the Chinese mainland, which has driven much of the global fall in inflation, saw a rebound from mid-2013 onwards. Two of the world’s major economies – the EU and China – have driven much of the uncertainty over the past four years, but the ACCA/IMA heath-check is cautiously optimistic. In the EU, the report finds that, despite mounting government debt, financial contagion has been contained, much of the missing institutional framework in the Eurozone is being built and the banking sector is on the mend. In China, despite repeated ‘doomsday’ warnings, slowing growth has so far remained manageable. However, the country is slowing down and shifting from an investment-driven to a consumption-driven economy, which will present a significant longer-term challenge for Chinese policymakers, and for countries which have tied their economic growth to commodity exports or direct Chinese demand. The ‘health check’ of the recovery has shown that businesses around the world have been holding back on long-overdue investment for years, while austerity-hit public sectors have also often sacrificed public investment in order to maintain government consumption levels. The result has been a significant loss of productivity which will take years to reverse. ACCA and IMA believe, however, that a rebound in investment has already begun in 2013 and will be the biggest economic story of the next year, shaping industries for years to come. Access to finance has recovered consistently in most regions, businesses are increasingly seeking growth capital and it is mostly structural, rather than cyclical, factors that are holding up business financing. Manos Schizas said: 'Finance professionals are at the heart of business globally and have front-row seats to the recovery. Over the last five years they have given us accurate and timely indications of its direction of travel.' 'Our five year review demonstrates that policy makers and business leaders around the world must overcome numerous challenges if they are to secure a sustained economic recovery. Fortunately, both businesses and the public sector can continue to rely on finance professionals to help steer them through these challenges.' - ends - For further information: Colin Davis, ACCA Newsroom tel: + 44 (0) 207 059 5738 mob: + 44 (0) 7720 347713 Twitter @ACCANews [email protected] The five year report is available via the 'Related Links' section, left of this article. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We support our 170,000 members and 436,000 students in 180 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of 91 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers. PREVIOUS Survey shows public distrust in political leaders and businesses is hurting the global economy Pensions Accounting Rules – Statement of Recommended Practice will bring clarity, but lobbying of DWP is important in achieving this

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Silver from Great Britain Silver Britannias Silver Britannias 2013 Great Britain 1 oz Silver Britannia BU (Colorized) While silver Britannia has always offered beauty and reliability it now also gives you 0.999 purity. The legendary figure of Britannia has symbolised Britain’s strength and integrity on coinage since Roman times. Little wonder then that the silver Britannia, with such a depth of history behind it, has been a popular choice with bullion investors ever since its introduction in 1997. This new specification combined with its tradition and integrity gives new life for today’s investment customer. The 2013 Britannia Silver Bullion coin contains one ounce of 0.999 fine silver and measures an impressive 38.61mm in diameter. Please note - the colorizing of this coin was applied by an experienced third party company. Britannia, the female personification of the British Isles, takes her name from an ancient term for Great Britain and has been a popular figure since the 1st century, when she was first depicted on Roman coinage under the rule of Emperor Hadrian. Illustrated as a goddess, Britannia resembles the Roman figure Boudica. Britannia first appeared on British coins in 1672, when she graced the farthing. She was a firm fixture on coins from this point onwards, appearing on pennies issued under every monarch from 1797 until decimalization, when she was chosen to appear on the 50 pence coin until 2008. Over the years, the image of Britannia has altered slightly, with her maritime links being emphasized by switching her spear to a trident. Britannia is seen as a symbol of British unity, liberty and strength, meaning she resurfaces during particularly challenging times. Like Columbia in the U.S. and Marianne in France, Britannia becomes more prominent in times of war or when national pride is booming. In 1987, Britannia’s image graced the new Gold bullion coin minted by the Royal Mint known as the Gold Britannia. These Gold coins have since grown in popularity as an investment and a collector’s piece. Gold Britannias are available in sizes as small as 1/20 oz and as large as 5 oz Gold coins. In 1997, the Royal Mint expanded this design to a Silver bullion coin known as the Silver Britannia. Over time, both the Gold Britannia and Silver Britannia have experienced changes in design and an increase in metal purity, making them major players in the modern coin market. Brilliant Unc

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» The JOBS Act The JOBS Act Crowdfunding for Small Businesses and Startups William Michael Cunningham The JOBS Act: Crowdfunding for Small Businesses and Startups provides usable information and insight on the Jumpstart Our Business Startups (JOBS) Act. Readers will learn how to take advantage of the new law to get up to $1 million in crowdfunding to launch and grow a business. ∨ Full Description ∨ Publication Date: October 2, 2012 Available eBook Formats: On April 5, 2012, President Barack Obama signed the Jumpstart Our Business Startups Act, better known as the JOBS Act. The act is designed to “reopen American capital markets to small companies,” defined in the act as Emerging Growth Companies. This is one of the most significant legislative initiatives in finance since the Securities and Exchange Acts of 1933 and 1934, and it opens up funding to a slew of companies previously shut out of the capital markets. Here’s the good news: Small businesses and startups will be able to raise up to $1 million in equity (or debt) funding online via what are called Crowdfunding Platforms—online communities and websites. Imagine an eBay-like site that allows you to post your idea for a commercial venture online and then allows investors to purchase equity shares or stakes in it. As one journalist put it, it’s “social media meets venture capital.” How can you get in on the new funding opportunities? That’s what The JOBS Act: Crowdfunding for Small Businesses and Startups is all about. Investment expert William Michael Cunningham shows how the new law will enable you to use the internet to raise significant amounts of capital funding for your startup. After discussing briefly the development and implementation of the law, what it means, and how it will impact the business startup marketplace, he delivers the nuts and bolts of how to take advantage of the JOBS Act to access new sources of capital for your small business or startup. As you’ll see, the act has the power to unleash a new wave of innovation, increase employment, and set many more average entrepreneurs and investors on the road to wealth. Not just for entrepreneurs, The JOBS Act: Crowdfunding for Small Businesses and Startups will benefit investors, securities lawyers, community development specialists, educators, venture capitalists, and those offering services in the new crowdfunding arena. It is, simply, the most current and most comprehensive compendium of information on the law and its impact on this new market. What you’ll learn<li> What the JOBS Act is and why it’s needed <li> The JOBS Act’s definition of ”crowdfunding,” “crowdfunding platforms,” and “emerging growth companies” <li> How to get up to $1 million through crowdfunding <li> The risks and rewards of taking advantage of JOBS Act <li> How to stay on the right side of the law when soliciting funds <li> How to identify and deal with reliable crowdfunding platforms and companies <li> How businesses owned by women and minorities can raise new capital, as well as those now shut out of the capital markets (restaurants, day-care centers and others ignored by finicky venture capitalists and skittish bankers) <li> How investors can identify opportunities, avoid fraud, perform due diligence, and then make an intelligent investment Who this book is for The JOBS Act: Crowdfunding for Small Businesses and Startups is for people who are wondering how the JOBS Act can help them finance their dreams, for the small-business executive seeking capital, for the community development executive seeking to finance community businesses, and for executives at large companies wondering about the impact the act might have on their firm. It’s also for investors who need to understand the risks involved in buying equity in small firms, angels and venture capitalists who must understand the nature of the new kid on the funding block, and securities lawyers and other advisors and consultants to start ups. The JOBS Act: Crowdfunding for Small Businesses and Startups is an excellent choice for people who need to understand the nuts and bolts of new business opportunities that will be generated by the Act. Table of Contents Introduction The JOBS Act represents a fundamental change in the business financing environment. Many companies previously blocked out of the market will now be able to obtain funding. This could and should lead to many more business success stories, as well as many more product and service “disruptions” across the board. The introduction will review the history of the Act, noting who wrote it and outlining the legislative players and timeline as well as their overall expectations. Part I: Summary of the JOBS Act Part I covers the basic thrust of the law and what it hopes to accomplish. Chapter 1: The Act: Summary and Definitions The law targets emerging growth companies and defines them as an issuer with “total annual gross revenues of less than $1 billion” during its most recently completed fiscal year.” These firms are now exempt from certain reporting requirements.To understand the law, you must know the precise meaning of several terms, including “Emerging Growth Company” and “Crowdfunding.” In addition, it’s important to understand the set of institutional arrangements that govern the market for startup financing. Using examples, charts, and graphs, I will describe the marketplace. Chapter 2: The Startup Financing Environment: Why Now? Using information on startup business capital flows, I will describe how startups are currently financed. The impact of the financial crisis on the availability of capital for startup business financing will be described in detail. Part II: Disclosure One of the major changes promulgated by the JOBS Act is the change on financial disclosures. Startups are relieved from many of the more burdensome accounting and reporting requirements, especially requirements that are imposed by the Securities and Exchange Acts of 1933 and 1934. This section will describe these changes in detail, and provide sample before-and-after financial statements. Chapter 3: Emerging Growth Companies Emerging Growth Companies are defined as firms with less than $1 billion in revenue. This is a large and amorphous grouping. I will present charts and graphs showing the number and type of firms in this category. In addition, I will describe characteristics of companies in this group and how they might take advantage of the new law. Chapter 4: Accounting and Other Standards Accounting and other information standards and regulations have been significantly reduced for Emerging Growth Companies. This chapter will enumerate those changes. Chapter 5: Crowdfunding Crowdfunding can be described as social media–enabled business financing. Startups and others use crowd financing to raise capital for business ventures. Startups, special ventures, and small- and medium-sized businesses can all use crowdfunding. This chapter outlines the short history of crowdfunding and the huge impact the law will have. Chapter 6: Funding Portals A Funding Portal is, according to the law, “any person acting as an intermediary in a transaction involving the offer and sale of securities for the account of others, solely pursuant to section 4(6) of the Securities Act of 1933 (15 U.S.C. 77(d)(6)).” In plain English, it is a website that facilitates the creation and sale of equity (or debt) securities issued by startups. If eBay, for example, were to allow people on their site to sell shares of stock in new ventures, it would be a Funding Portal. This chapter will detail how portals operate and what it takes to become one. Part III: The Act, by Title In the final third of the book, I offer verbatim language of the JOBS Act, along with my commentary on each section. This will be important, as sometimes citizens can "set the rules" and influence the practical ways the law can be applied before regulators start codifying it. Chapter 7: Title I – Reopening American Capital Markets to Emerging Growth Companies Commentary Chapter 8: Title II – Access to Capital for Job Creators Commentary Chapter 9: Title III - Crowdfunding Commentary Chapter 10: Title IV – Small Company Capital Formation Commentary Chapter 11: Title V - Private Company Flexibility and Growth Commentary Chapter 12: Title VI – Capital Expansion Chapter 13: Title VII - Outreach Crowdfunding sites Errata

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MENU Homepage Markets Stocks Currencies Commodities Rates + Bonds Economics Magazine Benchmark Watchlist Economic Calendar Tech Silicon Valley Global Tech Venture Capital Hacking Digital Media Bloomberg West Pursuits Cars & Bikes Style & Grooming Spend Watches & Gadgets Food & Drinks Travel Real Estate Art & Design Politics With All Due Respect Delegate Tracker Culture Caucus Podcast Masters In Politics Podcast What The Voters Are Streaming Editors' Picks Opinion View Gadfly Businessweek Subscribe Cover Stories Opening Remarks Etc Features 85th Anniversary Issue Behind The Cover More Industries Science + Energy Graphics Game Plan Small Business Personal Finance Inspire GO Board Directors Forum Sponsored Content Sign In Subscribe INDUSTRIALS SECTOR » INDUSTRIAL CONGLOMERATES INDUSTRY » 656 fosun international ltd (656:Stock Exchange of Hong Kong Limited) OverviewBoard MembersCommittees Executive Profile* John William Snow Ph.D.Consultant of the Board,Fosun International LimitedAgeTotal Calculated CompensationThis person is connected to 77 board members in 7 different organizations across 25 different industries.See Board Relationships77-- Background* Dr. John William Snow, Ph.D. has been the President of JWS Associates, LLC since October 2006. Dr. Snow has been a Consultant of the Board at Fosun International Ltd since 2010. He served as the President, Chairman and Chief Executive Officer at CSX Corporation from April 1989 till 2003. He served at Federated Equity Funds - Federated Prudent Bear Fund. Dr. Snow served as U.S. Secretary of United States Department of The Treasury from February 2003 to June 2006. His ... previous public service includes having served at the Department of Transportation as an Administrator of the National Highway Traffic Safety Administration, Deputy Undersecretary, Assistant Secretary for the Governmental Affairs, and a Deputy Assistant Secretary for Policy, Plans, and International Affairs. He is also recognized as a leading champion of improved corporate governance practices. He served as a Treasurer and Trustee at Johns Hopkins University until November 2006. He serves as Chairman of Cerberus Capital Management, L.P. He has been a Director of Dominion Midstream GP LLC, a General Partner of Dominion Midstream Partners, LP since October 10, 2014. He has been a Director at Marathon Petroleum Corporation since 2011. He serves as a Member of Americas Advisory Board at Deutsche Bank AG. He has been Member of Client Advisory Board at Deutsche Bank Trust Company Americas since January 25, 2007. He has been Lead Independent Director and Director of Armada Hoffler Properties, Inc. since May 13, 2013. He serves as Trustee of National Gallery Of Art. He is part of an independent panel that will oversee Takata Corp.’s efforts to ensure that its airbag inflators meet federal safety standards. He served as Director of British Airways Plc (UK). He served as a Director of Black Knight InfoServ, LLC from March 12, 2013 to January 2, 2014. Dr. Snow served as the Chairman of CSX Transportation, Inc. He served as Governor of The European Bank for Reconstruction and Development, African Development Bank and Inter-American Development Bank. He served as Director of Verizon New England Inc, United States Steel Corp., Circuit City Stores Inc, CarMax Inc, Verizon New York Inc. and Sapient Corp. He served as a Director of International Consolidated Airlines Group, S.A. since 2010 until December 19, 2013. He served as Director of GTE Corporation since 1998. Dr. Snow served as Director of CSX Corp. since April 1988. He served as a Director of AMERIGROUP Corporation from August 05, 2010 to December 24, 2012. He served as a Director of Marathon Oil Corporation from September 27, 2006 to June 30, 2011 and Verizon Communications Inc. from February, 01 2007 to May 03, 2012. He served as a Director at Johnson & Johnson and USX Corp. Dr. Snow was Co-Chairman of the influential Conference Board's Blue-Ribbon Commission on Public Trust and Private Enterprise. He also served as a Co-Chairman of the National Commission on Financial Institution Reform, Recovery, and Enforcement in 1992 that made recommendations following the savings and loan crisis. Dr. Snow taught Economics at the University of Maryland, University of Virginia, as well as Law at George Washington and also served as a Visiting Fellow at the American Enterprise Institute in 1977 and Distinguished Fellow at the Yale School of Management from 1978 to 1980. Dr. Snow received a Bachelor’s Degree from the University of Toledo in 1962, a Master’s Degree from Johns Hopkins University, a Doctorate in Economics from the University of Virginia and a Juris Doctor degree from George Washington University. He also did undergraduate from Kenyon College.Read Full Background Corporate Headquarters* No. 2 East Fuxing RoadShanghai, -- 200010ChinaPhone: 86 21 6332 5858Fax: 86 21 6332 5028 Board Members Memberships* ChairmanCerberus Capital Management, L.P.TrusteeNational Gallery Of Art2011-PresentDirector, Member of Compensation Committee and Member of Corporate Governance & Nominating CommitteeMarathon Petroleum Corporation2013-PresentLead Independent Director and Chairman of Compensation CommitteeArmada Hoffler Properties, Inc.2014-PresentDirector of Dominion Midstream GP LLC, Member of Audit Committee and Member of Conflicts CommitteeDominion Midstream Partners, LP Master's Degree Johns Hopkins UniversityDoctorate University of VirginiaJD The George Washington UniversityBachelor's Degree 1962The University of ToledoUnknown/Other Education Kenyon College Other Affiliations* AMERIGROUP CorporationGTE CorporationSapient Corp.The European Bank for Reconstruction and DevelopmentCerberus Capital Management, L.P.Johnson & JohnsonBritish Airways Plc (UK)CSX Corp.Marathon Oil CorporationUnited States Steel Corp.CarMax Inc.Circuit City Stores Inc.Deutsche Bank AGVerizon Communications Inc.Dominion Midstream Partners, LPThe George Washington UniversityDeutsche Bank Trust Company AmericasVerizon New York Inc.African Development BankVerizon New England Inc.Inter-American Development BankCSX Transportation, Inc.University of VirginiaJohns Hopkins UniversityKenyon CollegeThe University of ToledoNational Gallery Of ArtUnited States Department of The TreasuryBlack Knight InfoServ, LLCFederated Equity Funds - Federated Prudent Bear FundMarathon Petroleum CorporationInternational Consolidated Airlines Group, S.A.Armada Hoffler Properties, Inc. Annual Compensation* Stock Options* Total Compensation* To contact FOSUN INTERNATIONAL LTD, please visit . Company data is provided by Capital IQ. Please use this form to report any data issues.

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Ron Paul worries Fort Knox gold is gone Rep Ron Paul wants to be sure that the Gold that their claims to be in Ft. Knox, really is in there. He called on a congressional hearing Thursday so he can grill the federal officials about his bill to audit and inventory Ft. Knox. Ron Paul is also known for wanted to convert the current monetary system to the gold standard. June 24, 2011: 11:58 AM ET By Jennifer Liberto CNN MONEY WASHINGTON (CNNMoney) -- With the price of gold at record highs, presidential candidate Rep. Ron Paul wants to make sure the U.S. gold bars at Fort Knox are really there. Paul called a congressional hearing Thursday to grill federal officials about his bill to audit and inventory all of the gold reserves at Fort Knox, Ky., West Point, N.Y., and Denver, even though Treasury officials insist that the gold is audited annually and is all there. During the hearing, Paul suggested that the Federal Reserve of New York, which has 5% of the U.S. gold reserves, has the ability to secretly sell or swap gold with other countries without anyone knowing. "The Fed is pretty secret, you know," said Paul, who leans Libertarian. "Congress doesn't have much say on what's going on over there. They do a lot of hiding." Paul, a Texas Republican who wants to convert the U.S. monetary system to one based on the gold standard, says the federal government owes it to taxpayers to make sure U.S.-owned gold is safe. (Ron Paul: Bernanke's biggest critic) "This is one of the few legitimate functions of government: To check our ownership and be fiscally responsible and find out just what we own and whether it's really there," said Paul, who is among those running for the Republican presidential nomination. Audits by the Treasury Department and Government Accountability Office are based on samples. Paul wants to open up Fort Knox and other reserves and count the bars manually. "We know where it is. We know how much there is. We know it's there. None of it has been removed," said Treasury Inspector General Eric Thorson. Ron Paul, John Boehner, Nancy Pelosi: Peek at their wealth In September, Treasury completed its latest audit, showing that U.S. gold reserves total 9,300 tons with a market value of $320 billion, Thorson said. The recent run-up in gold prices -- the precious metal is trading at about $1,515 an ounce -- puts the market value at $340 billion as of Wednesday, according to Thorson's testimony. He added that each gold bar weighs about 27 pounds and is worth around $500,000. Paul said that his questions were partly in response to the numerous Internet conspiracy theories, including those that accuse the government of secretly selling all of the gold in Fort Knox. Thorson said Treasury doesn't believe that anyone, including the Fed, has taken the gold or laid claim to U.S. gold bars. Any further audit as proposed by Paul's legislation would be redundant, he said. "There is no movement. There is nothing there that can happen, once those doors are sealed," Thorson said. "It's very obvious if those seals are ever broken." William Lacy Clay, a Democratic representative from Missouri, said that doing a complete audit as Paul is calling for is a waste of federal manpower and could cost tens of millions of taxpayer dollars. Thorson reported that the U.S. Mint told him that moving, counting and testing the gold would cost around $60 million. Paul said he had heard from Treasury that it would only cost $15 million. Part of the expense would be due to the bill's requirement to "assay" all the gold, said Gary T. Engel, a director of Financial Management and Assurance at GAO. Assaying means drilling little holes in all the gold bars in order to test its purity. But that process is "basically destroying whatever that piece is." Finally, Engel cautioned, "There will be some loss of the gold from the bars through the assaying process if you do that for every single bar that's out there." To see original article CLICK HEREPrevious External Article:Inflating Away America's FutureNext External Article:Five money moves one inflation hawk is making now

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Unlocking Apple's iPhone Profit Stream? Monday, 8 Oct 2007 | 11:01 AM ETCNBC.com Apple shares continue to take off, thanks to news nuggets here and there about the better-than-expected iPhone sales success. In fact, shares are so high that rumblings of an impending stock split are coming back, even though CEO Steve Jobs was pretty clear at his shareholders meeting earlier this year, offering up props to the Google no-split stock-price strategy (Eric Schmidt sits on Apple's board) and steering investors away from the idea of any kind of split.But let's take a look at one of the key reasons why Apple shares continue to swell: I've spent a lot of time looking into the whole "unlocking" trend and what it means for sales. The conventional wisdom goes that consumers are buying the phones three or four at a time (I've checked around at Apple and AT&T stores and everyone I've talked to say they've seen customers buy multiple phones at once). Initially, investors might have been squeamish about the exclusive deal with AT&T and what many complained was a sub-standard network. Then, the unlocking thing began to gain momentum: first, a complicated hardware approach; then, a far easier software download. The thinking is that Apple wins no matter what since the phones are obviously in demand, and can now run on any network if you download the right programs. So consumers will buy them no matter what. Manuel Balce Ceneta Whoopee for Apple! A collective sob for AT&T. Then, Apple steps up and says new software from the company, once it's downloaded onto an unlocked phone, could disable that phone, so consumers need to be warned. There was lots of skepticism that this was indeed the case. (I'm still skeptical, though the web is rife with angry iPhoners who have seen their unlocked phones turn into a snazzy desktop paperweight.) But the profit potential from buying these phones, unlocking them, and then selling them overseas for a tidy profit because the dollar remains so weak, is apparently an irresistible proposition. So much so that Piper Jaffray now estimates that one in ten iPhones purchased this past quarter was done so for precisely that: unlocking and then re-selling overseas. That's a big number. And on its surface, it would appear to bolster the idea that the iPhone is enormously popular, and that Apple sits in the catbird seat -- until you also remember that an important part of the Apple revenue and profit model isn't merely selling the iPhone, but collecting a nice chunk of the monthly service revenue it was supposed to share with AT&T. This isn't merely about the phone, but about the recurring monthly fees Apple was supposed to enjoy as well. When unlocking was a difficult, complex, hardware solution, it seemed so esoteric that it wouldn't affect any meaningful number of Apple handsets. But now that it has gotten so easy, and, according to Piper Jaffray, affects up to 10% of iPhone handsets sold, this becomes something much more insidious. In fact, right now, Piper estimates that of Apple's whopping $4.3 billion in operating income, only a paltry $28 million comes from revenue sharing with AT&T. Next year, the number swells to $200 million, or 3% of operating income. By 2009, we're talking real money: $800 million, or 13% of Apple's projected $6.2 billion in operating income. It's certainly worth watching for investors giddy about the Apple stock story. I'm not suggesting that this torpedoes Apple and its shares. No way. The company, thankfully, is much more diversified than a single product: the new iPods seem to be selling briskly; and Mac sales are nothing short of amazing. But if iPhone is so critical to the company's future, and a key revenue stream disappears because Apple customers are more innovative than the company itself, investors would be well-advised to keep this developing news top of mind -- and to see how the company addresses all this on its conference call after earnings Oct. 22. Questions? Comments? [email protected]

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3 Men who brought down Wall Street Thread: 3 Men who brought down Wall Street 3 Men who brought down Wall Street megimoo Here is a quick look into 3 former Fannie Mae executives who have brought down Wall Street. Franklin Raines was a Chairman and Chief Executive Officer at Fannie Mae. Raines was forced to retire from his position with Fannie Mae when auditing discovered severe irregulaties in Fannie Mae's accounting activities. At the time of his departure The Wall Street Journal noted, ' Raines, who long defended the company's accounting despite mounting evidence that it wasn't proper, issued a statement late Tuesday conceding that 'mistakes were made' and saying he would assume responsibility as he had earlier promised. News reports indicate the company was under growing pressure from regulators to shake up its management in the wake of findings that the company's books ran afoul of generally accepted accounting principles for four years.' Fannie Mae had to reduce its surplus by $9 billion. Raines left with a 'golden parachute valued at $240 Million in benefits. The Government filed suit against Raines when the depth of the accounting scandal became clear. http://housingdoom.com/2006/12/18/fannie-charges/ <http://housingdoom.com/2006/12/18/fannie-charges/> . The Government noted, 'The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public. The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner.' These charges were made in 2006. The Court ordered Raines to return $50 Million Dollars he received in bonuses based on the miss-stated Fannie Mae profits. Tim Howard - Was the Chief Financial Officer of Fannie Mae. Howard 'was a strong internal proponent of using accounting strategies that would ensure a 'stable pattern of earnings' at Fannie. In everyday English - he was cooking the books. The Government Investigation determined that, 'Chief Financial Officer, Tim Howard, failed to provide adequate oversight to key control and reporting functions within Fannie Mae,' On June 16, 2006, Rep. Richard Baker, R-La., asked the Justice Department to investigate his allegations that two former Fannie Mae executives lied to Congress in October 2004 when they denied manipulating the mortgage-finance giant's income statement to achieve management pay bonuses. Investigations by federal regulators and the company's board of directors since concluded that management did manipulate 1998 earnings to trigger bonuses. Raines and Howard resigned under pressure in late 2004. Howard's Golden Parachute was estimated at $20 Million! Jim Johnson - A former executive at Lehman Brothers and who was later forced from his position as Fannie Mae CEO. A look at the Office of Federal Housing Enterprise Oversight's May 2006 report <http://www.ofheo.gov/media/pdf/FNMSPECIALEXAM.PDF> on mismanagement and corruption inside Fannie Mae, and you'll see some interesting things about Johnson. Investigators found that Fannie Mae had hidden a substantial amount of Johnson's 1998 compensation from the public, reporting that it was between $6 million and $7 million when it fact it was $21 million.' Johnson is currently under investigation for taking illegal loans from Countrywide while serving as CEO of Fannie Mae. Johnson's Golden Parachute was estimated at $28 Million. WHERE ARE THEY NOW? FRANKLIN RAINES? Raines works for the Obama Campaign as Chief Economic Advisor TIM HOWARD? Howard is also a Chief Economic Advisor to Obama JIM JOHNSON? Johnson hired as a Senior Obama Finance Advisor and was selected to run Obama's Vice Presidential Search Committee IF OBAMA PLANS ON CLEANING UP THE MESS - HIS ADVISORS HAVE THE EXPERTISE - THEY MADE THE MESS IN THE FIRST PLACE. Would you trust the men who tore Wall Street down to build the New Wall Street ? Quick Navigation

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Mercury General using guise of benevolence to assault Prop. 103 Michael HiltzikContact Reporter The art of setting automobile insurance rates is incomprehensible to most of us civilians. Liability coverage, comprehensive insurance, assigned risk pools, discounts, surcharges . . . the list goes on. Just try to figure out how your carrier arrived at the figure at the bottom of your itemized bill -- I know nuclear physicists who can't do that math.So when industry lobbyists cook up a ballot initiative they claim will bring down rates, one's first instinct should be to cry, "Whoa!" That brings us to the proposed "Continuous Coverage Auto Insurance Discount Act," which its sponsor, Californians for Fair Auto Insurance Rates, says will surely lower our insurance bills.Never heard of that organization? You may know it by its alter ego, Mercury General Corp., the state's third-largest auto insurer.Mercury -- excuse me, CalFAIR -- filed the continuous coverage act with the state secretary of state's office two weeks ago. Its strategy is to start collecting signatures for the initiative this fall, in time to get it on the ballot next June.Since it sometimes takes little more to geta ballot measure approved in this state than concocting a deceptively beguiling advertising pitch and raising the cash to pay an army of signature collectors, and since Mercury has about $4 billion in assets, we can safely assume that we'll be hearing more about this one in the near future.Therefore, as a public service, I'm going to shake the skeletons out of its closet now.The proposal is essentially the latest attempt by Mercury to eviscerate Proposition 103. That's the 1988 ballot measure that dramatically reshaped insurance regulation in this state by giving an elected insurance commissioner the authority to approve property and casualty rates before they go into effect.Auto insurance carriers were a particular target of Proposition 103, because the industry was viewed as especially discriminatory and arbitrary, and because the state's mandatory insurance law gave motorists little choice but to buy coverage.To bar the redlining of underprivileged neighborhoods, the measure strongly discouraged the use of ZIP Codes in setting rates. Henceforth, the primary factors were to be the driver's safety record, the number of miles driven annually and the driver's years of experience.Proposition 103 specifically barred insurers from using the absence of a prior policy as a factor in rate-setting for any driver. The concern was that higher premiums based on that factor would discourage uninsured motorists from getting legal. "That was one of the big problems before 103," says Harvey Rosenfield, the measure's author and the founder of Santa Monica-based ConsumerWatchdog.org. "California had absolutely no regulation, and you could be surcharged if you didn't have insurance before." (Is Rosenfield girding for battle over the Continuous Coverage Act? That's like asking whether a lawyer knows the fastest way to the courthouse.)Nothing in Proposition 103 prevents insurers from giving discounts to their own customers based on the length of time they've remained loyal to the same company. But the insurance department ruled that to offer discounts based on continuous coverage by other companies was in effect the same as imposing a surcharge on all those without such "persistency," to use the industry term. Consequently, the agency outlawed that kind of discount.In the two decades since the enactment of Proposition 103, California insurers have mounted a persistent effort to chip away at the measure. They've gone to court, showered the odd insurance commissioner with campaign contributions and tried to push revisions through the Legislature.That in itself should give voters pause, because Proposition 103 is one of the most successful ballot measures ever. From its enactment in 1988 through 2005, according to the Washington-based Consumer Federation of America, auto insurance in California dropped from the third-costliest in the nation to 18th. Average premiums, which had been 30% higher than the national average, declined to dead even.Nor did this measure deprive auto insurers of reasonable profits -- the profit margin of California insurers from 1997 to 2006 was 10.1%. That ranked 17th in the nation, according to the federation, which got its data from the National Assn. of Insurance Commissioners.No one's been more determined to rewrite Proposition 103 than Mercury and its founder and chairman, George Joseph. The 87-year-old Joseph is known for detesting Proposition 103, and for not being reluctant to spend millions of dollars to rewrite it. When it comes to Proposition 103, in fact, he's sort of an antimatter Harvey Rosenfield.One of his specific targets is the ban on no-prior-insurance surcharges. It shouldn't surprise anyone that bills allowing insurers to give persistency discounts got passed in 2002 and 2003 by Mercury's wholly owned subsidiary, the California Legislature.(State figures show that Mercury made campaign contributions to 70 of the 120 state legislators in 2001-02, and to 91 of them in 2003-04. Incidentally, when Proposition 89, which would have tightened limits on big-money contributions to political candidates and initiative campaigns, appeared on the 2006 ballot, Joseph spent $100,000 to defeat it. I wonder why. Anyway, it lost.)Then-Gov. Gray Davis vetoed the discount bill in 2002. But the next year, when he was fighting for his political life in the recall election, he signed the measure. Mercury donated at least $175,000 to his campaign that year.A state court of appeal threw the statute out in 2005 on the grounds that it undercut Proposition 103.As the court took pains to observe, in actuarial terms a discount offered to one group is functionally identical to surcharging everyone not in that group. In other words, if you're offering a discount to customers who have kept up their insurance with any carrier, you're in effect surcharging anyone who is either a new customer or has had a break in coverage -- such as those who temporarily dropped their coverage because they couldn't afford it, or who had injuries that kept them from driving for a few months.That's important, because the most common argument you're going to hear in favor of the new initiative (which is almost identical to the 2003 bill) is that it's not about surcharging anyone, it's about "expanding" a "discount." "We're going to give customers an option they don't have," says Jim Conran, a former state consumer affairs official under Republican Gov. Pete Wilson who is co-chairing the initiative campaign.You'll also hear that the initiative will make the California insurance market more competitive. It's not clear what the measure's backers mean by this, since the Consumer Federation's data show the California market to be the fourth most competitive in the nation. Anyway, one should wonder why Mercury, which is already one of the leading insurers in the state, would spend heavily to make its home market more competitive. I'm inclined to think the company has something else on its mind, and I'd bet that giving customers a break isn't it. Forewarned is forearmed: Hang on to your wallets.Michael Hiltzik's column appears Mondays and Thursdays. Reach him at [email protected], read previous columns at www.latimes.com/hiltzik and follow @latimeshiltzik on Twitter.

