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EH Report Capital Raising Suite Fund Launches and Closures Hedge Fund News EH Report ‘Mizuho-Eurekahedge Index’ goes live Asian Hedge Fund Awards Industry Events Calendar Hedge Fund Monthly Islamic Finance and SRI: Any Crossover? Novethic September 2009 Socially responsible investing (SRI) is an investment management approach which integrates environmental, social and governance (ESG) criteria in traditional financial analysis. Despite having less framework and detailed rules than Islamic finance, SRI shares a focus on non-economic factors in its economic and social principles. According to the Social Investment Organisation, SRI is seeing considerably lower shareholder redemption rates than conventional funds – strong evidence that suggests investors are committed to SRI for the long-term. The principle of Shariah, on which Islamic finance is based, applies ethical and extra-financial criteria that represent potential crossover with SRI. It bears similarity to SRI in its socially responsible purpose and the exclusion of businesses deemed unethical. Islamic finance is, however, an entire financial system in its own right. This article points towards possible answers by first outlining the basic principles of SRI and Islamic finance. It then analyses any potential compatibility between their processes and reviews the new financial products on the market, which for the first time combine the two strategies. The first SRI resolution was filed in the late-1960s in the US by church groups and student organisations whom opposed to the war in Vietnam. Another notorious topic was apartheid in South Africa. The Interfaith Centre on Corporate Responsibility (ICCR), now comprising 275 Protestant, Catholic and Jewish institutions holding over US$120 billion, has since spearheaded shareholder activism on social issues in the US. Religious activists in the UK also participated in the campaign against apartheid from 1970 to 1984, notably challenging Barclays Bank and oil giant Royal Dutch/Shell. Their endeavours to convince institutional investors to divest from these companies led to Barclays’ partial withdrawal from South Africa in 1985. Furthermore, the development of this campaign on both sides of the Atlantic resulted in the departure of over two-thirds of US companies active in South Africa. Today, the SRI assets owned by religious groups are marginal compared with institutional investors such as insurance companies, welfare organisations and pension funds. Ironically, the development of SRI in the past ten years by most asset management firms has led to a degree of aversion to ethical investment approaches. This is due to two factors – the financial management problems arising from the exclusion of certain securities or sectors, and the difficulty in identifying ethical standards shared by investors who are not united by a single religious conviction. Instead, much stronger emphasis has been placed on sustainable development focused on environmental, social and governance issues. Crossover with SRI: Islamic Purpose and Moral Principles Islam may be considered a system of standards based on moral and ethical values. The purpose of Islamic finance is to improve living conditions and well-being, establish social equity and prevent injustice in trade relations. This is precisely the reasoning behind the prohibition of usury and its replacement with a system whereby profits and risk are shared more equally. This purpose resembles that of SRI as it has developed in recent years, with its focus on sustainable development in its economic and social principles – creation of wealth for society and improvement in the quality of life. The environment is also considered in Islamic finance – one of the tenets of Islam is that man plays the role of steward over divine creation. God’s creation, which encompasses not only nature and the environment but also humans and society, belongs to God and is entrusted to man, who is vested with the duty of maintaining and managing the earth on God’s behalf. The application of this principle is often that wasteful and useless, superfluous consumption are unacceptable. Norm-based Exclusions and The Global Compact Unlike what may be the case for SRI, Islamic finance does not explicitly exclude issuers guilty of the worst social and environmental practises. Nevertheless, a report by OWW Consulting, a CSR (corporate social responsibility) and SRI consulting firm in Southeast Asia, highlights the compatibility between the tenets of Islam and those of the United Nations (UN) Global Compact. The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. These principles draw on the standard references in these areas, including the Universal Declaration of Human Rights, the International Labour Organisation Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development and the UN Convention against Corruption. It should be noted that the Global Compact does not enforce any regulation nor does it measure or review the practices of signatories. OWW Consulting’s report describes how the tenets of Islam comply with each of these principles, despite being based on different sources and motivations and often stricter ethical standards. It does not examine the application of these principles in Islamic finance, which is significantly less effective. In Practise Novethic called on a number of experts that specialise in both SRI and Islamic finance in order to assess how this theoretical compatibility is reflected in management practises. On the supply side, three asset management companies involved in both investment strategies were consulted – Pictet and SAM Sustainable Asset Management (Swiss), and F&C Investments (British). On the potential demand side, the sovereign fund Abu Dhabi Investment Authority (ADIA) was contacted. The latter fund does not feel concerned as it does not practise SRI or Shariah-compliant investments. Lastly, the viewpoints of the Association for Sustainable & Responsible Investment in Asia (ASrIA), an association dedicated to promoting SRI and CSR in Asia, and OWW Consulting were also taken into account. These two organisations are located in Southeast Asia, the only geographical region outside the UK where Islamic finance and SRI are developing side-by-side. Conclusion: Compatibility and Complementarities Many in the financial community believe that Islamic finance and SRI are compatible but there is no natural link between the two, first because they do not employ the same expertise, and second because they do not target the same clientele. Pictet is the perfect example – its SRI fund and Shariah-compliant fund were launched separately, and its management teams are based in different countries, Switzerland for the former and the UK for the latter. OWW and ASrIA have observed similar phenomena in Southeast Asia, both markets are growing but in different countries. Islamic finance is strong in Malaysia, Indonesia and Singapore, while SRI has a firmer foothold in Japan and South Korea. Traditional investors show less enthusiasm with regard to religious finance, expressing limited interest for what they consider to be a niche market which, more importantly, does not outperform indices (although Islamic finance may provide less risk). They clearly lean towards the more buoyant environmental fund market. Perhaps the only exception is SAM. The Swiss asset management firm is an expert in the application of ESG criteria to sustainable investment themes and issuer practises. In collaboration with the UK Islamic bank Gatehouse, it recently launched a Shariah-compliant fund focused on water. The initiative of SAM and Gatehouse Bank therefore seemed perfectly coherent. SAM’s “sustainability” team had extensive discussions with Gatehouse’s Shariah board, whose members were very interested in theme-based and ESG analyses of issuers. The project initiated by SAM and Gatehouse Bank remains a unique example of how SRI strategy can be combined with Islamic finance. Notwithstanding the basic purpose of these types of finance which encourages social well-being and environmental protection, Islamic finance remains a more formal system that provides both financial and extra-financial guidelines. These guidelines, when compared with responsible investment, are consistent with ethical finance and sharing, both in approach and objective, but do not preclude compatibility with other SRI approaches. Still, despite the fact that Islamic finance does not subject company practises to ESG screening, it is in line with UN Global Compact principles, which are used by a number of SRI managers in defining norm-based exclusions. As long as these approaches do not have any conflicting purposes, they could, in fact, be not only compatible but complementary, with the integration of ESG criteria offering both ethical and financial added value, notably by limiting risk. The success of Islamic finance and SRI does not seem correlated today, but it will be up to financial experts, research centres, ratings agencies, non-governmental organisations and even regulators to consolidate the two approaches. As they both focus on encouraging more ethical, responsible and transparent practises, they could be developed jointly, as could their potential client bases, thus spring boarding SRI into new markets. This article first appeared in Islamic Finance News (Pg 14, Vol 6, Issue 29). If you have any comments about or contributions to make to this newsletter, please email [email protected] [Top] Industry News The Eurekahedge Report - April 2014 Asset Flows Update for the Month of March 2014 Hedge Fund Performance Commentary for the Month of March 2014 2014 Key Trends in European Hedge Funds The Billion Dollar Interview with David Harding, Chairman and Chief Executive Officer at Winton Capital Management Interview with Vincent Lam, Chief Investment Officer at VL Asset Management A Supportive Environment for Vietnam�s Stock Markets Derivative Regulations for Swiss Pension Funds Russia: A Vast Opportunity for Islamic Finance Copyright © 2014 Eurekahedge Pte Ltd. Use of this site is subject to our terms and conditions of use.

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Advertisement Building riches, brick by brick Matt Krantz Travis Matheson has spent $15,000 on his Lego collection and is among the 10 per cent of customers who are adult fans. Photo: Simon O'Dwyer Investors understand the value of stocks and bonds. But Lego bricks? Those ubiquitous interlocking bricks, usually stuffed in closets, tucked under toy boxes and scattered across playrooms, aren't what most people think of as an investment. But to some, like David Schooley, Lego bricks are serious money, and buying and selling them, just as some investors trade stocks, is becoming a way to turn a profit, brick by brick. Schooley, a 49-year-old information technology professional in Memphis and father of six, is one of a growing niche of people who buy and hold Lego bricks not as toys but investments. Just as stock investors have portfolios of all different sorts of stocks, Lego investors hold massive collections of Lego sets. Schooley has more than 3000 sets piled high in a climate-controlled storage facility. He bought most of them years ago, planning to sell them a year later for a profit. Doing this again and again generates a tidy 10 to 15 per cent annual profit, he says, topping even the 10 per cent long-term average return of stocks. "You start to realise these are worth a lot of money," he says. Investing in Lego bricks may sound ludicrous to those who see them just as kids' toys but savvy investors can reap rewards if they know how to buy the toys from stores, hold them and then sell them online. It's not just a theory. Let's say two investors had $10,000 to invest at the end of 2011. One investor bought 174 shares of the Vanguard S&P 500 index exchange traded fund for $57.45 apiece, while the other bought 100 boxes of the Emerald Night Lego train set for $99.99 each. The Emerald Night is a 1085-piece Lego set that, when built, looks like a classic steam engine with a tender and a passenger car. Fast forward to today. The stock investors would have done pretty well, with a 15 per cent gain, including dividends paid. But the Lego investor would be able to sell the Lego Emerald Night trains for $203 each, a 103 per cent profit. In other words, the Lego train would have outperformed the sharemarket by 587 per cent. And that's not an anomaly. Lego bricks, have become lucrative investments due to a confluence of bullish factors. Driving the market is the strong underlying demand for Lego bricks and sets. The toys are craved by older people, who now have their own money to spend on the sets rather than waiting for a birthday gift. Building toy sets are also a fast-growing corner of the toy business for young kids. Americans spent $US1.6 billion on building-set toys last year, up 23 per cent on 2010, according to the latest data available from industry tracker The NPD Group. Building-set toys account for nearly 10 per cent of all toys sold. And while Lego does have some competition, the rivals are bit players, coming nowhere near Lego's dominance. Possibilities galore Meanwhile, there's a new cadre of Lego consumers growing up. The Lego universe is reinforced not just by the hundreds of building sets on the shelves at major retailers, but by a multimedia push. There are several lines of Lego sets that are tied to popular movies and TV shows, including Star Wars, Harry Potter, Lord of the Rings, and soon, even the Teenage Mutant Ninja Turtles. There are sets that look like haunted houses, ninja battlegrounds and there's even a line designed for girls with pastel-coloured bricks and female figurines. Such product tie-ins are just the start. Cartoon Network runs Lego-themed shows all day, with characters made out of Lego bricks, or so-called minifigs, or mini-figures. There's also a line of Lego-themed video games that allow players to traverse digital terrains made out of Lego bricks and tied to popular characters such as Batman and Harry Potter. But what makes Lego bricks a potential bonanza for investors is how the Lego Group controls the supply of sets. The company often produces sets, say a new Star Wars spaceship, for a year or two, and then will stop producing it. Once popular sets are "retired", consumers who want one have no other choice than to hit eBay or other online marketplaces to buy it, often for prices way above the original price. Huge gains for Millennium Falcon One example still considered a pinnacle success story of Lego investing is a set released in 2007 for $500, called the Ultimate Collector's Millennium Falcon. The 5195-piece re-creation of Han Solo's battered noble star fighter from Star Wars now sells, new, for $2165, according to data collected by BrickPicker.com, a site dedicated to Lego investors. That's a staggering 34 per cent compound average annual gain over five years. "It keeps ticking up. I wonder where it will stop," says Ed Maciorowski, co-founder of BrickPicker.com, and a Lego investor himself. Maciorowski says he has more than 3000 sets, with an estimated value of more than $100,000. He plans to sell them in a few years to pay for his son's college tuition. They are stuffed in his house, closets and in his office. After seeing the value of a few of his sets skyrocket, Maciorowski approached his brother Jeff, a computer whiz, to design a website that would help Lego investors increase their returns. BrickPicker keeps a "portfolio" of all the sets owned by an investor and fetches market prices by seeing how the sets are selling on online marketplaces such as eBay and Amazon. "These things are gold," Jeff says. To Ed Maciorowski, investing in Lego bricks is much more prudent that most mainstream investments, especially stocks, which he isn't fond of. He sold many of his stocks and other investments just before the tech bubble burst, and watched as other investors lost fortunes in paper wealth. The tangibility and global appeal of Lego bricks makes them a worthwhile investment for him. "Even if the price of