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Continuity Control Rolls Out Automated Compliance Software March 06, 2013 • Reprints Continuity Control, a New Haven, Conn.-based compliance company, has announced the availability of an automated compliance management system aimed at small and mid-sized credit unions and designed to offer continually updated information about evolving regulations from the NCUA. “This will reduce the costs and the time involved with compliance,” said Andy Greenawalt, Continuity Control CEO. “It’s designed to be the least effort way to stay fully compliant,” said Greenawalt, who elaborated that at the company’s smaller credit unions clients – in the $15 million in assets range – it typically is the CEO who uses the tool. “We designed it with the time constraints of the staff in mind,” said Greenawalt. “What before would have taken hours usually can be done with our tool in minutes.” Exactly what the software does is track NCUA regulations and then translates changes into deliverables that each credit union has to meet, said Greenawalt. When a credit union executive has questions about regulations, they also can pick up the phone and call a Regulation Adviser for a one on one conversation. Online chat also is available. Neither involves extra charges, said Greenawalt, who indicated that the platform is priced in accordance with an institution’s assets. Annual fees range from around $10,000 to $25,000, said Greenawalt. Customers range from $15 million in assets up to $250 million. Continuity Control has 35 customers, he added. Greenawalt said that the advantage of his automated service versus the compliance officer on call services offered by an increasing number of leagues is that – because his is automated and computer based – he can keep the costs down to a range where smaller credit unions can afford the service. Catherine Davis, executive vice president at $67 million New Dimensions Federal Credit Union in Waterville, Maine, said that using the tool has let the institution stay compliant without having to add staff. Davis said she personally is the one who most commonly uses the platform inside her credit union. “It’s simplified our compliance. It keeps us on track,” said Davis. « Prev

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Rick Webb Retiring After 40-Plus Years at Atlantic Financial FCU March 08, 2013 • Reprints Rick Webb has announced his retirement as president/CEO of the $98 million Atlantic Financial Federal Credit Union in Hunt Valley, Md., ending a career of more than 40 years with the Baltimore-area credit union. Webb held the 11,000-member AFFCU’s top job for the past 19 years and prior to that had served for 23 years as a volunteer, including as board chair, when he was named CEO in 1993. Webb has been active in industry affairs, including with the Maryland & DC Credit Union Association, and under his management the credit union executed six mergers, built a new headquarters and added more than 150 SEGs, including Transamerica Life. “The credit union exists only to serve its members, who are also the owners of a credit union. I hope that I have served every member, whether directly or through my actions, as well as an owner would expect,” Webb said in the credit union’s announcement of his retirement. AFFCU’s Board of Directors and its search committee are now seeking a new CEO. AFFCU has offices in Hunt Valley and Baltimore’s Inner Harbor. Webb originally joined what then was Baltimore Telephone Federal Credit Union as a member through his employment at C&P Telephone Co./Bell Atlantic. « Prev

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What's New · What's Next · Site Map · A-Z Index · FAQs · Careers · RSS > 2006 Speeches Governor Susan Schmidt Bies At the Banking Institute, Charlotte, North Carolina An Update on Regulatory Issues Thank you for the invitation to speak here at the Banking Institute. I want to discuss with you today some recent and ongoing regulatory issues that are likely of interest to this audience. These issues include efforts to enhance our regulatory capital regime, compliance risk management, and consumer protection. Proposed Revisions to Regulatory Capital RegimeFirst of all, you probably heard the good news yesterday that the Federal Reserve Board reviewed and in an open Board meeting approved a draft of the interagency notice of proposed rulemaking (NPR) on the Basel II capital framework. The draft NPR was made available on the Board's website as well as some statements made at the public meeting. The final NPR is expected to be issued in the Federal Register once all of the U.S. banking agencies have completed their review and approval processes, at which time it will then be "officially" out for comment. We are very pleased that the substantial time spent on this effort has culminated in this agreement among the agencies. We also recognize the significance of this development to the industry, the Congress, and others who have waited for greater specificity on the proposed revisions. We look forward to comments on the NPR; they will be an important contribution to the assessment of Basel II objectives and implementation of the framework. In some areas, the agencies are still grappling with what the correct approach is. For this reason, the NPR contains a number of requests for feedback on specific topics. All of this will help us as we continue to develop the framework. But before commenting further on the NPR and the U.S. Basel II process, I would like to reiterate our rationale for pursuing Basel II. Reasons for Pursuing Basel IIThe current Basel I capital framework, adopted nearly twenty years ago, has served us well, but has become increasingly inadequate for large, internationally active banks that are offering ever-more complex and sophisticated products and services. We need a revised capital framework for these large, internationally active banks, and we believe that Basel II is such a framework. One of the major improvements in Basel II is the closer linking of capital requirements and risk. The current Basel I measures are not very risk-sensitive and do not provide bankers, supervisors, or the marketplace with meaningful measures of risk at large, complex organizations. Under Basel I, it is possible for two banks with dramatically different risk profiles in their commercial loan portfolio to have the same regulatory capital requirement, and a bank's capital requirement does not reflect deterioration in asset quality. In addition, the balance-sheet focus of Basel I does not adequately capture risks of certain off-balance-sheet transactions and fee-based activity--for example, the operational risk embedded in many of the services from which many large U.S. institutions generate a good portion of their revenues. In addition to enhancing the meaningfulness of regulatory capital measures, Basel II should make the financial system safer by substantially improving risk management at banks. Basel II builds on the risk-management approaches of well-managed banks and creates incentives for banks to move toward leading risk-measurement and risk-management practices. By providing a consistent framework for all banks to use, supervisors will more readily be able to identify portfolios and banks whose risk management and risk levels are significantly different from the range seen in other banks. By communicating these differences to banks, management will be able to benchmark their risk assessments, models, and processes in a more detailed and regular manner. We have already seen some progress in risk management at many institutions in the United States and around the globe as a result of preparations for Basel II. The new framework is also much more consistent with the internal capital measures that institutions use to manage their business. Basel II can also provide supervisors with a more conceptually consistent and more transparent framework for assessing the link between risk and capital over time at our most complex institutions; identifying which institutions have deficiencies; and evaluating systemic risk in the banking system through credit cycles. Therefore, Basel II establishes a more coherent relationship between how supervisors assess regulatory capital and how they supervise the banks, enabling examiners to better evaluate whether banks are holding prudent capital levels, given their risk profiles, and to better understand differences among institutions. As a central bank and supervisor of banks, bank holdings companies, and financial holding companies, the Federal Reserve is committed to ensuring that the Basel II framework delivers a strong and risk-sensitive base of capital. That is why we support safeguards to ensure strong capital levels during the transition to Basel II, and will remain vigilant in monitoring Basel II's impact on an ongoing basis. This means that during and after the transition to Basel II, supervisors will rely upon ongoing, detailed analysis to continuously evaluate the results of the new framework and ensure prudent levels of capital. To be quite clear, the Federal Reserve believes that strong capital is critical to the health of our banking system and we believe that Basel II will help us continue to ensure that U.S. banks maintain capital levels that serve as an appropriate cushion against risk-taking. As we have mentioned before, we will continue to use existing prudential measures to complement Basel II. For example, the current leverage ratio requirement--a ratio of capital to total assets--will remain unchanged for all banks, whether or not they are subject to the Basel II framework. Also, supervisors will continue to enforce existing prompt-corrective-action rules in response to declines in capital. Both the leverage ratio and prompt-corrective-action are fully consistent with Basel II. Basel II NPRI will not try to summarize the NPR here today. We want all of you to read it and come to your own judgments. I would, however, like to highlight a few key points. As you know, the U.S. Basel II NPR is based on the 2004 framework issued by the Basel Committee and adheres to the main elements of that framework. But the U.S. agencies, just as their counterparts in other countries, have exercised national discretion and tailored the Basel II framework to fit the U.S. banking system and U.S. financial environment. For example, the U.S. agencies continue to propose that we implement only the advanced approaches of Basel II, namely the advanced internal-ratings-based approach (AIRB) for credit risk and the advanced measurement approaches (AMA) for operational risk. The U.S. agencies also included in the NPR a timetable and set of transition safeguards that are more rigorous than those set forth in the 2004 Basel II framework. For instance, the U.S. agencies are proposing three transition floors, below which minimum required capital under Basel II will not be permitted to fall, relative to the general risk-based capital rules. The first transition period would have a floor of 95 percent, the second 90 percent, and the third 85 percent. Part of the justification for implementing more rigorous floors stemmed from the lessons we learned from the fourth quantitative impact study (QIS4) conducted in the United States in 2004. As I have said before, QIS4 was not intended to reflect the ultimate impact of Basel II on U.S. institutions--particularly since it was not based on a complete proposal and bank inputs to QIS4 were not based on fully developed systems or full supervisory guidance. Rather, it was conducted on a "best-efforts basis" to provide a snapshot for gauging progress toward implementation of Basel II and to give the U.S. agencies a better sense of how to structure the NPR. One of the key areas in the NPR influenced by QIS4 pertains to banks' estimates of loss given default (LGD). QIS4 results showed that, in general, data histories were not long enough to capture weaker parts of the economic cycle, especially for LGDs, which must reflect downturn conditions. As a result, the agencies have provided a supervisory mapping function for those institutions unable to estimate downturn LGDs. The mapping function takes average LGDs and "stresses" them to generate an input to the capital calculation that is better suited to the Basel II formulas and produces a more appropriate capital requirement. The Federal Reserve believes this supervisory mapping function is a necessary component of Basel II because it appears difficult for some banks to produce internal estimates of LGD that are sufficient for risk-based capital purposes. I hope it is clear from the NPR and other statements made by the agencies that we are committed to ongoing, detailed analysis to ensure that U.S. implementation of Basel II achieves a strong and risk-sensitive base of minimum regulatory capital. We need to ensure that the items we identified as incomplete in QIS4 are appropriately addressed, and we also need to ensure that additional areas will not inadvertently lower capital levels. We intend to conduct thorough analysis of each institution's Basel II capital results and the impact on aggregate capital in the U.S. banking system at many stages along the way. In addition, the U.S. regulators are united in their belief that no bank should be permitted to operate under Basel II until it has proven itself ready to do so. There will be no "free pass" or "safe harbor" for any institution, regardless of portfolio composition or business activity. In other words, we plan to have very high standards for Basel II qualification requirements. For instance, a bank will be able to move from the parallel run to live capital calculations with a 95 percent floor only after its primary supervisor has given it permission to do so after having thoroughly evaluated its risk-management methodologies and its ability to calculate minimum regulatory capital using the new framework. Similarly, a bank will need approval to move to each of the other two floor levels. After the third floor period, a bank will be allowed to move to the full Basel II minimum capital calculation without floors upon a finding by the primary supervisor that it is ready, following a rigorous qualification process. Proposed Amendments to Basel IBefore I end my remarks about regulatory capital, I would like to offer some thoughts about ongoing efforts to revise existing regulatory capital rules, known as Basel I. First of all, we expect only one or two dozen banks to move to Basel II in the near term. The vast majority of U.S. banks would be able to continue operating safely and profitably under Basel I as amended through the rulemaking process. The Basel I framework has already been amended more than twenty-five times in response to changes in the banking environment and a better understanding of the risks of individual products and services. The agencies believe that now is another appropriate time to amend the Basel I rules. Concerns have been raised about potential competitive inequities between Basel II banks and Basel I banks. We take these concerns seriously and sought input from the industry and other interested parties in the Basel I ANPR process. In an effort to mitigate those concerns, regulators have proposed changes to enhance the risk sensitivity of U.S. Basel I rules and remain vigilant about potential competitive distortions that might be created by introducing Basel II. We are also mindful that amendments to Basel I should not be too complex or too burdensome for the multitude of smaller banks to which the revised rules will apply. Additionally, we recognize the need for full transparency about Basel II proposals and proposed Basel I amendments. For that reason, we expect to have overlapping comment periods for both the Basel II NPR and the proposed Basel I amendments. The intent is to allow banks and others to review both NPRs before both sets of rules are finalized. In that way, bankers from potential opt-in institutions and those not planning to move to Basel II can evaluate the potential impact of Basel II in light of the proposed Basel I amendments. In fact, we want all interested parties to compare, contrast, and comment on the two proposals in overlapping timeframes. At this point, we are still reviewing the comments received on the ANPR for amendments to Basel I. The comment period ended in mid-January. The agencies are developing their proposals for Basel I amendments, based on comments received, and hope to have a Basel I NPR by summer. Finally, I would like to underscore that both regulatory capital proposals being worked on by the U.S. agencies are just that--proposals. The U.S. agencies welcome any and all comments on these documents. Accordingly, our proposals could change based on comments received or new information gathered by the U.S. agencies. We know that at times this posture can be frustrating to some, but given the breadth and depth of these proposals, it is critical that we consider all viewpoints. This is especially true for the Basel II proposal, which represents a substantial and complex change in bank supervision and regulation. In this respect, I would like to echo the comments made earlier this month by Comptroller John Dugan: if the U.S. agencies see that Basel II is not accurately reflecting risk or is producing unacceptable capital levels, we will seek to make changes. Indeed, we expect to make some adjustments as we move forward, just as changes have been made to Basel I over the years to reflect changes in bank practice and improvements in supervision. Compliance-Risk ManagementWhile the release of the Basel II NPR is indeed a major step forward, it is of course not the only topic worth addressing here today. Accordingly, I would now like to turn to another area the financial sector and regulators are focused on: compliance-risk management. "Compliance-risk" can be defined as the risk of legal or regulatory sanctions, financial loss, or damage to an organization's reputation and franchise value. This type of risk may result when an organization fails to comply with the laws, regulations, or standards or codes of conduct that are applicable to its business activities and functions. The Federal Reserve expects each banking organization to have a compliance culture in place across the whole institution and an infrastructure that can identify and control the compliance risks it faces, along with appropriate rewards and penalties for business managers who oversee the compliance risk. To create appropriate compliance-risk controls, organizations must first understand risks across the entire entity. Managers should be expected to evaluate the risks and controls within their scope of authority at least annually. I also emphasize the need for the board of directors and senior management to ensure that staff members throughout their organizations understand the compliance objectives and each member's role in implementing the compliance program. An enterprise-wide compliance-risk management program should be dynamic and proactive, meaning it constantly assesses evolving risks when new business lines or activities are added or when existing activities are altered. To avoid having a program that operates on "autopilot," an organization must continuously reassess its risks and controls and train employees to effectively implement those controls. An integrated approach to compliance-risk management can be particularly effective for Bank Secrecy Act and anti-money-laundering (BSA/AML) compliance. Often, the identification of a BSA/AML risk or deficiency in one business activity can indicate potential problems or concerns in other activities across the organization. Controlling BSA/AML risk continues to be a primary concern for banking organizations. We recognize the commitment that organizations have made to compliance with BSA/AML requirements, and, in return, we continue to work to ensure that obligations in this area are clearly communicated to banking organizations and examiners alike. The Federal Reserve strives to provide clear and comprehensive guidance that directly communicates our expectations to the institutions we supervise, so that institutions do not need to rely on, for example, their own interpretations of public enforcement cases, which are not intended to serve as industry-wide compliance guidance. The Federal Financial Institutions Examination Council (FFIEC) BSA/AML Examination Manual issued last year is one example of our interagency efforts to clearly communicate our expectations. The FFIEC BSA/AML Examination Manual reflects a common view of the federal banking agencies and the Treasury Department's Financial Crimes Enforcement Network (FinCEN) with regard to BSA/AML compliance expectations. The agencies universally stress that the purpose of a BSA/AML examination is to assess the overall adequacy of a banking organization's BSA/AML controls, in view of that particular organization's lines of business and customer mix. This is critical to ensuring that resulting controls are risk-based, so that resources are directed appropriately. We also are working closely with our Treasury and law enforcement counterparts to disseminate information about perceived money-laundering or terrorist-financing threats. By identifying emerging vulnerabilities, we can better collaborate with banking organizations to develop systems and procedures to combat criminals' abuse of the financial sector. For example, the interagency Money Laundering Threat Assessment (4.1MB PDF) is one step we have taken--with fifteen other U.S. government bureaus, offices and agencies, including law enforcement--to identify significant concerns and communicate them to banking organizations.1 Consumer ProtectionThe Federal Reserve also cares greatly about consumer protection, as should bankers when they are assembling a broad risk-management strategy. Bankers need to be especially alert to developing easily understood disclosures as they introduce more innovative and complex products that can be confusing to consumers. As you may know, the U.S. banking agencies recently issued proposed guidance on nontraditional mortgages. The comment period for this interagency proposal closed on March 29, so we are now in the process of reviewing comments and determining how to proceed. Nontraditional mortgages allow borrowers to defer payment of principal and, sometimes, interest. While the proposed guidance focuses on banks' ability to adequately identify, measure, monitor, and control the risk associated with these products, it also addresses consumer protection. Nontraditional mortgages, including "interest-only" mortgages and "payment-option" adjustable-rate mortgages, have been available for many years, and are beneficial for some borrowers because of the payment flexibility they offer. Although these products were initially designed for higher-income borrowers, today these products are being offered to a wider spectrum of consumers, including borrowers for whom these types of mortgages may be ill-suited. Moreover, institutions are combining these nontraditional loans with other practices, such as reduced documentation of income and assets in evaluating applicants' creditworthiness. Many borrowers may not fully recognize the risks of nontraditional mortgages, particularly "payment shock" when the loan's interest rate increases, or when the consumer is required to make fully amortizing payments. Negative amortization coupled with flattening, or even lower, housing prices could make it difficult for some borrowers to refinance or sell the property to avoid payment shock. In addition to ensuring that institutions comply with the Truth in Lending Act and other applicable laws, the draft guidance urges institutions to ensure that their advertisements, promotional materials, and oral communications are consistent with the product terms and that these communications provide clear, balanced, and timely information about the risks. This is important so that consumers have the information they need at critical decision times, such as when selecting a loan product or choosing a specific payment option each month. The Board's Truth in Lending regulations require creditors to provide consumers with disclosures about the loan terms, including a schedule of payments. For interest-only and payment option ARMs, the payment schedule shows consumers how their payments will increase to include amortization of the principal. The proposed interagency guidance describes how institutions can use their promotional materials to provide better information about the features and risks of these products, especially the risk of payment shock. For example, the guidance recommends that institutions' promotional materials inform consumers about the maximum monthly payment they could be required to pay once interest-rate caps and negative-amortization caps have been reached. The proposed guidance also lists recommended practices to address other risks. When negative amortization is possible, the guidance suggests that institutions alert consumers about the consequences of increasing principal balances and decreasing home equity. If both reduced-documentation and full-documentation loan programs are offered, the draft guidance advises institutions to inform consumers if they will pay a pricing premium for the reduced-documentation loan. When institutions provide monthly statements with payment options, they are urged to include on the statement information that enables borrowers to make responsible choices, by explaining each payment option and the impact of each choice. In addition to the draft nontraditional mortgages, the Federal Reserve Board plans to hold several public hearings this summer on home-equity lending. These hearings are a first step to a broader review of mortgage disclosure rules. One of the issues that will be explored at the hearings is likely to be the adequacy of the existing disclosures for nontraditional mortgages, such as interest-only loans and payment-option ARMs, as well as forty-year mortgages and reverse mortgages. The hearings also likely will address issues related to predatory lending and market developments since 2002, when the Board last revised its rules for higher-priced loans under the Home Ownership and Equity Protection Act (HOEPA). Concerns about predatory lending continue to be raised, and the hearings could explore the impact of the HOEPA rule changes on abusive lending practices as well as on the availability of subprime credit. ConclusionIn carrying out its role as central bank and banking supervisor, the Federal Reserve must continue to ensure that banking institutions operate in a safe and sound manner with a strong capital base. For large, internationally active U.S. organizations, the Federal Reserve believes that the current regulatory capital regime is insufficient. The Basel II framework, we believe, provides more risk sensitivity and a much better link between capital and risk--especially for complex products, services and processes--promotes advanced risk management practices and improves transparency to supervisors, bankers, and markets about the nature of risk exposures and risk management. Beyond our work on regulatory capital, we encourage institutions to focus on overall improvements in risk management, of which compliance-risk management is an important element. One key message is to continue to make sure the compliance process reflects the changing product and customer mix of the financial institution. Another is that as institutions provide more complex products with features that are not as familiar to the customer, the organization must also improve the clarity of its communications with customers. Footnotes 1. U.S. Money Laundering Threat Assessment Released. Return to text Return to top 2006 Speeches Last update: March 31, 2006 Home | News & Events

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Miriam Marcus CIT Defensive About Moody's Downgrade CIT is outlining its comeback strategy in light of a Moody’s downgrade. Amid the mounting criticism of the credit-rating agencies and their roles in the subprime crisis, Moody’s was forced to deal with grumbling from one of the companies it rates on Friday. Finance company CIT took issue with a downgrading on Thursday, saying Moody’s just didn’t appreciate what it had done to improve its financial position. “We disagree with the ratings actions that Moody’s has taken, particularly in light of the significant progress we have made to strengthen our balance sheet, improve liquidity and position CIT for long-term success and profitability,” the company said in a public rebuke on Friday. It is unusual for a company to criticize a rating agency. Investors, however seemed to take Moody’s side: CIT shares dropped 94 cents, or 8.6%, to close at $9.99 in Friday trading. Moody’s cut New York City-based CIT’s senior unsecured rating one notch to Baa1 from A3, attributing the move to the challenging market conditions over the last past year as a result of the credit crunch emanating from the United States subprime crisis. CIT has been hit especially hard in its home lending division and faced mounting losses from rising defaults in that portfolio. The company provides various forms of finance. Its shares have fallen from more than $60 a year ago. The downgrade was made because the potential magnitude of losses in the home lending portfolio are uncertain and could hamper CIT’s ability for “re-establishing solid footing in the credit markets,” Moody’s said. The downgrade could make it more expensive for CIT to borrow money as the company struggles to pay back $14.0 billion of debt this year resulting from the credit crunch. But CIT insists it has been making “significant progress” in strengthening its balance sheet and improving its liquidity, and that those efforts will ensure profitability for the company. Over the past 60 days, CIT has raised $1.6 billion in new capital and sold more than $2.0 billion of assets at near-book value. The company also plans to continue other initiatives, including the previously announced sale of discrete business units and asset portfolios. CIT is looking at selling off its rail car leasing operations, one of its main businesses, to help pay off debt. Moody’s agreed that CIT’s recent efforts should improve the firm’s capital base, helping its position in the long term, and that it has enough sources of funding to meet its needs for the next 12 months. Hopefully for CIT, investors will share the optimism as they did in April when, after steep dividend cuts and losses in the company’s home- and consumer-lending divisions, seemingly unfazed shareholders were happy to bid up the stock on hopes for a future focused on the firm’s commercial finance business. Sameer Gokhale, an analyst at Keefe Bruyette & Woods, told Forbes.com then that investors saw management doing the right thing to get them back on track. “It’ll be slow and painful,” he said, “but they’re moving in the right direction.” (See CIT Focuses On Finance) Recent and planned asset sales should provide CIT with enough liquidity for all of 2009–a big plus in a time when funding is hard to come by. Gokhale explained that “the company is saying they want to be smaller and more focused on its commercial finance business, and that appeal to a lot of investors. The balance sheet will be smaller, but with greater predictability.” The Associated Press and Reuters contributed to this article.

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Gabelli Utility Trust Continues Monthly Distributions, Declaring Distributions of $0.05 Per Share Published: Nov 21, 2013 9:45 a.m. ET RYE, N.Y., Nov 21, 2013 (BUSINESS WIRE) -- The Board of Trustees of The Gabelli Utility Trust GUT, +0.15% (the "Fund") approved the continuation of its policy of paying fixed monthly cash distributions. The Board of Trustees declared cash distributions of $0.05 per share for each of January, February, and March 2014. The distribution for January 2014 will be payable on January 24, 2014 to common shareholders of record on January 17, 2014. The distribution for February 2014 will be payable on February 21, 2014 to common shareholders of record on February 14, 2014. The distribution for March 2014 will be payable on March 24, 2014 to common shareholders of record on March 17, 2014. Each quarter, the Board of Trustees reviews the amount of any potential distribution from the income, realized capital gain, or capital available. The Board of Trustees will continue to monitor the Fund's distribution level, taking into consideration the Fund's net asset value and the financial market environment. If necessary, the Fund will pay an adjusting distribution in December which includes any additional income and net realized capital gains in excess of the monthly distributions for that year to satisfy the minimum distribution requirements of the Internal Revenue Code for regulated investment companies. The Fund's distribution policy is subject to modification by the Board of Trustees at any time, and there can be no guarantee that the policy will continue. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund. The Gabelli Utility Trust has paid a distribution to shareholders every month since October 1999. The Fund's shares are currently trading at a premium to net asset value. The Board of Trustees believes that the premium at which the Fund shares trade relative to net asset value is not likely to be sustainable. Shareholders participating in the Fund's dividend reinvestment plan should note that at the current market price, the reinvestment of distributions occurs at a premium to net asset value. All or part of the distribution may be treated as long-term capital gain or qualified dividend income (or a combination of both) for individuals, each subject to the maximum federal income tax rate, which is currently 20% in taxable accounts for individuals. In addition, for taxable years beginning on or after January 1, 2013, certain U.S. shareholders who are individuals, estates or trusts and whose income exceeds certain thresholds will be required to pay a 3.8% Medicare tax on their "net investment income", which includes dividends received from the Fund and capital gains from the sale or other disposition of shares of the Fund. If the Fund does not generate sufficient earnings (dividends and interest income and realized net capital gain) equal to or in excess of the aggregate distributions paid by the Fund in a given year, then the amount distributed in excess of the Fund's earnings would be deemed a return of capital. Since this would be considered a return of a portion of a shareholder's original investment, it is generally not taxable and is treated as a reduction in the shareholder's cost basis. Under federal tax regulations, some or all of the return of capital distributed by the Fund may be taxable as ordinary income in certain circumstances. This may occur when the Fund has a capital loss carry forward, net capital gains are realized in a fiscal year, and distributions are made in excess of investment company taxable income. Long-term capital gains, qualified dividend income, ordinary income, and return of capital, if any, will be allocated on a pro-rata basis to all distributions to common shareholders for the year. Based on the accounting records of the Fund as of November 15, 2013, each of the distributions paid to common shareholders in 2013 would include approximately 18% from net investment income, 11% from net capital gains and 71% would be a return of capital on a book basis. The estimated components of each distribution are updated and provided to shareholders of record in a notice accompanying the distribution and are available on our website (www.gabelli.com). The final determination of the sources of all distributions in 2013 will be made after year end and can vary from the monthly estimates. All shareholders with taxable accounts will receive written notification regarding the components and tax treatment for all 2013 distributions in early 2014 via Form 1099-DIV. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. More information regarding the Fund's distribution policy and other information about the Fund is available by calling 800-GABELLI (800-422-3554) or visiting www.gabelli.com. The Gabelli Utility Trust is a non-diversified, closed-end management investment company with $295 million in total net assets whose primary investment objective is to seek long-term growth of capital and income by investing primarily in utility companies involved in the generation and distribution of electricity, gas, and water. The Investment Adviser is a subsidiary of GAMCO Investors, Inc. GBL, +0.80% which is a publicly traded NYSE listed company. SOURCE: The Gabelli Utility Trust The Gabelli Utility Trust David Schachter, 914-921-5070 Copyright Business Wire 2013 Gabelli Utility Trust U.S.: NYSE: GUT GAMCO Investors Inc. Cl A U.S.: NYSE: GBL

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What you need to know about the Bank of Japan and negative interest rates William Watts Kuroda’s move was unexpected AFP/Getty Images Bank of Japan Gov. Haruhiko Kuroda WilliamWatts Deputy markets editor The Bank of Japan brought the thunder Friday, shocking investors and economists after it pushed a key interest rate into negative territory in its latest attempt to reinflate the country’s economy. Here’s what you need to know about negative rates and the Bank of Japan: The rate cut The Bank of Japan announced it had cut the rate on excess reserves to minus 0.1%, meaning institutions will have to pay the central bank for the privilege of parking reserves that exceed those required by regulators. The rate on most existing reserves, however, remains at 0.1%, while the rate for required reserves was cut to zero (see chart below). Unlike the single negative rate applied to deposits parked at the European Central Bank, the Japanese move is similar to tiered measures put in place by the Swiss National Bank, which punishes sight deposits, or commercial bank assets, of more than 320 billion Swiss francs ($312.5 billion) with a fee of 0.75%. Bank of Japan Why would it do that? The move does speak to a certain degree of desperation. There appear to be a number of reasons for the move. The most pressing is the fact that the Bank of Japan continues to struggle to achieve its goal of pushing inflation back up to 2%—considered a healthy level for most economies. The central bank on Friday further pushed out its timetable for achieving that goal to the first half of 2017. Read: How to brace for the next central banks surprise. Part and parcel of those concerns is the recent strength of the Japanese yen USDJPY, +0.29% While the currency has weakened sharply since late 2012 when the dollar fetched less than ¥80, it had found some renewed strength recently. Some analysts saw the ¥116 level as a possible line in the sand that might have spooked some policy makers and contributed to Friday’s decision. See: Perma-bear Marc Faber denounces BOJ move. Weak economic data and concerns that the bank’s ability to expand its already sizable asset-buying program amid liquidity concerns are also seen contributing to the move. In the wake of the BoJ’s decision Friday, the yen plummeted to its lowest level in five weeks against the dollar to ¥121.00 compared with ¥118.84 late Thursday. How do negative interest rates work? A central bank uses its deposit rate to influence how banks handle their reserves. In the case of negative rates, central banks want to dissuade lenders from parking cash with them. The hope is that they will use that money to lend to individuals and businesses, which in turn will spend the money and boost the economy and contribute to inflation. It is also aiming to force investors to shift money out of bank accounts and into higher-yielding assets. So this has been done elsewhere? The European Central Bank in June 2014 was the first major central bank to venture into negative territory followed by the Swiss National Bank in December 2014. The Danish central bank has also employed negative rates to defend its currency’s peg to the euro, while Sweden’s rates are also in negative territory. And former Federal Reserve chief Ben Bernanke has said that in the event of a serious downturn, negative interest rates are a tool that the U.S. central bank should consider. What next? Many economists see the Bank of Japan’s move as a testing of the waters. They expect the central bank to follow through with further cuts to the deposit rate, perhaps approaching the negative 0.75% rate in place in Switzerland. What does it mean for other central banks? The term “currency wars” is getting thrown around a lot this morning. The move has significantly raised expectations the European Central Bank will follow through in March with a further cut in its deposit rate and expansion of its own asset-buying program. European money market rates are pricing in a more than 100% likelihood of a 10-basis-point March cut by the ECB and an almost 100% likelihood of a cumulative 20-basis-point cut by year-end, noted analysts at Barclays. Read: A lesson for the Fed in the Bank of Japan’s move. Then there is the Fed. The move raises questions about the central bank’s ability to further raise interest rates in the face of a rising dollar, which highlights the widening divergence of global monetary policy. More from MarketWatch William Watts is MarketWatch's deputy markets editor, based in New York. Follow him on Twitter @wlwatts.

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Talbots cuts outlook again, shares skid HINGHAM — The Talbots Inc. on Tuesday lowered its guidance for the fourth quarter and fiscal year after a weak holiday season. The guidance, coming after disappointing outlook a month ago, sent shares down 24 percent in pre-market trading to $5.70. The cut is the latest sign that Talbots' plan to regain customers it lost during the recession — by revamping merchandise and investing in advertising — is failing to take hold. Talbots and other "missy" retailers — clothing sellers that target women around their 40s — were among the hardest hit during the recession. In an effort to improve results, Talbots last year pulled off a complex deal that let it reduce its debt and buy out its largest shareholder, Japanese retail company Aeon (U.S.A.) Inc., which held a 54 percent stake. The company, based in Hingham, Mass., also invested in a splashy advertising campaign that featured model Linda Evangelista. But Talbots said that while it had "solid" sales during the busy shopping weekend after Thanksgiving, sales deteriorated in the last two weeks of December into January, despite aggressive markdowns by the retailer. Talbots blamed weaker than expected customer response to new merchandise, high levels of markdowns in the sector and weather. Revenue in the fourth-quarter is down 7 percent compared to a year ago, Talbots said. The company now expects an adjusted loss for the quarter of 15 cents to 19 cents per share versus prior guidance for earnings of 5 cents per share to a loss of 3 cents per share. The latest projection is much worse than the loss of 2 cents per share analysts expect. For the year, Talbots now expects earnings of 56 cents to 60 cents per share versus prior guidance of 70 cents to 78 cents per share, excluding one-time items. Analysts expect earnings of 73 cents per share.

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| Sun Mar 27, 2011 9:38am EDT Related: Brazil Private funds still scarce in Brazil infrastructure | By Brian Winter Passengers walk after landing at Guarulhos Airport in Sao Paulo, in this March 4, 2011 file photo. Reuters/Nacho Doce SAO PAULO Construction projects related to Brazil's World Cup, already well behind schedule, have run into another unexpected problem -- financing.Of the $14 billion that Brazil plans to spend on airports and other projects directly related to the Cup, more than 98.5 percent of the funds will likely come from public-sector sources, according to a report by the Tribunal de Contas da Uniao, the official accountability arm of the Brazilian government.That wasn't always the plan. Ricardo Teixeira, the head of the official host committee, said as recently as 2009 that a majority of the funds should come from the private sector, according to media reports at the time.Other infrastructure projects not related to the World Cup have fared better, especially in the booming oil and gas sector. However, in riskier areas such as airports, seaports and railroads, some say the Brazilian government has yet to create guarantees and make regulatory changes that would attract more private capital. "In some areas, concrete opportunities just haven't been structured for the private sector to invest," said Jean-Marc Etlin, executive vice president at Itau BBA, a Brazilian investment bank.In Brasilia, officials say they are likely to continue to depend heavily on financing from the state-run BNDES development bank and other public-sector sources to build dams, highways and other big-ticket projects."We just don't see the conditions for a greater participation of the private sector at this time," said Mauricio Muniz, a Planning Ministry official overseeing infrastructure projects. The big barrier, from the private sector's perspective: BNDES is able to offer subsidized long-term loans at far lower interest rates than Brazilian banks. The benchmark lending rate in Brazil is 11.75 percent, one of the world's highest among major countries, and is likely to rise further this year.Meanwhile, long-term financing is still a relatively new concept in a country where inflation was running at 2,500 percent fewer than two decades ago. BNDES President Luciano Coutinho has called the bank Brazil's "only long-term lender." The BNDES's rapid expansion has stirred some concerns. It loaned more than $96 billion in 2010, three times more than the World Bank. Some economists say the rapid credit growth helped push inflation to a six-year high last year.Coutinho himself has spoken of the need to scale down the BNDES's operations over time to allow private banks more room. Yet the bank's delinquency rate is an extremely low 0.15 percent, and many of its private-sector counterparts praise its lending standards and overall credit-worthiness."Their monitoring of projects is extremely well done," said Cassio Schmitt, who works on project finance for Banco Santander (SANB11.SA) in Sao Paulo. He said the BNDES should eventually finance a smaller percentage of projects in Brazil, "but that reduction needs to be done very gradually."(Editing by Claudia Parsons)

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Sify.comFinanceDefaultSubbarao grilled over busting of Saradha Subbarao grilled over busting of Saradha Source : By : BS Reporter Last Updated: Sat, May 25, 2013 05:43 hrs Reserve Bank of India (RBI) governor D Subbarao on Friday faced tough questions from a Parliament panel over the busting of the Saradha Group, which left investors high and dry. He was asked why no action was taken against the company when it had been offering fancy rates of returns. Members of Parliament's standing committee on finance asked Subbarao how so many chit fund companies were operating, as no further licence had been given since 1997, those in the know said.Kabali review: Rajini carries film on his shoulders Bharatiya Janata Party leader Ravi Shankar Prasad and the Communist Party of India MP Gurudas Dasgupta wanted to know why the regulatory framework to control chit fund companies was not working and why there was a proliferation of laws in this sphere. The RBI Governor will have to answer to all these questions, they said. The governor was told that there is no plan of action on monitoring these companies. Before coming out with some kind of law to monitor chit fund companies, there should first be a mechanism for that, he was told. The members also criticised the Centre and the West Bengal government for lack of coordination. It was not clear as to whose responsibility it was to monitor these companies, members said. They said while small investors invested in these companies, they did not have any clue about who to approach with their grievances. BJP leader and committee chairman Yashwant Sinha will write a letter to Finance Minister P Chidambaram to come out with a framework on chit fund companies, those in know of the development said. Earlier, the department of financial services had proposed amending the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 to make inducement to persons for joining multi-level marketing, pyramid, ponzi or collective investment schemes an offence to plug loopholes in money churning activities of companies. The department under the finance ministry proposed to insert a new section 3A in the Act through an amendment Bill for this purpose, those in the know told Business Standard. The development assumes importance as Parliament's standing committee on finance is also expected to examine the Act. Besides, the department wanted the Serious Fraud Investigation Office (SFIO) be entrusted with the powers of coordination and prosecution in schemes, which operate in many states in coordination with states. SFIO may be entrusted with the powers of collecting information and on fraudulent pyramid companies and issuing caution notices to state police authorities, the department suggested. The proposals also sought to add a new section in the Act to make it punishable with imprisonment of persons launching a collective investment scheme without the approval of the market watchdog, Securities and Exchange Board of India (Sebi). Besides Chits Act and Sebi Act, these schemes are currently covered under the RBI Act, 1934, the Companies Act, 1956, and state laws for protection of interest of depositors in the financial establishment. The Chits Act covers prize chits and money circulation schemes, but there is no specific reference to multi-level marketing schemes for goods and services in the Act.

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Geithner sees U.S. economy strengthening gradually Associated PressFriday, January 25, 2013 3:30am WASHINGTON — Outgoing Treasury Secretary Timothy Geithner thinks the U.S. economy will strengthen this year — as long as Congress avoids cutting spending too deeply in a budget deal and Europe's economy gradually improves. Related News/Archive U.S. economy still on the rise, White House report finds U.S. economy grew faster in first quarter than previously thought U.K.'s Brexit vote adds uncertainty to an already shaky global economy In an interview Friday on his last day in office, Geithner, 51, told the Associated Press, "The economy is stronger than people appreciate." He said he agrees with many private forecasters that growth will accelerate this year, in part because the U.S. economy is no longer being held back by oil shocks and because Europe's debt crisis has subsided. Asked about his future, Geithner ruled out the possibility that he would return to Washington as chairman of the Federal Reserve next year, when Ben Bernanke's term ends, if asked by President Barack Obama. "There are lots of people more qualified than me," Geithner said. Obama last week nominated Jack Lew, his chief of staff and formerly the White House budget director, to succeed Geithner as Treasury secretary. Lew's nomination is expected to win quick approval in the Senate. Geithner was the last remaining original economic adviser to Obama. He served during a turbulent four years in which the administration had to confront the worst U.S. economic and financial crisis since the Great Depression of the 1930s. In a wide-ranging interview, Geithner made these other points: • A move by House leaders to postpone a deadline for raising the government's borrowing limit for nearly four months is encouraging. But it must be followed by action to remove the threat of a first-ever U.S. government default from budget talks. "It's just a simple rule of negotiating: If your threat is something that you can never carry out because default is unthinkable, then it doesn't give you any leverage," Geithner said. • A permanent solution for beleaguered mortgage giants Fannie Mae and Freddie Mac, which the government took over in 2008, might not be achieved before Obama leaves office. Geithner said it could take three to five years to reduce the dominant role the two companies play in mortgage financing to the point where their role could be handled by some new enterprise Congress might decide to create. He said that time should be used for a debate over what Fannie's and Freddie's future should be. • The Dodd-Frank Act, the sweeping financial overhaul Congress passed in 2010, won't be overturned, even though Republicans and many in the financial services industry want to weaken or kill it. Geithner said Dodd-Frank emerged from Congress "more messy and with more complexity than was necessary." But, he added, "I don't think they will be able to undo the core reforms we put in place because they make a lot of economic sense for the country." • He defended the actions he helped take to bail out large banks and stabilize the financial system, but said he could probably never win over skeptics: "It is very hard to convince people or make credible to people the risks that we were living with at that time. That we could have had a much deeper collapse of not just the U.S. economy but the global economy." Geithner sees U.S. economy strengthening gradually 01/25/13

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Whats News Business Finance Europe Business & Finance *** The ECB's increasingly swollen balance sheet has helped bring a measure of calm to volatile markets, but some believe it could itself become a problem and bring more volatility to the 17-nation currency bloc. Apple is pinched between the promise and perils of doing business in China—a challenge highlighted after a fracas outside a Beijing store and as the company detailed working conditions throughout its supply chain. U.S. private-equity firm TPG Capital has made contact with Japanese technology firms about a potential joint investment in some of Olympus's businesses. A bankruptcy judge was asked by the Pension Benefit Guaranty Corp. to force AMR to disclose details of its underfunded pension plans, escalating a spat between the U.S. government agency and American Airlines' parent. PepsiCo will announce the results of a strategic review in early February. The board says it stands by CEO Indra Nooyi. J.P. Morgan Chase said fourth-quarter profit fell 23% from a year ago amid a sharp slowdown on Wall Street. Bank of America has told U.S. regulators that it is willing to retreat from some parts of the country if its financial problems deepen, according to people familiar with the situation. Goldman Sachs recently approached the Federal Reserve Bank of New York and offered to buy a multibillion-dollar bundle of risky mortgage bonds acquired in the 2008 bailout of AIG, people familiar with the matter said. China's stockpile of foreign-exchange reserves shrank for the first time in over a decade. World-Wide *** Rescue operations continued inside the cruise ship that ran aground off the shore of Tuscany, Italy, late Friday, triggering a confused evacuation of thousands of passengers in which five people died. Thai police said they had broken up a terror plot aimed at Bangkok tourist sites, after U.S. warnings triggered in part by worsening tensions with Iran after the killing of a nuclear scientist. Kazakhs voted in an election aimed at slightly broadening representation in parliament, a tiny concession that poses no challenge to Nazarbayev's hold on the legislature. An Alaska town appeared close to receiving a fuel shipment following the arrival of a Russian tanker. Intercepted communications indicate the leader of the Pakistani Taliban was killed in a recent U.S. drone strike, Pakistani intelligence officials said. A bombing killed 14 in a Shiite religious procession in the east. U.N. chief Ban demanded Syrian President Assad stop killing his own people, while state media reported that Assad granted an amnesty for crimes committed during the uprising. U.S. defense leaders are increasingly concerned Israel is preparing to take military action against Iran, over U.S. objections, and have stepped up planning to safeguard U.S. facilities in the region in case of conflict. Nobel Peace laureate Mohamed ElBaradei withdrew his candidacy from Egypt's presidential race, in protest over the autocratic governance that has persisted under Egypt's post-revolutionary military leadership. Myanmar's climb out of diplomatic isolation advanced, with a visit by France's foreign minister and the planned arrival of the U.S. Senate's top Republican. Save Article

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Petsky Prunier Daily Deals Blog Daily Deals covering the technology, media, marketing, eCommerce, and healthcare industries About Petsky Prunier About Daily Deals ← Daily Deal Activity 01/27/14 Daily Deal Activity 01/29/14 → Daily Deal Activity 01/28/14 Digital Media/Commerce Brazil-based online lifestyle retailer Dafiti, has raised $19.3 million in funding led by IFC. The newest round of capital raised brings the company’s total funding to $249 million. Russia-based Lamoda, a fashion online retailer of shoes, clothes, and accessories, has raised $12.9 million in funding led by IFC. The new capital raised brings the company’s funding to a total of $143 million. The investment will be used to enable regional development of the company’s express delivery. Microsoft Corporation (NasdaqGS:MSFT) has acquired the rights to the Gears of War franchise from Epic Games, including rights to all existing and future games, entertainment experience, and merchandise. Terms were not disclosed. mobile content/apps, social media/apps CrowdOptic, which develops a crowd-based mobile application offering a technology that combines augmented reality with location services to connect people at live events, has raised an undisclosed amount in debt funding from Silicon Valley Bank. The funding will aid the company to offer its software off the shelf and gain enterprise customers. mobile content/apps Madison Reed, a hair-dye company that offers digital tools and mobile applications to help its customers color their hair at home, has raised $12 million in Series B funding led by Norwest Venture Partners. The latest funding brings total capital raised by the startup to around $16 million. The company will be using the new capital to offer online shopping and at-home hair color services. Voxeet, which provides mobile conferencing technology for private conversations, business meetings, or team collaborations, has raised $1.5 million in seed funding led by Partech Ventures, with participation from Aquiti, Kima Ventures, and individual angels. social media/apps China-based Babytree.com, an online community for parents to swap advice and connect with other users, has raised $25 million in funding led by TAL Education Group (NYSE:XRS), a China-based educational technology company. social media/apps, Mobile content/apps MyActivityPal, a mobile messaging and social networking application, has raised $5 million in Series A funding led by individual investor Sameer Gehlaut, Chairman and Co-Founder of IndiaBulls group. The company will use the new capital for product development, hiring, and to launch their user acquisition campaign. Tapastic, which offers a platform to share and view webcomics and visual stories, has raised $2 million in Series A funding led by Daum Communications, a South Korea-based internet portal site and operator of webcomics sites. With the investment Tapastic will explore the option of expanding into the English-speaking market. ad networks/exchanges Online advertising company Federated Media Publishing has sold off its content marketing business, as well as the Federated Media name, to digital marketing campaigns company LIN Digital Media. The programmatic ad side of the organization, which was built up around Federated’s acquisition of Lijit in 2011, will continue to operate as an independent company called “Sovrn Holdings”. Terms were not disclosed. Sightly, a company operating a local video platform, has raised $1.7 million in seed funding led by Mack Capital, with participation from Tomorrow Ventures and 500 Startups. The company plans to use its latest round to expand its client base beyond small-to-medium-sized businesses and will debut its new enterprise video ad platform. The new capital brings the company’s total funding to $7.3 million. online lead generation, mobile content/apps Yiftee, which operates a gifting service that aims to drive business to local merchants, has raised $2.1 in funding led by individual investors. Yiftee allows you to give gifts to friends through a mobile application. The new capital raised will be used to expand “Yitfee Pro”, and brings the company’s total funding to around $3 million. market research software GutCheck, a provider of real-time online solutions to gain marketing insights, received $4 million in Series B funding from Icon Venture Partners. The new capital will be used for sales, marketing, and product development expansion. The new capital raised brings the company’s funding to a total of $10 million. Israel-based mobile technology startup Zikk Software, has received an undisclosed amount of funding from Wadi Ventures. The company intends on using the new capital to further develop its products and increase partnerships with mobile network operators. online targeting/optimization, ad serving MobSoc, a company providing a publishing network optimized for the mobile and social space, has raised $5 million in Series A funding led by individual investors. The new capital will be used to further develop the company’s digital publishing network and expand their team. website creation/hosting Codero Hosting, which provides dedicated, managed, cloud and hybrid hosting services, has raised $8 million in venture debt financing from Silicon Valley Bank and Farnham Street Financial. The capital financing enables Codero to deploy new data centers across the U.S. and Europe and expand its hosting portfolio to serve more customers and multiple data center locations. Canada-based radio stations 106.9 FM The Bear and Boom 99.7, were acquired by Corus Entertainment for a reported $16 million from Bell Media. Simple Energy, which uses big data, gaming, and digital messaging to help utilities cut energy consumption, has raised $6 million in Series B funding led by The Westly Group. Simple Energy takes household energy bills, housing, socio-economic and demographic data to develop customer-specific profile consumption and offer targeted suggestions on how to cut electricity use. The new capital will enable the company to further develop new products and expand their national reach. Cotap, an enterprise mobile messaging service, has raised $10 million in Series B funding led by Emergence Capital Partners, with participation from Charles River Ventures. The new capital will be used to extend the application to the Android and desktop platforms and expand their team. Business application developer Tomfoolery, was reportedly acquired by Yahoo (NasdaqGS:YHOO) for about $16 million in funding. Tomfoolery’s solutions allow colleagues to share files and discuss work projects using a single mobile application for the iPhone and Android platforms. Previous to the acquisition the company raised $1.7 million in funding from Andreessen Horowitz and Morado Venture Partners. UK-based GoCardless, which provides small merchants an online payment platform, has raised $7 million in Series B funding led by Balderton Capital, with participation from Accel Partners and Passion Capital. The round brings the company’s total funding to nearly $12 million. The new capital will be used to expand their engineering team. geo-demo software Applied Weather Technology, a provider of fleet optimization services and onboard voyage management software, was acquired by Norway-based StormGeo, which offers commercial weather forecasting services. With the acquisition the combined group will provide a broad approach to safeguarding weather sensitive operations with tailored software and decisions support systems. Terms were not disclosed. Information & Business Services Marketing and advertising research company, comScore (NasdaqGS:SCOR) has acquired Nielsen Audio’s cross-platform audience measurement services, including television and radio data collected through the Portable People Meter (PPM). This agreement enables continued inclusion of certain Nielsen Audio data in comScore’s cross-media measurement solutions. Terms were not disclosed. healthcare information Media and information company Hearst Corporation, which has been acquiring and funding health-information companies as it continues its expansion into new areas, has announced the formation of its newest business division, Hearst Health, which will be putting a $75 million fund to work helping early-stage providers of health-care information products. Filed under Daily Deals About Petsky PrunierPetsky Prunier is one of the leading investment banks in the technology, media, marketing, eCommerce, and healthcare industries. Our firm's mergers and acquisitions and private placements advisory services reflect a unique blend of product specialization and industry expertise. Together with strategic consulting firm Winterberry Group, a Petsky Prunier company, our organization represents one of the largest industry-specific advisors providing strategic and transactional services. In addition, we offer international reach through our partnership with investment bank Altium, which operates from nine offices across Europe. Securities transactions are processed through Petsky Prunier Securities LLC, a member of FINRA and an affiliated entity. Follow Petsky Prunier Daily Deals Blog on WordPress.com Follow Petsky Prunier on TwitterMy Tweets Contact UsPetsky Prunier LLC 60 Broad Street, 38th Floor New York, NY 10004T. 212-842-6022 Blog at WordPress.com. Follow “Petsky Prunier Daily Deals Blog”

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Of the sons of Issachar, men who understood the times, with knowledge of what Israel should do, their chiefs were two hundred; and all their kinsmen were at their command — 1 Chronicles 12:32 Posts Tagged ‘highest tax rate’ U.S. Now Has Highest Corporate Tax Rate IN THE WORLD (But Emperor Obama Says Business Must Render More Unto Him Instead Of Creating Jobs) America is NUMBER ONE!!! But unfortunately, we’re just number one in anti-competitive taxes, pseudo-scientific obstructionism and costly regulations that all guarantee we’ll never be number one in much else ever again. Let me take those in order: No Fooling: U.S. Now Has Highest Corporate Tax Rate in the World This April Fool’s Day, the joke is on all of us. That’s because as of April 1, the U.S. now has the highest corporate tax rate in the developed world. Our high corporate tax rate has long made the U.S. an uncompetitive place for new investment. This has driven new jobs to other, more competitive nations and meant fewer jobs and lower wages for all Americans. Other developed nations have been cutting their rates for over 20 years. The U.S. did nothing. The U.S. was at least able to stay out of the top spot until now, because Japan had also failed to get its corporate tax rate in line with other more competitive nations. But Japan has finally seen the light and reduced its rate as of April 1. Japan’s rate was 39.5 percent. That was just barely ahead of the U.S. rate of 39.2 percent (this includes the 35 percent federal rate plus the average rate the states add on). Japan’s rate now stands at 36.8 percent after its recent cut. The U.S. rate is well above the 25 percent average of other developed nations in the Organization for Economic Cooperation and Development (OECD). In fact, the U.S. rate is almost 15 percentage points higher than the OECD average. This gaping disparity means every other country that we compete with for new investment is better situated to land that new investment and the jobs that come with it, because the after-tax return from that investment promises to be higher in those lower-taxed nations. Our high rate also makes our businesses prime targets for takeovers by businesses headquartered in foreign countries, because their worldwide profits are no longer subject to the highest-in-the-world U.S. corporate tax rate. Until Congress cuts the rate, more and more iconic U.S. businesses such as Anheuser-Busch (which was bought by its Belgian competitor InBev in 2008) will be bought by their foreign competitors. To get back in line with international norms, Congress needs to reduce the rate so the combined federal and state rate matches or falls below the OECD average. Some will contend that with deficits north of $1 trillion annually, we simply can’t afford such a large rate reduction. But the actions of the nations we compete with for new investment show that these nations understand that lowering the corporate tax rate is necessary because of the boost to economic growth it provides. The United Kingdom, for instance, is in as perilous fiscal situation as the U.S. However, the U.K. reduced its rate in 2011 from 28 percent to 26 percent. Chancellor of the Exchequer George Osborne recently announced that the U.K. would further cut its rate to 22 percent by 2014 to increase competitiveness. Congress needs to cut the corporate tax rate to make the U.S. a more hospitable place for investment. The time for excuses is over. Until it does, every day will be a cruel joke. An interesting exchange between ABC News anchor Charles Gibson and Barack Obama during a debate shows us where Obama is: You have however said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, “I certainly would not go above what existed under Bill Clinton, which was 28 percent.” It’s now 15 percent. That’s almost a doubling if you went to 28 percent. But actually Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20 percent. SENATOR OBAMA: Right. MR. GIBSON: And George Bush has taken it down to 15 percent. MR. GIBSON: And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected? SENATOR OBAMA: Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness. You can reward wise practices or you can punish them. You can reward individual initiative or you can punish it. Obama is the latter even though the former is far and away the best for society. Consider the words of Mark Levin as he shreds Obama’s “fairness” meme: Utopianism also finds a receptive audience among the society’s disenchanted, disaffected, dissatisfied, and maladjusted who are unwilling or unable to assume responsibility for their own real or perceived conditions but instead blame their surroundings, “the system,” and others. They are lured by the false hope and promises of utopian transformation and the criticisms of the existing society, to which their connection is tentative or nonexistent. Improving the malcontent’s lot becomes linked to the utopian cause. Moreover, disparaging and diminishing the successful and accomplished becomes an essential tactic. No one should be better than anyone else, regardless of the merits or value of his contributions. By exploiting human frailties, frustrations, jealousies, and inequities, a sense of meaning and self-worth is created in the malcontent’s otherwise unhappy and directionless life. Simply put, equality in misery – that is, equality of result or conformity – is advanced as a just, fair and virtuous undertaking. Liberty, therefore, is inherently immoral, expect where it avails equality. Equality, in this sense, is a form of radical egalitarianism that has long been the subject of grave concern by advocates of liberty. Tocqueville pointed out that in democracies, the dangers of misapplied equality are not perceived until it is too late. “The evils that extreme equality may produce are slowly disclosed; they creep gradually into the social frame; they are seen only at intervals; and at the moment at which they become most violent, habit already causes them to be no longer felt.” Among the leading classical liberal philosophers and free-market economists, Friedrich Hayek wrote, “Equality of the general rules of law and conduct … is the only kind of equality conducive to liberty and the only equality which we can secure without destroying liberty. Not only has liberty nothing to do with any sort of equality, but it is even bound to produce inequality in many respects. This is the necessary result and part of the justification of individual liberty: if the result of individual liberty did not demonstrate that some manners of living are more successful than others, much of the case for it would vanish.” Thus, while radical egalitarianism encompasses economic equality, it more broadly involves prostrating the individual. Equality, as understood by the American Founders, is the natural right of every individual to live freely under self-government, to acquire and retain the property he creates through his own labor, and to be treated impartially before a just law. Moreover, equality should not be confused with perfection, for man is also imperfect, making his application of equality, even in the most just society, imperfect. Otherwise, inequality is the natural state of man in the sense that each individual is born unique in all his human characteristics. Therefore, equality and inequality, properly comprehended, are both engines of liberty (Mark Levin, Ameritopia, pp. 7-9). Levin proceeds in the following paragraphs to demonstrate why “equality” is inherently easier to demagogue than “liberty.” He then points out – in words that obviously could be applied to ObamaCare: Utopianism’s authority also knows no definable limits. How could it? If they exist, what are they? Radical egalitarianism or the perfectibility of mankind is an ongoing process of individual and societal transformation that must cast off the limits of history, tradition, and experience for that which is said to be necessary, novel, progressive, and inevitable. Ironically, inconvenient facts and evidence must be rejected or manipulated, as must the very nature of man, for utopianism is a fantasy that evolves into a dogmatic cause, which in turn manifests a holy truth for a false religion. There is little or not tolerance for the individual’s deviation from orthodoxy lest it threaten the survival of the enterprise (Ibid., p. 10). Obama isn’t just pushing for more and more taxes to punish more and more job creators to guarantee that there will be fewer and fewer jobs; he’s also targeting the oil that lubricates the entire American economy and way of life: Yesterday the Obama administration announced a delaying tactic which will put off the possibility of new offshore oil drilling on the Atlantic coast for at least five years: The announcement by the Interior Department sets into motion what will be at least a five year environmental survey to determine whether and where oil production might occur. Obama has a documented history of performing endless “studies” and then perverting those studies in profoundly unscientific ways: Academics, environmentalists and federal investigators have accused the administration since the April spill of downplaying scientific findings, misrepresenting data and most recently misconstruing the opinions of experts it solicited. The latest complaint from scientists comes in a report by the Interior Department’s inspector general, which concluded that the White House edited a drilling safety report in a way that made it falsely appear that scientists and experts supported the administration’s six-month ban on new deep-water drilling. The AP obtained the report early Wednesday. And Obama has used frankly Stalinist tactics to then pressure the experts to fabricate their numbers in his political favor: The Obama administration pressured analysts to change an environmental review to reflect fewer job losses from a proposed regulation, the contractors who worked on the review testified Friday. The dispute revolves around proposed changes to a rule regulating coal mining near streams and other waterways. The experts contracted to analyze the impact of the rule initially found that it would cost 7,000 coal jobs. But the contractors claim they were subsequently pressured to not only keep the findings under wraps but “revisit” the study in order to show less of an impact on jobs. Steve Gardner, president of Kentucky consulting firm ECSI, claimed that after the project team refused to “soften” the numbers, the firms working on the study were told the contract would not be renewed. ECSI was a subcontractor on the project. The government “‘suggested’ that the … members revisit the production impacts and associated job loss numbers, with different assumptions that obviously would then lead to a lesser impact,” Gardner testified before a House Natural Resources subcommittee. “The … team unanimously refused to use a ‘fabricated’ baseline scenario to soften the production loss numbers.” So when Obama says he’s going to do a study, what he means is that he’s going to delay and stall and finally use manipulation and pressure-tactics and deception to fabricate a bogus “legitimacy” for his ideology and his cronyism. To add to the injury Obama is doing to the economy there is the “hidden tax” of regulation: A new report from the Competitive Enterprise Institute (CEI) titled “Ten Thousand Commandments” reveals the vast amount of private-sector capital drowned in the sea of government regulations. The report’s conclusion is mind-boggling. The cost of complying with federal regulations has hit the $1.7 trillion dollar mark. That’s trillion, with a T. To put that number in perspective, it’s larger than the President’s own anticipated 2011 budget deficit of $1.6 trillion. In fact, the current regulatory burden imposed on businesses across America now amounts to 50% of total government spending in one year alone. That’s nuts! But guess what? We can top it. As the CEI report underscores, the compliance cost of regulation is larger than all corporate pretax profits in 2008 and dwarfs the estimated 2010 individual income tax receipts by nearly 50%. That last point is worth repeating: The cost of abiding by all the government regulations tallies up to $1.7 trillion, which towers over the revenue brought in by all income taxes, in every bracket. Putting it all together puts America out of business. Tags:capital gains, corporate tax rate, drilling, fairness, highest tax rate, regulations, Utopia Posted in Barack Obama, Economy, Politics, science, taxes | 4 Comments » Categories abortion (157) Armegeddon (174) Conservative Issues (2,327) first Jeremiah Wright term (837) Grand Theft Auto (1) Jeremiah Wright (57) John McCain (139) McCain (6) Michelle Obama (10) missile defense (11) Mitt Romney (50) President Bush (27) proliferation (26) reconciliation (10) Religion and Culture (589) Shiite (13) third Bush term (2) UN (19) Follow “Start Thinking Right”