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Search this site: Critical readingA SocialistWorker.org blog Newskicks Recession continues for most Americans October 14, 2010 12:56 am CDT But not all. Wall Street pay is set to hit a record $144 billion in 2010. --PG Across the U.S., Long Recovery Looks Like Recession Source: NY Times By MICHAEL POWELL and MOTOKO RICH This is not what a recovery is supposed to look like. In Atlanta, the Bank of America tower, the tallest in the Southeast, is nearly a fifth vacant, and bank officials just wrestled a rent cut from the developer. In Cherry Hill, N.J., 10 percent of the houses on the market are so-called short sales, in which sellers ask for less than they owe lenders. And in Arizona, in sun-blasted desert subdivisions, owners speak of hours cut, jobs lost and meals at soup kitchens. Less than a month before November elections, the United States is mired in a grim New Normal that could last for years. That has policy makers, particularly the Federal Reserve, considering a range of ever more extreme measures, as noted in the minutes of its last meeting, released Tuesday. Call it recession or recovery, for tens of millions of Americans, there’s little difference. Born of a record financial collapse, this recession has been more severe than any since the Great Depression and has left an enormous oversupply of houses and office buildings and crippling debt. The decision last week by leading mortgage lenders to freeze foreclosures, and calls for a national moratorium, could cast a long shadow of uncertainty over banks and the housing market. Put simply, the national economy has fallen so far that it could take years to climb back. The math yields somber conclusions, with implications not just for this autumn’s elections but also — barring a policy surprise or economic upturn — for 2012 as well: ¶At the current rate of job creation, the nation would need nine more years to recapture the jobs lost during the recession. And that doesn’t even account for five million or six million jobs needed in that time to keep pace with an expanding population. Even top Obama officials concede the unemployment rate could climb higher still. ¶Median house prices have dropped 20 percent since 2005. Given an inflation rate of about 2 percent — a common forecast — it would take 13 years for housing prices to climb back to their peak, according to Allen L. Sinai, chief global economist at the consulting firm Decision Economics. ¶Commercial vacancies are soaring, and it could take a decade to absorb the excess in many of the largest cities. The vacancy rate, as of the end of June, stands at 21.4 percent in Phoenix, 19.7 percent in Las Vegas, 18.3 in Dallas/Fort Worth and 17.3 percent in Atlanta, in each case higher than last year, according to the data firm CoStar Group. Demand is inert. Consumer confidence has tumbled as many are afraid or unable to spend. Families are still paying off — or walking away from — debt. Mark Zandi, chief economist of Moody’s Analytics, estimates it will be the end of 2011 before the amount of income that households pay in interest recedes to levels seen before the run-up. Credit card delinquencies are rising. “No wonder Americans are pessimistic and unhappy,” said Mr. Sinai. “The only way we are going to get in gear is to face up to the reality that we are entering a period of austerity.” This dreary accounting should not suggest a nation without strengths. Unemployment rates have come down from their peaks in swaths of the United States, from Vermont to Minnesota to Wisconsin. Port traffic has increased, and employers have created an average of 68,111 jobs a month this year. After plummeting in 2009, the stock market has spiraled up, buoying retirement accounts and perhaps the spirits of middle-class Americans. As a measure of economic health, though, that gain is overstated. Robert Reich, the former labor secretary, notes that the most profitable companies in the domestic stock indexes generate about 40 percent of their revenue from abroad. Few doubt the American economy remains capable of electrifying growth, but few expect that any time soon. “We still have a lot of strengths, from a culture of entrepreneurship and venture capitalism, to flexible labor markets and attracting immigrants,” said Barry Eichengreen, an economist at the University of California, Berkeley. “But we’re going to be living with the overhang of our financial and debt problems for a long, long time to come.” New shocks could push the nation into another recession or deflation. “We are in a situation where our vulnerability to any new problem is great,” said Carmen M. Reinhart, a professor of economics at the University of Maryland. So troubles ripple outward, as lost jobs, unsold houses and empty offices weigh down the economy and upend lives. Struggles in Arizona, New Jersey and Georgia echo broadly. Florence, Ariz. In 2005, Arizona ranked, as usual, second nationally in job growth behind Nevada, its economy predicated on growth. The snowbirds came and construction boomed and land stretched endless and cheap. Then it stopped. This year, Arizona ranks 42nd in job growth. It has lost 287,000 jobs since the recession began, and the fall has been calamitous. Renee Wheaton, 38, sits in an old golf cart on the corner of Tangerine and Barley Roads in her subdivision in the desert, an hour south of Phoenix. Her next-door neighbor, an engineer, just lost his job. The man across the street is unemployed. Her family is not doing so well either. Her husband’s hours have been cut by 15 percent, leaving her family of five behind on water and credit card bills — more or less on everything except the house and car payment. She teaches art, but that’s not much in demand. “I say to myself ‘This can’t be happening to us: We saved, we worked hard and we’re under tremendous stress,’ ” Ms. Wheaton says. “My husband is a very hard-working man but for the first time, he’s having real trouble.” Arizona’s poverty rate has jumped to 19.6 percent, the second-highest in the nation after Mississippi. The Association of Arizona Food Banks says demand has nearly doubled in the last 18 months. Elliott D. Pollack, one of Arizona’s foremost economic forecasters, said: “You had an implosion of every sector needed to survive. That’s not going to get better fast.” To wander exurban Pinal County, which is where Florence is located, is to find that the unemployment rate tells just half the story. Everywhere, subdivisions sit in the desert, some half-built and some dreamy wisps, like the emerald green putting green sitting amid acres of scrub and cacti. Signs offer discounts, distress sales and rent with the first and second month free. Discounts do not help if your income is cut in half. Construction workers speak of stringing together 20-hour weeks with odd jobs, and a 45-year-old woman who was a real estate agent talks of her job making minimum wage bathing elderly patients. Many live close to the poverty line, without the conveniences they once took for granted. Pinal’s unemployment rate, like that of Arizona, stands at 9.7 percent, but state officials say that the real rate rises closer to 20 percent when part-timers and those who have stopped looking for work are added in. At an elementary school near Ms. Wheaton’s home, an expansion of the school’s water supply was under way until thieves sneaked in at night and tore the copper pipes out of the ground to sell for scrap. Five miles southwest, in Coolidge, a desert town within view of the distant Superstition Mountains, demand has tripled at Tom Hunt’s food pantry. Some days he runs out. Henry Alejandrez, 60, is a roofer who migrated from Texas looking for work. “It’s gotten real bad,” he says. “I’m a citizen, and you’re lucky if you get minimum wage.” Mary Sepeda, his sister, nods. She used to drive two hours to clean newly constructed homes before they were sold. That job evaporated with the housing market. (Arizona issued 62,500 housing permits several years ago; it gave out 8,400 last year.) “It’s getting crazy,” she says, holding up a white plastic bag of pantry food. “How does this end?” You put that question to Mr. Pollack, the forecaster. “We won’t recover until we absorb 80,000 empty houses and office buildings and people can borrow again,” he says. When will that be? “I’m forecasting recovery by 2013 to 2015,” he says. The housing market in this bedroom community just across the border from Philadelphia never leapt to the frenzied heights of Miami Beach or Las Vegas. But even if foreclosure notices are not tacked to every other door, a malaise has settled over the market. Home prices have fallen by 16 percent since 2006, and houses now take twice as long to sell as they did five years ago. That’s enough to inflict pain on homeowners who need to sell because of a job loss or drop in income. Some are being forced to get rid of their houses in short sales, asking less than they owe on a mortgage. As of last week, 10 percent of all listings in this well-tended suburb were being offered as short sales. Chrysanthemums bloomed in boxes on the porch of one of those homes as a real estate broker unlocked the front door. In the kitchen, children’s chores were listed neatly on an erasable white board. Dinner simmered in a Crock-Pot on the counter. There were few signs of the financial distress that prompted the owners to put their four-bedroom colonial on the market for less than they paid five years ago. The colonial’s owners, James and Patricia Furrow, bought near the top of the market in 2005 for $289,900. Mr. Furrow, 48, retired in July after 26 years as a corrections officer and supplements his pension with work as a handyman. But his income is spotty, and his wife, who works in a school cafeteria, does not earn enough to cover the mortgage on the house where they live with their three children. They have already missed a payment; they want to sell the house in hopes their lender will forgive the shortfall between their loan balance and the lower sale price. They are asking $279,900. “When we did buy, the market was still moving pretty good,” said Mr. Furrow. “Then it got to the point where people said it is not going to last. And of course it didn’t last.” Some of the homes being offered at distressed prices are dragging down prices for less troubled homeowners who hope to sell. And with foreclosures now in disarray, the market could be further weakened. “Even someone who is trying to sell a normal, well-maintained house is at the mercy of these low prices,” said Walter Bud Crane, an agent with Re/Max of Cherry Hill. So the houses sit, awaiting offers that rarely materialize. According to Mr. Crane, the average number of days that homes sit on the market has nearly doubled, to 62 this year from 32 in 2005. Buyers are chary, not sure if their jobs are secure. Open houses draw sparse crowds. In Camden County, where Cherry Hill sits, unemployment is near 10 percent. Several large employers have closed or conducted huge layoffs, and others have pruned hours. With Gov. Chris Christie reining in spending, government workers are jittery. Real estate agents say it has rarely been a better time to buy: interest rates are at record lows, house prices have fallen and the selection is large. Tara Stewart-Becker, a 28-year-old financial services manager, said she and her husband would love to buy a sprawling fixer-upper just three blocks from the narrow colonial they purchased four years ago in Riverton, which backs onto the Delaware River. But a bad kitchen flood and a loan to pay for repairs has left Ms. Becker and her husband, Eric, owing more on their mortgage than the house is currently worth. Even though the couple make far more money than they did when they bought their house and could afford a larger loan and renovations, they cannot sell. “I would gladly take a new mortgage and stimulate the economy for the rest of my life,” Ms. Becker said. “Unfortunately, there isn’t anything that a government or a bank can do,” she added. “You just have to settle for less and wait.” Long fast-growing, no-holds-barred Atlanta has burned to the ground before, figuratively and in reality, and each time it was a phoenix rising. But this recession has cut deeper than any since the Great Depression and left Atlanta’s commercial and high-end condo real estate in an economic coma. Over all, assuming a robust growth rate, industry leaders say it could take 12 years for Atlanta to absorb excess commercial space. “That one — see it?” Alan Wexler points to a gleaming blue tower as he drives. “A Chicago bank took it over six months ago. Sold at a 40 percent discount.” “And over there” — he juts his chin at a boarded-up hotel topped by a Chick-fil-A fast-food restaurant crown. “That was going to be a condo. They just shut it down and walked away.” Mr. Wexler, a wiry and peripatetic real estate data analyst, describes it all on a drive down Peachtree Road, Atlanta’s posh commercial spine. He starts in the Buckhead neighborhood, which has more than two million square feet of vacant commercial space. A billboard outside one discounted condo tower promises “New Pricing from the $290s!” There are towers half-empty and towers in receivership. Office buildings that once sold for $85 million now retail for $35 million. Approaching downtown, Mr. Wexler hits the brakes and points to an older, white marble building. “See that one? It’s the Fed Reserve. That’s where they sit, look, sweat and wonder: How did we get into this mess?” That’s a question much on the minds and lips of residents. The commercial vacancy rate in Buckhead is near 20 percent, and the Atlanta region has added jobs only at the low end. Mike Alexander, research division chief for the Atlanta Regional Commission, posed the question: “When do we start to add premium jobs again?” Lawrence L. Gellerstedt III, chief executive of Cousins Properties, sits in an office high atop an elegant Philip Johnson tower, with a grand view of the Atlanta commercial corridor running north. He does not see improvement on the horizon. “We’re all wondering what gets the economy producing jobs and growth again,” he says. “Atlanta always was the fair-haired child of real estate growth and now, it’s ‘O.K., poster boy, you’re getting yours.’ ” Small banks are a particular disaster, 43 having gone under in Georgia since 2008. (Federal regulators closed 129 nationally this year, up from 25 last year.) Real estate was the beginning, the middle and the end of the troubles. In one deal, dozens of Atlanta banks invested in Merrill Ranch, a 4,508-acre tract of desert south of Phoenix. The deal imploded and took a lot of banks with it. “No one was demanding documents or reading the fine print, and mortgage banks were fat and happy,” recalls John Little, a developer. “Well, that train couldn’t keep running.” He has a ringside seat on this debacle, as he sits in the office of a handsome condo complex he built in west Atlanta. He faced price discounts so deep that he decided to rent it instead. Nationwide banks have no interest in lending to local developers, and the regional banks are desperate for cash and calling in their loans. Mr. Little got lucky; he bought out his loan and kept his property. “Most of my generation of builders has gone under,” he said. “It’s still spiraling out of control.” Back to the Critical Thinking blog FAIR USE NOTICE: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a "fair use" of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more, see: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond "fair use", you must obtain permission from the copyright owner. International Socialist Org. About Critical Reading Critical Reading features news and opinion from other media, both mainstream and independent, that you should see. If you have an article to suggest for Critical Reading, e-mail it, along with a link, to [email protected]. 4/184/174/164/154/144/11Friday, April 18thIt was martial law in Watertown Thursday, April 17thMarxism and the making of history Why was this Nazi able to kill? "People First" puts money first What lies ahead for Michoacán? Running low on hope Views in brief Wednesday, April 16thAre better schools the solution to poverty? The real fraud about Afghanistan's election Solidaire in Quebec's election Ready to raise the floor in SF The lessons of cricket When criticism is off limits Tuesday, April 15thWhy are they waging a war on science? How will labor be revived? The movement needs to keep moving We're sick of poverty wages Where's our 3 percent raise? Victories against police repression Soborno institucionalizado Monday, April 14thWe need a tipping point toward climate justice UPS backs down over firings Chicago police justify another killing A boycott of conscience Custodians crank up the heat Human rights and the art world Friday, April 11thTheses on national questions Critical readingWhy localism isn't the solution U.S. education—racist to the core Paul Ryan pulls out his racist dog whistle Capitalism and militarism U.S. hypocrisy over Ukraine Sign up for e-mail alerts from SocialistWorker.org. E-mail address: SocialistWorker.org War/Antiwar Activist News Readers' Views Books/Entertainment Published by the International Socialist Organization

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About Farmers National Bank Over one hundred years of continuous service to the people of Lebanon and Marion County - that's a long time! That's how long the Farmers National Bank of Lebanon has been in existence, offering sound financial services to thousands of satisfied customers. And it has been done in a quiet, efficient, down-home friendly fashion. It's not the biggest bank in Kentucky. It's not even the biggest bank in Marion County. It's simply Marion County's friendly neighbor “growing with you since 1890.” We believe it’s not the size of the city, or the building, or even the safe that matters. It’s the size of the commitment to customer satisfaction that does. At Farmers National Bank, we’re big enough to serve your needs, and small enough to care. At Farmers National Bank, we offer hometown banking the way it should be - people you know and trust, who go out of their way to recognize and appreciate you from the minute you walk through our doors. Come visit us and you’ll see why we say there’s no other bank in this area that has a stronger tradition of service to the local community than we do. Privacy Notice I Terms of Use All Rights Reserved. © 2013 Farmers National Bank. NMLS # 402972 Powered by ProfitStars. Notice: The bank is not responsible for and has no control over the subject matter, content, information, or graphics of the web sites that have links here. The portal features are being provided by an outside source - The bank is not responsible for the content. Please contact us with any concerns or comments.