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Overview Culture and People Business Groups Rewards and benefits Inclusion and Diversity Campus Recruiting Job Search Our history Ideas, innovations and growth Beginning with its founding in 1988, BlackRock’s story over a quarter of a century is about a commitment to putting clients first, innovative thinking, passion for performance and a remarkable collaboration. Something different: 1988-1994 BlackRock began in 1988 with eight people in a single room who believed they could build a better asset management firm. They shared a determination to put client needs and interests first and a dedication to clear thinking and fact-based, data-driven investing, as well as a passion for understanding and managing risk. Founded under the umbrella of The Blackstone Group, the firm initially focused primarily on fixed-income. By listening to clients and understanding their unmet needs, the firm was able to develop important early innovations related to closed-end funds, trusts, defined contribution plans and more. One of these was the Blackstone Term Trust, which raised $1 billion and set the business on a path of steady growth and success. Development also began on Aladdin®, the unified investment platform that combines trading, risk management, and client reporting. Aladdin’s capacity for insight would distinguish BlackRock as an investment and risk manager and become the basis for the BlackRock Solutions business. In 1992, the firm adopted the name BlackRock. By the end of that year, BlackRock had $17 billion in assets under management; at the end of 1994, the figure was $53 billion. Aladdin®: Powering our collective intelligence Aladdin is BlackRock's central nervous system. The platform powers the collective intelligence of our people around the globe—helping us see clearer, work smarter, and make better decisions. Video - Aladdin: Powering BlackRock's Collective Intelligence Seeds of diversification: 1995-2004 Now established as BlackRock, in 1995 the firm became a subsidiary of the bank holding company, PNC Financial, and soon began managing open-end mutual funds, including equity funds. The association with PNC gave BlackRock access to PNC’s large distribution network and opportunities for diversification through alliances and mergers with PNC affiliates specializing in equity and other investments. As it diversified, the firm developed the concept of One BlackRock, which would become a core principle. Where many companies were structured with autonomous business units, BlackRock insisted instead on a coordinated platform. Managing fixed-income, equity and other businesses together, BlackRock put in place a client-centric business model in which the entire firm’s resources and products can be leveraged for the benefit of clients. In 1999, BlackRock went public with broad employee ownership. By the end of that year, the firm had $165 billion in assets under management and that figure would grow to $342 billion by the end of 2004. BlackRock is listed on the New York Stock Exchange, 1999. A diversified global asset manager: 2005 to today By 2005 BlackRock had strong fixed-income, equity and advisory businesses. The firm now undertook a series of transformational mergers that added core investment competencies. Beginning with the acquisition of Merrill Lynch Investment Managers early in 2006, these mergers strengthened BlackRock's products and services mix with more offerings in equity, multi-asset products and alternatives, and they greatly expanded the firm's scale and global reach. The biggest of the mergers took place in 2009, when BlackRock acquired Barclays Global Investors, giving the firm additional active, index and exchange traded fund capabilities through iShares. In this period, BlackRock pioneered multi-asset solutions. The firm became the market leader by bringing together teams that provided a range of client offerings into one unit, combining asset allocation and a host of product solutions that spanned asset classes. Leveraging earlier work, including BlackRock Solutions, BlackRock began providing impartial advice through Financial Markets Advisory (FMA). The FMA team helps governments, financial institutions and other public and private capital markets participants around the world understand their investments and risk. Today, BlackRock is the leading global asset manager, serving many of the world's largest companies, pension funds, foundations, and public institutions as well as millions of people from all walks of life. All figures as of 12/31/15

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Speech by SEC Staff: "Maintaining the Pillars of Protection in the New Millennium" Remarks by by Paul F. Roye1 Director, Division of Investment Management,U.S. Securities and Exchange Commission Before the Investment Company Institute1999 General Membership MeetingWashington, D.C. Thank you and good morning. It's a pleasure to be at this year's ICI General Membership Meeting. I. Dramatic Growth of Industry As everyone in this audience is well aware, we are in the midst of an extraordinary period in the mutual fund industry. To say the industry has experienced substantial growth in the last few years is a little like saying "Star Wars -- The Phantom Menace" had a pretty good opening at the box office. I guess you could say mutual fund assets have grown to cosmic proportions -- with almost $6 trillion in assets, compared to a "mere" $1.3 trillion in 1991 when Matt Fink became President of the ICI. As we consider the emerging issues for the mutual fund industry beyond the Year 2000, I think it is important to consider the factors that have contributed to the success of the industry today. One obvious factor has been the longest bull market in history -- the Dow has now hit 11,000 and everyone, including the mutual fund industry, is enjoying the ride. Another significant factor has been the dramatic shift in retirement assets from defined benefit pension plans to defined contribution plans. Other factors include new distribution channels, new products and improvements in shareholder services. And the list goes on and on . . . . In my mind, however, the one factor that has been at the very heart of the industry�s success is the fundamental integrity and credibility of the mutual fund industry. II. Role of Investment Company Act in Industry�s Success As we approach the dawn of the new century and the 60th anniversary of the enactment of the Investment Company Act of 1940, I would like to spend this morning reflecting on three things: (i) the 1940 Act; (ii) a proposal to amend the statute; and (iii) some challenges confronting the mutual fund industry. Let me begin with what I consider one of the most successful statutes regulating financial institutions -- the Investment Company Act of 1940. An extensive Division of Investment Management study of the Act came to the same conclusion in 19922 and the Congress made only minor changes to the statute after it took a hard look at it in 1996. Trillions of dollars have been invested in U.S. mutual funds, without the benefit of a single dollar of government guarantee, subsidization or bailout. Over the years, mutual funds have contributed untold amounts to capital formation in the United States, as well as in many foreign markets, including developing markets. But, to borrow liberally from the disclaimer, past performance is no guarantee of future results, I believe that the success of this industry, was and will remain, dependent on its ability to command the confidence of investors. That confidence is based in no small measure on the effectiveness of the 1940 Act in preventing many of the abusive practices that prompted its adoption. The 1940 Act created what I would call the "four pillars of protection" for mutual fund investors. These protections give investors confidence that: (i) Their investments will be managed in accordance with the fund's investment objectives;3 (ii) The assets of the fund will be kept safe;4 (iii) When they redeem, they will get their pro rata share of the fund�s assets;5 and (iv) The fund will be managed for the benefit of the fund�s shareholders and not the fund's adviser or its affiliates.6 We would all agree, I think, that the 1940 Act successfully addressed the abuses that occurred before its enactment. But the true genius of the Act was its drafters' understanding that markets and circumstances change, and that industries evolve. The exemptive authority given to the Commission in the 1940 Act makes the Act flexible and allows it to accommodate change and innovation in ways that preserve the Act's underlying principles7. This flexibility permitted the development of money market funds, variable insurance products, expanded international investing, alternative distribution arrangements, securities lending programs, and unique exchange-traded products like SPDRS that serve particular investor needs. Another unique aspect of the 1940 Act is the requirement that investment companies have independent directors. As far as I know, investment companies are the only U.S. companies that are required by law to have independent directors. Investment company directors are called upon to safeguard the interests of fund shareholders and ensure that the "pillars of protection" I mentioned earlier are not breached. As you probably know, the Commission has undertaken a broad initiative to determine what problems independent directors are encountering and how their effectiveness can be enhanced. In February, the Commission hosted a roundtable on the role of independent investment company directors. As a result of the roundtable, and at the urging of Chairman Levitt, we expect that later this summer we will be recommending that the Commission propose rules that strengthen fund boards and the corporate governance provisions of the 1940 Act by, among other things, providing for a majority of independent directors, self-nominating independent directors and director access to independent counsel. Additionally, in response to Chairman Levitt�s call for action, the ICI has created a special committee to develop best practices regarding investment company governance. We urge this committee to take a hard look at recommendations which would significantly improve the governance structure and go beyond what we could properly propose as regulators. Together, through these initiatives, we can make sure that independent directors have the tools needed to fulfill their role as representatives and guardians of the shareholders� interest. We were also pleased by ICI Mutual�s quick response to another issue that has caused concern -- the existence of joint liability insurance policies for directors and fund management that exclude coverage regarding claims brought by co-insureds. What this means is that if management and directors have a joint liability policy and management sues the directors, the directors will not be covered. It seemed clear to us that independent directors who find themselves in litigation with management cannot be effective representatives of shareholders if they�re worried about funding costly litigation out of their own pockets. Soon after the Chairman spoke about this issue publicly, ICI Mutual announced it was modifying its co-insured exclusion to address this problem. I want to thank ICI Mutual, and the leadership of Dave Silver, for the timely response to these concerns. Some of you may be thinking that there is no need to strengthen the governance structure; however, we collectively have an interest in ensuring that this $6 trillion dollar industry remains free of the scandals that, over recent years, plagued other segments of the financial services industry. Strengthening the governance structure by enhancing the role of independent directors is an important step towards ensuring the continued vitality of the industry. As we look toward the new millennium, I believe the basic regulatory structure of the 1940 Act, established almost 60 years ago, is alive and well. It has served American investors well; it has served the mutual fund industry well; and it has served the capital markets well. But we all know that in some areas changes need to be made. Changes that reinforce the goals of the 1940 Act and changes that respond to today�s marketplace. Some, however, have proposed amendments to Section 17(a) of the 1940 Act. I believe these legislative recommen- dations have the potential to open the door to overreaching, self-dealing, and the other abusive practices that prompted enactment of the statute. It is my view that any problems that are posed by Section 17(a) can be addressed administratively by the Commission through its broad exemptive authority. But before substantial modifications to Section 17(a) are made, we need to give careful consideration to the reasons for the Act and the purposes of the affiliated transaction prohibitions. The 1940 Act�s provisions concerning affiliated transactions were enacted in response to the Commission�s exhaustive five-year study on the investment company industry. The Investment Trust Study devoted over 200 pages to the discussion of specific instances of overreaching by affiliates in the 1920s and 1930s. The Commission found that affiliates not only sold securities to investment companies to realize profits as principal, but also sold securities to these companies for a variety of other reasons. Underwriters of securities formed funds into which they could dump underwritings. Dealers in securities formed funds into which they could dump their inventories. Banks formed funds in order to make loans to them. Frequently, sponsors of funds also sold securities to their affiliated investment companies in order to secure, facilitate or maintain control over portfolio companies, or to aid in mergers, consolidations or other objectives of the sponsors. As a result, the regulatory framework included restrictions on transactions involving investment companies and their affiliates. Perhaps it would be useful to briefly review Section 17(a). Section 17(a) of the statute makes it unlawful for an affiliate of a registered investment company knowingly to sell securities or property to the company, purchase securities or property from the company, or to borrow money or property from the company. Section 17(a) seeks to protect the fiduciary relationship, by deeming it better to foreclose principal transactions rather than attempt to separate the beneficial and harmful transactions and allow the fiduciary to justify representation of two conflicting interests. Section 17(a) also reflects the common law theory that disclosure alone cannot satisfy the duty of loyalty of a fiduciary. Even with complete disclosure, a fiduciary must act in a manner that the fiduciary believes to be in the beneficiary�s interest. As managers of investment companies, you are fiduciaries entrusted with the savings of millions of investors, to whom you owe a fiduciary duty in the handling of those savings. Therefore, the highest standards of care, loyalty and judgment are not the most a shareholder can ask for, but rather the very least of what they should expect. From an investor protection standpoint, the 1940 Act�s provisions concerning affiliated transactions are at its heart and serve as a fundamental protection. The provisions of Section 17(a) have not prevented the growth of mutual funds nor their attractiveness as the investment option of choice for millions of small investors. The importance of the prohibitions against affiliated transactions to mutual fund investors and to the mutual fund industry cannot be underestimated and the consequence of their demise cannot be overestimated. We need to proceed cautiously. Let us not forget that the loosening of restrictions on savings and loans in the early 80s contributed to and exacerbated the S&L crisis, which ultimately led to the collapse of that industry. In addition, some sources have concluded that forms of "insider abuse" played a significant role in various bank failures. Of course, the proposal recently put forth would not entirely repeal Section 17(a), but it would represent a breach of the wall that was built around mutual fund assets. This wall -- one of the pillars of protection I referred to earlier -- protects funds from being used for the benefit of fund sponsors and their affiliates. We need to carefully consider the risks and consequences of opening the door to principal transactions with affiliated funds. Even in situations in which the transactions would be in the best interests of the fund, the adviser runs the risk that with 20/20 hindsight, the principal transactions will be questioned if the securities drop in value, exposing the advisory firm to risk. Plaintiffs� lawyers could have a field day, suing everyone connected to the transaction, the affiliated dealer, the adviser, the portfolio manager and even the independent directors who presumably have signed off on the transactions. While Section 17(a) protects the fund and its investors, it also protects management companies by drawing a clear line. I believe the fund industry recognizes the importance of strong rules to prevent abusive practices. And from the start, I believe that the fund industry has recognized this. In fact, President Roosevelt noted at the signing ceremony for the Investment Company Act in 1940 that "the investment trusts have themselves actively urged that an agency of the federal government assume immediate supervision of their activities."8 (Since 1940, I bet they haven't heard that one very often in Washington!). And before you start growing concerned that we at the SEC are trapped in some sort of 1940�s time warp -- I want to make clear that we are very sensitive to the fact that our rules must keep pace with the changes in the marketplace. We realize additional flexibility is needed in this area, and believe we have the regulatory tools to tailor Section 17(a) to the changes taking place. We have granted individual exemptive orders to funds to allow transactions that would otherwise be prohibited under Section 17(a) when the terms have been fair and reasonable. Right now, we are carefully reviewing a series of exemptive rule proposals under Section 17 submitted by the ICI for our consideration, as well as examining the possibility of an exemptive rule under Section 206(3) of the Investment Advisers Act, which imposes conditions on principal transactions involving private advisory accounts. Of course, any proposals we would make to remove restrictions under Section 17 and Section 206(3) would need to be consistent with the underlying policy and purposes of these sections. III. Challenges to the Industry in the New Millennium Some may say Section 17 and the other "pillars of protection" represent a competitive disadvantage for the mutual fund industry. Not surprisingly, I disagree. I actually believe the opposite is true -- that these "pillars of protection" represent a competitive advantage for the industry. As the choices available to investors multiply daily, I believe that adherence to the standards and principles reflected in the statute are one of the best marketing tools available to the fund industry. And as you are well aware, the industry will be facing many challenges in the 21st century, including, among others, new technology, consolidation of the financial services industry and increased competition. Take technology for example -- it has allowed the mutual fund industry to achieve incredible growth, and to manage this growth. The industry has effectively used technology to better communicate with investors, improve services and lower trading costs. Technology has made it possible for funds to engage in increasingly sophisticated trading techniques, and to expand the number and types of funds available. And while technology has helped the mutual fund industry grow, it has also helped its competitors grow. Technology has, and will continue to, revolutionize how people invest, how funds do business and how markets function. Investors are now tempted by on-line trading, chat room hype, market cheer-leading on television and the explosive volatility in, for example, Internet stocks. Some mutual fund shareholders are moving their money out of stock funds to buy stocks directly. A marketing executive at an on-line brokerage firm was quoted as saying that "[o]n-line investing is a national pastime. Baseball was fueled by radio. Football fueled by TV. On-line investing is fueled by the Internet."9 Will this on-line trading explosion last? How will the fund industry convince investors to stick with their mutual funds, and not to jump into the stock market directly? One brokerage advertisement for an on-line brokerage firm even plays up this issue by showing an embarrassed jogger admitting to a stock trading friend that she still invests in mutual funds. Another challenge for the industry will be increased competition from other financial services companies. As banks and other financial institutions consolidate, create new alliances, and increase their participation in the mutual fund industry, competition for the investor's dollar will intensify. It is assumed that financial modernization legislation would pave the way for one-stop shopping for financial services. The question investors will ask is "where should I make this one-stop?" Will it be at the bank, the fund complex, or some other service provider? With or without financial modernization legislation, it is clear that the fund industry can expect increasing competition from other financial services providers. It is for this reason that functional regulation is necessary to protect the interests of mutual fund investors, and to ensure that there is a level playing field. Bank regulation is traditionally more concerned with the safety and soundness of the bank rather than the interests of investors. All parties that provide investment advice to mutual funds, including banks, should be subject to the same oversight, including Commission inspections and examinations. Any type of entity that is affiliated with a mutual fund should be subject to the conflict of interest provisions of the federal securities laws. Additionally, we are concerned about the unique conflicts of interest resulting from increased bank involvement in the mutual fund business. The conflict-of-interest provisions in the 1940 Act were drafted at a time when Congress could not have anticipated the dramatic change in the scope of bank securities activities, such as bank lending to affiliated mutual funds. Financial modernization legislation must adequately address these conflicts of interest. Public investors would be better off with no legislation, rather than legislation that fails to address these important conflicts of interest. IV. Meeting the Challenges of the New Millennium In meeting the challenges of the new millennium, you must remember how you reached the enviable position you are in today. In this day and age when investors can choose among an amazing array of financial professionals and investment opportunities, and have access to alternative trading systems and information technology, the fund industry will need to distinguish itself in a very crowded field. By adhering to the fundamental principles in the 1940 Act, and by ensuring that your relationship is still based on trust and integrity between a fiduciary and a client, the mutual fund industry will continue to succeed. This is why I believe in the area of principal transactions we need to proceed cautiously. Let me close by saying that the mutual fund industry should be proud of its achievements but at the same time it should be mindful of the key ingredients of its success -- investor trust and confidence. I caution the industry not to lose sight of the important role the 1940 Act has played in its success and not to let others who do not appreciate the importance of the standards reflected in the Act dictate the course of the industry. The Act holds the industry to the highest standards, making it absolutely clear that managing a mutual fund is no ordinary business -- but the business of a fiduciary. As the industry moves into the new millennium, the industry would be well advised to heed the wisdom that "those who do not remember the past, are condemned to relive it." Thank You. 1 The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees. The views expressed herein are those of the author and do not necessarily reflect the views of the Commission or the author's colleagues upon the staff of the Commission. 2 Protecting Investors: A Half Century of Investment Company Regulation (May 1992), p. xxii ("The soundness [of the fundamental principals underlying the 1940 Act] is demonstrated by the successful and safe operation of investment companies "). 3 Sections 5(b)(2) (fundamental investment policies) and 13(a) (changes in investment policies). 4 Sections 17(f) (custody of fund assets) and (g) (bonding of employees). 5 Sections 22(c) and (d) (redeemable securities), 22(e) (right of redemption), and 2(a)(32) (definition of redeemable security). See also Section 18(f) (senior securities). 6 Sections 17(a) (affiliated transactions), 17(d) (joint transactions with affiliates), 17(e) (affiliates effecting transactions in portfolio securities), 10(f) (participation in affiliated underwritings), 15 (advisory contracts), 16 (boards of directors), and 36 (breaches of fiduciary duty). 7 Sections 6, 17(b), and 10(f). 8 Statement by the President of the United States upon the signing into law H.R. 10065, Aug. 26, 1940, 86 Cong. Rec. 5230-31 (1940) (Appendix). 9 Ianthe Jeanne Dugan, "Brokerage Ads Veer From Mainstream; Industry Touting Online Services," The Washington Post , April 23, 1999, at El. http://www.sec.gov/news/speech/speecharchive/1999/spch279.htm Modified:05/24/1999

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The coalition government and your money We look at what the coalition government means for inheritance tax, national insurance, capital gains tax and our finances Live clinic: The election result and your finances The coalition government is going to bring changes to your personal finances. Photograph: Christopher Furlong/Getty Images Lisa Bachelor, Miles Brignall and Patrick Collinson Wednesday 12 May 2010 13.06 EDT The coalition government has already back-tracked on some election promises and has announced radical changes to taxation, pensions and benefits that will affect your pocket. We list the main details so far: What they say: "We agree to announce in the first Budget a substantial increase in the personal allowance from April 2011, with the benefits focused on those with lower and middle incomes. This will be funded with the money that would have been used to pay for the increase in Employee National Insurance thresholds proposed by the Conservatives." What it means: The increase in national insurance paid by employees from April 2011 will, after all, go ahead. But the increase paid by employers – Cameron's much-quoted "tax on jobs" – will be axed. The hike in NI for workers will be partly offset by higher personal allowances, gradually rising to £10,000 and taking many low-paid workers out of the tax net altogether. What they say: "We further agree to seek a detailed agreement on taxing non-business capital gains at rates similar or close to those applied to income, with generous exemptions for entrepreneurial business activities." What it means: A rise in the rate of capital gains tax (CGT) from 18% to 40%. This will hit owners of buy-to-let properties and share portfolios hardest, prompting speculation that landlords may dump properties on the market ahead of the budget to beat the tax. Separately, the annual exemption limit for CGT, currently £10,100, may come down, some say to as low as £2,500. This will bring hundreds of thousands more people into the tax net. What they say: "We agree that [changes to the NI personal allowance and axing of the increase to employers' contributions] should take priority over other tax cuts, including cuts to inheritance tax." What it means: The Conservative manifesto pledge of an increase in the IHT threshold to £1m has been postponed indefinitely. The state pension What they say: "We will restore the earnings link for the basic state pension from April 2011 with a 'triple guarantee' that pensions are raised by the higher of earnings, prices or 2.5%, as proposed by the Liberal Democrats." What it means: An absolute minimum increase in the basic state pension from its current level of £95.25 to £97.65 a week from April next year. Until now the state pension has been based on the September inflation numbers. If the retail prices index, currently at 4.4%, stays high then pensioners may see the basic payment rise to £100. As earnings recover when the economy improves, pensioners could be in line for bigger rises. Public sector pensions What they say: "The parties commit to establishing an independent commission to review the long term affordability of public sector pensions, while protecting accrued rights." What it means: Pension entitlements built up by public sector workers so far are safe, so a 58-year-old teacher who has been in the profession since his or her twenties will secure the payout they were expecting. But future entitlements will be cut back, in some cases substantially, hitting younger public-sector workers hardest. Likely options are later retirement ages and lower accrual rates – workers will have to work more years to obtain the same pension. Retirement ages What they say: "The parties agree to phase out the default retirement age (DRA) and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women." What it means: The timetable for increasing the state pension age has been brought forward by as much as four years. Labour planned to equalise men and women's retirement age at 65 by the year 2020. Phasing out of the DRA means that employers will no longer be able to force people to retire at age 65. What they say: "We agree to end the rules requiring compulsory annuitisation at 75." What it means: Currently, anyone who has a "defined contribution" company pension scheme, which builds up depending on the performance of the stockmarket, has to buy an annuity (a fixed income) with their pension pot by the age of 75. It is a much-hated rule, as individuals hand their money over to a pension company but risk losing the lot should they die the next day. Now they will be able to hold on to the money, although it is not clear if new rules may be introduced to stop the "moral hazard" of pensioners blowing the lot on a luxury cruise, then falling back on the state. Home information packs What they say: "The parties agree to the retention of energy performance certificates (EPCs) while scrapping HIPs." What it means: The disappearance of Hips may please home sellers, but it will be a bitter blow for those who have trained as home inspectors. "Hundreds of home inspectors left their old jobs and invested their own money into the Hips industry, either to pay for their own training or set up their own business," said Jeremy Raj, head of residential property at City law firm Wedlake Bell. "Many home inspectors are self-employed, so if they do lose their livelihood without any kind of compensation then that would be a severe blow." EPCs are required under European law, so they must be retained. Child trust funds and tax credits What they say: "The parties agree that reductions can be made to the child trust fund and tax credits for higher earners." What it means: Details are not clear yet, although the Liberal Democrats had wanted to scrap CTFs altogether, while the Conservatives had planned to give them only to the poorest third of families and disabled children. The Conservatives also planned to stop paying tax credits to households with an income above £50,000, so this seems likely to be what the two parties have now agreed on. Equitable life What they say: "We agree to implement the parliamentary and health ombudsman's recommendation to make fair and transparent payments to Equitable Life policyholders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure." What it means: This is good news for the surviving Equitable policyholders as it goes much further than the limited scheme currently being devised at the request of the former Labour government. In July 2008 the parliamentary ombudsman, Ann Abraham, published a long-awaited report recommending that the government set up a scheme to compensate more than a million policyholders who suffered large cuts to the value of their pensions. Labour instead agreed to a watered-down scheme that would give limited payments to those who had lost money "disproportionately". Now it looks like this will be revised to reflect Abraham's recommendation. What they say: "The parties agree to implement a full programme of measures to fulfil our joint ambitions for a low carbon and eco-friendly economy, including the establishment of a smart grid and the roll-out of smart meters. The full establishment of feed-in tariff systems in electricity – as well as the maintenance of banded ROCs." What it means: Both parties said they would push green technologies if they won the election. The Labour Party introduced Feed-in-Tariffs (FiTs) to encourage householders to put solar panels and water heaters on their roofs, but left out a trail of very unhappy "early adopters" from the lucrative payments system which started in April. Prior to the election the Tories said they would pay FiTs to all those with qualifying technologies, irrespective of when they were fitted, and this now looks likely to happen. They also appear to be committing themselves to creation of smart grid – a way to move, and monitor locally produced energy from the generator to nearby consumers. Smart grids allow devices to communicate with utility firms to give an accurate view of energy use that could cut CO2 emissions significantly, particularly when combined with another goal – a smart meter showing exact consumption in every home. What they say: "The parties agree to the replacement of the Air Passenger Duty with a per flight duty." What it means: This is to stop the crazy practice of airlines running empty or partially empty flights. It emerged that some airlines have been running empty trans-atlantic flights because they didn't have enough crew, or to enable them to keep their lucrative slots at Heathrow airport. Air passenger duty charged per flight would end this practice and encourage the airlines to run as near to full as possible, as they would have to collect the tax when they sold the ticket. Once the measure is in place, expect to see a return to last-minute ticket discounting as airlines seek to fill up planes. Child trust funds

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Gamesys spurns takeover move from Caesars Entertainment Online bingo group Gamesys has been in talks with owners of the Caesars Palace hotel and casino in Las Vegas Caesars Entertainment owns the Harrah's brand and the World Series of Poker, as well as the Caesars Palace hotel and casino in Las Vegas. Photograph: Ethan Miller/Getty Images Alex Hawkes Gamesys, which runs The Sun's online bingo platform, has been approached by the world's largest gambling company about a possible takeover. The London-based company had talks with Caesars Entertainment, owner of the Caesars Palace hotel and casino in Las Vegas, the Harrah's brand and the World Series of Poker. "It was an early-stage chat, but hasn't gone anywhere," a source involved said. It was unclear how much Caesars was offering to pay for Gamesys, but a source indicated that a figure approaching £300m was "justified" by the profits the business is making. The talks are understood to have taken place in the last couple of months. Despite the interest in Gamesys, it is understood that the private company will not sell. Shareholders are thought to be happy with the performance of the business and are not currently looking for an exit. Gamesys' most recent accounts revealed pre-tax profits of £21m on £74m of revenues in the year to the end of March 2010. The company paid out almost £29m in dividends, mostly to its founders, Noel Hayden, Andrew Dixon and Robin Tombs, who between them own two-thirds of the business. Founded in 2001, Gamesys owns Jackpotjoy.com, an online gambling site that has more than three million members and pays out more than £90m a month in winnings. Gamesys has strong contacts with Caesars, running the famous Las Vegas brand's online bingo operation. A British rival, PartyGaming, made a bid for Gamesys in 2006, but talks broke down. PartyGaming was prepared to offer £200m, but pulled out after its own market value was slashed by 60% following the US ban on online gambling. A deal to buy Gamesys would offer former PartyGaming chief executive Mitch Garber a second bite at the UK firm. Garber left PartyGaming in 2008 and now runs Harrah's interactive business for Caesars. The US group's interest in Gamesys could be an attempt to manoeuvre for position in advance of a possible lifting of the online gambling ban in America. PartyGaming

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You are hereHome » Media Center » Press Releases » October 6th 2004 Robertson Stevens Settles Market Timing Case State Attorney General Spitzer today announced a $30 million settlement with RS Investments (RS) to resolve allegations that the company permitted excessive market timing of its mutual funds. Under the terms of the settlement, which was reached in cooperation with the Securities and Exchange Commission, RS has agreed to pay $11.5 million in restitution and disgorgement to injured investors, $13.5 million in civil penalties and $5 million in a reduction of fees charged to investors over a five-year period."RS managers and executives knew that arrangements with market timers were contrary to claims made in the company's prospectus and harmful to long-term investors," Spitzer said. "Despite this knowledge, company officials allowed and facilitated market timing of funds because it proved to be a lucrative source of fee revenues." Market timing activity within the RS Emerging Growth Fund first came to the Attorney General's attention during the investigation of Canary Capital Partners in the summer of 2003. Since then, coordinated investigations by state and federal regulators revealed that RS entered into agreements with other market timers, including Canary, which allowed them to engage in improper, frequent short-term trading of shares of the RS fund at the expense of other fund shareholders.The agreements that RS made with timers were not disclosed to long-term investors. Indeed, the prospectus for RS' s equity funds told investors that: "You may not exchange your investment more than four times in any 12-month period . . . ."As part of the settlement, RS has agreed to implement significant corrective measures designed to create greater board and adviser accountability and to prevent the kinds of abuses that gave rise to this investigation.These measures include designation of an independent board chairperson with no prior connection to the company or its affiliates; enhanced compliance and ethics controls; new disclosure to investors of expenses and fees, and a commitment to hire a full-time senior officer to ensure that fees charged by the funds are negotiated at arm's length and are reasonable. RS, located in San Francisco, is a mutual fund adviser to ten mutual funds with a total of approximately $5 billion in assets under management as of the end of 2003.The Attorney General's investigation was handled by Senior Enforcement Counsel Roger Waldman and Assistant Attorney General Verle Johnson, under the supervision of David Brown IV, Chief of the Attorney General's Investment Protection Bureau, with assistance provided by Economist Hampton Finer of the AG's Public Advocacy Division.Attachments:Assurance of Discontinuance For Adobe PDF files you can download Adobe Reader from Adobe Systems. New York City Press Office: (212) 416-8060

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Fed Says It Will Begin Tapering Off Its Stimulus In January By Scott Neuman Dec 18, 2013 ShareTwitter Facebook Google+ Email Federal Reserve Chairman Ben Bernanke delivers remarks Wednesday in Washington, at his final planned news conference before he steps down. Jonathan Ernst Originally published on December 18, 2013 5:31 pm (This post was last updated at 3:50 p.m. ET) Citing an improving economy, the Federal Reserve announced Wednesday that it would begin gradually paring back an $85 billion-a-month bond-buying program aimed at stimulating growth. The move was seen as a tentative vote of confidence and comes amid an improving jobs picture and other positive signs as the U.S. continues struggles to emerge from the worst downturn since the Great Depression. The Fed said it would reduce its purchases of Treasurys and mortgage-backed securities by $10 billion a month beginning in January. In a news conference, Chairman Ben Bernanke, said he expects the Federal Open Market Committee to take "further measured steps at future meetings" to reduce the program, which began in September 2012. The Federal Open Market Committee says in a statement that it had "decided to modestly reduce the pace of its asset purchases." "Beginning in January, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $35 billion per month rather than $40 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $40 billion per month rather than $45 billion per month." Bernanke, speaking at what is likely to be his last news conference before handing over the post to current Vice Chair Janet Yellen, said the FOMC had "seen meaningful, cumulative progress in the labor market." The Committee said it would closely monitor the progress of the economy in coming months to determine when it was appropriate to further reduce bond-buying and that it would continue to "employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability." "My expectation is for similar moderate steps going forward throughout most of 2014," Bernanke said. He also said that "15 of 17 FOMC do not foresee a funds rate increase before 2015." NPR's John Ydstie reports that "while he pointed to a brightening recovery, Bernanke argued the economy still needs help and [that] the Fed is not really pulling back." Bernanke, Ydstie says, echoed the committee's statement that it planned to keep the federal funds rate of 0 to 1/4 percent "at least as long as the unemployment rate remains above [6.5 percent], inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal." The Fed is keen to keep inflation in a narrow Goldilocks range, not too high and not too low. As NPR's Marilyn Geewax reported on Tuesday, an inflation rate that is too low is not good for economic growth. The policy shift comes amid November's employment report, which saw a better-than-expected 203,000 new jobs and an unemployment rate that fell to 7 percent for the first time in five years. Bloomberg reports: "Bernanke, in the final weeks of his eight-year tenure, is curtailing the purchases that swelled the Fed's balance sheet almost to $4 trillion as he sought to put millions of jobless Americans back to work. The policy, supported by his designated successor, [Yellen], stirred concern it risks inflating asset-price bubbles even as its economic benefits ebbed." According to The Associated Press: "Stocks surged after the Fed's policy statement was released, signaling investors approved of the modest tapering and the stronger pledge to keep short-term rates low for an extended time. "The Dow Jones industrial average rose more than 150 points minutes after the announcement." Copyright 2014 NPR. To see more, visit http://www.npr.org/. View the discussion thread. © 2016 KUNM

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SEC Staff Identifies Concerns at Credit Rating Agencies SEC staff issued a report summarizing the staff's observations and concerns arising from the examinations of ten credit rating agencies registered with the SEC as Nationally Recognized Statistical Rating Organizations ("NRSROs") and subject to Commission oversight. The report was required by the Dodd-Frank Act, which imposed new reporting, disclosure and examination requirements to enhance the regulation and oversight of NRSROs. The report notes that despite changes by some of the examined credit rating agencies to improve their operations, Commission staff identified concerns at each of the NRSROs. These concerns included apparent failures in some instances to follow ratings methodologies and procedures, to make timely and accurate disclosures, to establish effective internal control structures for the rating process and to adequately manage conflicts of interest. The report notes that the staff made various recommendations to the NRSROs to address the staff’s concerns and that in some cases the NRSROs have already taken steps to address such concerns. September 30, 2011 in SEC Action | Permalink SEC Plans to Bring More Negligence Actions The Wall St. Journal says that SEC enforcement attorneys may bring more enforcement actions against individuals alleging negligence instead of fraud and quote Ken Lench, the head of the SEC's structured and new-product enforcement unit to that effect. The article cites as an example of the agency's change in strategy a complaint filed in June against Edward Steffelin, a former executive of GSC Capital Corp., charging negligence over allegedly inadequate disclosure in a mortgage bond deal. Of course, negligence charges may not satisfy those who want to see heads roll, and defendants charged with negligence may be enboldened to fight the charges rather than settle. WSJ, SEC Changes Tack on Enforcement Strategy September 29, 2011 in News Stories, SEC Action | Permalink SIFMA Issues Best Practices on Expert Networks SIFMA released a set of best practices for its member firms to provide guidance to broker-dealers on engaging and interacting with expert networks and their associated consultants. SIFMA’s best practices include: Core Assessment. Firms that use expert networks should develop policies and implement procedures concerning the use of expert networks and the consultants identified by the expert networks. Training. Firms should provide training for their employees and other affected individuals who interact with expert networks. Role of Firm Supervision. Firms’ systems of supervisory oversight should be designed with a view of securing an understanding of a firm’s use of expert networks and their associated consultants. Firm Monitoring and Oversight. Firms should develop policies and procedures, or supplement existing politics and procedures that require firms to escalate for review and take appropriate action on “red flags” that become known to the firm. Agreement Between the Firm and Expert Network. Firms should favor written agreements with expert networks for repeating and/or substantial arrangements. Advising Consultants of Firm Policies. Firms should develop procedures, on a risk-assessed basis, for directly advising consultants associated with expert networks on firm’s policies regarding the use of material non-public information and confidential information, at the outset of any new engagement of a consultant. Additional Firm Policies and Controls. Firms should develop procedures obtaining from the expert network or a consultant, relevant and non-confidential information regarding any employment and/or other arrangements where the consultant may have access to material non-public information and confidential information. SIFMA also advises firms to consider whether the best practices may have applicability to situations where firms have direct relationships with consultants. September 29, 2011 in News Stories | Permalink SEC Charges Investment Adviser with Lying about "Soft Dollars" The SEC charged Kurt Hovan, a San Francisco-area investment adviser, with fraud for lying to clients about how brokerage commission rebates were being used and producing phony documents to cover up the fraud during an SEC examination. The SEC alleges that Hovan misappropriated more than $178,000 in “soft dollars” that he falsely claimed to be using to pay for legitimate investment research on his clients’ behalf. In reality, Hovan was secretly funneling the money for such undisclosed uses as office rent, computer hardware, and his brother’s salary. When SEC examination staff asked Hovan to provide documentation to back up his claims, he created phony research reports. The SEC also charged his wife Lisa Hovan and his brother Edward Hovan for their roles in the fraudulent scheme at Hovan Capital Management (HCM). SEC Settles Litigation With Former Execs of AOL Time Warner By Securites Lawprof The SEC announced that, on September 6, 2011, the United States District Court for the Southern District of New York entered a settled final judgment against J. Michael Kelly, the former Chief Financial Officer of AOL Time Warner Inc. and that on July 19, 2010, the district court entered a settled final judgment against Joseph A. Ripp, the former Chief Financial Officer of the AOL Division of AOL Time Warner, in SEC v. John Michael Kelly, Steven E. Rindner, Joseph A. Ripp, and Mark Wovsaniker, Civil Action No. 08 CV 4612 (CM)(GWG) (S.D.N.Y. filed May 19, 2008). The final judgments resolve the Commission’s case against Kelly and Ripp. The Commission’s complaint alleges that, from at least mid-2000 to mid-2002, AOL Time Warner overstated the company’s online advertising revenue with a series of round-trip transactions. The complaint further alleges that the defendants participated in this effort and that their actions contributed to this overstatement. Online advertising revenue was a key measure by which analysts and investors evaluated the company. Without admitting or denying the allegations in the complaint, Kelly consented to entry of a final judgment permanently enjoining him from future violations of Section 17(a)(2) and (3) of the Securities Act of 1933 and ordering him to pay disgorgement of $200,000 and a civil penalty of $60,000. Without admitting or denying the allegations in the complaint, Ripp consented to the entry of a final judgment permanently enjoining him from future violations of Rule 13b2-1 promulgated under the Securities Exchange Act of 1934 (Exchange Act) and from aiding and abetting violations of Exchange Act Section 13(b)(2)(A) and ordering him to pay disgorgement of $130,000 and a civil penalty of $20,000. SEC Plans Roundtable on Conflict Minerals Reporting The SEC announced that it will host a public roundtable on Oct. 18 to discuss the agency’s required rulemaking under Section 1502 of the Dodd-Frank Act, which relates to reporting requirements regarding conflict minerals originating in the Democratic Republic of the Congo and adjoining countries. According to the SEC, the panel discussions will focus on key regulatory issues such as appropriate reporting approaches for the final rule, challenges in tracking conflict minerals through the supply chain, and workable due diligence and other requirements related to the rulemaking. FINRA Fines Raymond James for Unreasonable Commissions FINRA ordered Raymond James & Associates, Inc. (RJA) and Raymond James Financial Services, Inc. (RJFS) to pay restitution of $1.69 million to more than 15,500 investors who were charged unfair and unreasonable commissions on securities transactions. FINRA also fined RJA $225,000 and RJFS $200,000. FINRA found that from Jan. 1, 2006 to Oct. 31, 2010, RJA and RJFS used automated commission schedules for equity transactions that charged more than15,500 customers nearly $1.69 million in excessive commissions on over 27,000 transactions involving, in most instances, low-priced securities. The firms' supervisory systems were inadequate because the firms established inflated schedules and rates without proper consideration of the factors necessary to determine the fairness of the commissions, including the type of security and the size of the transaction. FINRA required the firms to revise their automated commission schedules to conform to the requirements of the Fair Prices and Commissions Rule. In settling these matters, RJA and RJFS neither admitted nor denied the charges, but consented to the entry of FINRA's findings. September 29, 2011 in Other Regulatory Action | Permalink Judge Rakoff Reduces Madoff Trustee's Claims Against Net Winners Judge Jed Rakoff significantly reduced the amount of money the Madoff trustee can potentially recover from "net winners." In Picard v. Katz (S.D.N.Y. 09/27/11), the trustee sought to recover over a billion dollars from defendants Saul Katz and Fred Wilpon on a variety of theories under federal bankruptcy law and New York Debtor and Creditor Law. The court, however, dismissed all claims except those alleging actual fraud and equitable subordination and narrows the standard for recovery under the remaining claims. First, because Madoff Securities was a registered broker-dealer, the liabilities of its customers are subject to the "safe harbor" of Bankruptcy Code section 546(e), under which a trustee cannot avoid settlement payments made by a stockbroker in connection with a securities contract except in cases of actual fraud. The court relied on the plain language of the statute and rejected the trustee's argument that the policy behind the provision did not warrant its application to payments by Madoff Securities to its customers. Accordingly, the court rejected all the trustee's claims based on principles of preference or constructive fraud. Second, with respect to claims based on actual fraud, the court applied the bankruptcy code's avoidance provision permitting the trustee to clawback payments made by Madoff Securities to its customers within two years of the bankruptcy filing. The bankruptcy code, however, provides that a transferee "that takes for value and in good faith" may retain its interest to the extent it gave value to the debtor in exchange for such transfer. Accordingly, the trustee cannot recover the principal invested by a Madoff customer absent bad faith. The trustee can recover a net winner's profits regardless of good faith. Third, the court rejected the customers' argument that, so long as they acted in good faith, their profits, as reflected on their monthly statements, were legally binding obligations of Madoff Securities, so that payments of those profits were simply discharges of antecedent debts. Rather, as to payments received in excess of their principal, customers would have to show that they took for value. Fourth, the court leaves open whether the trustee can avoid as profits only what defendants received in excess of their investment during the two-year look back period or instead the excess they received over the course of their investment with Madoff. According to the trustee's complaint, defendants' profits amounted to about $83 million in the two-year period and about $295 million over the course of their investment. Fifth, the court discusses what lack of "good faith" means in this context. Both sides agreed that actual knowledge (which the trustee did not allege) or willful blindness (which the trustee did allege and about which the court expresses skepticism) would constitute lack of good faith. The trustee also argued that "inquiry notice" and failure to investigate constituted lack of good faith; the defendants, of course, disagreed. The court rejected the latter in the context of a SIPA trusteeship, where bankruptcy law is informed by federal securities law. Just as fraud, in the context of federal securities laws, requires scienter, so too "good faith" in a SIPA bankruptcy implies a lack of fraudulent intent. In particular, an investor generally has no duty to investigate its broker in the absence of red flags that suggest a high probability of fraud. Finally, the trustee can subordinate the defendants' own claims against the estate only by proving that the defendants invested with Madoff Securities with knowledge, or in reckless disregard, of its fraud. September 29, 2011 in Judicial Opinions | Permalink SEC Charges Bay Area Investment Adviser for Defrauding Clients and Falsifying Documents During SEC Exam The SEC charged a San Francisco-area investment adviser with fraud for lying to clients about how brokerage commission rebates were being used and producing phony documents to cover up the fraud during an SEC examination. The SEC alleges that Kurt Hovan misappropriated more than $178,000 in “soft dollars” that he falsely claimed to be using to pay for legitimate investment research on his clients’ behalf. In reality, Hovan was secretly funneling the money for such undisclosed uses as office rent, computer hardware, and his brother’s salary. When SEC examination staff asked Hovan to provide documentation to back up his claims, he created phony research reports. The SEC’s complaint charges Kurt Hovan, Lisa Hovan, Edward Hovan, and HCM with violating the antifraud provisions of the federal securities laws, and asserts additional recordkeeping violations against Kurt Hovan and HCM. The complaint seeks injunctive relief, disgorgement with prejudgment interest, and financial penalties. SEC Charges Long Island-Based Hedge Fund Manager With Fraud Involving PIPE Transactions The SEC charged a Long Island-based investment adviser with defrauding investors in hedge funds investing in PIPE transactions and misappropriating more than $1 million in client assets for his personal use. The SEC alleges that Corey Ribotsky and his firm The NIR Group LLC repeatedly lied to investors to hide the truth that his PIPE investment and trading strategy was failing during the financial crisis. For example, Ribotsky falsely told investors that despite the adverse market conditions he could liquidate all of the PIPE investments in 36 to 48 months – a practical impossibility given the size of the investments. Meanwhile, Ribotsky misused investor money by writing checks to pay for personal services and such luxury items as a Lexus, Mercedes, and Rolex watch. According to the SEC’s complaint , NIR’s family of AJW Funds provided cash financing to distressed, emerging growth, and start-up microcap companies quoted on the Over-the-Counter Bulletin Board or the Pink Sheets. The AJW Funds were typically invested in 120 to 130 different companies at any given time. The SEC alleges that beginning in July 2004, Ribotsky began siphoning assets from one of the AJW Funds he was managing through NIR. NIR’s strategy of investing in distressed and start-up companies began to show signs of failure by mid-to-late 2007. Many of the distressed companies to which the AJW Funds had made loans were by then essentially defunct or on the verge of filing for bankruptcy. The SEC alleges that Ribotsky made false and misleading statements to investors while his hedge funds were struggling to create the illusion of success. The SEC’s complaint seeks a final judgment permanently enjoining Ribotsky and NIR from future violations of the above provisions of the federal securities laws and ordering them to disgorge any ill-gotten gains plus prejudgment interest and pay monetary penalties. Updated Market-Wide Circuit Breaker Proposals to Address Extraordinary Market Volatility The SEC announced that the national securities exchanges and the FINRA are filing proposals to revise existing market-wide circuit breakers that are designed to address extraordinary volatility across the securities markets. When triggered, these circuit breakers halt trading in all exchange-listed securities throughout the U.S. markets. The proposals being filed today would update the market-wide circuit breakers by among other things reducing the market decline percentage thresholds necessary to trigger a circuit breaker, shortening the duration of the resulting trading halts, and changing the reference index used to measure a market decline. If approved by the Commission, the new market-wide circuit breaker rules would replace the existing market-wide circuit breakers, which were originally adopted in October 1988. The proposals would revise the existing market-wide circuit breakers by: Reducing the market decline percentage thresholds necessary to trigger a circuit breaker from 10, 20, and 30 percent to 7, 13, and 20 percent from the prior day’s closing price. Shortening the duration of the resulting trading halts that do not close the market for the day from 30, 60, or 120 minutes to 15 minutes. Simplifying the structure of the circuit breakers so that rather than six there are only two relevant trigger time periods — those that occur before 3:25 p.m. and those that occur on or after 3:25 p.m. Using the broader S&P 500 Index as the pricing reference to measure a market decline, rather than the Dow Jones Industrial Average. Providing that the trigger thresholds are to be recalculated daily rather than quarterly. September 27, 2011 in Other Regulatory Action, SEC Action | Permalink SEC & RBC Settle Charges of Selling Unsuitable Investments to Wisconsin Schools The SEC charged RBC Capital Markets LLC for misconduct in the sale of unsuitable investments to five Wisconsin school districts and its inadequate disclosures regarding the risks associated with those investments. According to the SEC’s order instituting administrative proceedings, RBC Capital marketed and sold to trusts created by the school districts $200 million of credit-linked notes that were tied to the performance of synthetic collateralized debt obligations (CDOs). The school districts contributed $37.3 million of district funds to the investments with the remainder of the investment coming from funds borrowed by the trusts. The sales took place despite significant concerns within RBC Capital about the suitability of the product for municipalities like the school districts. Additionally, RBC Capital’s marketing materials failed to adequately explain the risks associated with the investments. RBC Capital agreed to settle the SEC’s charges by paying a total of $30.4 million that will be distributed in varying amounts to the school districts through a Fair Fund. Last month, the SEC separately charged St. Louis-based brokerage firm Stifel, Nicolaus & Co. and a former senior executive with fraudulent misconduct in connection with the same sale of the CDO investments to the school districts. Court Dismisses Fraud Claims Against AOL Senior Managers Pursuant to Janus A frequent question in the aftermath of the 2008 financial meltdown is: why aren't individual defendants being held accountable for their misdeeds? Part of the difficulty is establishing securities fraud and the difficulty of pleading and proving scienter. Another difficulty results from the definition of a "maker of a statement" the U.S. Supreme Court set forth in Janus Capital Group, Inc. v. First Derivative Traders. In holding that a fund' investment adviser and administrator could not be held liable under Rule 10b-5 for misstatements in the Fund's prospectus, the Court defined a "maker of a statement" as "the person or entity with ultimate authority over the statement, including its content and whether and how to communicate it....One who prepares or publishes a statement on behalf of another is not its maker." In SEC v. Kelly (S.D.N.Y. Sept. 22, 2011), the court relied on that language to hold that two AOL senior managers could not be liable under Rule 10b-5 and 33Act section 17(a) for misstatements about advertising revenues. As doubtful litigation strategy, the SEC conceded that Janus foreclosed a misstatement claim under Rule 10b-5(b), but argued that they could be liable under "scheme liability" based on Rule 10b-5(a) and (c) and section 17(a) of the 33 Act. The court rejected both these arguments, because "this case is not about conduct that is itself deceptive -- it is about conduct that became deceptive only through AOL's misstatements in its public filings." Moreover, since the elements of a 17(a) claim are essentially the same as those for Rule 10b-5 claims, the court also dismissed those claims. Shareholder's Challenge to Executive Compensation Survives MTD Because of Negative Say-on-Pay Vote A recent opinion suggests that a negative shareholder vote on a "say-on-pay" resolution will improve shareholders' chances in surviving a motion to dismiss a derivative suit alleging excessive executive compensation. In NECA-IBEW Pension Fund v. Cox (S.D.Ohio 09/20/11), involving Cincinnati Bell, Judge Timothy Black framed the question: Whether a shareholder of a public company may sue its directors for breach of the duty of loyalty when the directors grant $4 million dollars in bonuses, on top of $4.5 million dollars in salary and other compensation, to the chief executive officer in the same year the company incurs a $61.3 million dollar decline in net income, a drop in earnings per share from $0.37 to $0.09, a reduction in share price from $3.45 to $2.80, and a negative 18.8% annual shareholder return. In answering that question in the affirmative, the judge emphasized that at the motion to dismiss stage, plaintiff only needs to state a plausible claim and that the business judgment rule imposes a burden of proof, not a burden of pleading. The factual allegations raise a plausible claim that the bonuses approved by the directors in a time of the company's declining financial performance violated Cincinnati Bell's pay-for-performance compensation policy and thus constituted an abuse of discretion or bad faith. In particular, the opinion references the fact that 66% of voting shares voted against the say-on-pay resolution; Cincinnati Bell was one of only 1.6% of public companies that received negative shareholder recommendations on their say-on-pay resolutions (as of the end of June 2011). In addition, plaintiff was excused from the requirement of pre-suit demand because of futility, because it pled specific facts to give reason to doubt that the directors could make unbiased, independent business judgments about whether to sue: Given that the director defendants devised the challenged compensation, approved the compensation, recommended shareholder approval of the compensation, and suffered a negative shareholder vote on the compensation, plaintiff has demonstrated suficient facts to show that there is reason to doubt these same directors could exercise the independent business judgment over whether to bring suit against themselves for breach of fiduciary duty.... Perhaps the nonbinding advisory vote will prove to have more teeth than anticipated! S&P Gets Wells Notice About CDO Rating The McGraw-Hill Companies, Inc., the parent company for Standard & Poor's, issued a press release stating that on September 22, 2011, it received a "Wells Notice" stating that the SEC staff is considering recommending that the Commission institute a civil injunctive action against S&P, alleging violations of federal securities laws with respect to S&P's ratings for a particular 2007 offering of collateralized debt obligations, known as "Delphinus CDO 2007-1." If the SEC does determine to bring an action, it will be the first against a rating company based on a faulty rating. ProPublica has the background on the Delphinus CDO; see In a First, SEC Warns Rating Agency It May Bring Financial Crisis Lawsuit. Griffin et al. on Reg FD Enforcement Enforcement and Disclosure under Regulation FD: An Empirical Analysis, by Paul A. Griffin, University of California, Davis - Graduate School of Management; David H. Lont, University of Otago - Department of Accountancy and Finance; and Benjamin Segal, INSEAD - Accounting & Control Area, was recently posted on SSRN. Here is the abstract: While Regulation FD was designed to benefit investors by curbing the selective disclosure of material non-public information to “covered” investors, such as analysts and institutional investors, it can also impose costs. This paper finds that FD levies three kinds of enforcement and disclosure costs. First, investors cannot recover as part of an SEC enforcement action the gains to covered investors from their alleged use of the non-public information. Second, investors lose because the market responds negatively to an SEC enforcement announcement. Third, investors suffer because some companies post their FD filings well after the due date, without earlier public disclosure. September 25, 2011 in Law Review Articles | Permalink SEC CHARGES THREE PRINCIPALS OF FORMERLY REGISTERED BROKER-DEALER FOR INVOLVEMENT IN MICROCAP STOCK FRAUD SCHEME AND STOCK SALES IN UNREGISTERED OFFERINGS The SEC filed charges against the three former principals of Westcap Securities, Inc., a now-defunct broker-dealer – Thomas Rubin (“Rubin”), Westcap’s then Chief Executive Officer, Christopher Scott (“Scott”), Westcap’s then Chief Compliance Officer, and Jeff Greeney, Westcap’s then Chief Financial Officer, and their related entities. The Commission alleges that Rubin and Scott committed securities fraud by, among other things, engaging in market manipulation in a broader manipulative scheme, and also, through their respective related entities, BGLR Enterprises, LLC and E-Info Solutions, LLC, violated the registration provisions of Section 5(a) and (c) of the Securities Act of 1933 (“Securities Act”) by selling stock in unlawful unregistered offerings. The Commission separately alleged that Greeney, through his related entity, Big Baller Media Group, LLC, violated the registration provisions by selling stock in unlawful unregistered offerings. The Commission alleges that Rubin and Scott participated in a broader market manipulation ring that involved bringing companies public through reverse mergers; using Westcap to raise funds for the newly-created companies through purported private placements; and manipulating the public markets for those newly-created public companies, which allowed Rubin and Scott, through their related entities, to sell their holdings of these companies at artificially inflated prices for total proceeds exceeding $1.5 million. The Commission seeks injunctions, penny stock bars, disgorgement, and penalties from Rubin and Scott (and their related entities, BGLR Enterprises and E-Info Solutions), in addition to an officer and director bar against Scott because he was an officer of one of the microcap issuers. With respect to Greeney, the Commission alleges that he, through his related entity, sold shares in unregistered offerings of two of the microcap issuers for unlawful profits of approximately $330,000, in violation of the registration provisions of the Securities Act. Greeney and his related entity, Big Baller Media Group, have offered to settle the Commission’s allegations.

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Advertisement Home > Finance & Investment > Massive REIT Stock Offerings May Signal Future Deals Massive REIT Stock Offerings May Signal Future Deals Comments 0 Advertisement A recent spate of stock offerings by some of the retail sector’s stronger REITs points to a possible pick-up in acquisitions going forward, analysts say. Since March 19, more than a quarter of the sector’s 17 REITs conducted stock offerings. Most of those proceeds, which together with debt offerings might exceed $2.6 billion in total, will go towards paying down outstanding balances on revolving lines of credit. But that doesn't explain all the cash REITs have raised. Some have said funds may be used for "general corporate purposes"—REIT-speak for possible acquisitions, joint venture funding, developments, redevelopments and debt payments. Firms with strong enough balance sheets might even use some of the equity being raised for either direct property buys or debt purchases, says Michael Magerman, senior vice president for the REIT sector with Realpoint LLC, a Horsham, Pa.-based credit rating agency. However, even if acquisitions pick up, under current market conditions these transactions will likely remain small and won’t include acquisitions of whole companies. "I think one of the reasons so many REITs have [done stock offerings] recently is they realized there is a premium to be placed on shoring up their balance sheets and having more capital flexibility," says Todd Lukasik, a REIT analyst with Morningstar. "Some of them may use their improved balance sheets to look at acquisitions. We would expect there to be some bargains available for retail properties given what’s going on in that market." Simon Property Group (NYSE: SPG), an Indianapolis-based REIT with the largest retail portfolio in the country at 246 million square feet, was the first to announce a stock offering on March 19, concurrent with a debt offering. By March 25, the firm closed on the sale of 17.25 million common shares, priced at $31.50 per share, and $650 million of its 10.35 percent senior unsecured notes, for a total of approximately $1.2 billion. Speaking at New York University’s annual REIT symposium on Apr. 2, Steven Roth, chairman and CEO of Vornado Realty Trust (NYSE: VNO), a New York City-based diversified REIT which has also commenced a stock offering recently, said the stronger players in the REIT sector would soon start raising equity in order to buy quality assets (Read story here) Since then, five additional retail REITs have announced stock offerings, including Kimco Realty Corp. (NYSE: KIM), Regency Centers Corp. (NYSE: REG), Weingarten Realty Investors (NYSE: WRI), Acadia Realty Trust (NYSE: AKR) and Equity One, Inc. (NYSE: EQY). The trend was further spurred by a price recovery in the REIT sector—in the past month, REIT shares have risen by 30 percent to 60 percent, according to Morningstar. In March, the NAREIT Equity REIT Index registered a 3.05 percent increase in REIT prices after a 21.28 percent drop in February. Fearing the rally might not last, REIT executives might feel they have a short window of opportunity to improve their balance sheets, says Rich Moore, an analyst with RBC Capital Markets. "There is real fear about this credit environment," Moore notes. "I think it tells you how bad things are when you have so many REITs making the same play. When they all do it, something’s not right." Nevertheless, most analysts agree some of the money might be deployed toward acquisitions of choice assets, given that in April prices on commercial properties were down 17 percent year-over-year, according to Real Capital Analytics, a New York City-based research firm. Retail prices were down more than 25 percent from 2007 peaks. Many observers predict that the peak-to-trough drop-off in retail property prices will total approximately 45 percent. Equity One, Inc., a North Miami Beach, Fla.-based REIT that announced an offering of 6.5 million common shares on Apr. 8, emerged as the most likely to target acquisitions. In addition to the common stock offering, which is expected to net $89 million, the REIT agreed to sell 2.45 million stock shares to MGN America, LLC, a firm affiliated with its largest stockholder Gazit-Globe Ltd., for a net of $35 million. Since Equity One already boasts a strong balance sheet and recently expressed interest in Ramco-Gershenson Properties Trust (NYSE: RPT), a Farmington Hills, Mich.-based REIT with a 20-million-square-foot portfolio, analysts think it might be getting ready to strike. (Read story here.) "They could make a move," says Moore. Simon also remains high on the top of REITs that might be looking at acquisitions. While analysts say it’s unlikely Simon would want to deal with General Growth Properties’ debt load (Read story here.), there are probably some assets in the latter’s portfolio that Simon would find attractive if the price was low enough, says Lukasik. Print Please Log In or Register to post comments. Advertisement Related ArticlesRetail REITs pursue stock offerings in a Darwinian battle of the balance sheets. Westfield/CPPIB Joint Venture Signals Strong Interest in Fortress Malls Blackstone’s Purchase of Equity One Portfolio Signals Confidence in Retail Assets Equity One to buy IRT Key factor for portfolio diversification is REITs low correlation to other stocks and bonds Advertisement The Latest in Finance & Investment Colony Capital’s Thomas Barrack Extolls Trump’s Virtues at Republican National Convention