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Listen Shows Contests Events People Advertise Advertiser Directory KOMO Newsradio Club Hotlinks Contact Dell bows out of stock market in $24.4 billion deal to go private By MICHAEL LIEDTKE AP Technology Writer Published: Feb 5, 2013 at 8:50 AM PDT Last Updated: Feb 5, 2013 at 9:13 AM PDT SAN FRANCISCO (AP) - Slumping personal computer maker Dell is bowing out of the stock market in a $24.4 billion buyout that represents the largest deal of its kind since the Great Recession dried up the financing for such risky maneuvers.The complex agreement announced Tuesday will allow Dell Inc.'s management, including founder Michael Dell, to attempt a company turnaround away from the glare and financial pressures of Wall Street.Dell stockholders will be paid $13.65 per share to leave the company on its own. That's 25 percent more than the $10.88 the stock was going for before word of the buyout talks trickled out last month, but a steep markdown from the shares' price of $26 less than five years ago.Dell shares rose 12 cents to $13.39 per share in morning trading, indicating that investors don't believe a better offer is likely.Once the sale to the group that includes investment firm Silver Lake is finalized, Dell's stock will stop trading on the Nasdaq nearly 25 years after the Round Rock, Texas, company raised $30 million in an initial public offering of stock. Microsoft Corp. is helping the deal along by lending $2 billion to the buyers.The company will solicit competing offers for 45 days.The IPO and Dell's rapid growth through the 1990s turned its founder into one of the world's richest people. His fortune is currently estimated at about $16 billion. Michael Dell, who owns nearly 16 percent stake in the company, will remain the CEO after the sale closes and will contribute his existing stake in Dell to the new company.Dell's sale is the second highest-priced leveraged buyout of a technology company, trailing the $27 billion paid for First Data Corp. in 2007.The deal is the largest leveraged buyout of any type since November 2007 when Alltel Corp. sold for $25 billion to TPG Capital and a Goldman Sachs subsidiary. Within a few months, the U.S. economy had collapsed into the worst recession since World War II.Leveraged buyouts refer to deals that saddle the acquired company with the debt taken on to finance the purchase.Dell's decision to go private is a reflection of the tough times facing the personal computer industry as more technology spending flows toward smartphones and tablet computers. PC sales fell 3.5 percent last year, according to the research group Gartner Inc., the first annual decline in more than a decade. What's more, tablet computers are expected to outsell laptops this year.The shift has weakened long-time stalwarts such as Dell, fellow PC maker Hewlett-Packard Co., chip maker Intel Corp. and software maker Microsoft Corp.Like the others, Dell's revenue has been shriveling and its stock has been sinking amid worries that the company might not be able to regain its technological edge.Both Dell and its larger rival HP are trying to revive their fortunes by expanding into business software and technology consulting, two niches that are more profitable than making PCs.The PC downturn has hurt Microsoft by reducing sales of its Windows operating system. As the world's third largest PC maker, Dell is one of Microsoft's biggest customers.By becoming a major Dell backer, Microsoft could gain more influence in the design of the devices running on a radically redesigned version of Windows that was released in late October. The closer ties with Dell, though, could poison Microsoft's relationship with HP, the largest PC maker, and other manufacturers that buy Windows and other software.In a statement, Michael Dell said that while the company has made progress, turning it around will be easier under private ownership."We recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision," he said.As a private company, Dell won't have to pander to the stock market's fixation on whether the company's earnings are growing from one quarter to the next.Taking the company private is a major risk, however. It will leave Dell Inc. without publicly traded shares to entice and reward talented workers or to help buy other companies.As part of its shift toward business software and technology services, Dell already has spent $9 billion on acquisitions in the past three years.Leveraged buyouts also require companies to earmark some of their incoming cash to reduce the debt taken on as part of the process of going private. The obligations mean Dell will have less money to invest in innovation and expansion of its business.The buyout will mark a new era in another technology company that began humbly and matured into a juggernaut.With just $1,000, Michael Dell, then a freshman at the University of Texas at Austin, started his company as "PCs Limited" in his dorm room. He would go on to revolutionize the PC industry by taking orders for custom-made machines at a reasonable price - first on the phone, then on the Internet.Initially valued at $85 million in its 1988, Dell went on a growth tear that turned the company into a stock market star. At the height of the dot-com boom in 2000, Dell was the world's largest PC maker, with a market value of more than $100 billion.But Dell began to falter as other PC makers were able to lower their costs. At the same time, HP and other rivals forged relationships with stores that gave them the advantage of being able to showcase their machines. By 2006, HP had supplanted Dell as the world's largest PC maker.With its revenue slipping, Dell's market value had fallen to $19 billion before the mid-January leaks about the buyout negotiations. scychan 5pts Dell is a good company,and they make good products,but the management lost their directions. Freespeech 5pts This is a wiser move as seriously all wall street does is speculate on numbers and sales each quarter... likely they will be better off once they realize the PC market is growing but honestly unless my computer craps out I don't replace it every year! ... I build my own and have done so since I was in high school...after a few years I max out the specs and push it on for another several years... unlike manufactures trying to keep a good stock price I focus on building my own personal quality product... if I need a laptop its been HP for the last 14 years... some businesses would be better served if they cut themselves clear of the stock market as well - speculators are the darn devil these days! I hope they succeed. Â They make great laptops.

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Alaris Royalty Corp. TSX : AD Alaris Closes Previously Announced Partner Contributions CALGARY, ALBERTA--(Marketwire - Dec. 21, 2012) - NOT FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW. Alaris Royalty Corp. ("Alaris" or the "Corporation") (TSX:AD) is pleased to announce that it has closed the previously announced transactions with KMH Limited Partnership ("KMH") and Agility Health LLC ("Agility"). On December 19, 2012, the Corporation entered into an operating agreement and subscription agreement (collectively, the "Agility Agreements") with Agility. Pursuant to the Agility Agreements, Alaris contributed USD $12,500,000 (the "Agility Contribution") to Agility in exchange for a pre-tax annual preferred distribution of USD $2,000,000 (the "Agility Distribution") for the first full year after the Agility Contribution, which represents an expected initial pre-tax return of 16%. Agility is Alaris' ninth Private Company Partner (as defined below), and its second U.S. partnership. The Agility Distribution was funded with funds drawn on the Company's senior credit facility (the "Facility"). The Corporation also contributed $6,200,000 (the "KMH Contribution") to KMH on December 21, 2012 in exchange for an additional $918,518 annual preferred distribution (the "KMH Distribution") for the first full year following the KMH Contribution. The KMH Distribution is effective January 1, 2013. Alaris has now contributed an aggregate of $54,800,000 to KMH and, after giving effect to the KMH Contribution, the total aggregate distribution payable to Alaris from KMH is $8,269,200, on an annualized basis. The KMH Contribution was funded with funds drawn on the Corporation's Facility. About Agility Health Agility Health (www.agilityhealth.com) is a leading healthcare provider devoted to the rehabilitation of patient physical injuries and conditions. Established in 1968, Agility Health delivers personalized care through over one million therapy visits annually at more than 155 service sites in 14 states nationwide. The company is dedicated to providing exceptional value to the patients, clients and partners it serves through the provision of physical therapy, occupational therapy, speech pathology services and clinical management software. Agility Health's innovative clinical services, proven practice management systems and flexible partnership models help achieve optimal performance in a variety of settings, including outpatient clinics, hospitals, long-term care facilities and employer work sites. About KMH: KMH provides access to rapidly-evolving medical technology, state-of-the-art diagnostic equipment and highly qualified specialists in Canada and the United States. According to KMH management, KMH has grown from a single facility in 1988 to become the largest provider of Nuclear Cardiology services in North America. KMH services include Nuclear Medicine, Cardiology and Magnetic Resonance Imaging (MRI) diagnostic services. Physician practice management solutions by KMH further enhance patient care by providing access to specialist consultations and treatment. According to KMH management, more than 85,000 patients visit KMH annually after being referred by physicians, insurance companies, employers and other third party service providers. KMH has successfully administered more than 600,000 cardiology, nuclear cardiology and nuclear medicine diagnostic tests and more than 40,000 magnetic resonance imaging scans. KMH consistently provides a high level of service which has created a strong rapport within the healthcare community. KMH is well recognized by more than 10,000 physicians and has established a preferred provider relationship within the insurance and health services industry. About Alaris: The Corporation provides alternative financing to a diversified group of private businesses ("Private Company Partners") in exchange for royalties or distributions from the Private Company Partners, with the principal objective of generating stable and predictable cash flows for dividend payments to its shareholders. Royalties or distributions to Alaris from the Private Company Partners are structured as a percentage of a "top line" financial performance measure such as gross margin, same clinic sales, gross revenues and same-store sales and rank in priority to the owners' common equity position. This news release contains forward-looking statements as defined under applicable securities laws. Statements other than statements of historical fact contained in this news release may be forward-looking statements under applicable securities legislation, including, without limitation, management's expectations, intentions and beliefs concerning: the amount of the Agility and KMH Distributions and the return to Alaris. Many of these statements can be identified by looking for words such as "believe", "expects", "will", "intends", "projects", "anticipates", "estimates", "continues" or similar words or the negative thereof. To the extent any forward-looking statements herein constitute a financial outlook, they were approved by management as of the date hereof and have been included to provide an understanding with respect to Alaris' financial performance and are subject to the risks and assumptions disclosed herein. There can be no assurance that the plans, intentions or expectations upon which these forward looking statements are based will occur. Statements containing forward-looking information by their nature involve numerous assumptions and significant known and unknown facts and uncertainties of both a general and a specific nature. Key assumptions include, but are not limited to assumptions that: the Private Company Partners will continue to grow and may require additional capital from Alaris in the future; the Canadian and U.S. economies will grow moderately over the next 12 months; interest rates will not rise in a material nature over the next 12 months; more private companies will require access to alternative sources of capital; and the Corporation will obtain required regulatory approvals on a timely basis. In determining the Corporation's expectations for economic growth, management primarily considers historical economic data provided by the Canadian and U.S. governments and their agencies. The forward-looking statements contained herein are subject to numerous known and unknown risks that may cause actual results to vary from those set forth in the forward-looking statements, including, but not limited to risks associated with: general economic conditions and changes in the financial markets; risks associated with the Private Company Partners and their respective businesses; a change in the ability of the Private Company Partners to continue to pay Alaris' preferred distributions; failure to obtain required regulatory approvals on a timely basis or at all; and changes in legislation on government regulations and the interpretations thereof. In addition, the information set forth under the heading "Risk Factors" in the Corporation's Annual Information Form dated March 14, 2012 (a complete copy of which can be found on SEDAR at www.sedar.com) identifies additional factors that could affect the operating results and performance of the Corporation and may cause the actual results of the Corporation to differ materially from those anticipated in forward-looking statements. As forward-looking statements are subject to risks, uncertainties and assumptions and should not be read as guarantees or assurances of future performance. Accordingly, readers are cautioned not to place undue reliance on any forward-looking information contained in this news release as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements. Statements containing forward-looking information reflect management's current beliefs and assumptions based on information in its possession on the date of this news release. Although management believes that the assumptions reflected in the forward-looking statements contained herein are reasonable, there can be no assurance that such expectations will prove to be correct. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this news release are made as of the date of this news release and Alaris does not undertake or assume any obligation to update or revise such statements to reflect new events or circumstances except as expressly required by applicable securities legislation. Alaris Royalty Corp.Curtis KrawetzManager of Investor Relations, Analyst403-221-7305 Alaris Royalty Corp.