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More Gloom on the Island of Lost Toy Makers By CONSTANCE L. HAYS The welcome mat is out once again at the annual winter toy fair in New York, but the industry's prospects have rarely looked more uninviting. Already, two major toy-selling chains, F.A.O. Schwarz and Zany Brainy, have essentially disappeared after FAO Inc., their parent company, declared bankruptcy 14 months ago. Two others -- Toys ''R'' Us and KB Toys -- have seen their business fall off. The industry, which sells about $20 billion worth of toys and games a year in the United States, is dominated by discounters like Wal-Mart Stores and Target. Their relentless price-cutting and focus on drawing attention to only the most popular toys has pushed the major specialty retailers to the wall. Toys ''R'' Us is for sale, and although FAO Inc. has emerged from bankruptcy, it is left with just two stores: its traditional showcase on Fifth Avenue in Manhattan, which has recently been redone, and another in Las Vegas. Toy sellers and their suppliers have sought lately to reverse the trend. But global sales fell 2 percent last year, and many toy manufacturers are so unsure of their ability to grow by selling toys that they are branching out into candy, furniture, apparel and other areas. Some are pressuring retailers that never sold toys before -- electronics stores, drugstores and grocery chains, for example -- to take them. ''You have a retail environment that's shrinking, with fewer players and more competition for shelf space,'' said Lou Novak, chief executive of Playmates Toys, based in Costa Mesa, Calif. ''All of those components have led to less innovation.'' Adding to the industry's problems, children are losing interest in toys earlier, their attention seized by video games, cable TV and the Internet, in a phenomenon known to the trade as ''kagoy,'' which stands for ''kids are getting older, younger.'' What only a few years ago nicely held an 8-year-old's attention -- action figures, for example -- now is considered marketable only to 3-, 4- and 5-year-olds, said Neil Friedman, the president of Fisher-Price Brands, a division of Mattel. ''You're not going to change it,'' he added. Successful toys, when they do come along, are quickly copied as store brands by suppliers with hefty contracts from the discount chains. At the Toy Industry Association, officials are in what amounts to crisis mode, searching for solutions to their members' problems. ''We talk to Wal-Mart all the time,'' said Thomas P. Conley, the association's president. ''Clearly, they are not going to change. Toys are but one category for them, and they have a global market strategy.'' A Wal-Mart spokeswoman said the company's goal was to provide consumers with items ''at a value in a one-stop-shopping environment that focuses on customer service.'' The toy association has lost members whose business evaporated because their top-selling products were duplicated for Wal-Mart by lower-cost manufacturers in China, Mr. Conley said. He said he worried about the future of innovation, since smaller companies tended to be the ones with the smart new ideas. ''If they can't survive and innovate,'' he said, ''what's going to happen to the business?'' The Wal-Mart spokeswoman, Karen Burk, said in a statement that the company was intent on selling brand-name toys ''at the best value'' but added: ''If we can come up with private-label items that can bring something different, unique or new to a category that allows us to be a better agent for our customers.'' A store brand, she said, ''fills a void in the category,'' either in pricing or value. Executives at some of the smaller toy makers are alternately despondent and hopeful. ''There are a lot more roadblocks than there ever used to be, starting with the number of accounts to sell to,'' said Jim Engle, chief executive of Little Kids, a small toy company in Providence, R.I., with less than $50 million in annual sales that is best known for its spill-proof bubble sets. Mr. Engle has spent 30 years in the toy industry, starting as a salesman for Hasbro. While the retail scene has shifted, he also believes that price is not the only object for all shoppers. ''When the retail environment gets tough, a lot of people try to compete via price,'' he said. ''Clearly, there are people out there whose discretionary income is limited. But I do think that there are a lot of people who are not driven by price. They want quality, and they will not go to some of the big-box stores to shop.'' Discounters, however, have reinforced the idea that many toys can be purchased for less than specialty toy stores charge. And that has taken a toll. When Wal-Mart and Target engaged in a price war during the 2003 holiday selling season, Toys ''R'' Us was the big loser. Last summer, Toys ''R'' Us management said it was splitting its business, probably keeping the more profitable juvenile-furniture and baby clothing division while putting the toy operation up for sale. Buyers were expected to submit their final bids this month for the toy stores, which could end up parceled out primarily for their real estate value. Ms. Burk of Wal-Mart said retailers had to adapt, which she called ''a win-win for consumers.'' ''No retailer can be all things to everyone and specialty stores of many kinds have been able to find success by providing merchandise or services we don't,'' she said. 1

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Dubai Expo will fuel boom, pose challenges Dubai, October 21, 2013 By Martin Dokoupil and Praveen Menon An international meeting in Paris next month may trigger billions of dollars of fresh investment in Dubai - and, if plans are not handled carefully, contribute to the kind of boom-and-bust cycle which nearly bankrupted the emirate four years ago. Dubai is competing with Izmir in Turkey, Sao Paulo in Brazil and Yekaterinburg in Russia for the right to host the 2020 World Expo. A vote of the 167 member states of the Paris-based Bureau International des Expositions is expected to choose between them at an assembly on Novemebr 26-27. Holding the world's fair would be a defining moment for Dubai, marking the transformation of the emirate of 2.2 million people into a top global centre for tourism, trade and finance. But it would carry a risk. Anticipation of a spike in demand due to the World Expo could cause property developers to build too many residential and commercial projects, and investors to pour too much money into them, inflating a speculative bubble that would eventually burst. Such a bubble popped in 2008-2010, when the global financial crisis caused Dubai property prices to crash by more than 50 percent, shaking financial markets around the world. "If Dubai wins the World Expo 2020 bid, we will witness another boom in the property market," said Khalid Kalban, chief executive of Dubai-listed property developer Union Properties , whose share price is up 142 percent so far this year. "Hopefully this will be a planned boom rather than a speculative one, which we saw before," he said. FRONT-RUNNER Thanks to its status as an international business hub, as well as a slick public relations campaign, Dubai may be the front-runner in the competition to host the Expo - although it could face stiff competition from Izmir, which lost its bid for Expo 2015 to Milan by 86 votes to 65. Signalling Dubai's determination, the logo for its Expo bid adorns government vehicles, buildings and emails. Because of Dubai's small population, the Expo could have more of an impact on its economy than most host locations. The government cites a report by consultancy Oxford Economics which estimates the event would attract 25 million visitors over six months and create about 277,000 jobs. Many property developers have expressed interest in projects around the proposed 438-hectare Expo site in Jebel Ali, near Dubai's new airport and the third busiest port in the world. "Dubai's real estate growth will be in this area," said Craig Plumb, regional head of research at consultants Jones Lang LaSalle. In particular, "there's a need for more hotels close to the Expo site." Some 45,000 new hotel rooms would need to be added, based on the government's calculation that 70 percent of the visitors would come from outside the UAE, HSBC analysts Patrick Gaffney and Aybek Islamov said. A huge exhibition centre would need to be built. Dubai's transport authority said in June that it would expedite plans for a 5 billion dirham ($1.4 billion) extension to its metro rail line if the emirate won the Expo. As a result, total spending related to the Expo, including private sector projects, could reach $18.3 billion, HSBC estimated. That would still be dwarfed by China's spending on the 2010 Shanghai Expo, which totalled some $58 billion according to Chinese media reports. The Dubai government is expected to provide a total of about $6.8 billion of capital spending for the Expo, while the fair would cost around $1.6 billion to operate, Bank of America Merrill Lynch said in a report. Such figures, spread over seven years, look manageable for Dubai's $90 billion economy, even though it is still recovering from the last crisis; the International Monetary Fund estimates that about $64 billion of debt held by the government and related enterprises will come due between 2014 and 2016. Direct economic benefits from hosting the Expo might be modest. The government estimates it would generate an additional $23 billion in spending by the hosts, participants and visitors between 2015 and 2021. Many of the jobs created would be for relatively low-paid construction workers from abroad, who remit much of their earnings back to their home countries. Bank of America predicted the Expo could lift Dubai's gross domestic product growth by around 0.5 percentage point annually in 2016-2019 and about 2 percentage points in 2020/21. It is not certain that a Dubai Expo would make a profit; Shanghai's event enjoyed an operating profit of over 1 billion yuan ($164 million), but Germany's 2000 Expo in Hanover lost $1 billion or more after attendance fell short of forecasts. For proponents of the project, however, the immediate economic impact is secondary to the benefits of burnishing Dubai's reputation and introducing it to millions more visitors from around the world. Much of the emirate's success has been built on distinguishing itself through aggressive marketing from competing centres such as Qatar and Bahrain. "I can tell you now, the benefit will outweigh the cost of hosting the event," Sheikh Ahmed bin Saeed Al-Maktoum, head of Dubai's supreme fiscal council and its Expo committee, told reporters last month. Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum described his approach in a book which he published last month: "To take a risk and fail is not a failure. The real failure is the fear of taking any risk...If we had waited for regional stability to be restored before launching our large projects, where would we stand today?" MANAGING GROWTH One risk for Dubai lies in the fact that its Expo bid is being made at a time when the property market is already rebounding strongly from the crash and developers have already announced tens of billions of dollars of projects this year. Apartment prices have jumped over 20 percent in the past 12 months; the stock market is up 79 percent this year. In this climate, winning the Expo could attract a fresh surge of money that overheats the property sector, some analysts worry. "We think that the property market dynamics are increasingly being driven by investor demand rather than end-user demand," said Farouk Soussa, Citigroup's chief economist for the region. "The implementation of large-scale projects risks exacerbating existing supply overhang issues and could fuel a future boom-bust property cycle in the emirate." The IMF issued a similar warning in July, saying Dubai might need to intervene in its property market to prevent another bubble from forming. There are many signs that authorities are aware of the risk and are taking steps to counter it. This month Dubai doubled, to 4 percent, the registration fee charged on land transactions; the UAE central bank plans rules to restrict mortgage lending and limit banks' lending exposure to big state firms. But such steps cannot guarantee stability in the real estate market - especially if Dubai cannot find new occupants for its projects once the Expo crowds have gone home. "The main downside risks include project funding given the existing elevated leverage in the system, as well as the likelihood of subsequent overcapacity in the hospitality sector, in our view," Bank of America said. South Africa saw its hotel occupancy jump to 84 percent for its 2010 soccer World Cup tournament, but the rate plunged to just over 55 percent in the following year because of fewer visitors and greater supply, HSBC said. "Dubai's toughest challenge isn't generating growth, it's managing its pace," said Simon Williams, chief economist for the Middle East and North Africa at HSBC. "The decisions it takes in the months ahead will show us what lessons it has learnt from the boom-and-bust cycle of 2003-08." - Reuters economy | Dubai | real estate | growth | World Expo | More Analysis, Interviews, Opinions Stories

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When Your Parents' Money Is Your Problem Preventing a crisis down the line may involve making tough decisions now. AARP The Magazine, September 9, 2008|Comments: 0 Don Quinn,* 45, was flabbergasted to discover late in 2005 that his father, a former bankruptcy judge, was in serious financial trouble. Diabetic and seriously ill, George Quinn had given responsibility for his money to his wife of 30 years, Don’s stepmother, Nora. That seemed wise, since she was a former accountant. But then a fast-growing brain tumor destroyed her impulse control, and in a year’s time she racked up close to $200,000 in credit card debt, from gambling and loans to her son from a previous marriage. Only after Nora had emergency surgery to remove the tumor did she call Don in a panic. Don and his father had never talked about money. “Not even slightly,” Don says. “I was in complete and utter shock.” Don went from having no involvement in his parents’ financial affairs to having to be responsible for them completely. Nora and George, who was of sound mind but had no inkling of his wife’s spending, willingly signed powers of attorney to Don, and the younger Quinn began negotiating with their creditors, with help from an accountant and a lawyer. He also drew down his own savings account “to a minimal balance” so he could lend his parents $15,000. To give them more cash and to keep them from driving—Don considered letting either of them behind the wheel unsafe—he took out an $8,000 loan from a credit union to buy his father’s car. He used a credit card to help pay his parents’ moving expenses after they sold their house and moved to assisted living. “There was a lot of float involved,” he says. Matt Plummer hears stories like this all the time. “Almost never do adult children know the lay of the land regarding their parents’ finances,” says Plummer, who in 2001 started a financial-counseling program in Milwaukee, for its older residents. “It’s something that’s just not discussed. A classic scenario is that the son or daughter comes into town when a parent goes into the hospital, then stays at the house and finds that the refrigerator is bare and there are past-due bills around.” Such surprises often prove costly. Half of those caring for a loved one 50 or older—about 17 million Americans—spend more than 10 percent of their income on caregiving, according to a study released last year by the National Alliance for Caregiving and Evercare. The added expense can mean adult children stop saving or spend their savings, skimp on their own medical care, or pile on debt, a particularly worrisome move in a sputtering economy. Some frank conversations with your parents now might prevent a future crisis like the one the Quinns experienced, says Ramsey Alwin of the Washington, D.C., nonprofit group Wider Opportunities for Women. Alwin leads a project called the Elder Economic Security Initiative, which studies the cost of living for retirees. She notes that inflation is hitting those on fixed incomes harder than the rest of the population because the cost of such basics as heating oil, gasoline, food, and medicine jumped dramatically in 2008, while Social Security payments rose only 2.3 percent. Because many people don’t seek help until they’re in a crisis—and sometimes don’t divulge the full extent of their problems even then—the lesson financial pros draw again and again is the same: families need to start talking about money before there’s an emergency. Among the obstacles to that appoach is the excuse “It’s none of the kids’ business how much I have or I don’t have,” says Suzann Enzian Knight, who for 25 years has taught low- and middle-income families how to manage their money at the University of New Hampshire Cooperative Extension in Durham. “Parents need to understand that there may come a time when they’ll need assistance,” she says. To ease into what can be a sensitive conversation, avoid becoming a “mother to your mother,” says Knight. “Don’t take over initially. You’re trying to determine what the need is, and help the aging parent make critical decisions, as opposed to telling him or her what to do.” To get to the harder conversation about a parent’s overall financial status, Knight suggests these icebreakers: 1. Use the News: Almost half of older Americans carry debt. Talk about your coworker’s father who can’t afford his prescription drugs, or a news story about an older person who owes more on a mortgage than her home is worth. 2. Talk Bargains: Perhaps you can help a parent find less costly phone service or cheaper groceries. Then probe for concerns. Says Knight: “Ask, ‘How will you get through the winter with the cost of heating?’” 3. Be Humble: Ask your father to join you at a financial-education workshop—to help you, not him. To find a free or affordable program, call your state or county cooperative extension service or visit the online complement to the cooperative extension system at www.extension.org/personal_finance. 4. Pose Questions: If you notice unopened or unpaid bills in your parent’s house, ask about them. The goal is for parents to provide their kids with critical information, including the whereabouts of bank accounts, insurance, and wills. 5. Write a Letter: If you can broach a subject more easily on paper, write down how much you care about your mom and that you want to plan ahead so her life goes smoothly. Tell her how she helped you and how you want to give back. In the end, the best argument for open communication is what happens when there isn’t any. Though Don’s father paid him back within two years, untangling the mess sucked up a lot of time and left Don disappointed, angry, and stressed. “It was a complication I didn’t need in my life,” he says. “You’re put in this position. They didn’t have anyone else.” Elaine Appleton Grant is a freelance writer based in Strafford, New Hampshire. *His family's names have been changed. Lending to Mom Formalizing a private loan can make a touchy situation easier Loans to relatives can exact an emotional price—unpaid debts strain relationships, to put it mildly. One way to remove the emotion: hire a service to manage the loan and set up automatic payments. This kind of peer-to-peer lending that circumvents banks is a growing phenomenon, spurred by the Web. Boston-based Virgin Money (800-805-2472) helps individuals make personal, business, and mortgage loans. For a $99 fee, you can formalize, say, a $15,000 loan to your mother. You set the interest rate and Virgin Money does the paperwork. (For the IRS to see yours as a legitimate loan, rather than as a gift, you must charge market-rate interest.) For $199 plus $9 per payment, the company will also electronically debit her bank account and credit yours, taking you out of the role of collection agent. “It’s a very nice way to handle delicate communication between a borrower and a lender,” says Jim Bruene, editor of Online Banking Report, an industry newsletter. If your parent can’t keep up with the pay schedule, you can revise it. Unless you direct Virgin to do so, it doesn’t report to credit bureaus. At Prosper, borrowers post loan requests of $1,000 to $25,000 for free. Friends and family (and anyone else) can bid for all or part of the loan at interest rates of their choosing. Prosper manages the loan, charging closing and servicing fees that start at 1 percent. Relatives making small loans may find such service is overkill. For $14.95, LoanBack generates pay schedules and binding promissory notes. LoanBack won’t help you collect those payments, though—usually the touchiest part of an awkward process. —E.A.G.

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US charges Australian in IBM insider trading case by Ruth Liew US authorities have announced charges against Australian citizen, Trent Martin, for allegedly trading and tipping others ahead of a 2009 acquisition by computer giant IBM, expanding a related insider trading case filed last month.Federal prosecutors have claimed 33-year old Martin, who worked at a Connecticut brokerage firm, purchased shares of SPSS before IBM agreed to the $US1.2 billion deal. The research analyst was also charged with passing the information to others, including his roommate.On November 29 the Justice Department and the Securities and Exchange Commission charged two former stockbrokers Thomas C. Conradt and David J. Weihaus, including Martin's roommate, for their roles in the alleged insider trading scheme. The three and others made more than $US1 million by trading ahead of the acquisition, prosecutors said. “Martin, Conradt, Weishaus, and their co-conspirators allegedly traded on the basis of material, non-public information concerning IBM’s acquisition of a software company, SPSS Inc., in 2009, earning in the aggregate more than $1 million in profits," according to a statement from the US Federal Bureau of Investigation.According to the FBI statement, the inside information concerning IBM’s acquisition of SPSS allegedly originated from a corporate lawyer, who was part of the legal team that represented the technology giant in the transaction three years ago.On May 31 2009, the lawyer shared inside information concerning the transaction - including the names of the parties and that IBM was about to buy SPSS for a “significant premium" over its market price - with his “close friend", Mr Martin. Martin was specifically named as the source of the information in instant messages between Conradt and Weishaus, authorities said.In June 2009, Mr Martin bought SPSS stock based on the information and shared the tip with his roommate, Mr Conradt, who also bought shares in the company. Mr Conradt also tipped Mr Weishaus on the information.“In instant messages exchanged in July 2009, Conradt and Weishaus discussed their insider trading scheme and the fact that their information came from Martin," the statement said.“For example, on July 1, 2009, Weishaus wrote to Conradt, “somebody is buying spss . . . we should get [CC-1] to buy a f***load [of SPSS shares] . . . ." Conradt responded, “jesus don’t tell anyone else . . . we gotta keep this in the family." Martin was arrested on December 22 in Hong Kong, the Justice Department said.IBM unveiled its acquisition of SPSS on July 28 of 2009, and the takeover target’s shares rose 41 per cent in one day to US$49.45.Mr Martin has been charged with one count of conspiracy to commit securities fraud, and one count of securities fraud.This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant US Attorneys John T. Zach and David B. Massey are in charge of the prosecution. with Reuters NextDC ‘moving in the right direction’ Nokia, still here, shows off Android tablet BlackBerry Leaps back into slider phones Apple and Google heading to agreement over workers’ wage suppression China dumps Apple, Cisco, Intel and more technology brands Latest Stories

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Lawsuit: Investors Harmed in Empire State Building IPO NEW YORK -- Investors in the Empire State Building have filed a lawsuit accusing the real estate magnates who took it public of short-changing them $300 million by refusing to sell the iconic skyscraper at a premium price. According to a complaint filed Tuesday in a New York state court in Manhattan, Peter Malkin and his son Anthony put their own interests ahead of the building's investors by spurning all-cash offers of as much as $2.3 billion for the building and $1.4 billion for Empire State Building Associates, which held the title and master lease. Instead, the Malkins put the landmark building and 17 other properties into Empire State Realty Trust Inc., whose Oct. 1 IPO valued the property at just $1.89 billion and ESBA at just $1.1 billion, according to the complaint. The lawsuit by plaintiff Marc Postelnek seeks class-action status on behalf of more than 2,800 investors who hold shares in ESBA, which was created in 1961 and was supervised by a Malkin company, Malkin Holdings. It claimed the Malkins acted in bad faith by aborting a "bidding war" for the building, and instead enriched themselves by hundreds of millions of dollars through an IPO. "Given their positions of control and authority over the fate of the Empire State Building, %VIRTUAL-article-sponsoredlinks%the Malkins had a duty to act in the best interests of their investors," the plaintiffs' lawyer, John Rizio-Hamilton, a partner at Bernstein Litowitz Berger & Grossmann, representing Postelnek, told Reuters. "By failing to properly consider offers to maximize the building's value, the Malkins breached that duty." The lawsuit seeks to recover profit that building investors allegedly lost because of the Malkins' refusal to sell. Empire State Realty Trust, a real estate investment trust, is a successor to Malkin Holdings. "These claims are wholly without merit and we will respond to them in court," a spokeswoman for the REIT said Thursday. ESBA had been created by Lawrence Wien, the father-in-law of Peter Malkin, and the shares were sold privately. Postelnek oversees a trust for his grandmother, Mabel Abramson, one of the original ESBA investors. Opened in 1931, the 102-story Empire State Building was the world's tallest building for about four decades, until it was passed by the original World Trade Center's north tower. King Kong climbed the Empire State Building in a 1933 movie, and Tom Hanks and Meg Ryan finally met there in a climactic scene of the 1993 movie "Sleepless in Seattle." Empire State Realty Trust (ESRT) went public at $13 a share, the low end of the forecast range. In Thursday afternoon trading, the stock was down 5 cents at $15.30 on the New York Stock Exchange. The case is Postelnek v. Malkin et al., New York State Supreme Court, New York County, No. 654456/2013. The promise: Offers customizable, themed portfolios of up to 30 stocks. Available on: Website, iPhone Motif lets you invest in a very narrow sector -- say, clean tech or companies tied to the housing rebound -- using one of 90 themed portfolios. The site requires a $250 minimum and charges a commission of $9.95 per portfolio. You wouldn't want to use Motif for your retirement fund, but it's a fun way to invest your mad money if you play the market. The service could also be a good introduction to investing for novices, says MIT finance professor Andrew Lo. The promise: Puts your investment data on a single dashboard and recommends ways to optimize your portfolio. Available on: Website, iPhone, Android This site-and-app combo syncs with more than 90 brokerages to track your 401(k), IRA, and stock market investments. You can also see charts breaking down your asset allocation and risk level. What really sets SigFig apart from other investing tools, though, is that the service checks your portfolio weekly for hidden fees, overcharges, and underperforming funds, and suggests alternatives. The promise: Tracks and analyzes your investment, bank, and credit card accounts. App allows you to make payments and transfers. Available on: Website, iPhone, Android Best for investing and budget By combining money management tools with a full listing of your investment accounts, Personal Capital provides a broad financial picture in a single application, says Jim Breune, editor of NetBanker.com, which covers online financial tools. Personal Capital offers fee-based financial advice, but you don't need to buy in to use its website and mobile app. Follow your investments in real time with an app. Mobile offerings vary by brokerage (Fidelity's version is still the most downloaded), but most also let you check news and quotes, says Brett DiDonato of OnlineBrokerRev.com. Available on: iPhone, Android, BlackBerry, Windows Phone A treasure trove of financial info. Track your investments in real time or use interactive charts to get more detailed data about their performance. Best apps to manage your money Six secrets to a dream retirement 5 family vacation bargains Empire State Realty Trust

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Obama, Romney and the Federal Reserve By Sheyna Steiner • Bankrate.com HighlightsRomney has not advocated or endorsed the Audit the Fed bill.The regular monetary policy meetings of the FOMC are closed-door affairs.If Obama has any bones to pick with the Fed, he hasn't made them public. Politics » Obama, Romney And The Federal ReserveThe Federal Reserve is a hot-button issue for some members of Congress, for instance the former presidential candidate Rep. Ron Paul from Texas. Though Paul's supporters were no doubt disappointed that he failed to win the nod from the GOP, his antipathy for the central bank did get some recognition with a spot in the Republican platform. Candidates on the issues Tax plans: Obama vs. Romney Medicare and the election Obama, Romney on FinReg The election choice on Obamacare Vote may heel consumer watchdog Obama, Romney and the Fed Obama vs. Romney on housing Obama vs. Romney on college aid From the platform:(The) Republican Party will work to advance substantive legislation that brings transparency and accountability to the Federal Reserve, the Federal Open Market Committee and the Fed's dealings with foreign central banks. The first step to increasing transparency and accountability is through an annual audit of the Federal Reserve's activities.Though it sounds vaguely Ron-Paulian, Mitt Romney, Republican presidential nominee and former Massachusetts governor, has not advocated or endorsed the Audit the Fed bill approved by the House in July.The bill does offer some specific ideas about where in the central bank to shine some light. Those include discount window and open market operations, agreements with foreign governments and central banks, and Federal Open Market Committee directives.The discount window is the Federal Reserve's emergency lending operation for banks. When solvent banks can't find short-term financing through other means, they can go to the Fed as the lender of last resort. Banks that borrow through the discount window are not publically identified. The term "open market operations" refers to programs in which the central bank buys securities in the open market. More On Politics: Views on politics Campaign contribution spending Federal Reserve coverage Create a news alert for "politics" "The Fed, just like any bank, is always audited to the extent of basic operations to make sure there's no malfeasance," says David Stasavage, a professor of politics at New York University. "But, what they've pushed on more -- and I think this is more of a hot-button issue -- is the extent to which Federal Reserve deliberations or records of deliberations should be subject to greater scrutiny."As it currently stands, the regular monetary policy meetings of the Federal Open Market Committee, or FOMC, are strictly closed-door affairs. Three weeks after the meeting, a paraphrasing of the minutes is released. After five years, a lightly edited verbatim transcript is released.The devil is in the detailsWhile Romney has publically thrown his support behind the idea of auditing the Fed, his campaign has not offered many details beyond that."It is clear that some behind this movement, such as Congressman Paul, want much more than just transparency and accountability," says Anil Kashyap, the Edward Eagle Brown Professor of Economics and Finance at The University of Chicago Booth School of Business."Others may simply feel that some of the beneficiaries from government support during the crisis were not clearly identified. There is a big gap between these two views. Without seeing the actual rules, it is impossible to determine whether this will be a big change or not," he says.The president on the FedFor his part, the president has not had much to say on the issue of auditing the Federal Reserve. He did defend the monetary policies enacted in the first quantitative easing program in 2010.In November 2010, President Barack Obama said, "I will say that the Fed's mandate, my mandate, is to grow our economy. And that's not just good for the United States. That's good for the world as a whole," Reuters reported.Though the president hasn't said much about Federal Reserve audits, Treasury Secretary Timothy Geithner has. Geithner served as president of the Federal Reserve Bank of New York from 2003 to 2009, when he was named Treasury secretary in the Obama administration. Geithner has spoken about the idea of auditing the Federal Reserve, but he's not in favor of it. In an August 2009 interview with The Wall Street Journal, Geithner said, "The Fed is dramatically more transparent than it was, and is subject to comprehensive oversight and audit. But there are certain things that the Fed does that you need to make sure that you preserve as independent of political influence. That line is one that we don't want to cross."If the Treasury or the Obama administration has any bones to pick with the Federal Reserve, they haven't made them public. To all appearances, the Geithner Treasury and Ben Bernanke Fed have worked well together."Secretary Geithner had very strong ties to the Fed, and it seems the Fed and Treasury have mostly avoided turf battles. A different Treasury secretary, Democrat or Republican, might function very differently, especially if he or she has a different world view than Chairman Bernanke's," Kashyap says.Political independenceThe air of secrecy around the Fed has attracted no shortage of conspiracy theories, some of which feed the calls to turn the central bank upside down and dislodge its secrets. But one of the hallmarks of the central bank is that it is apolitical and independent, and that's for good reason."There is strong evidence that independent central banks deliver better inflation performance. And, by better inflation performance, I mean lower and more stable inflation than less independent central banks," says Rob Roy McGregor, professor of economics at the University of North Carolina, Charlotte.Whenever Congress becomes involved in the workings of the Fed, it runs the risk of injecting politics into monetary policy. For instance, the appointment of Fed governors already has taken on political overtones."A Nobel Prize winner from MIT was turned down because there was opposition in Congress. The risk is that you're not going to get the best people on the FOMC. You're going to get people who are subject to one political constituency or another, but they're not the best people," Stasavage says.Without any details of how the Federal Reserve should be monitored, it's difficult to judge how much mandated audits would influence monetary policy, if at all. Just the perception of being observed could influence FOMC deliberations, observers say.advertisementRelated Links:Does the Fed's script hold a plot twist?Fed and Congress lapse into summer rerunsTimeline: The federal funds rate at work Related Articles:What did the Fed say?Mortgages quiet, pre-FedEffects of Fed rate Connect with Sheyna Steiner on Google+. Posted: Oct. 17, 2012

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Overview Culture and People Business Groups Rewards and benefits Inclusion and Diversity Campus Recruiting Job Search David J. Blumer Head of Europe, Middle East & Africa David Blumer is Head of EMEA for BlackRock and is a member of the Global Executive Committee. Prior to joining BlackRock in 2013, Mr. Blumer was Chief Investment Officer and a member of the Executive Committee at Swiss Reinsurance Co. Ltd. Additionally, he assumed the role of Chairman of Swiss Re’s Admin Re Division, and was a member of the board at Brevan Howard. Preceding his employment with Swiss Re, Mr. Blumer was Chief Executive Officer of Credit Suisse’s Asset Management and a member of the Executive Board. During his 15-year career at Credit Suisse, Mr. Blumer held various positions in private banking and asset management in Zurich, London and New York. In 2004, Credit Suisse appointed Mr. Blumer Head of Trading and Sales, and two years later appointed him Head of Asset Management. Mr. Blumer was also a member of the board of SIX Swiss Exchange and, until recently, on the board of RobecoSAM. Mr. Blumer earned a degree in economics from the University of Zurich.