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Home > Press > VeruTEK Technologies, Inc. Completes Private Placement, Appoints Three Independent Directors to its Board VeruTEK Technologies, Inc. (VTKT.OB) announced the completion of a private placement offering whereby the Company sold approximately 1.34 million shares of its common stock plus warrants to purchase approximately 2.7 million additional shares of common stock. VeruTEK raised approximately $2.059 million. The proceeds will be used for working capital to support current growth as well as for other general corporate purposes. VeruTEK Technologies, Inc. Completes Private Placement, Appoints Three Independent Directors to its Board BLOOMFIELD, CT | Posted on October 18th, 2007 VeruTEK also announced the appointment of Douglas Anderson as Chairman of its board of directors and Mark Ain and Carlos Naudon as Independent Directors.Douglas Anderson brings extensive experience in operations, management, finance and M&A to the position. He is the former Chairman, CEO and President of Open Solutions, Inc. (OSI), a leading provider of e-business and software applications for community financial institutions. OSI was acquired in January 2007 by private equity firms The Carlyle Group and Providence Equity Partners. In addition, Mr. Anderson was President of Manchester Savings Bank before it was sold to New Alliance Bank.Mark Ain is Founder, former CEO and current Executive Chairman of Kronos Incorporated, a human capital management software company that was recently acquired by Hellman and Friedman Capital Partners for $1.8 billion.Carlos Naudon is the founder, President and Chief Executive Officer of Banking Spectrum, a strategy and compliance consulting company serving the financial services industry. He is also an attorney with Allister and Naudon as well as a retired Certified Public Accountant. Mr. Naudon formerly served as Managing Director of OSI."Doug, Mark and Carlos each have a history of helping young companies become highly successful, profitable organizations," said Dr. John Collins, CEO of VeruTEK. "Doug's leadership on the board will be invaluable as VeruTEK continues to grow. Mark and Carlos round out an experienced and prestigious Board of Directors that will help ensure that VeruTEK reaches the next level. We are extremely excited that they have joined the Company."As part of this growth strategy, VeruTEK co-founder, Senior Vice President and Director of Research and Development, George Hoag, Ph.D., has stepped down from the board effective immediately. Dr. Collins said, "another benefit of adding these tremendous new board members is that it frees George up to focus even more on research and development of new green products and technologies."####About VeruTEK Technologies, Inc. VeruTEK (VTKT.OB) provides proprietary, patent-pending, green nanotechnology solutions for cleaning up the environment. For more information, please visit http://www.verutek.com .Safe Harbor StatementThe statements contained herein, which are not historical, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements including, but not limited to, certain delays beyond the Company's control with respect to market acceptance of new technologies, products and services, delays in testing and evaluation of products and services, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. For more information, please click here Contacts:VeruTEK Technologies, Inc.Jim Carini312-953-8319 Copyright © Business Wire 2007 Appointments/Promotions/New hires/Resignations/Deaths Nanobiotix Appoints Thierry Otin as Head of Manufacturing and Supply April 15th, 2014 Industry Veteran Fergus Clarke Joins Picodeon as CEO: Appointment comes as Picodeon prepares for growth April 8th, 2014 Peter B. Littlewood appointed Director of Argonne National Laboratory March 26th, 2014

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> A tale of many price indices A tale of many price indices Part of Consumer Price Indices, December 2012 Release CPI, RPI, PPI, HPI... ONS produces a lot of price indices. But what is a price index, why are they important and why do we have so many? A price index is the means of measuring inflation – the speed at which, in general, prices are going up or down in the economy. This article briefly explains what inflation is and why we measure it, describes some of the range of price indices produced by ONS and explains why we need to produce so many. What is inflation and why do we measure it? Being able to measure inflation is important as it tells us how much of something we can get for our money. An easy way of thinking about it is in terms of changes in the price of a fixed shopping basket. For example, supposed you went to the shops today and spent £100 on a basket of items. Then, the next time you went back to the shops you bought the exact same basket of items and this time it cost you £110. The percentage increase in cost is the price inflation. Inflation indices are used in lots of ways, such as in contracts, when up-rating pensions, calculating student loans and deciding interest rates. In other words, inflation indices are a part of our everyday life. What are the different measures produced by ONS? So why does this require so many measures? There are a couple of answers to this. First, we need to consider what inflation we want to measure. For example, the Producer Prices Indices (PPIs) measure the prices of goods bought and sold by UK manufacturers. The headline measure, known as factory gate inflation, measures the price of the goods UK manufacturers charge other UK businesses for their products. This is great if you own a factory or want to understand how this part of the economy is performing, but not so useful if you want to understand the pressures on your own personal budget. Service Producer Price Indice (SPPIS) do a similar job for the service industry sector, and have similar types of use to PPIs, but from a service sector perspective. For private households, there are the Consumer Prices Index (CPI) and Retail Prices Index (RPI). From March 2013, ONS will also publish a new measure, CPIH, which includes owner occupiers’ housing costs which are excluded from the CPI. If you want to know about changes in the average price of a house there’s the House Price Index (HPI). The multiple measures for private households bring us on to the second reason for producing a range of measures – what do you want to do with your measure of inflation? The CPI has been designed to provide a comparable measure of inflation across Europe. Having been designed to be comparable, it has also been designed in line with best international standards for measuring the inflation of private households. The RPI has been around a lot longer than the CPI (it dates back to the 1940s). The RPI has many long-term users and ONS is required to produce it under UK law. The National Statistician recently announced that the RPI does not meet best international standards because of a formula used in its calculation. Therefore a new index called RPIJ, which uses another formula (called Jevons) in its calculation, will be published from March 2013. In recognition of the value to users in maintaining continuity, the RPI will continue to be published too. ONS produces a range of price indices, all of which measure the inflation for different groups of people or products. ONS statisticians are always happy to help people understand the differences between the indices so that users can decide which is the most appropriate measure for them to use. If you have any comments or suggestions, we'd like to hear them. Please email us at: [email protected] Categories: Economy, Prices, Output and Productivity, Price Indices and Inflation, Consumer Price Indices, Consumer Prices Index, Retail Prices Index

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Published: May 29, 2012 / Summer 2012 / Issue 67 Business Literature: Books in Brief A Credit ReportA review of Borrow: The American Way of Debt, by Louis Hyman.by Robert Hertzberg by Louis Hyman Vintage Books, 2012 In his new book, Borrow: The American Way of Debt, Louis Hyman tracks the history of debt in the U.S. from the necessary borrowing by farmers in the early years of the republic to the wanton sale of credit since the mid-1980s, and shows how it all led to the meltdown of the financial system in 2008. Hyman’s point: The woe with which we’ve been dealing had numerous antecedents. To cite just one, there was the trouble caused by Section 235 of the Housing Act of 1968, a lending program established by Congress in the wake of the race riots of the 1960s that was intended to make mortgages available to low-income, inner-city home buyers. The mechanics of the problem were different from those of our subprime mortgage crisis, as was the magnitude of the mess that followed, but the toxic mix of easy credit, inexperienced home buyers, profit-seeking brokers, and late-stage real estate speculation is stunningly similar to the situation four decades later. Both crises show the trouble that can result from borrowing when government fails in its role as overseer. Hyman doesn’t subscribe to the bromide “Neither a borrower nor a lender be,” but as an assistant professor at Cornell University’s School of Industrial and Labor Relations, he is fluent in the problems that credit has created in the United States. Those early farmers, in the days when the country’s economy was primarily agricultural, needed mortgages to buy land to farm, and credit to carry them from one harvest to the next. A lack of cash forced the farmers to accept the usurious rates charged by merchants, who supplied them with equipment, clothes, and groceries in return for warehousing, transporting, and selling their crops. Things weren’t much better in the cities, where the farmers’ children and millions of European immigrants started moving around 1900. Many second-generation Americans have heard stories about how indebtedness changed the life of a relative. Hyman’s discussion of loan sharks — and of ethnic lending circles, which often ended in disaster despite the fact that the lenders looked like the borrowers and spoke their language — places these stories in context. The larger systemic risks of consumer credit had their origin in the 1920s, with the creation of the first financing companies, including the General Motors Acceptance Corporation (GMAC). GM started GMAC to extend credit to its dealers, and the subsidiary soon started making loans to consumers as well. To raise the capital it needed to help consumers buy cars, GMAC sold bonds to investors — a move that helped GM bypass the more conservative Ford in market share. This was the first instance of what Hyman calls “anonymous investment in anonymous borrowing,” and although it became the model on which the consumer credit industry is based, it also paved the way for a wide range of risky credit practices, including the sharp rise in U.S. credit card use in the 1980s. Hyman doesn’t moralize about consumer credit. Consumer credit can work well, he acknowledges, during periods of job stability and rising wages. He notes that in the 25 years after World War II, U.S. residents moving to the suburbs acquired the refrigerators, televisions, cars, and homes they wanted mostly with borrowed money. They “lucked out,” Hyman writes. “Instead of ruining them, borrowing helped postwar Americans leave the ruins of the Depression far behind.” But he also notes how dangerous consumer borrowing can be, especially when financial institutions have an incentive to maximize lending and no one questions the ability of the borrower to make good on his or her commitment. Thus, the disaster of 2008. Innovation Begins with Three QuestionsThe Long Road to U.S. Healthcare ReformMind Your FeedbackAlternative Systems for Corporate SurvivalThe Freaky Friday Management TechniqueOuting Gender BiasMuckraking Is Alive and WellA Sucker’s Bet in SochiHow Do You Compete?How’s Your Brand’s Love Life?

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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. A Bitcoin for Your Thoughts What corporate treasurers need to know, and do, about the birth and growth of virtual currencies. By Joram Borenstein November 5, 2013 • Reprints Bitcoin seems to be everywhere these days. What was once an esoteric topic discussed only by mathematicians, cryptographers, end-of-the-world doomsday predictors, and the occasional conspiracy theorist has grabbed front-page headlines around the world and become a leading topic presented at financial services industry events. Regulators, journalists, bankers, consultants, and venture capitalists have poured time, money, and energy into understanding what a bitcoin is and trying to determine how the virtual currency fits into the global payments landscape. The bitcoin payment mechanism emerged in 2008 under extremely mysterious circumstances. The term “bitcoin” was supposedly coined by someone named Satoshi Nakamoto, who wrote a paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” As of this writing, no known individual, organization, agency, or government has ever maintained that it created the bitcoin infrastructure or technology platform. Various theories have been floated, and a few mainstream publications—including The New York Times and Fast Company—have launched serious investigations, but so far no one really knows how bitcoin payments got their start. The bitcoin currency is entirely digital. Although publications sometimes use photo montages of gold-embossed coins to accompany articles about bitcoins, these are purely mock-ups. Bitcoins do not exist in the physical world; the best way to think of a bitcoin is as a long sequence of data. Individuals who want to make bitcoin-denominated purchases can buy the currency through one of several exchanges, including Bitstamp; Kraken; CampBX; and Mt. Gox, which is the most prominent and popular. Bitcoins’ value fluctuates vis-à-vis the U.S. dollar and other traditional currencies. Users can track exchange rates at sites such as bitcoinexchangerate.org and preev.com. Through most of 2013, the price of a bitcoin has hovered in the $100 to $140 range, but it fluctuated from a low of US$20 in January to around US$220 in April, and it's back up to just over US$240 today. Owners of bitcoins transact using an open-source, peer-to-peer file-sharing technology that is similar in many ways to the music-sharing Napster technology from the late 1990s. Each bitcoin transaction utilizes cryptography—the mathematical science that goes into keeping communications secure from unwanted third parties—to protect the identity of its owners while ensuring the transaction’s integrity. Each transaction is time-stamped and is permanently recorded in a public ledger called the “blockchain.” A secondary market for bitcoins is beginning to appear, but it does not yet represent a strong and viable platform for speculation. For people who are technologically challenged, two options for bitcoin investments are the SecondMarket Bitcoin Investment Trust and the Winklevoss Bitcoin Trust—launched this summer by the famous Winklevoss twins, who were involved in the lawsuit against Mark Zuckerberg enshrined in the 2010 film “The Social Network.” These vehicles enable investors to put money into bitcoins without actually directly trading in the currency, in much the same way that an investor might elect to fund a REIT mutual fund rather than buy a piece of real estate directly. Bitcoins Gain Purchase in the Public Eye Payments experts tend to think that bitcoin-denominated payments appeal primarily to three groups of people. First are people who believe the virtual currency is a good mechanism for speculation, and that the bitcoin will soon be a highly valuable commodity. Second are people who inherently distrust authority. These individuals find the notion of anonymity appealing and consider bitcoin transactions to be less traceable than deals made in traditional currencies, since bitcoin has no central bank or central banker. Finally, the bitcoin platform appeals to criminals who are trying to cover their tracks—money launderers, terrorists, and the like. In theory, they can avoid scrutiny by any government if they use bitcoin payments to move funds, compensate employees, and initiate other types of transactions. ZDNet has referred to the bitcoin platform as “the world’s largest floating black market.” In early 2012, the mainstream media and investors began paying a great deal of attention to the potential inherent in bitcoin-based businesses. Venture capital funds in California started funding startups that manage, trade, track, and process bitcoin-denominated payments. With names like Coinbase, Vaurum, Coinsetter, Tradehill, CoinLab, BitInstant, Gliph, Alydian, BitPay, and TruCoin, these various startups remain at the vanguard of the emerging payments mechanism. At the same time that funding began flowing into the community of bitcoin-related startups, the platform was involved in a number of very public incidents that demonstrated its ability to capture the attention of the mainstream media and the public. Several high-profile renegades began accepting donations from their supporters via bitcoin exchanges. Julian Assange’s WikiLeaks organization has reportedly received nearly $500,000 in bitcoin donations since the late-2010 blockage of donations to WikiLeaks by Bank of America, Visa, MasterCard, PayPal, and Western Union. More recently, the legal fund for Edward Snowden, the alleged U.S. National Security Agency (NSA) leaker, supposedly received $13,000 in bitcoin-based contributions within the first two weeks of its launch. Then, in September 2013, the U.S. FBI shut down the drug market website called “Silk Road.&rdq