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Bloomberg Anywhere Remote LoginDownload SoftwareService Center MENU Homepage Markets Stocks Currencies Commodities Rates + Bonds Economics Magazine Benchmark Watchlist Economic Calendar Tech Silicon Valley Global Tech Venture Capital Hacking Digital Media Bloomberg West Pursuits Cars & Bikes Style & Grooming Spend Watches & Gadgets Food & Drinks Travel Real Estate Art & Design Politics With All Due Respect Delegate Tracker Culture Caucus Podcast Masters In Politics Podcast What The Voters Are Streaming Editors' Picks Opinion View Gadfly Businessweek Subscribe Cover Stories Opening Remarks Etc Features 85th Anniversary Issue Behind The Cover More Industries Science + Energy Graphics Game Plan Small Business Personal Finance Inspire GO Board Directors Forum Sponsored Content Sign In Subscribe N.Y. Senate Fracking Backer Tied to Firm With Gas Lease Freeman Klopott May 9, 2013 — 5:06 PM EDT Share on FacebookShare on TwitterShare on WhatsApp Share on LinkedInShare on RedditShare on Google+E-mailShare on TwitterShare on WhatsApp Libous represents Southern Tier counties that sit atop the Marcellus Shale, a formation stretching to West Virginia that may hold enough natural gas to supply the U.S. for about six years, according to the U.S. Energy Department. Source: Official Senate Photo Share on FacebookShare on TwitterShare on WhatsApp Share on LinkedInShare on RedditShare on Google+E-mailShare on TwitterShare on WhatsApp Senator Tom Libous, a champion of fracking in the New York Legislature, is blocking a bill that would delay drilling for natural gas for at least two more years. Passage of the measure would harm the prospects of a real-estate company founded by Libous’s wife and run by a business partner and campaign donor. The donor, Luciano Piccirilli, operates Da Vinci II LLC, which owns 230 acres near Oneonta, west of Albany. Da Vinci II’s rights to underground natural gas are leased to a drilling company, property and corporate records show. Piccirilli’s company stands to gain if the 60-year-old Binghamton Republican senator stymies opponents of fracking, in which water, sand and chemicals are injected into rock to free gas. Da Vinci II would get a share of the revenue stream from any well, and the value of the land could rise. Owners of mineral rights typically receive royalty payments of at least 12.5 percent of gas revenue, according to a 2011 report to the state by Ecology and Environment Inc. of Lancaster, New York. Development would “substantially increase” the value of land, according to the study. Deep TiesPiccirilli and Libous share deep ties. Da Vinci II was formed by Frances Libous in 2005. Piccirilli also co-owns two Florida properties with Libous and was general contractor for the senator’s $415,000 lakeside house, according to property records and a building permit. Raymond Rolston, a subcontractor who oversaw paving at the home, said in an interview this week that the FBI asked him about his work there. Bonnie Mariano, a Federal Bureau of Investigation spokeswoman in Albany, declined to comment on the questioning. Libous said in a radio interview today on Binghamton’s WNBF-AM that he isn’t aware of any FBI investigation and said he supports gas drilling to benefit the region. “I stand to gain nothing personal from fracking, and I mean that,” Libous said. “I’m doing what I think is right.” Fracking is one of the most contentious issues before the state legislature. The body in the past two years has legalized gay marriage, approved a measure limiting bullets carried in gun magazines and closed more than $12 billion in budget gaps, all at the behest of Governor Andrew Cuomo, a 55-year-old Democrat. Yet Cuomo has been calling for lawmakers to better police their ethics after two senators and an assemblyman, all Democrats from the New York City area, have been accused in federal corruption cases since April. Another Democratic senator, Shirley Huntley of Queens, pleaded guilty in January to conspiring to commit mail fraud. Ban BlockerIt is against that backdrop of triumph and scandal that lawmakers must decide on the fracking ban, a decision that could mean billions for state coffers -- and for investors. The battle pits landowners seeking the type of economic growth seen in Pennsylvania, where thousands of fracking wells have been drilled since 2007, against environmental groups and residents who say it will damage drinking water, render farmland unusable and ruin the quality of life. Since 2008, New York has had a moratorium on fracking as it studies its environmental effects and develops regulations. Fracking ‘Mouthpiece’In March, the Democratic-led assembly passed a bill that would extend the ban for two years. In the Senate, Libous, who as head of the Republican campaign committee oversaw the raising of $10.4 million in the 2012 election cycle, said he would stop a similar measure from coming to a vote. “I’m going to make sure that it doesn’t,” Libous said in a March interview in Albany. “Tom Libous is one of the only mouthpieces we have in Albany that has been in support of this from the beginning,” said Dan Fitzsimmons, the president of the Joint Landowners Coalition of New York, a group that supports fracking. “He’s very interested in helping his area.” Libous represents Southern Tier counties that sit atop the Marcellus Shale, a formation stretching to West Virginia that may hold enough natural gas to supply the U.S. for about six years, according to the federal Energy Department. The fortunes of his supporter’s company could be boosted by what that shale holds. Land prices just across the border in Pennsylvania have climbed by as much as 100 percent per acre because of fracking, said Thad DeMulder, a Binghamton-based vice president with RealtyUSA who also runs an office in Pennsylvania. “We take that as an indication of what would happen in the Southern Tier,” DeMulder said in a telephone interview. “We expect to see a similar price increase.” Longtime PartnersPiccirilli and Libous have done business together for years. Piccirilli runs a plumbing and heating company in Libous’s hometown of Binghamton, about 180 miles (290 kilometers) northwest of New York City. He has donated at least $28,000 to the senator’s campaigns over the past decade, including $20,000 since 2008, either directly or through companies in his name, according to state records. Piccirilli and Libous serve together on the board of Spencer, New York-based Tioga State Bank, which has more than $360 million in assets, according to its website. The two men are also linked through Da Vinci II itself. The company was started in 2005 by Frances Libous, the vice chairwoman of the state Workers’ Compensation Board, according to documents filed with the New York Department of State. Though their names don’t appear on the founding documents, Tom Libous and Piccirilli were also part of the original firm, according to interviews with both. Florida DealsPiccirilli said in a telephone interview last month that he and the Libouses started the company to invest in Florida real estate, until they learned that their mortgage provider required the properties to be held in the names of individuals. In 2005, Piccirilli, Libous and another man, George Slavik, jointly purchased two homes in Naples on the Gulf Coast for about $475,000 combined, Collier County records show. Da Vinci II sat idle, Piccirilli said, before he decided to use it to purchase property in upstate New York, beginning in 2008. Both Libous and Piccirilli say that by that time, the senator and his wife had left the company, though they said they couldn’t recall an exact date. The senator said he has documents showing the change, though he didn’t respond to a Bloomberg News request to provide them. “He was going to invest in gas drilling, and I said I would like to leave the LLC because we don’t want to be involved,” Libous said last month in an interview in Albany. ‘Personal Business’In the radio interview today, Libous said he wouldn’t make the documents public. “It’s my personal business,” he said. “I’ve disclosed everything I have to disclose.” Later in the day, however, Libous released a document to the Press & Sun-Bulletin in Binghamton that shows he and his wife left the company in January 2008. Piccirilli said in the April interview that he didn’t know why the ownership change wasn’t filed with the state. His lawyer would know, he said, declining to provide the attorney’s name. “There were three original partners with Da Vinci, and the others terminated their involvement 100 percent,” Piccirilli said. Frances Libous didn’t respond to telephone messages left at her home. In 2008, Da Vinci II began buying property within 30 miles of Binghamton. Mineral RightsIn New York state, where the value of gas locked in shale is uncertain because there’s been little drilling, mineral rights are valued at $300 to $1,000 an acre, according to a person who has invested in such deals in both states. The person couldn’t speak publicly because of company policy. In Pennsylvania, the rights are valued at between $5,000 and $35,000 an acre, depending on how quickly wells can be developed, the person said. Da Vinci II first bought almost six acres in Afton, a Chenango County town, then about 20 acres in Lapeer, property records show. In 2011 it acquired another seven in Afton, where a natural-gas well drilled in sandstone was planned, according to property and Environmental Conservation Department records. In 2010, Da Vinci II bought 230 acres for $329,000 from Peter Hudiburg in Plymouth, including the rights to gas, oil and minerals underground, according to the deed and Hudiburg. A lease allows a company the right to drill there, property records show. Under state law, Da Vinci II must receive at least 12.5 percent of the revenue from gas extracted. Gas LeaseThe current lessee is Erie, Pennsylvania-based EmKey Resources LLC, which owns and operates more than 100 gas wells in central New York, according to property records and its website. Worth Snyder, EmKey’s president, declined to comment on the lease. Four years before Piccirilli and Libous founded Da Vinci II, they collaborated on another real-estate venture. Piccirilli was general contractor for the construction of Libous’s house on the shore of Oquaga Lake, according to the building permit filed with the town of Sanford, about 30 miles east of Binghamton. The estimated construction cost was $110,000, according to the permit. Tom and Frances Libous purchased the property in December 2000 for $30,000, property records show. The property is currently assessed at $415,000, said Becky Ottens, Sanford’s assessor. Rolston, a former partner in the company that did the paving at the lake house, said an FBI agent visited him in early March, asking about the project, including whether his firm was paid. He said he didn’t know whether the firm received money for its work. ‘Wild’ Climate“With the climate in Albany right now, which is a little wild, I’m not surprised that different folks aren’t looking into anything and everything they’ve been fed,” Libous said today. “I’m sure a lot of us are being looked at in a lot of different ways. It’s disturbing to me.” Emmanuel Priest, a spokesman for Libous, didn’t respond to a request for comment on Piccirilli’s role in building the senator’s lakeside home or the questioning. Piccirilli didn’t respond to phone messages requesting comment on his role. The house has balconies off the back of each of its two floors, with views of the lake, which is three miles in circumference. The home has a two-story, two-car garage and the two buildings are clustered around a circular driveway with an angel statue at its center. Above a garage doorway hangs a sign that reads “Fahgettaboutit.” Before it's here, it's on the Bloomberg Terminal. LEARN MORE Tom Libous Luciano Piccirilli

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JC Penney looks to old CEO to secure its future Mike Ullman In this Oct. 23, 2009 photo, Mike Ullman, Chairman and CEO of J.C. Penney Company, Inc., visits a company store in New York. Mike Ullman was named CEO of JC Penney's after Ron Johnson was ousted on Monday, April 8, 2013, after restructuring backfired. (AP Photo/Mark Lennihan) ANNE D'INNOCENZIO,AP Retail Writer NEW YORK (AP) — J.C. Penney is hoping its former CEO can revive the retailer after a risky turnaround strategy backfired and led to massive losses and steep sales declines. The company's board of directors ousted CEO Ron Johnson after only 17 months on the job. The department store chain said late Monday, in a statement, that it has rehired Johnson's predecessor, Mike Ullman, 66. Ullman was CEO of the department store chain for seven years until November 2011.The announcement came after a growing chorus of critics including a former Penney CEO, Allen Questrom, called for Johnson's resignation as they lost faith in an aggressive overhaul that included getting rid of most discounts in favor of everyday low prices and bringing in new brands.The biggest blow came Friday from Ullman's strongest supporter, activist investor and board member Bill Ackman. Ackman had pushed the board in the summer of 2011 to hire Johnson to shake up the dowdy image of the retailer. Ackman, whose company Pershing Square Capital Management is Penney's biggest shareholder, reportedly told investors that Penney's execution "has been something very close to a disaster."On Saturday, Ullman received a phone call from Penney Chairman Thomas Engibous asking him to take back his old job, according to Penney spokeswoman Kate Coultas. The board met Monday and decided to fire Johnson.Neither Johnson nor Ullman was available for an interview.The early investor reaction to the shake-up was negative. J.C. Penney shares tumbled $1.39, or 8.8 percent, to $14.48 in trading about two hours before the market opening on Tuesday.Until early last week, some analysts thought the board would give Johnson, a former Apple Inc. and Target Corp. executive, until later this year to reverse the sales slide. A key element of Johnson's strategy was opening "mini-shops" in Penney stores featuring hot brands to help turn around the business. They began opening last year and had been faring better than the rest of the store."I truly believed that he had until holiday 2013," said Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisers. "Today's announcement is an indictment of his strategy."Under Ullman, the chain brought in some new brands such as beauty company Sephora and exclusive names like MNG by Mango, a European clothing brand. But he didn't do much to transform the store's stodgy image or to attract new customers. He's expected to serve mostly as a stabilizing force, not someone who will make changes that will completely turn the company around."What they need is a little bit of stability and essentially adult supervision," said Craig Johnson, president of Customer Growth Partners, a retail consultancy. "(Ullman) did nip-and-tuck surgery. But this was a place that needed radical surgery."Sozzi said he thinks that Ullman will serve only as an interim CEO. He expects the Plano, Texas, company's board to hand off the job to another executive who may want to take the company private.Ullman is getting a base salary of $1 million and the company didn't sign an employment agreement, according to a Securities and Exchange Commission filing.Johnson's removal marks a dramatic fall for the executive who came to Penney with much fanfare. There were lofty expectations for the man who made Apple's stores cool places to shop, and before that, pioneered Target's successful "cheap chic" strategy by bringing in products by people such as home furnishings designer Michael Graves at discount-store prices.Few questioned Johnson's savvy when Penney hired him away from his job as Apple's retail chief in June 2011 to fix a chain that had gained a reputation for boring stores and merchandise.But Johnson's strategy led to sputtering sales and spiraling losses. The initial honeymoon with Wall Street ended soon after customers didn't respond favorably to his changes. Johnson revised his strategy several times in an attempt to bring back shoppers, with little success.The turnaround plan was closely watched by industry observers who wanted to see if Johnson could actually change shoppers' behavior. The plan failed. And now worries are mounting about the company's future.Penney's stock price Monday evening showed investors' frustration with Johnson and it's uncertainty about Penney's future. When news began to leak after the market closed that Penney was ousting Johnson, the stock, which had closed at $15.87 in the regular session, climbed nearly 13 percent to $17.88 in after-hours trading. But after Penney announced Ullman would take over, the stock reversed course, falling as far as 11 percent from its regular closing price, to $14.10. That was 21 percent off its after-hours high.Johnson's future at Penney became uncertain after the department store retailer reported dismal fourth-quarter results in late February that capped the first full year of a transformation plan gone wrong. Penney amassed nearly a billion dollars in losses and its revenue tumbled almost 25 percent from the previous year to $12.98 billion.Under Johnson, 54, Penney ditched coupons and most of its sales events in favor of everyday low prices. It's bringing in hipper designer brands such as Betsey Johnson and updating stores by installing specialty shops devoted to brands such as Levi's to replace rows of clothing racks.Johnson's goal was to reinvent Penney's business into a trendy place to shop in a bid to attract younger, wealthier shoppers. The plan turned off shoppers who were used to heavy discounting. Once-loyal customers have strayed from the 1,100-store chain. It hasn't been able to attract new shoppers to replace them.Initially, Wall Street supported Johnson's ideas. In a vote of confidence, investors drove Penney's stock up 24 percent to $43 after Johnson announced his vision in late January 2012. But as the plans unraveled, Penney's stock lost more than 60 percent of its value. Credit rating agencies downgraded the company deeper into junk status. On Monday, the stock closed down about 50 percent from when Johnson took the helm.In one of the biggest signs of the board's disapproval of Johnson's performance, Johnson saw his 2012 compensation package plummet nearly 97 percent to about $1.9 million, according to an SEC filing last week. He didn't get any stock or option awards, or a bonus. In 2011, he had received a stock award worth $52.7 million on the day it was granted. The award was given to Johnson after he was named CEO and made a $50 million personal investment in the company.In yet another blow to Johnson's turnaround strategy, Vornado Realty Trust, one of Penney's biggest shareholders, sold more than 40 percent of its stake in the company last month. The company's chairman and CEO, Steve Roth sits on Penney's board.A court battle with department store Macy's Inc. over a partnership with Martha Stewart also has raised questions about Johnson's judgment. Macy's, which has had long-term exclusive rights to the Martha Stewart brand for products such as bedding and bath items, is trying to block Penney from opening Martha Stewart mini-shops, planned for this spring.Macy's contends that Penney's deal with Stewart infringes on its own deal with the home maven. If Penney loses, it will have to take a big loss on the products that it ordered from Martha Stewart Living.While acknowledging that Penney made some mistakes during the fourth-quarter conference call with investors, Johnson said Penney would start offering sales in stores every week — about 100 of the 600 or so the chain offered each year prior to his turnaround plan. And it would bring back coupons.Critics have said that one of Johnson's greatest missteps was that he didn't test the pricing plan with shoppers. He argued that testing would have been impossible because the company needed quick results and that if he hadn't taken a strong stance against discounting, he would not have been able to get new, stylish brands on board."Experience is making mistakes and learning from them, and I have learned a lot," Johnson said at the time. "We worked really hard and tried many things to help the customer understand that she could shop any time on her terms. But we learned she prefers a sale. At times, she loves a coupon."During his tenure, Johnson had spoken of being around for the long-haul and referred to his plan as a multiyear strategy. His plans were only partially realized. Shops for Joe Fresh featuring brightly colored clothes were launched last month. A new home area sporting names like Jonathan Adler and Michael Graves is set to launch this spring. Other brands were expected to be unveiled in coming years as the stores transformed into a collection of up to 100 mini-shops.But the company's board wasn't willing to wait. Now that Johnson is out, the worry on Wall Street is that Ullman won't be able to turn around business fast enough."Ullman is in a crisis zone," said Sozzi. "This is not a normal situation. He has a short window to get in and see what's wrong with the company and put a Band-Aid on the fundamental problems."

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Search this site Commentary The Other Trust Fund Report By Michael D. Tanner December 5, 1996 While the latest report warning that the Medicare Trust Fund will be broke by 2001 has garnered headlines, a second crisis has been quietly brewing. The latest report of the Social Security system’s Board of Trustees, also released earlier this year, provides new evidence of the program’s growing financial problems. According to the trustees, Social Security will be insolvent by 2029, back from 2030 in last year’s report. This is the eighth time in the last 10 years that the projected insolvency date has been brought closer. But even that does not provide the full story of Social Security’s looming crisis. The important date is 2012. Social Security taxes currently bring in more revenue than the system pays out in benefits. The surplus theoretically accumulates in the Social Security Trust Fund. However, in 2012 the situation will reverse. Social Security will begin paying out more in benefits than it collects in revenues. To continue meeting its obligations, it will have to begin drawing on the surplus in the trust fund. The trouble is that the trust fund is really little more than a polite fiction. For years the federal government has used the trust fund to disguise the actual size of the federal budget deficit, borrowing money from the trust fund to pay current operating expenses and replacing the money with government bonds—essentially IOUs. In 2012 Social Security will have to start turning in those bonds to the federal government to obtain the cash needed to pay benefits. But the federal government has no cash or other assets with which to pay off those bonds. It can obtain the cash only by borrowing and running a bigger deficit, increasing taxes, or cutting other government spending. All those options pose obvious problems. Even if Congress can find a way to redeem the bonds, the trust fund will be completely exhausted by 2029. At that point, Social Security will have to rely solely on revenue from the payroll tax. But that revenue will not be sufficient to pay all promised benefits. Either payroll taxes will have to be increased—to as much as 40 percent according to some estimates—or benefits will have to be reduced by as much as one-third. Social Security’s financing problems are a result of its fundamentally flawed design, which is comparable to the type of pyramid or Ponzi scheme that is illegal in all 50 states. Today’s benefits to the old are paid by today’s taxes from the young. Tomorrow’s benefits to today’s young are to be paid by tomorrow’s taxes from tomorrow’s young. Because the average recipient takes out more from the system than he or she has paid in, Social Security can work only as long as there are more workers paying into the system than beneficiaries taking out of the system. However, life expectancy is increasing and birth rates are declining. As recently as 1950 there were 16 workers for every Social Security beneficiary. Today there are only 3.3. By 2030 there will be fewer than 2. Moreover, even if Social Security’s financial difficulties can be fixed, the system remains a bad deal for most Americans, and the situation is even worse for today’s young workers. Payroll taxes are already so high that even if today’s young workers receive the promised benefits, those benefits will amount to a low, below-market return on their taxes. Today’s retirees will generally get back all they paid into Social Security plus a modest return on their investment, but when today’s young workers retire, they will actually receive a negative rate of return—less than they paid in. Young workers today would be better off stuffing their Social Security taxes in their mattresses than counting on benefits from the program. Those workers can now get far higher returns and benefits through private savings, investment and insurance. In fact, a study by financial analyst William Shipman demonstrates that if a 25-year-old worker were able to privately invest the money he or she currently pays in Social Security taxes, he or she would receive retirement benefits three to six times greater than under Social Security. There is, of course, no reason to panic. There is time to make the reforms necessary to ensure that both today’s and tomorrow’s elderly will be able to retire with dignity. We can follow the successful example of Chile and privatize our Social Security system. Chile’s success can be measured in many ways. The country’s private savings rate is 26 percent of gross domestic product, compared with 4 percent in the United States. The infusion of capital into the private sector has contributed in large part to Chile’s phenomenal 7 percent annual economic growth rate over the past 10 years, double ours. But most important, retirees are receiving much higher benefits. Since the privatized system became fully operational on May 1, 1981, the average rate of return on investment has been 13 percent per year. As a result, the typical retiree is receiving a benefit equal to nearly 80 percent of his or her average annual preretirement income, almost double the U.S. replacement value. The crisis is coming. The question is, do our political leaders have the courage to ensure that tomorrow’s retirees will have a secure retirement? Michael Tanner is director of health and welfare studies at the Cato Institute. Sign Up

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Mark Carney tells London bankers 'integrity can't be bought' Head of England's central bank urges financial industry to show restraint By Pete Evans, CBC News Posted: May 28, 2014 1:52 PM ET Former Bank of Canada head Mark Carney told a banking audience that they must be responsible for their own actions. (Chris Ratcliffe/Bloomberg) Related Stories Carney's true test at Bank of England may be fickle British media Mark Carney's new rule for banks: Don't be evil Global income inequality will stifle growth, economist says No amount of financial regulation can save the banking industry from itself if the people in it are fundamentally greedy and self-interested, Mark Carney told a room full of millionaires Tuesday. Carney, the Canadian-born former head of the Bank of Canada who's now heading up the Bank of England, made the remarks at conference in London attended by money managers in charge of $30 trillion — a third of the investable money on the planet. Carney is generally heralded for his stewardship of Canadian monetary policy in the lead-up to the global recession of 2008 and afterwards. His speech to the London audience on Tuesday was at once a recap of all the measures that financial regulators have taken ever since then to rein in the more egregious excesses of the financial world, but also a plea for bankers to recognize that ultimately the global economy is in their hands. Mark Carney's new rule for banks: 'Don't be evil' U.S economy may never fully recover, Mark Carney warns "Integrity can't be bought and it can't be regulated," Carney said to an audience that included former U.S. president Bill Clinton, IMF head Christine Lagarde and the Prince of Wales. The global recession that began in 2008 was born out of a financial crisis that preceded it, which was itself caused by international banks suddenly realizing they were invested in murky, shoddy assets, and they didn't have enough actual capital to cover their sudden, mounting losses. Although co-ordinated international efforts seem to have managed to bring the global economy back from the brink of collapse, there's a palpable sense among regular people that the financial industry hasn't learned from its mistakes — nor did it ever really pay for them. "Major banks were too big to fail operating in a privileged 'heads-I-win-tails-you-lose' bubble," said Carney, who also heads up the international Financial Stability Board, in addition to his duties at London's central bank. "Bankers made big sums in the run-up, they were well compensated after the hit and taxpayers picked up the tab for the failure." Global crackdown Carney outlined a number of steps that international regulators have taken to beef up their oversight, including a cap on bonuses in several countries, demands to increase capital ratio reserves, and broad limitations on what types of businesses, exactly, banks are even allowed to meddle in. But ultimately, those who work in the financial industry must know they are responsible for the damage that can be caused by any immoral or illegal actions. He said the excesses revealed in the downturn exacerbated economic factors such as inequality and GDP growth. But they had a more important "corrosive" impact on what he called the "social fabric" too. Click here to watch Carney's entire speech "Individual firms must have a sense of their duty to the broader system," Carney said in his 20-minute speech, which was followed by a brief question and answer session. The crux of Carney's argument has been said before — most frequently by Wall St. critics who note that none of the executives at major banks who lost billions of dollars and started off the crisis have ever been prosecuted for any crimes. But Tuesday's event was unique in that it was one of the first time the financial world was voluntarily meeting to acknowledge the fact that their actions can have drastic if unintended consequences. "Finance has to be trusted," Carney said. "There needs to be a sense of society." Report Typo or Error

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Build Smarter Companies Faster Home Bill Elkus Jim Armstrong Sumant Mandal William Quigley Rajan Mehra Vish Mishra Anil Patel Dana Moraly TM Ravi Prabakar Sundarrajan Rita Cardenas Sumant is a Managing Director at Clearstone Venture Partners, a leading early stage venture capital firm that has been the initial investor in companies such as Paypal, Netzero, MP3.com, Overture and many others. He is co-founder of The Hive, a company co-creation studio focusing on data-driven businesses. And, his is also co-founder of The Fabric, a company creation studio for next-gen networking companies, through which he is involved in the creation of multiple new technology businesses. Sumant also initiated and manages all Clearstone India investments. Sumant sits on the boards of The Rubicon Project, BillDesk, Games2Win, Glossi, Clearfly, Deep Forest Media and Openbucks. Notable companies Sumant has helped incubate and been the first investor in are Kazeon Systems (sold to EMC), Apture (sold to Google), Mimosa Systems (sold to Iron Mountain), Ankeena Networks (sold to Juniper Networks), and Cetas (sold to VMware). Prior to venture capital, Sumant has been co-founder of multiple businesses in the online media, energy and industrial systems, both in the US and India. Sumant has an MBA from the Kellogg Graduate School of Management at Northwestern University, and a BS in Electrical Engineering from Michigan State University. He is also a Charter Member of TiE. You can follow Sumant on twitter @sumantmandal and watch his video series at www.clearstone.com/sumant. Partner with a trusted advisor that can get you connected. Copyright © 2016 Clearstone Venture Partners - All Rights Reserved

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Money in Motion Currency Class Key Terms Dictionary Andrew Busch Andrewbusch.com Publisher Andrew B. Busch is the founder of andrewbusch.com, a research and consulting firm. Busch has appeared for the last three years on CNBC's "Closing Bell" with Maria Bartiromo and is a CNBC contributor. He is regularly quoted in The Wall Street Journal, Reuters, Dow Jones, The Associated Press and The Globe and Mail. Previously, he was the global currency and public policy strategist for BMO Capital Markets, the investment and corporate banking arm of BMO Financial Group. Busch is a senior fellow on economic issues for the Illinois Policy Institute and an American Action Forum Expert. He consults with the staffs from the U.S. Treasury, Congress, and the White House on economic and financial market issues; he has met and advised the last three U.S. Treasury secretaries, including Tim Geithner. Busch also was an advisor on the economy and the financial markets to Republican presidential candidate John McCain. Busch is a recognized expert on the world financial markets and how these markets are affected by political events. He spoke at the Pacific Economic Conference in Russia on the global credit crisis, and met and consulted with the governor of Primorsky Territory and the mayor of Vladivostok over the future direction of the Russian economy. He is a prolific writer whose views appear daily in his newsletter, the Busch Update; monthly, he writes the Busch GPS: Global Political Strategy; and his book, "World Event Trading: How to Analyze and Profit From Today's Headlines," has been translated into Mandarin and Japanese. He joined BMO Financial Group in 1990 in the foreign exchange trading room of Harris Trust and Savings Bank, which merged with Bank of Montreal's room in 1995. Prior to joining Harris, Busch traded foreign exchange at Northern Trust Company. Busch graduated Phi Beta Kappa with a B.A. in economics from Ohio Wesleyan University and received his MBA from the University of Chicago. Follow Andrew Busch on Twitter @abusch. Read More Busch: Anatomy Of A Panic And The Response By: Andrew Busch Thursday, 18 Sep 2008 | 11:03 AM ET The Lehman bankruptcy sent waves of asset sales and capital raises throughout the system. One of the early casualties was the "Breaking-Of-The-Buck" at the Primary Reserve money market fund. However, there are numerous other ripples. Busch: Three Words for Today Wednesday, 17 Sep 2008 | 11:46 AM ET Three Words For Today: Unusual, Exigent, and Catastrophic The NY Times & Obama: Blindside Economics Tuesday, 2 Sep 2008 | 5:20 PM ET On August 30, the NYT ran an interesting story entitled "Is History Siding With Obama's Economic Plan?" and reviews a book called "Unequal Democracy" by Larry Bartels. Here's what's wrong with both Times articles... Busch: Gustav Spreads Fear as it Gathers Steam Thursday, 28 Aug 2008 | 11:54 AM ET After experiencing strong political winds from Denver all week, the markets are now firmly focused on the "other" wind that forming in the Gulf of Mexico. Busch: Pending Home Sales: Why The Numbers Are Good Sign Thursday, 7 Aug 2008 | 11:06 AM ET PHS are essentially the leading indicator the housing market. These sales include homes, condos, and co-ops. Busch: Markets Starting a McCain Shift? Friday, 1 Aug 2008 | 2:45 PM ET American voters are not as dumb as people think and the latest polling data could be showing they understand which policies are going to work for creating jobs via trade. Busch: Long Term Energy Plans Can Be Short Term Solutions Tuesday, 22 Jul 2008 | 4:32 PM ET As T. Boone Pickens in the Wall Street Journal described his master plan for solving an aspect of the US energy crisis: dependence on foreign oil. At its core, this solution was really only a swap of foreign energy sources from oil to natural gas. Busch: Watch the Numbers, Beware the Grind Wednesday, 2 Jul 2008 | 12:30 PM ET If the jobs number prompts the market to slide down tomorrow, watch out for the coming weekds, says FX expert Andy Busch. Busch: It's Time for the Fed to Choose Tuesday, 17 Jun 2008 | 4:42 PM ET Today's PPI numbers force us to skeptically look at what the Federal Reserve is doing and whether their policies are seriously behind the curve. Strike that, we know they are behind the curve. This Week on Money in Motion Ron Paul on the Sequester - The outspoken former representative says current budget cuts will do little to stem the deficit. Find out why he says America should do instead. More From Money in Motion Family-Run Companies — And the Prospects for Their Shares Andrew B. Busch is the founder of andrewbusch.com. Rebecca Patterson Managing Director and Chief Investment Officer, Bessemer Trust TradingAnalysis.com founder Amelia Bourdeau Director, Senior Foreign Exchange Sales at UniCredit AG Dennis Gartman Editor and Publisher, The Gartman Letter Forex Street babypips.com Forex Factory