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Fremont Bank Corporation and Wells Fargo Announce Definitive Agreement CANON CITY and PUEBLO, Colo. — December 5, 2005Wells Fargo & Company (NYSE:WFC) and Fremont Bank Corporation announced today they have signed a definitive agreement for Wells Fargo to acquire Fremont Bank Corporation’s banking operations in Canon City, Colo., and Pueblo, Colo. Terms of the agreement were not disclosed. Fremont Bank Corporation, a privately held bank holding company, owns Fremont National Bank of Canon City and Centennial Bank of Pueblo, which have combined assets of $167 million as of Aug. 31, 2005. Fremont National Bank has four locations – two in Canon City and one each in Penrose and Westcliffe. Centennial Bank has two locations in Pueblo. Wells Fargo has three banking stores in Pueblo and a Wells Fargo Home Mortgage store in Canon City. Approximately 90 employees are at the Fremont and Centennial locations. "Wells Fargo has had a strong relationship with our organization for more than a decade,” said Darryn W. Biggerstaff, personal representative of The Estate of Darryl W. Biggerstaff, majority shareholder of Fremont Bank Corporation. “Wells Fargo is committed to the communities they serve as well as to their people. This philosophy directly parallels that of Fremont and Centennial Bank and is therefore a natural and logical partnership. All parties involved have been waiting for the timing to be right. That time is upon us.“We want to join with Wells Fargo because they share our community banking philosophy,” said Bill Betts, president of Fremont National Bank. “It starts with local management and local decision-making by people who live and work in the community.” “This partnership is good for our customers and good for our employees,” said Harvey Hoff, president of Centennial Bank. “Our employees will have significant opportunities for growth and our customers will have access to an expanded product line delivered to them when, where and how they want.” “Centennial Bank and Fremont National Bank will help us grow and strengthen our distribution network in Pueblo and the Canon City area,” said Gene Sullivan, Wells Fargo’s regional president in Southern Colorado. “The teams from both of these fine banks have a great reputation that they’ve earned by serving their customers well. We look forward to them joining Wells Fargo.” “This acquisition represents a natural expansion of our footprint in southern Colorado,” said Don Sall, regional president for Wells Fargo in Greater Colorado. “We have had an interest in the Canon City market for a number of years and we’re thrilled to agree to acquire the market leader in Fremont Bank. Canon City is a vibrant, stable market whose economy is anchored by 13 state and federal correctional facilities. The Centennial Bank acquisition in Pueblo broadens our distribution in the southeastern part of the community and will propel us to the top bank market share position. Along with our long-term strong position in Colorado Springs, this acquisition further defines us as the premier financial services provider in southern Colorado.” The companies expect to complete the acquisition in 2006, pending approval from banking regulators and Fremont Bank Corporation shareholders. Centennial Bank and Fremont National Bank would convert to Wells Fargo’s computer systems and combine with Wells Fargo late in 2006 after completion of the acquisition. In addition to Betts and Hoff, members of Centennial Bank’s and Fremont National Bank’s senior management teams comprised of Anthony Andenucio, Mike Cowperthwaite, Roy Gillmore, and Terry Speakes will join Wells Fargo. In Colorado, Wells Fargo has approximately 6,000 team members and more than 185 financial services stores in 55 communities. Wells Fargo & Company is a diversified financial services company with $453 billion in assets, providing banking, insurance, investments, mortgage and consumer finance to more than 23 million customers from more than 6,200 stores and the Internet (wellsfargo.com) across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only bank in the United States to receive the highest possible credit rating, “Aaa,” from Moody’s Investors Service. ###

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Marginal Tax Rates on the Poor and Lower Middle Class There's always a lot of talk about how marginal tax rates affect the incentives of those with high incomes. But how high are marginal tax rates on those with low incomes? The question might seem peculiar. After all, don't we know for a fact that those in the bottom of the income distribution, at least on average, don't pay federal taxes? Instead, on average, they get "refundable" tax credits from the federal government for programs like the Earned Income Tax Credit and the child credit. As a result, the Congressional Budget Office has calculated that the bottom two quintiles of the income distribution pay a negative income rate. Even with payroll taxes for Social Security and Medicare and federal excise taxes on gasoline, cigarettes and alcohol added in the bottom quintile of the income distribution pays only 1% of its income in federal taxes. But the marginal tax rate that someone owes is not the same as the average tax rate that they owe. Those with low incomes can often face a situation where, as their income rises, the amount that the receive from the Earned Income Tax Credit declines. There are other non-tax programs like Food Stamps, Medicaid, Temporary Assistance to Needy Families (welfare), and Children's Health Insurance Program (CHIP) that phase out as income increases. Thus, for each marginal $1 that someone with a low income earns, the gradual withdrawal of these benefits means that their after-tax income rises by less than $1. In addition, even those with low incomes pay Social Security and Medicare payroll taxes. The Congressional Budget Office has taken on the tax of calculating "Effective Marginal Tax Rates for Low- and Moderate-Income Workers." Here's an illustrative figure showing before-tax and after-tax income for a hypothetical single parent with one child. Before-tax income is just a straight line for illustrative purposes. The line for after-tax income shows what after-tax income would be for this family, given the before-tax level of income. For example, with a before-tax income of zero, after tax income would be approximately $20,000, due to various transfer payments. At a before-tax income of about $27,000, after-tax income is also about $27,000: that is, $27,000 is the break-even point where the subsidies available from the government at that income level are equal to the taxes being paid at that income level. In general, the after-tax income line has a flatter slope that the before-tax line, which is telling you that when you earn $1 of before-tax income, the gain to after-tax income is less than $1--even for those with low and moderate income levels. The first graph is more-or-less real data, but for a hypothetical family. A second graph looks at the actual marginal tax rates by household income level. At any given income level, of course, there is actually a range of marginal tax rates, depending on how many people are in the family, what programs they are eligible for, even state they live in (because benefit levels for many programs will vary by state). Thus, there will be a range of different marginal tax rates for households at any given income level. The graph shows the range of marginal tax rates for any given income level, ranging from the 10th percentile of marginal tax rates up to the 90th percentile. Earnings on the horizontal axis are shown as a percentage of the federal poverty line (FPL). Two main patterns jump out at me from this graph. One pattern is that there is an enormous range of marginal tax rates at very low income levels, at and below the poverty line. This range of marginal tax rates reflects the enormous diversity in types of households in poverty, and what sort of government assistance each family is eligible for. The other pattern is that for those from about 200% of the poverty line up to about 600% of the poverty line, a sizeable proportion of households are facing marginal tax rates--considering federal income and payroll taxes, along with food stamps--in the range of 30-40%. These high marginal tax rates on those with low and moderate levels of income raise some questions for those on all sides of the tax debates. For those who don't believe that high marginal tax rates have much affect on incentives to work at higher income levels, like households earning $250,000 or more per year, consistency would seem to suggest that they shouldn't worry too much about incentives to work at lower income levels, either. For those who express a lot of concern about how high marginal tax rates would injure incentives to work for those at the top income levels, consistency would seem to suggest that they express similar concern over lower marginal tax rates for those at the lower and moderate income levels, too--which means making programs like the Earned Income Tax Credit, food stamps, welfare, and others more generous, so that they can be phased down more slowly as people earn income. Posted by Timothy [email protected] Follow by Twitter Follow @TimothyTTaylor Global Manufacturing: A McKinsey View The BP Spill: What's the Monetary Cost of Environm... International Capital Flows Slow Down The Lucas Critique Why Doesn't Someone Undercut Payday Lending? Was Curbside Recycling the Invention of Beverage C... An Economist Chews Over Thanksgiving The Paperless Office: Headed that Way at Last? China's Economic Growth: A Different Storyline Marginal Tax Rates on the Poor and Lower Middle Cl... The Case For and Against Advertising The Uncertain Future for Universities Raising U.S. Exports Hydraulic Models of the Economy: Phillips, Fisher,... Options for the Deficit from CBO Fetal Origins and Epigenetics: Interview with Jane... Fall 2012 Journal of Economic Perspectives Should Voting be Compulsory? Minimum Wage to $9.50? $9.80? $10? Economics and Natural Disasters 72 is the New 30?!! © 2011-13 Timothy Taylor. Picture Window template. Powered by Blogger.

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2014-15/1666/en_head.json.gz/14651

Gen X Takes The Housing Hit; Boomers Only Grazed Share Tweet E-mail Comments Print By Marilyn Geewax Originally published on Fri May 18, 2012 8:11 am Listen Prices are about a third lower than they were in 2006, and they are continuing to drop in most cities. The National Association of Realtors says that this summer, prices fell nearly 5 percent compared with last year. David J. Phillip At this time five years ago, the white-hot U.S. housing market was starting to cool. Before long, it would slip into a deep freeze. The thaw still hasn't come. The latest statistics show residential real estate prices are continuing to drop — a trend that could have a long-lasting impact on the net wealth of younger homeowners who bought property during the housing bubble. The problem is that today's prices — already down by about a third from the peak -– are still dropping. They fell in nearly three quarters of metropolitan areas during July, August and September, according to the latest report from the National Association of Realtors. The national median price of a previously occupied house declined 4.7 percent just for the three-month period, the trade group reported. "Home sales need to recover first, only then can prices stabilize," Lawrence Yun, the Realtors' chief economist, said in a statement. But few economists expect home sales to recover any time soon, given the continuing foreclosure crisis. A new report from RealtyTrac Inc., a foreclosure listing firm, shows foreclosures are shooting up again. There had been a brief lull a year ago, but only because lenders needed time to straighten out the flood of foreclosure paperwork. Now that backlog has been reduced, so 77,733 properties received an initial default notice last month, up 10 percent from September, RealtyTrac said. The dismal foreclosure and pricing outlook is depressing both construction and sales of existing homes. "This is shaping out to be the worst year on record for the single-family housing market," IHS Global Insight U.S. economist Patrick Newport wrote in an assessment of the housing market. Victims Of Bad Timing For millions of younger Americans, this long price slump will have a lasting financial impact. Economists are finding the slump is disproportionately hurting the so-called Generation X — people born between 1965 and 1982. Here's why they are being hurt more than Baby Boomers, born between 1946 and 1964: Consider the financial fate of a boomer who was 30 years old in 1991. If he purchased a typical house that year, the median price was about $100,000. Today, the median selling price is around $170,000. Today's price is well below what it would have been five years ago. But still, even after adjusting for inflation, a person who sells a house purchased 20 years ago will make a profit today. And that profit can help make for a much more comfortable retirement. The story is quite different for a Gen-Xer who was 30 years old in 2006. If she bought the typical house that year during the housing bubble, she paid about $250,000. Today, that home owner would be 35 years old, and her property's value would have declined by about a third, dimming her prospects for an affluent retirement. Thus, The Generation Gap Grows Last week, the Pew Research Center released a study showing the profound impact of these dynamics. It showed that older Americans are now a wealthier demographic group, compared with people who were in that group in the 1980s. But in contrast, households headed by people 35 or younger have gotten poorer. The difference in wealth largely reflects the divergence in home equity. The Pew study concluded: "People generally accumulate wealth as they age, so it is not unusual to find large age-based gaps on this measure. However, the current gap is unprecedented. In 1984, the age-based wealth gap had been 10:1. By 2009, it had ballooned to 47:1." The timing of a home purchase was a key difference, the study found. "Most older homeowners purchased their homes long ago – at 'pre-bubble' prices," the report said. As a result, those older people "are still ahead over the long haul." Unfortunately for them, many Gen-Xers "purchased their homes at "bubble" prices, and –- with the bursting of the bubble -– now have less equity in their homes than when they purchased them," the study concluded.Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/. Transcript AUDIE CORNISH, host: This is WEEKEND EDITION from NPR News. I'm Audie Cornish. At this time about five years ago, the white-hot housing market was just starting to cool. Before long, it would slip into a deep freeze. We haven't seen a thaw yet, which is bad news for today's home sellers. But even worse, the slump could permanently reduce the net wealth of an entire generation. Here to explain is NPR senior business editor Marilyn Geewax. Marilyn, welcome. MARILYN GEEWAX: Hi, Audie. CORNISH: First, give us an update. What is the status of the housing market at this point? GEEWAX: This seems almost hard to believe, but residential real estate is still heading down. And, you know, prices are down about a third since 2006, and they are continuing to drop in most cities. The National Association of Realtors - they put out a report recently that said this summer, prices fell almost 5 percent compared with last year. This is shaping up to be, for the single-family housing market, the worst year on record. And, you know, we've got records going back a half a century. CORNISH: And now we're heading into winter, which really isn't the - kind of - high selling season. But is there any end in sight? GEEWAX: Not really. All of the latest reports are showing that home foreclosures are shooting up again. You know, we saw a brief lull last year because the banks had to straighten out all of that paperwork related to foreclosures. But they've whittled down that pile of paperwork and now, they're throwing delinquent borrowers out of their homes again. CORNISH: So how is this slump essentially reshaping people's lives? GEEWAX: Well, it's kind of changing the narrative for a lot of people's lives. Many people grew up hoping to own their own home. They wanted to see their kids grow up throwing a football around in their own backyard. But instead, they may be pushing buttons in an apartment building because they can never own. But for a lot of younger people, this is more than just a phase in life. It's going to continue all the way through their lives into their old age. CORNISH: Because they've lost the opportunity to build wealth, or... GEEWAX: Yes, exactly. If you think about how retirement is going to unfold for baby boomers compared with gen-Xers - the generation that came behind them - you can see how this is a problem. If you were a boomer who bought a typical house in 1991, you paid the typical price of $100,000. So if you sell the house today, the typical price is $170,000. Even when you take into account inflation, you are still going to come out ahead if you're a baby boomer. But it's very different for the gen-Xer. CORNISH: And that is bad news for me, frankly. (SOUNDBITE OF LAUGHTER) CORNISH: So give me the lowdown on what it means for my generation. GEEWAX: Well, you know, say you were 30 years old in 2006. If you bought the typical house then, it was the peak of the bubble; you paid about $250,000. Now, you're in your mid-30s and your house has dropped in value by about a third. You're not building wealth; you're actually backsliding. CORNISH: How widespread is this? GEEWAX: It's a problem that's really showing up in the statistics. The Pew Research Center released a study this past week, and it showed that older Americans have actually become a wealthier demographic group, compared with older people back in the 1980s. But at the same time, younger households - those with the head of household 35 or younger - they've actually gotten poorer. And the big difference has been this home equity thing. If you were a person who bought your house 20,30 years ago, you're still doing OK. And if you're a younger person who bought your house in the last five, eight years, you're underwater and you're losing ground. CORNISH: What does all of this mean for the economy in the long term? GEEWAX: It's definitely not good. You want people to be heading towards retirement with as much wealth as possible. But this younger generation, they're off to such a tough start. They have had a bad job market, depressed wages; they've had these falling home prices. So, it's bad. But it's fair to point out that we can't predict the future accurately. We live in an age of technological wonders. And there may be some innovations coming that perk up the economy. But if you're looking to your house to be the source of your wealth in retirement, that is very unlikely for the younger generation. CORNISH: NPR senior business editor Marilyn Geewax. Marilyn, thanks so much. GEEWAX: Oh, you're welcome Transcript provided by NPR, Copyright National Public Radio.