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Burberry Group: Buy, Sell, or Hold? Zarr Pacificador | LONDON -- I'm always searching for shares that can help ordinary investors like you make money from the stock market. Right now I am trawling through the FTSE 100 and giving my verdict on every member of the blue-chip index. I hope to pinpoint the very best buying opportunities in today's uncertain market, as well as highlight those shares I feel you should hold... and those I feel you should sell! I'm assessing every share on five different measures. Here's what I'm looking for in each company: Financial strength: Low levels of debt and other liabilities; Profitability: Consistent earnings and high profit margins; Management: Competent executives creating shareholder value; Long-term prospects: A solid competitive position and respectable growth prospects, and; Valuation: An underrated share price. A look at Burberry Group Today I'm evaluating Burberry Group (LSE: BRBY ) , an international retailer that designs and sells luxury men's, women's, children's clothing and non-apparel accessories, which currently trades at 1,366 pence. Here are my thoughts: 1. Financial strength: Burberry is in strong financial position with over 500 million pounds in cash on the balance sheet and a net cash position of 237 million pounds. Interest cover is sizable at 538 times, while free cash flow generation has been very good, averaging more than 200 million pounds per year over the last three years. 2. Profitability: For the past 10 years, Burberry has grown revenue and earnings per share at an outstanding rate, increasing by 14% and 17% per year, respectively, while dividends have grown by eight times since 2003. Operating margins have been excellent, consistently around the high-teens and low-20% range, while the 10-year average ROE has been phenomenal at 27% -- all the more impressive considering the company has employed little debt. It has even proven resilient to the financial crisis, growing revenues at 20% per year, earnings per share by 32%, and dividends by 34% per year over the last three years, mainly driven by the increasing appetite for luxury goods in emerging markets. 3. Management: Current CEO Angela Ahrendts is widely credited, along with her predecessor, former CEO Rosemarie Bravo, and creative director Christopher Bailey, for the brand's phenomenal growth the past decade. They introduced more modern and hip product lines; launched innovative marketing strategies such as "The Art of the Trench" and broadcasting fashion shows online; and launched well-targeted ad campaigns featuring trendy British models and actresses, which revitalized the brand and restored its high-level fashion image. Along with this, management has also rewarded shareholders by means of share repurchases and dividends totaling around 780 million pounds over the past 10 years. 4. Long-term prospects: The group has accelerated retail expansion in existing and new markets during the last few years. It has strengthened its position in flagship cities around the world by refurbishing and opening more mainline stores, and opening new stores in underpenetrated growth markets in Central and Latin America, India, and the Middle East. It already has a leading presence in China, the fastest-growing luxury market in the world, with a total of 70 stores opened by year-end. Also, the company has invested heavily in digital technology, where it is now the leading luxury brand in the digital marketing arena. It already has around 15 million fans in Facebook and has a leading presence in China's social media networks. 5. Valuation: Burberry shares are currently trading at a trailing price-to-earnings (P/E) ratio of 22 and forward P/E of 21, well above its 10-year P/E average of 18. Its price-to-earnings-to-growth ratio (PEG) is 1.1 and the current dividend yield is 1.96%. My verdict on Burberry Group The future looks bright for Burberry, as the world luxury market is expected to increase by 6% to 7% per year through 2015: It is well positioned to take advantage of this trend with a leading presence in emerging markets and a well-recognized brand name throughout the world. However, its P/E and PEG ratios are already high, implying that growth has already been factored into its share price. If demand slows down in its major markets, there is a huge risk that the company might not be able to sustain returns similar to that of the last few years. So overall, I believe Burberry Group at 1,366 pence looks like a hold. Another growth opportunity Although I feel Burberry Group is a hold right now, I am more positive on the FTSE share highlighted in this exclusive in-depth report. The report details a company many think is past its prime, but we think those people are missing very compelling growth opportunities -- so compelling that it has just been named "The Motley Fool's Top Growth Stock for 2013." Just click here to get your free copy. In the meantime, please stay tuned for my next verdict on a FTSE 100 share. Zarr Pacificador does not own any share mentioned in this article. The Motley Fool has recommended shares in Burberry. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

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Home » It's World Trade Week It's World Trade Week | By Kevin Murphy | Its World Trade Week As the world churns World Trade Week begins World Trade Week features EU update 2014-2015 Supply Chain Lessons Learned GVSU's Van Andel Global Trade Center presents Culture & Coffee: Navigating the Middle East GRAND RAPIDS — This year's 20th annual World Trade Week events in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Grand Rapids will have an even more global feel than in years past. While previous conferences have focused on one or two main countries of interest, organizers decided not to geographically limit the 2005 week of seminars and speeches. Instead, this year's events, with the theme "Leveraging Global Partnerships," are intended to be as broad-based as possible. "The thinking was, after a lot of discussion, that there's so many areas in the world that people are doing business now that we really need to open it up and provide more information to our constituency. We can't focus on just one area; that's very limiting," said Bill Richeson, senior vice president of global trade and treasury at National City Bank and chair of the World Trade Week West Michigan 2005 committee. "So we thought about the need to partner with various companies and organizations throughout the world. That's how we came up with 'Leveraging Global Partnerships.'" Richeson eagerly points out that the week's events feature numerous CEOs of local companies, as well as experts on global trade from around the world. Among them is a panel of U.S. Department of Commerce officials whose "road show" will only be stopping at four other cities in the United States. The commerce officials will offer one-on-one sessions with local business leaders. That, said Richeson, is "a tremendous opportunity — almost like free consulting or access to advice from international trade experts." The week's events begin Monday with a luncheon at the Grand Rapids Economic Club, featuring Alticor CEO Doug DeVos. He will present a program called, "Sleepless in West Michigan: Keeping Up With the 24-7 Economy." Later that evening, an invite-only VIP reception will take place at the GeraldR.FordMuseum The main conference will take place on Tuesday at GrandValleyStateUniversity's downtown campus. Throughout the day, 18 speakers from around the world will offer insights on how to succeed in today's global business environment. Keynote speaker at the May 17 conference will be Wolverine World Wide President, CEO and Chairman Timothy J. O'Donovan. Since taking the helm of the company in 2000, O'Donovan has engendered prodigious growth across the shoemaker's product line and bottom line. The company, which earned just shy of $992 million in 2004, is expected to top the $1 billion mark this year for the first time in its 122-year history. Much of that success has come by way of developing and maintaining international relationships. Of the 43 million pairs of shoes the company sold last year, nearly one-third were sold abroad, according to a recent speech by O'Donovan. The recent growth in Europe and Asia has come, in part, because of massive branding campaigns throughout the globe. The success of those campaigns will be the basis of O'Donovan's keynote speech at the World Trade Week conference. He will deliver a presentation entitled "Partnering to Build Global Brands" at 12:15 p.m. in Loosemore Auditorium. The West Michigan World Trade Association will present its 2005 World Trader of the Year award at a wine reception Tuesday afternoon (SEE MAY16B TRDAWARD) new event for this year's World Trade Week is Student Global Awareness Day. The program introduces students from the Grand Rapids Public Schools to "the opportunities and realities of our increasingly global community" (see MAY16B STUDENT). The week wraps up Thursday evening with WorldQuest International Team Trivia. The game, presented by the World Affairs Council of West Michigan, challenges teams' knowledge of world news and events.1111 The registration deadline for the week's events has already passed, though at-the-door registration may be available for some events. Contact Kendra Kuo of the Department of Commerce at (616) 458-3564 or Norma Roelfsema at the Van Andel Global Trade Center at (616) 331-6811 for last-minute availability. Kevin Murphy Recent Articles by Kevin Murphy All's Well That Begins Well WWW Steps It Up Again Universal Strong Despite Downturn

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Andrea Coombes' Ways and Means 3 annuity mistakes to avoid Andrea Coombes Published: Nov 8, 2012 11:01 p.m. ET What not to do when evaluating annuities for retirement AndreaCoombes If you’re comparing annuities to other investment products, you’re making a classic mistake—and it’s just one of three major errors that consumers and financial experts make when evaluating annuities, according to a panel of experts at a recent MarketWatch Retirement Adviser event in New York that focused on income strategies. “Both immediate and deferred annuities have been shown to have a very positive role in an overall retirement-income strategy, but the deployment of these instruments is often hampered by some very fundamental misunderstandings,” said John Olsen, president of Olsen Financial Group, and author of a number of books on annuities, including “Index Annuities: A Suitable Approach.” RETIREMENT ADVISER Retirement income for life Think inside the box: Try this four-box strategy to match your lifestyle expenses with your retirement income sources. • What about the 4% strategy? Annuities errors to avoid • See the full special report The panel, moderated by MarketWatch senior columnist Robert Powell, also featured Farrell Dolan, principal with Farrell Dolan Associates, and David Blanchett, head of retirement research at Morningstar Investment Management. Mistake No. 1: Unfair comparisons One such misunderstanding—and it’s often made by financial experts, Olsen said—is to assess the value of a variable deferred annuity as though all of its costs “are nothing but pure overhead.” That can lead consumers to view such annuities as unreasonably expensive. Instead, he said, those costs “are charges for the transfer of risk from the shoulders of the buyer to the insurance company.” Consumers need to remember, Olsen said, that “any insurance product on the planet will not pay off on average. If the average buyer of any insurance product profits from purchasing it, the insurance company will go broke. That’s something we need to recognize when we analyze risk-management strategies.” Olsen was quick to point out that insurance costs shouldn’t be ignored. They might be too high or too low. But insurance shouldn’t be compared to other products. Don't make these annuity mistakes(3:15) Investors often think of annuities as investment products, but that's the wrong way to view them, says John Olsen, president of the Olsen Financial Group and a panelist at a recent MarketWatch Retirement Adviser live event. “When you compare, as some bad analysts do, a non-qualified mutual fund that has no such insurance benefits with a deferred variable annuity that does, and then say, ‘Well see, this is more expensive.’ Why not compare apples with oranges? Fundamentally, it’s a misconception,” Olsen said. MarketWatch’s Powell noted that one reason people misunderstand annuities is that financial experts and the media have focused on saving for retirement and, to a large extent, investment returns and “return management,” rather than risk management and, specifically, the risk of outliving one’s assets. “We’ve been telling people to save for retirement, but not really told them how to convert assets to income,” Powell said. “People have to get their arms around this different way of looking at retirement. No one ever had to think about outliving their assets years ago.” Mistake No. 2: Focusing on returns Another mistake people make in evaluating annuities: allowing prevailing interest rates to be a deal-breaker. It’s true that lower interest rates can mean a lower payout, but Olsen said that’s the wrong way to approach annuities. Read related story: Buying annuities in a low-interest-rate world. The reason to buy an annuity is because you “want the absolute insurance of having that income in your checking account every month,” Olsen said. “Saying, ‘I don’t like the return on investment’ or the internal rate of return misses the whole point. Annuities aren’t about internal rate of return. They’re about the absolute assurance of an income that you cannot outlive.” Plus, don’t forget about the value of “mortality credits,” said Dolan, of Farrell Dolan Associates. Mortality credits are a form of risk pooling, he said, a mechanism through which premiums paid by investors who die earlier than expected provide a higher yield to investors who live longer. “If a couple hundred thousand people get together and put money into a pot, some will die early, some will die later; those that die early fund those that live longer,” Dolan said, noting that Social Security is based on the same idea. Annuities are a means by which retirees can maximize mortality credits, he said. “When mortality credits really start to have a higher impact [is] around age 70,” he said. Even at today’s interest rates, “the cash flow that comes out is around 7%. If you wait longer, it might be 7.5%. And by cash flow, I mean if you put in $100,000, you’ll get $7,000 back guaranteed every year,” he said. “That’s not a bad cash flow, but it requires the mind to think cash flow, not return on investment,” Dolan said. Dolan added that at his current age of 64, he doesn’t have mortality credits, but in 10 years, when he does, he will adjust his portfolio. Currently his portfolio is focused on flexibility and growth; in 10 years, he said, he’ll focus on “pulling more guarantees into my portfolio. And that’s exactly when this mortality credit thing tends to work, because it’s age-based.” Others agreed. “Interest rates being low won’t affect the payout of an annuity when someone is 85 years old, because all that matters is the life expectancy at that point,” said Morningstar’s Blanchett. Also, Blanchett said, “For someone who is about to retire, if you don’t like today’s annuitization rates, delay your retirement for Social Security. That is a phenomenal payout,” he said, noting that those who delay from their full retirement age to age 70 enjoy what amounts to an 8% guaranteed rate of return each year, increased for inflation. “If you have the assets to create income from age 62 to 70…delay it as long as possible,” Blanchett said. “There’s the guaranteed benefit, and then your spouse receives the greater of your two benefits, so there’s significant value added for people delaying Social Security.” Mistake No. 3: Failing to annuitize Perhaps the biggest mistake is simply failing to annuitize assets to create a guaranteed stream of retirement income. “We have really good evidence that annuitization of part of a portfolio can significantly reduce the failure rate of that portfolio to produce required income over a required period of years, which may be a lifetime,” Olsen said. ”But people don’t do it.” For his part, Morningstar’s Blanchett said that a focus on historical returns may make annuities seem like a bad deal. But that may change going forward, he said. “We have this kind of perception, using past data, that it’s very easy to create a lot of income for a long time period,” Blanchett said. “If you just use some historical data, you can get a very negative perspective on annuities. You might say that you don’t need them. I think that the last decade has shown us, though, that it’s tough to take money from a portfolio and have that portfolio survive for a long time.” Coombes Andrea Coombes is a personal-finance writer and editor in San Francisco. She's on Twitter @andreacoombes.

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Detour Gold Corporation TSX : DGC Detour Gold Pours First Gold Bars at Detour Lake Mine TORONTO, ONTARIO--(Marketwire - Feb. 18, 2013) - Editors note: There is a photo associated with this release. Detour Gold Corporation (TSX:DGC) ("Detour Gold" or the "Company") is pleased to announce that today it poured its first four gold bars for approximately 2,000 ounces of gold at its Detour Lake mine. Gerald Panneton, President and CEO of Detour Gold, commented: "Today is a celebration for all of us that have been involved in this project from its inception. Our first gold pour is a remarkable milestone in Detour Gold's transition from a young exploration company to a gold producer. This achievement has truly been the result of great team work by everyone. We wish to thank our shareholders and all of our other stakeholders in supporting the development of the project, including our Board of Directors, management team, employees and contractors who worked very hard to make this all possible after 26 months of construction. We would also like to thank our Aboriginal partners and local communities with whom we have developed strong and mutually beneficial relationships." "We are very excited about what we have accomplished in six years from completing the acquisition of the property (January 31, 2007) to first gold pour. We are looking forward to the future as we move closer to becoming Canada's leading intermediate gold producer." About Detour Gold Detour Gold is an emerging mid-tier gold producer in Canada. The Detour Lake open pit mine is expected to produce an average of 657,000 ounces of gold annually over a period of 21.5 years. Detour Gold's shares trade on the Toronto Stock Exchange under the trading symbol DGC. Forward-Looking Information This press release contains certain forward-looking information as defined in applicable securities laws (referred to herein as "forward-looking statements"). Specifically, this press release contains forward-looking statements regarding annual production of 657,000 ounces of gold over a period of 21.5 years. Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond Detour Gold's ability to predict or control and may cause Detour Gold's actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, gold price volatility, changes in debt and equity markets, the uncertainties involved in interpreting geological data, increases in costs, environmental compliance and changes in environmental legislation and regulation, interest rate and exchange rate fluctuations, general economic conditions and other risks involved in the gold exploration and development industry, as well as those risk factors discussed in the section entitled "Description of the Business - Risk Factors" in Detour Gold's 2011 annual information form and in the continuous disclosure documents filed by Detour Gold on and available on SEDAR at www.sedar.com. Such forward-looking statements are also based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about the following: the supply and demand for gold, and the level and volatility of the price of gold; the availability of financing for exploration and development activities; the estimated timeline for the development of the Detour Lake gold project; the expected mine life; anticipated gold production; gold recovery; the development schedule; cash operating costs and other costs; the financial analysis for the project; capital costs; sensitivity to metal prices and other sensitivities; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource estimates are based; the receipt of necessary permits; market competition; ongoing relations with employees and impacted communities; and general business and economic conditions. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are made as of the date hereof, or such other date or dates specified in such statements. Detour Gold undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. To view the photo associated with this release, please visit the following link: http://www.marketwire.com/library/20130218-dgc218ful.jpg Detour Gold CorporationGerald PannetonPresident and CEO(416) 304.0800Detour Gold CorporationLaurie GaboritDirector Investor Relations(416) 304.0581www.detourgold.com Detour Gold Corporation Gerald Panneton (President and CEO) and Pierre Beaudoin (Senior VP Capital Projects) shake hands after the first gold pour. About Marketwired

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Pet costume sales take bite out of recession By October 24, 2012 at 12:09 PM I can't think of how many conversations I've had, stories I've edited or written, and general Bad Thoughts I've had, since starting here at NJBIZ, related to either the devastating recession or the devastatingly slow recovery. Every so often, though, I think that the whole thing has been a fantasy, like when I read a story such as this, forecasting that U.S. consumers are preparing to spend $370 million on costumes for their pets this year.That kind of surprised me, as someone who takes a hard look at how much a gallon of milk costs before buying it. Personally, the thought of spending $80 on Halloween — the average, says the National Retail Federation — would leave me as queasy as a dinner of candy corn. I mean, if you're eight, and want to dress like a vampire, that doesn't seem too unreasonable. Dressing up for an office party, to me, is putting a toe over a line that shouldn't be crossed. But deciding to put your schnauzer in a shark costume (oh yes, you can do that; a Google search for "pet costumes Halloween" returned almost 31 million hits) seems like the kind of thing you think about only after the door to your padded cell is locked.Of course, the minute the plastic skeletons are taken down and the pumpkins begin to rot, we'll be encouraged to start buying holiday gifts for everyone, pets included, and we'll be no closer to getting consumers to think about the credit card bills due Dec. 26. Halloween pet costumes may be a nice story for the retailers who sell them, but it's discouraging that consumers are so reckless in the middle of an agonizingly slow recovery.Unless, you know, we're not.I'm even more irreverent on Twitter @joe_arney.

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Nike board approves 2-for-1 stock split Nike announced today that its board has approved a two-for-one stock split. The split of Class A and Class B common shares will be in the form of a 100 percent stock dividend payable Dec. 24 to shareholders of record at the close of business Dec. 10. The company expects its common stock to begin trading at the split-adjusted price Dec. 26. The split, based on Nike stock history, has been a possibility for nearly all of this year. The Nike board has approved previous stock splits when the share price hovers near $100, as it has in 2012. The stock closed today on the New York Stock Exchange at $90.83. It's high this year was $114.81. Nike's shareholders in September approved authorizing the company to issue as many as 750,000 new shares. Don Blair, Nike's chief financial officer, said at the company's annual meeting on Sept. 20 that their action was necessary to facilitate a split. The company periodically splits the per-share price to keep it affordable, Blair said. "The board of directors wants to have the flexibility of splitting the stock in the future if and when it determines it is in the best interest of the company to do so," he said. Upon completion of the split, the outstanding shares of Nike Class A and Class B common stock will increase to approximately 178 million and 720 million, respectively. Also, the board declared a quarterly cash dividend on the company's outstanding Class A and Class B Common Stock of 21 cents per share, on a post-split basis, payable on Dec. 26 to shareholders of record at the close of business on Dec. 10. The dividend represents a 17 percent increase over the previous split-adjusted quarterly rate of 18 cents per share. This is the eleventh year in a row the Company has increased its annual dividend, over which time the dividend has increased by a factor of almost seven. -- Allan Brettman; twitter.com/abrettman Inside Playbooks & Profits About Allan Brettman Email Allan Brettman Follow @allanbrettman

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Home Repossessions Are Up in Half the States Pamela Prah An auction sign in front of a home in Salem, Ore. Foreclosure starts in the state increased more than 250 percent in the third quarter. During the same period, Kentucky had the largest increase in the number of bank repossessions of foreclosed homes, with 67 percent. (AP) Florida still leads the country in overall foreclosure activity, but Maryland and Oregon experienced dramatic increases in foreclosure starts in recent months. Meanwhile, bank repossessions climbed significantly in Kentucky and New York. The number of U.S. homes entering the foreclosure process hit a seven-year low between July and September, but bank repossessions were up 7 percent from the previous quarter, with Kentucky seeing the biggest jump, up nearly 70 percent, new data show. Even with its sharp increase in repossessions, Kentucky's overall foreclosure rate—which includes default notices, scheduled auctions and bank repossessions—ranked 36th among the states in the third quarter, according to a new data released Thursday (Oct. 10) from RealtyTrac, which follows real estate trends. Daren Blomquist, vice president at RealtyTrac, figures that that now that Kentucky's housing market is recovering, lenders are finally clearing out some of the properties that started the foreclosure process a year or two ago. “Some of those are finally being foreclosed and repossessed by the banks,” he said. Nationwide, more than 119,000 properties were repossessed by lenders in the third quarter, putting the nation on pace for close to half a million total bank repossessions for the year, RealtyTrac said. Nationwide, bank repossessions in the third quarter decreased 24 percent from a year ago. But 26 states experienced an increase in bank repossessions in the third quarter, including New York (up 65 percent), New Jersey (up 64 percent), Illinois (up 44 percent), Virginia (up 36 percent), Connecticut (up 34 percent) and Indiana (up 30 percent) (see graphic). At the height of the foreclosure crisis in 2010, Nevada led the country with 1 out of every 76 homes in some stage of foreclosure, including default notices, auctions and bank repossessions. Today, Florida leads with a rate of 1 in every 126 housing units — more than twice the national average. Nevada currently is ranked second, with a rate of 1 in every 128 housing units, RealtyTrac said. Maryland's foreclosure starts increased 259 percent in the third quarter, helping to boost the state's overall foreclosure rate to third highest among the states. Nationwide, the number of U.S. homes entering the foreclosure process during the July to September quarter totaled more than 174,000, a 13 percent decline from the previous quarter and a 39 percent decrease from a year ago, the lowest level since the second quarter of 2006, RealtyTrac said. “While foreclosures are clearly becoming fewer and farther between in most markets, the increasing time it takes to foreclose is holding back a more robust and sustainable recovery,” Blomquist said. It takes longest to foreclose a property in New York, where the average duration is 1,037 days. It takes the shortest amount of time in Maine, where the average is 160 days. Newer State Regulators Step In On Ridesharing Controversies State Regulators Step In On Ridesharing Controversies Stateline Daily Email Sign up for our daily update—original reporting on state policy, plus the day's five top reads from around the Web. About Stateline Stateline provides daily reporting and analysis on trends in state policy. Jeremy Ratner Director, Communications, 202.540.6507 [email protected]

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Tweet Tweet Challenges for asset managers in SIF risk requirements Sun, 18/11/2012 - 17:03 Tags : Articles and Features DCG Luxembourg managing director Daniela Klasén-Martin (pictured) says the new risk management requirements introduced by this year’s revision of the grand duchy’s SIF law are only the start for asset managers that fall within the scope of the EU’s AIFM Directive… On March 26 Luxembourg’s parliament passed legislation amending the Specialised Investment Funds Law of February 13, 2007. Among other changes, the new law has introduced the requirement to develop and implement a risk management process and a conflict of interest policy, pre-empting some of the requirements that are further set out within the Alternative Investment Fund Managers Directive. The SIF revision legislation came into force on April 1. Luxembourg’s regulator, the Commission de Surveillance du Secteur Financier, clarified the risk management requirements in a press release of April 20, followed by regulation 12-01 published on August 13. What are the regulation’s main requirements regarding risk management? Under the new rules, all existing SIFs had until June 30 to communicate to the CSSF a description of the systems implemented to identify, measure, monitor and manage all the risks to which the SIF could be materially exposed. This description covers, among other things, the risk management function (including the allocation of responsibilities), its independence or specific measures implemented to avoid conflicts of interest and ultimately allowing independent execution of activities or procedures, processes and methods to appropriately measure and manage the risks arising from the investment strategies and the risk profile of the fund or its individual compartments. The CSSF further clarifies in regulation 12-01 that the risk management function should be independent from the other operational units. What has this meant in practice? The extent to which this exercise has been challenging for asset managers depends on the size of their operations and on the existence (or otherwise) of risk management processes and procedures and the availability of internal resources to document these procedures. Lawyers and consultants have been busy supporting their clients to write a description of their risk management process, and the Luxembourg fund industry association, ALFI, has produced guidelines to support asset managers in carrying out this exercise. Putting aside the effort that asset managers have had to put into documenting their procedures and the associated costs, the main challenge is on one hand to ensure that appropriate resources are in place to maintain these procedures and processes and that limits are regularly reviewed and breaches escalated, and on the other to ensure that appropriate segregation of duties is applied to ensure that the risk management function is truly independent. The latter remains an issue, in particular for smaller asset managers that do not have sufficient internal resources to ensure that the risk management function is a truly independent one. What solutions are available? Under the principle of proportionality, for smaller organisations it remains possible to appoint a member of the board of directors to wear the risk management hat. However, such a director must be truly independent and able to demonstrate the skills necessary to ensure proper oversight of the risk management process for the particular asset classes in which the portfolio invests. Outsourcing is also an option, either to a specialist risk management service provider or to a third-party management company. The latter could be an interesting option to cover additional measures set out by the new law, such as the requirement for a regulated investment manager, or as a possible solution to comply with the AIFMD, if the asset manager expects to be in scope. What does this bring to the industry? The independent risk management function and the requirement to document the risk management process provide additional investor protection. Risk management is very much embedded in the fund’s investment management process, which makes it difficult for asset managers to consider independent and/or outsourced risk management as adding value. However, it is important to stress that the real value of an independent risk management function, being responsible for developing a holistic risk management framework, is that it will not only oversee the financial risk associated with the investment process, but perform ongoing oversight of all material risks that the fund is exposed to, including operational risk and oversight of delegation of functions. The independent risk management function will therefore play a role comprising co-ordination, analysis, issue management and escalation that can hardly be performed by a portfolio manager, whose main focus is the immediate risk linked to performance of the underlying assets. Implications of AIFMD implementation On August 24 the government laid before parliament draft legislation to transpose the AIFMD into Luxembourg law. SIFs that are within the scope of the directive will have to comply with its full rules, while those that are out of scope will continue to comply with the SIF law. This means that the SIF will remain a highly attractive vehicle for the structuring of alternative investments in Europe, since asset managers that do not fall within the scope of the directive will continue to benefit from the ability to use a flexible but now more robust vehicle offering increased investor protection. For those that are in scope, the SIF has the advantage of being a fully regulated product, incorporation most of the features that will be required under the AIFMD. What additional challenges will the AIFMD bring? For asset managers that are in scope of the AIFM Directive the challenge is more substantial, as additional requirements will be introduced. Whilst the SIF law and its regulations leave the content of the risk management process relatively flexible, the AIFMD requirements on risk are much more prescriptive, introducing monitoring of leverage limits and reporting to the regulator as well as enhanced investor disclosure. The level of control is more demanding, since in addition to the independent risk management function, independent compliance and internal audit functions are also required. These additional requirements, which also include regulatory rules, can constitute a significant challenge for smaller asset managers. The latter have available different solutions ranging from partial outsourcing to an experienced professional or full outsourcing to an AIFMD-compliant third-party management company. from Property Funds World Best wishes for 2016 from the Global Fund Media team Harewood Associates backs Help-to-Buy scheme Unlisted UK real estate fund returns jump to 4.9 per cent in Q2 2014 London new build property market sales top GBP1.2bn YTD Nexity reports strong residential growth in first half Crosslane’s St James’ House student development 78 per cent let for new academic year Cording expands UK facilities management team AEW acquires 17 Avenue Matignon St Modwen and Glenfinnan secure consent for gas-fired CCGT power station Specialist property and infrastructure dominate trust fundraising in Q2 Copyright © 2016 GFM Ltd. All Rights Reserved

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Resource Center Current & Past Issues eNewsletters 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 top of any article. CFOs' Top Risk Management Concerns Regulatory compliance and economic uncertainty are top-of-mind, but few CFOs are concerned anymore about their ability to secure credit. By Treasury & Risk Staff December 5, 2013 • Reprints To understand finance professionals' feelings about financial risk management, as well as their thoughts on the economy overall, TD Bank polled CFOs, controllers, treasurers, and directors of finance from across the United States. Respondents come from both midmarket companies, defined by TD Bank as being under $250 million in annual revenue, and "corporates," defined as organizations with revenues above $250 million. The survey revealed that these executives' confidence in the U.S. economy is increasing—and their confidence in their own organization is growing even faster. The largest proportion (41 percent) said they are more confident about the U.S. economic outlook over the next 12 months than they were over the previous 12 months. Thirty-one percent said they're less confident today, and 29 percent said their confidence level hasn't changed in the past year. But when asked how they feel about the prospects for their organization over the next 12 months, vs. the previous year, a full 60 percent said they're more confident, and nearly half of those (26 percent of all respondents) said they're much more confident today. In contrast, only 11 percent of respondents are less confident about the next year than the past year, and only 3 percent are much less confident. Fred Graziano, head of regional commercial banking and executive vice president with TD Bank, says these numbers are up from the bank's 2012 survey: "The difference from a year ago is that companies are feeling a little bit better about themselves and how they manage their business." Indeed, many of the organizations represented in the survey have made substantial changes to their risk management policies in the past several years. Half have gained more visibility into their cash position since the start of the financial crisis, and nearly as many have begun evaluating suppliers’ risk management practices and terminating business relationships that carry too much risk (see Figure 1, below). More than a third have improved their risk reporting practices, and more than one in five have implemented an enterprise risk management (ERM) program since 2008. However, most organizations did not respond to the financial risks brought to light in the financial crisis by making significant management or technology changes. Only 11 percent have deployed new risk management software, and fewer than 5 percent have established a chief risk officer (CRO) position. "Companies have made internal changes, such as adding people and improving reporting," Graziano says, "and then externally they've gone out and done a better job of evaluating their vendors and suppliers. By adding more resources to risk management, they've positioned themselves better, both internally and externally." Although they've gained important insights into their financial risks, most companies' willingness to take on financial risks hasn't changed much in the past year. When asked how they would rate their organization's current financial risk appetite compared with a year earlier, the majority (56 percent) said it hasn't changed. Nearly a quarter (24 percent) are somewhat more willing to take financial risks this year than they were last year, and 3 percent are much more willing to take risks. However, 10 percent are somewhat less willing—and another 7 percent much less willing—to take financial risks today. Respondents made clear the reasons why they're reluctant to take on new risks: They feel a good deal of uncertainty in the external environment, both in terms of regulations that may be coming in the future and in terms of the economy and their competitiveness in their marketplace (see Figure 2, below). "In 2008 and 2009, the big concern among CFOs was their ability to secure credit," Graziano says. "This year, that concern is near the bottom of the list. Instead, CFOs today are thinking about things like understanding financial risk, regulatory risk, and cash positions." Indeed, when asked to identify the risk that concerns them most, more than a third of survey respondents chose "regulatory changes/uncertainty." Nearly 20 percent cited economic uncertainty, and 15 percent cited competitive pressures. Fewer than 1 percent said that securing credit is their primary concern, with 2 percent saying they're most worried about the rising cost of credit. Perhaps because external uncertainties are their number-one concern, more than half of the surveyed finance executives said that their ability to forecast future financial risk is an ongoing challenge. Many also struggle to control their current financial risks, in large part because they feel they don't have the right data to manage those risks. Corporate policies are creating some challenges, as well. Twenty percent of respondents said they're operating without a clear financial risk management strategy. And similar proportions of CFOs grapple with their company's conservative risk appetite (16 percent) as with their organization's aggressive risk appetite (12 percent). "When you start taking on credit, and you want to invest in your company—whether it's people, buildings, equipment, or other fixed assets—you want to have the ability to forecast, and you want to feel comfortable that there's some stability, before you make that long-term investment," Graziano says. "I think what this survey emphasizes is that companies are forecasting a little better, but there's still a lot of uncertainty about the future. CFOs would like to face less uncertainty, but they're finding ways to manage those external risks." 6 Tips for Safer Business Travel HSBC Bankers Charged in U.S. Currency Case Brexit Could Cut $40B from North American Company Profits Why Corporate America's Borrowing Costs Keep Falling IRS Corporate-Debt Rules Exceed Authority, Tax Lawyers Say Previous Canada Dollar Touches Three-Year Low Swaps Rules Challenged in Court risk management software 8 technology changes 5 TD Bank 4

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