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Europe's Debt Crisis commentsGreece will muddle through By Ben Rooney @CNNMoneyInvest May 10, 2012: 5:19 AM ET Greek voters are fed up with austerity, but that doesn't mean they want to drop the euro.NEW YORK (CNNMoney) -- The political stalemate in Greece has raised concerns that the nation is more likely than ever to leave the euro currency union.But it may be too soon to say that the Greek government -- once there is one -- will decide that abandoning the euro is in the national interest. Greece has been thrust into political chaos after last weekend's elections failed to give any party a clear majority in Parliament.The main concern is that the lack of leadership in Athens could jeopardize the nation's bailout agreement with the European Union and International Monetary Fund. That could lead to a disorderly default by Greece, which would force the nation out of the eurozone.As it stands, none of the main parties appear able to form a coalition government, which means the Greek president will have an opportunity to broker a deal. He too is expected to fail. That means Greece will likely hold a second election next month.Paul Christopher, chief international strategist at Wells Fargo Advisors, does not expect the current political turmoil to result in Greece leaving the eurozone. He said the mainstream parties in Greece, which were punished by voters for supporting the bailout, might do better the second time around.Coalition deal eludes Greek politicians - CNN"If the election fails to produce a coalition government, then the public fear of chaos may benefit larger, pro-European parties in a fresh election," said Christopher. In any event, pro-euro parties control 67% of the Greek Parliament, he added.Other euro area leaders have been ousted by voters frustrated with austerity -- the policy of cutting spending and raising taxes to reduce public debts. But in many cases, the new governments have stayed the course."Spanish, Irish and Italian voters have already voted out governments that offered austerity, only to see the successor administrations offer more of the same," said Christopher.Meanwhile, the stakes are potentially huge for the rest of the eurozone.There is still the danger that a default by Greece will drag down other troubled euro area governments, such as Spain and Portugal, despite beefed up crisis resources. In addition, the eurozone economy is fragile and any financial shock could plunge the region into a deep recession.Given these risks, many analysts say EU authorities might be wiling to cut Greece some slack, although an outright renegotiation of the bailout program seems unlikely.What's more, EU nations and the IMF have already lent Greece over €100 billion and the European Central Bank owns some €40 billion worth of Greek bonds. In other words, Greece's so-called official creditors have a significant financial interest in seeing the political drama resolved and a default avoided.0:00 /1:55Sick of Spain and the other PIIGS? Too bad"There are many signals coming from European leaders attempting to keep Greece in the eurozone," said Dimitri Papadimitriou, a professor of economics at Bard College. "I expect there will be some flexibility in meeting the targets for budget deficits."Much depends on how the newly-elected president of France, Francois Hollande, will interact with his German counterpart, Angela Merkel. A long-time Socialist Party leader, Hollande campaigned against too much austerity and has promised to push through measures to boost economic growth. Hollande is expected to meet with Merkel, the most outspoken supporter of fiscal discipline in the eurozone, shortly after he is sworn in later this month. "We first need to see how the dust settles in Athens and what Merkel and Hollande agree to before jumping to conclusions," said Holger Schmieding, chief economist at Berenberg Bank. Spanish bond yields cross 6% againGillian Edgeworth, an economist at Italy's UniCredit, thinks EU leaders could allow Greece an extra year to push through fiscal reforms. In a note to clients, Edgeworth said Greece is expected to build up a cash buffer of €5.2 billion, which could be used to cover budget shortfalls this year. In addition, the program assumes that Greece will pay down €9 billion in short-term debt this year and next, a portion of which could be delayed, she said. "Though not huge, there is some scope for maneuver," said Edgeworth.On Wednesday, the directors of Europe's bailout fund confirmed that Greece will receive an installment of €4.2 billion on Thursday. The European Financial Stability Facility also said it will disburse €5.2 billion from the first installment of Greece's new bailout program by the end of June.Officials from the EU, IMF and ECB -- known as the troika -- are expected to being their latest review of Greece's bailout program next month. Greece is scheduled to receive its next installment of bailout money in August. First Published: May 10, 2012: 4:59 AM ET Most Popular

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comments Debt ceiling: Treasury starts juggling act By Jeanne Sahadi @CNNMoney May 17, 2013: 3:00 PM ET Treasury Secretary Jacob Lew sent a letter on Friday formally notifying Congress that the Treasury will begin implementing so-called "extraordinary measures" to keep the country's borrowing below its legal limit. NEW YORK (CNNMoney) The debt ceiling clock is about to start running again. The U.S. Treasury on Friday began using "extraordinary measures" to keep the country from defaulting on its obligations. As part of a budget compromise in February, lawmakers suspended the country's legal borrowing limit at $16.394 trillion, and let Treasury keep borrowing to pay all the country's bills. But on Sunday the debt ceiling will automatically reset to a higher level reflecting the amount borrowed during the suspension period. The Bipartisan Policy Center estimates the increase will be roughly $265 billion. In effect, that means the country will reach its debt limit on Sunday. It's unclear how much time the extraordinary measures will buy. Treasury Secretary Jacob Lew said in a letter to lawmakers Friday that the measures could last "until after Labor Day." Just how long after that is uncertain, he said, given that tax receipts are unpredictable as is the pace of spending due to the forced budget cuts that began in March. Other estimates, however, put the drop-dead date for raising the debt ceiling at sometime in October or even November thanks to the fact that the deficit this year has fallen faster than expected. The first move that Treasury will take is to temporarily stop issuing special securities to state and local governments. Other measures Treasury can take include redeeming existing investments in the retirement and disability funds of civil service and postal workers. It's not clear just how Congress will handle the debt ceiling debate between now and the fall. Political analysts still say both parties realize how damaging it would be to engage in political brinksmanship the way Republicans did in the summer of 2011. But House Republicans in particular have made clear they will demand something in return for their vote to increase the borrowing limit. And it's very likely the fight could go down to the wire. What's not clear is what exactly Republicans will demand. It may be more spending cuts, a fast-track process for tax reform or something else entirely. "There's a lot of uncertainty and a longer time frame for the GOP to make up their mind now since the debt limit has been pushed. ... I think the GOP may come out of the gate with a bigger ask on spending cuts and entitlements, but a tax reform process seems like the most likely way out for all sides," said Sean West, the U.S. director of the Eurasia Group. First Published: May 16, 2013: 3:09 PM ET Join the Conversation Most Popular

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2014-15/1666/en_head.json.gz/15035

U.S. Banks Can't Hide From Europe's Debt Crisis Share Tweet E-mail Comments Print By Yuki Noguchi The Congressional Research Service estimated direct U.S. banking exposure in troubled European economies at $641 billion. U.S. banks say the amount is much lower. Sandor F. Szabo For months now, Europe's debt crisis has hung ominously over the U.S. markets and economy. But even as U.S. banks begin lessening their investments in Europe, it remains difficult to quantify the threat they face. Among other crises, earlier this week, Franco-Belgian bank Dexia agreed to a rescue plan and political wrangling continued over how to handle another round of funding for Greece. European Bank President Jean-Claude Trichet warned that the high interconnectedness of the European financial system has lead to a rising risk of contagion. "This threatens financial stability in the EU as a whole and adversely impacts the real economy in Europe and beyond," Trichet said this week. It would be nice to put a number on the amount of money the U.S. has at stake in European financial institutions. But because money moves so quickly through so many different channels, and because banks don't have to report where their money is at all times, it's not something for which there's an easy answer. That's not to say there aren't estimates: The Congressional Research Service last month put the direct U.S. banking exposure in Greece, Portugal, Ireland, Italy and Spain at a whopping $641 billion. Major U.S. banks say it's much lower. Citigroup, Bank of America and JP Morgan have the largest stakes. Combined, those firms say they have about $50 billion in private and public investments in the five troubled countries. Of that, a small fraction is in problem loans to those governments. Pulling Out Of European Investments Whatever the exact number, Treasury Secretary Timothy Geithner assured the Senate Banking Committee last week that the banks have enough capital to withstand the stress coming out of Europe. "U.S. financial institutions, including our major banks and the money markets as a group, have substantially reduced their exposure to the economies of Europe that have been under the most pressure," Geithner said. Jacob Kirkegaard, a fellow at the Peterson Institute for International Economics, notes that Geithner does have a stake in the matter. "Secretary Geithner has confidence in the U.S. banks because he's the U.S. treasury secretary, and therefore he has to have confidence in them," he says. But Kirkegaard also says Geithner has a point: U.S. banks are cautious about lending to European banks. And money market funds — those short-term, low-risk investments — are also cutting back. U.S. money markets used to lend about half a trillion dollars to European banks; they've cut that back by almost two-thirds. But there are other, indirect ways Europe's problems bounce back on the U.S. financial system. Kirkegaard identifies the issue of investment and trade, for one. "When the banks are not lending to each other, they're also not lending to many other private businesses," he says. That means slower growth for Europe, which is the United States' largest trading partner as a region. Combined with the U.S., Europe accounts for 40 percent of the world's gross domestic product. 'No Bank Can Be An Island' Finally, there is another issue, also hard to quantify, that is both psychic and financial: economic sentiment. "That's virulent, you know. Poor sentiment in Europe will affect sentiment in the U.S.," says Jan Randolph, director of the Sovereign Risk Group for IHS Global Insight in London. Randolph says the notion that we can limit exposure is itself limited. "Whether American banks like it or not, or whether Americans living in Nevada or Colorado like it or not, we do live in globalized markets, and that's particularly true when it comes to financial markets," Randolph says. "And there's no way out of that. No bank can be an island in this world anymore." Anyway, Randolph says, it goes both ways; just think back a few years ago, when Europe found itself ailing from problems that began across the pond. "We were affected by [the] U.S. subprime [crisis], you are now affected by peripheral eurozone government debt," he says. In other words, what goes around, comes around. ­­Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/. View the discussion thread.

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industry analysis 2013 > Still cautious, still optimistic Still cautious, still optimistic Aircraft industry may see boost in 2014 December 23, 2013 By Jim Moore Six months after the stock market crash of 1929, President Herbert Hoover told the U.S. Chamber of Commerce that the economy was turning a corner: “I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover.” Hoover has often since been misquoted as saying, “prosperity is just around the corner,” which amounts to the same basic message. It was a badly mistaken notion, and no one in the general aviation industry has been guilty of such hubris since the global collapse of 2008 (the aviation downturn is older still, now nearly a six-year struggle). Instead, aviation industry analysts like Richard Aboulafia of the Fairfax, Va.-based Teal Group use phrases like “cautiously optimistic.” Over and over again, from one year to the next. “It’s a bit like Groundhog Day,” Aboulafia conceded in a telephone interview about the state of the GA industry in 2013, referring to the 1993 film in which Bill Murray plays a weatherman who relives the same day, over and over again, for nearly the entire film. “What’s more frustrating is to look at the leading macroeconomic indicators. That’s almost painful,” Aboulafia said. “There’s a big disconnect between what we should be doing and what we actually are doing.” Companies are making money, and the number of high-net-worth individuals is increasing. “It’s all good news—it just doesn’t seem to be translating down to bizav,” Aboulafia said. That is not to say things are tough all over. Sales of high-end business jets, such as Gulfstream’s G650, have made up for losses in other segments. As The New York Times noted Dec. 16, the top-of-the-line segment has grown for the past five years. “It’s hardly organic,” Aboulafia said. Though still sluggish, the mid-sized business jets, pistons, and turboprops are nonethless showing signs of life. Aboulafia said his “cautious” optimism is founded by those positive indicators—along with the recent passage of a federal budget, the first in years, which may boost confidence in the economy as a whole and can be expected to inspire confidence among potential buyers. “They’re all primed for some kind of an uptick,” Aboulafia said of aircraft manufacturers. “You’re seeing progress in most categories.” Signs of recovery Brian Foley of Brian Foley Associates in Sparta, N.J., said the third-quarter numbers from the General Aviation Manufacturers Association—still the most recent data available until the year-end reports are issued in early 2014—made him more optimistic than some. Foley was particularly encouraged by the uptick in piston and turboprop deliveries, which are a more immediate indicator of demand than the larger jets, given the long delay between signing a contract and taking delivery of, for example, a $60 million aircraft. Sales of pistons and turboprops, Foley noted, are almost instant in comparison. “I’m glad to see that end of the market starting to pick up,” Foley said of airplanes with propellers. “It tells me in more real-time that there’s good changes out there.” Cessna Aircraft Co. touted the coming new jets (including the Latitude and Longitude), and its high-end piston TTx (which retails for $733,950) at the National Business Aviation Association Convention in October. At the same time, the company dismissed questions about a test flight engine failure of the diesel-powered Cessna 182 JT-A, reporting only that certification of that aircraft is ongoing. The light sport Skycatcher, on the other hand, wound up behind the woodshed in 2013 (the two-seater has “no future,” according to the company CEO), with dozens of unfinished aircraft still in inventory. Soft sales in the small and mid-size business jet market contributed to Cessna’s $23 million third-quarter loss, though deliveries of the new Citation M2 and Sovereign, followed by the Citation X expected in early 2014, may help Cessna turn that tide. Aboulafia said Cessna’s affinity for big-ticket aircraft makes perfect sense. “From Cessna’s standpoint, the top half of the market didn’t suffer, the bottom half got clobbered. The rest is details,” Aboulafia said. Beechcraft Corp. made news late in the year, when Textron, the parent company of Cessna Aircraft and Bell Helicopter, purchased the company for $1.4 billion. Beechcraft had emerged from bankruptcy in January and shut down jet production entirely. A company spokesman noted in an email exchange that a $1.4 billion deal with Wheels Up for delivery of 105 King Air 350i aircraft—a figure that includes ongoing maintenance support—was a major boost, and the company plans to increase spending on product development by 300 percent compared to recent years. Beechcraft also continues to gather customer input about making a single-engine turboprop. Aboulafia has not changed his original assessment that the sale of the Hawker jet lines (the company confirmed by email that the sale of the Premier and Hawker 4000 assets is expected soon) has rendered Beechcraft a “niche” company, with long-term survival an open question. “This was not a strategy, though, it was a necessity,” Aboulafia said, adding he will be surprised if a buyer takes on anything more than the after-market support of the jet lines. As for continued development and production, “the risk-to-reward ratio is turned all wrong.” ‘A turnaround year’ There remain bright spots in the piston and turboprop market. Agricultural aircraft, in particular—cropdusters are selling like gangbusters, driven by demand for increased food production worldwide, with no signs of letting up. Cirrus Aircraft has likewise done well with its Generation 5 SR22 models, posting $125.5 million in sales through the first three quarters of 2013, compared to $90.8 million for the same period in 2012. Matt Bergwall, the company’s product marketing manager, said the year has finished strong, and the current backlog of SR-series orders is approaching an all-time high. “It’s been a good year for us, and it feels like a turnaround year,” Bergwall said. “It really feels like those headwinds are starting to turn into tailwinds.” Foley said opinions are mixed when it comes to the Cirrus Vision SF50 jet. Cirrus expects the first conforming model to fly in a matter of months. “There’s a camp that says that’s the next great thing, we’ll darken the skies with those,” Foley said. “There’s others that might argue that maybe Cirrus should stick to their knitting and make the best piston aircraft.” Aboulafia said he’s in the latter camp. “Most likely it’s just going to drag cash away from your core business,” Aboulafia said. “Just because the Chinese play a role doesn’t mean you’ve won the lottery.” Bergwall said the SF50 program is separated from the company’s core business, with a dedicated staff and dedicated funding. “One thing we do have is over 500 positions (deposits),” Bergwall said of the new jet. “So for us, that’s a pretty good indication that there is definitely a market there.” Easing headwinds Piper Aircraft, another mainstay of the piston and turboprop markets, has been steadily making its numbers, buoyed in large part by a succession of fleet deals for training aircraft, along with demand for higher-end pistons and turboprops. The company has also beefed up its global sales force, and celebrated steady gains—along with concern about the government shutdown’s potential impact—in November. The long-running cycle of federal fiscal impasse has been ended, at least for a couple of years, with passage of a federal budget. Aboulafia said that budget deal, much more than the Small Airplane Revitalization Act (which imposes a 2015 deadline for the FAA to overhaul of Part 23 to simplify and cut the cost of certification), is likely to boost sales as a major source of uncertainty is removed from the equation. Foley noted that the decision by the Federal Reserve to ease stimulus is likely to prompt long-stagnant interest rates to begin to rise, and since most aircraft purchases are financed, buyers may be motivated to add fuel in 2014 to an industry engine long running lean. “That might have an effect of getting some people off the fence,” Foley said. Part 23, Piston, Single Engine, Click here to view the AOPA commenting policy Please enable JavaScript Comments powered by Disqus.

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Dell committee defends $24.4B sale as best choice (AP) Dell committee defends $24.4B sale as best choiceBy MICHAEL LIEDTKEAP Technology WriterSAN FRANCISCOThe committee of Dell board members that oversaw the negotiations to sell the slumping personal computer maker for $24.4 billion is standing behind the deal despite the misgivings of major shareholders who believe CEO Michael Dell and other investors buying the company are getting a bargain.In a four-paragraph statement released Wednesday, the four Dell directors on the committee provided their most extensive defense of the deal since it was announced a month ago.Although much of the information contained in the statement had already been disclosed, the directors' decision to publicly reiterate their rationale for agreeing to the deal currently on the table shows they aren't having any second thoughts even as the company's largest independent shareholder prepares to lead a possible shareholder.Southeastern Asset Management, which owns an 8.4 percent stake in Dell Inc., has demanded the names of other shareholders. That information could be used to rally opposition to the deal. T. Rowe Price, which owns a nearly 5 percent stake in Dell, also is lobbying against the deal.Dell's special committee said it went through a "rigorous" five-month review before accepting an offer to sell the company to founder Michael Dell and a group of investors led by Silver Lake for $13.65 per share. Although that's about $10-per-share below where the stock stood when Michael Dell returned for a second stint as CEO in 2007, it's 37 percent above the shares' average trading price during the 90-day period before word of the buyout negotiations leaked out in mid-January.Southeastern contends Dell is worth nearly $24 per share.Before accepting the $13.65-per-share offer, the special committee said it considered a variety of other options. The alternatives included revising the company's plan to diversity beyond PCs, adopting a different dividend policy and breaking up the company so its operations could be sold in parts. The committee said it reached in consultation of experts that included investment bankers from JP Morgan.Shareholder Forum, a group that seeks to protect that shareholder interests, wants access to the same information that influenced Dell's special committee to sell at $13.65 per share. The information would be used by experts to perform an independent evaluation of the proposed sale to help shareholders understand if it's the best choice, according to a Tuesday letter sent to Michael Dell by Gary Lutin, a former investment banker who runs the Shareholder Forum. Lutin said the Shareholder Forum is acting as a delegate of a Dell shareholder who wasn't identified in the letter. In an email, Lutin said the Shareholder Forum isn't working in concert with Southeastern Asset.If the second-guessing about the proposed sale of Dell continues to mount, the spotlight on the board's special committee is likely to intensify. The committee is chaired by Alex Mandl, a former telecommunications executive. The three other committee members are: Laura Conigliaro, a former computer industry analyst for Goldman Sachs; Ken Duberstein, who was President Ronald Reagan's chief of staff before starting his own consulting firm; and Janet Clark, the chief financial officer of Marathon Oil Corp.The special committee was formed last August after Michael Dell notified the Round Rock, Texas, company that he was exploring a buyout bid in partnership with other investors. Michael Dell has agreed to contribute 273 million of the company stock that he controls and $750 million in cash to help finance the buyout, which rely primarily on loans from PC software maker Microsoft Corp. and an assortment of banks.Michael Dell is trying to reduce the company's dependence on PCs, which are becoming tougher to sell as more people switch over to smartphones and tablet computers. He believes the company can thrive again by expanding into business software, data analytics and storage and other more profitable niches in technology _ a transition that Michael Dell believes will be easier without having to worry about the short-term financial interests of Wall Street. If the current agreement is approved, Dell will end its 25-year history as a publicly traded company.In an attempt to avoid allegations that it was biased toward Michael Dell's offer, the special committee has left open the door for a higher bid. The committee said it has provided financial incentives for investment banker Evercore Partners to find a better deal by March 22. If another enticing proposal surfaces, the special committee said it will negotiate past the March 22 deadline.The special committee said it "has worked hard, and continues to work hard to produce the best outcome for Dell's shareholders."Many investors are betting the pot will have to be sweetened to get a sale completed. Dell's stock was down 2 cents at $14.05 in afternoon trading Wednesday. They have traded in a 52-week range of $8.69 to $17.46 over the past year.

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HomeFinancial CrisesIssue Guide: Global Implications of the U.S. Debt Crisis Follow Us On Renewing America Issue Guide: Global Implications of the U.S. Debt Crisis Authors: Jonathan Masters, Deputy Editor, and Christopher Alessi Updated: August 1, 2011 Fears of a new global economic crisis have sharply risen as Washington lawmakers carried their dispute over how to raise the nation's $14.3 trillion debt ceiling and avoid default close to the August 2 deadline. Senior figures from both U.S. parties, as well as business leaders, the IMF chief and officials from many countries have warned of the consequences for the world economy if the White House and Congress fail to reach a deal. President Barack Obama announced on July 31 that a deal had been reached that he called a "serious down payment on the deficit reduction we need" but which still requires the support of lawmakers in both chambers of Congress. The following materials provide background and analysis on the global implications of the U.S. debt crisis. Analysis Brief: U.S. Debt and Prestige -- Downgrade? Whatever the outcome of the debt ceiling debate, many analysts expect a downgrade in the U.S. debt rating because of doubts about deficit-reduction plans. The fallout could include higher borrowing costs, a weaker dollar, and market turbulence. Interview: Tightening the Pentagon's Belt Defense-spending cuts should be a big part of a deficit reduction deal, says CFR's Richard Betts, with the Pentagon pursuing a budget that reflects a reduced threat environment and limits the production of expensive, state-of-the-art equipment. Interview: Global Aftershocks of a U.S. Default A protracted debt default would have serious global repercussions, but even without a default, a likely downgrade of U.S. debt and the absence of a fiscal reform plan are weakening the U.S. and unsettling world markets, says economist Uri Dadush. Essential Document: IMF Report on U.S. Fiscal Policy, July 2011 International Monetary Fund (IMF) executive directors released their yearly report on the U.S. economic situation on July 25, 2011, noting, U.S. fiscal policy faces tighter constraints going forward, given unsustainable public debt dynamics. Video: Charting the IMF's Role Amid U.S. and Eurozone Debt Concerns Christine Lagarde, the newly appointed managing director of the International Monetary Fund, discusses the IMF's changing role amid growing concerns over U.S. and eurozone debt with Tom Glocer, chief executive officer of Thomson Reuters. Essential Document: Hillary Clinton: Remarks on Principles for Prosperity in the Asia-Pacific U.S. Secretary of State Hillary Clinton assured a delegation in Hong Kong that U.S. lawmakers would do the "right thing" and reach a deal to raise the debt ceiling before August� 2, while also highlighting the importance of economics in U.S. foreign policy. Must Read: Economist: What if the Talks Fail? Having seen what happened with Lehman Brothers in 2008, the main worry of a U.S. default would be a freeze in global markets. Interview: C. Fred Bergsten: Why the U.S. Needs to Cut the Deficit Even if the United States cobbles together an agreement to raise the debt ceiling before August 2, lawmakers will still need to hash out a long-term, deficit-reduction package to avoid market disruption and preserve U.S. global standing, says Peterson Institute economist C. Fred Bergsten. Must Read: Foreign Policy: Worst. Congress. Ever. The current level of political dysfunction and ideological polarization in Congress is beyond the norm. A broken legislative branch risks plunging the United States into an economic catastrophe and damaging the nation's global standing, writes Norman Ornstein. Must Read: Economist: Dicing with Debt and the Future This analysis outlines eight reasons why the "Theory of Inevitable Compromise"--that Republicans and Democrats will ultimately hammer out a deal to raise the nation's debt ceiling ahead of August 2--may not hold true in this instance. Must Read: FT: From Italy to the U.S., Utopia V. Reality The United States may be on the verge of making one of the biggest and least-necessary financial mistakes in world history, while the eurozone could be approaching a financial crisis that destroys not just countries' solvency but possibly the currency union and much of the European project, writes the Financial Times' Martin Wolf. Article: Max Boot: Grand Old Doves? CFR's Max Boot says the preparedness of the U.S. military cannot be sacrificed for a federal budget deal. Expert Brief: Sebastian Mallaby: The Folly of U.S. Debt Brinkmanship Gridlock over raising the debt ceiling has already tarnished Washington's image, and failure to address the problem could cause global financial upheaval. Foreign Affairs: Altman and Haass: American Profligacy and American Power CFR's Richard N. Haass and Evercore's Roger C. Altman argue that a failure to curb U.S. debt addiction will result in an age of American austerity--not just for Americans' standard of living but also for U.S. foreign policy and the coming era of international relations. Foreign Affairs: Joseph S. Nye: The Future of American Power Harvard's Joseph Nye writes that while it is fashionable to predict a decline in U.S. power, the United States is not in absolute decline, and in relative terms there is a probability that it will remain more powerful than any other state in the coming decades. Foreign Affairs: Leslie H. Gelb: GDP Matters More Than Force Most nations have adjusted their foreign policies to focus on economic security, but the United States has not. Today's leaders should adapt to an economic-centric world and look to Presidents Harry Truman and Dwight Eisenhower for guidance, writes CFR's Leslie Gelb. Backgrounder: U.S. Debt Ceiling: Costs and Consequences As the United States approaches the deadline to raise its debt limit, economists warn of a fiscal crisis and higher borrowing costs for U.S. businesses and homeowners. Expert Roundup: The Budget Deficit and U.S. Competitiveness Five experts discuss the implications for U.S. global competitiveness of running large budget deficits, and what should be done to reign in the fiscal shortfall. Essential Document: Obama's Speech on the Budget Deficit, April 2011 Obama calls for a $4 trillion reduction in the annual budget deficit over twelve years, including cuts in defense spending, reductions in healthcare outlays, and tax increases. Essential Document: National Commission on Fiscal Responsibility and Reform Report This is the final version of the White House's National Commission on Fiscal Responsibility and Reform, co-chaired by Erskine Bowles and Republican Alan Simpson. Must Read: Fareed Zakaria: Are America's Best Days Behind Us? Fareed Zakaria discusses the relative decline of the United States and the potential for short-sighted fiscal fixes that will endanger long-term U.S. competitiveness. Article: Center for American Progress: A Historical Perspective on Defense Budgets CAP experts examine the lessons to be learned from past presidents about reducing defense spending. Policy Brief: Harvard Belfer Center: The Grand Strategic Consequences of U.S. Decline Belfer Center experts examine eighteen cases of acute relative national decline since 1870, and recommend the United States pursue a retrenchment policy that projects a more modest global presence. CFR's Renewing America project explores six major domestic challenges facing the United States that have significant consequences for national security and foreign policy. More on... United States, Financial Crises, Defense Budget Syria Civil War Total FatalitiesEvolving State Department-USAID Strategic GoalsThe Senate Torture Report and Investigative JournalismReceive Blog Posts by EmailSubscribe to the Blog Feed The Renewing America initiative explores the major domestic challenges facing the United States that have significant consequences for national security and foreign policy. Blog: Renewing America Progress Reports and Scorecards Policy Innovation Memos More From the Renewing America Initiative Ask CFR ExpertsWhat will be the effect of India's general election on relations with its neighbors, the EU, and the United States? Asked by Najibullah Adamji, Mithibai College, Mumbai UniversityAnswered by Alyssa Ayres Ask a Question The Role of the U.S. Federal Reserve Authors: Christopher Alessi and Mohammed Aly Sergie The Fed, which celebrated its centennial in 2013, has been transformed in the past decade, expanding its role of maintaining full employment... Backgrounder Debt, Deficits, and the Defense Budget Author: Jonathan Masters As the Pentagon attempts to refocus the U.S. military strategy toward Asia, the department is facing major budget constraints. Experts... Backgrounder What Is the Fiscal Cliff? While congressional action lags, a series of year-end fiscal measures could derail the U.S. recovery. This Backgrounder examines the... Backgrounder Why the Fiscal Health of States and Cities Matters Many states and cities face significant fiscal stress that could impede the U.S. economic recovery and undermine long-term growth, including... Facebook

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Innovative Branch Design Flies in Face of Idea Branch is Dead: Print Preview March 21, 2013 • Reprints Members are reminded of their dreams when they walk into Summit CU’s Fitchburg Inspiration Branch. In the call to bring out your dead, don’t be so quick to toss branches on top of the heap of abandoned projects. “If you look purely at the number of credit union branches in operation, there has been a steady decline that is likely to continue into the future. This is being driven by an increase in the number of banking channels to which members have access, including online banking, mobile banking and peer-to-peer lending,” said Michael Downs, vice president of marketing at Momentum, a design firm based in Seattle and Pittsburgh. “However, the branch is far from dead.” Rather than going away, Downs said branches are evolving in how they’re used by credit unions to deliver services. There are numerous surveys that demonstrate that members prefer to use a branch for certain types of interactions, and in fact, would change institutions if their branches went away, he added. The $1.8 billion Madison, Wis.-based Summit Credit Union has certainly explored re-imagining the branch with its Fitchburg location. The facility has been transformed into an Inspiration Branch, complete with full 3-D dreams and goals brought to life. “When we are young, we dream big dreams and sometimes, as we age, they fall by the wayside of our busy lives,” said Kim Sponem, CEO/president of Summit. “We have re-imagined what’s possible to support our members’ financial wellness. In a dramatic, cost-effective and innovative way, we’ve brought dreams to life in our new Inspiration Branch to remind people of their dreams and to energize and inspire action.” Flowing from one true-to-life scenario to another, the settings inside the branch range from a segment of a home that features a breakfast nook and girl’s bedroom, the Leaning Tower of Pisa and a beach scene complete with beach chairs, umbrella and a real sailboat, to a section of a life-sized airliner, featuring real doors and seats from a former working aircraft. Sponem began brainstorming the ideation for the inspiration concept more than two years ago with Becky Gerothanas, Summit senior vice president of operations, on how they could make the idea come to life. In addition to showcasing quintessential 3-D images of common dreams including home ownership, education and travel, the branch was designed with an open and informal concept. There are no traditional teller lines as a way to further reinforce the feeling of creating a fun, innovative environment for members. The inspiration façades have been designed by Strang Architects, and built by general contractor Findorff in collaboration with a team of theatre professionals. The facades are completely removable, like a stage set, and do not affect the structure of the branch. Sponem said it has been a cost-effective way to remind members of their dreams and inspire action. In the new setting, members have an option to meet with Summit advisers in more casual, open areas, such as an English pub setting, complete with chairs from a real pub in England, or inside the airliner replica, which, in addition to real airplane passenger seats, also includes captain’s seats, headsets and a flight simulator designed to occupy and entertain the children of members during more private meetings. “As a member-owned cooperative, we believe we have an obligation to try new things to support our members’ financial wellness,” Sponem said. “We know that visual reminders of goals and engaging environments support commitment and stimulate new thinking and action. The inspiration branch helps to build cooperative value for all our members as they envision and realize their dreams.” Downs added that increasingly, credit unions are evaluating their branch networks in a more holistic way. “When it comes to main operations facilities, credit unions are starting to look beyond the basic performance of the building itself, and are seeking measurement around the potential improvements in productivity, communication, employee satisfaction, employee recruitment and training,” Downs said. Credit unions are starting to pay attention to the growing body of research on workplace design and its impact on an organization’s ability to perform at higher levels, Downs noted. This is translating to investment decisions that are more evidence-based, with specific focus on improvements to the quality of member service, employee satisfaction, and overall financial performance, he added. As a result, branches are no longer an all or nothing proposition. “The branch is now one of several banking options and credit unions should consider how it supports all of its delivery channels and brand identity beyond that one specific location,” Downs said. The emphasis is going away from a place to conduct routine transactions, which are moving to online and mobile channels, and more on places to provide a higher level of engagement with members.” Downs said this higher level of engagement includes things as business services, investment services, and dispute resolution. While Apple and Starbucks are popular retail icons, in reality, those retail models fit the personality, culture and mission of very few credit unions, he suggested. “Instead, we see credit unions incorporating certain pieces of the Apple of Starbucks experience into something that is more authentic their brand,” Downs said. “In the end, the biggest driver of branching in the future will be credit unions’ operating strategy.” According to Downs, operations facilities have become centers of communication, training, and community outreach, and can also serve as an effective tool to recruit local talent into the credit union.

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Thousands of investors, millions in profit Former AIG CEO Hank Greenberg on How the Global Economy Has Changed Morgan Housel | Deep recessions only occur every few decades. Big economic shifts occur only a few times a century. An analyst or businessman with 20 or 30 years' experience can still be wet behind the ears as far as history is concerned. Which is why someone like former AIG (NYSE: AIG ) CEO Hank Greenberg is so fascinating to talk to. Greenberg has been an insurance executive since the 1950s, and has done business in dozens of countries. It's not a stretch to say he is one of the most experienced financiers alive. If he hasn't seen it all, he's come darn close. In a recent interview, I asked Greenberg how the global economy has changed since he began half a century ago. Here's what he had to say (transcript follows): Morgan Housel: You've been in this business for a long time, some 40-50 years. How is the global economy different today from what it was when you were starting and growing AIG, several decades ago? Hank Greenberg: Much different -- it's a good question. We were first movers in many countries. Trade in services didn't exist when we were building AIG. We traded with other countries for goods, but services they looked askance at you and said, "WTO doesn't cover services." Banks, insurance companies, credit card companies, had to fight to get into a country and trade. I was on the President's advisory board for trade negotiations. I had to first convince our own government that we ought to be negotiating trade in services. We finally did. It took a long time, and even then many countries were very stubborn in opening their markets. You had to fight to get into these markets. That was one of the major differences; the amount of time that we had to spend in opening markets. Then, as a first mover, you had an advantage. We could bring things, products, in countries that never had those products before -- insurance products. It was an exciting adventure. Of course, we were very good at product innovation. The world changes all the time; new opportunities arise. If you've got the people and the vision, you do well -- and we did. For more on AIGAt the end of last year, AIG was the favorite stock among hedge fund managers. Have they identified the next big multi-bagger, or are the risks facing the insurance giant still too great? In The Motley Fool's premium report on AIG, Financials Bureau Chief Matt Koppenheffer breaks down the key issues that you need to know about if you want to successfully invest in this stock. Simply click here now to claim your copy, and you'll also receive a full year of key updates and expert analysis as news continues to develop. Morgan Housel has no position in any stocks mentioned. The Motley Fool recommends American International Group. The Motley Fool owns shares of American International Group and has the following options: Long Jan 2014 $25 Calls on American International Group. 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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Wine Traders "puppet director" disqualified for 15 years after investors lost £2 million Stephen Pierre Boyd, the former director of The Wine Index, has been banned from being a director for 15 years by the High Court.Investigators from the insolvency service found that Boyd acted as a puppet director for Wine Traders International, although he was already serving a 13-year disqualification for his role in The Wine Index.Under Boyd's direction, Wine Traders sold fine wine as an investment to members of the public. The High Court found that the wine was overpriced and in some instances no wine was ever purchased for the customer. The court also found that Boyd had:• Caused the company to fail to supply customers with wine purchased for nearly £2million;• wrongfully transferred customers' wine valued at over £1million to a fictitious entity that he had created• wrongfully taken away a Porsche car leased to the company• failed to keep records to explain over £3million expenditure. In addition, a large quantity of the company's stock was transferred to ‘Bradshaw & Karr' - a fictitious corporate entity created by Boyd. The two disqualifications will run concurrently until 2028. Wine Traders was wound up in the public interest by the High Court on 4 March 2010 after an investigation by the insolvency service's company investigations team. Further investigations by the insolvency service's public interest unit found that Boyd had used false names including Pierre Boyd, Steve Gordon and Dave Martin. This revealed the existence of a puppet director and to Mr Boyd being uncovered as the man in control of the company, the insolvency service said. Sitting in the High Court, Registrar Derrett found all of these allegations to be proven and handed down the maximum period of disqualification available. "Hiding behind false names and stooges will not protect rogue directors. As this case shows, our investigations will reveal who is ultimately in control and we will take robust action to address wrongdoing," said Paul Titherington, official receiver in the Public Interest Unit. "In handing down the maximum possible period of disqualification, the Court has shown that this kind of behaviour will not be tolerated. It also demonstrates that the insolvency service will seek to remove these people from the business environment" Sign in to make a comment or register for free

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StreetAuthority Profitable Trading InvestingAnswers TopStockAnalysts Dividend Opportunities View NewslettersInvestingAnswers AlertFive-Star Stocks Investment IdeasGrowth Investing Income & Dividends Options & Derivatives Commodities & Precious Metals Education CenterInvesting Education Free NewslettersInvestingAnswers Alert Premium NewslettersFive-Star Stocks Home » Financial Dictionary » Stock Market Financial Dictionary Debt & Bankruptcy Black Friday Tweet What it is: In the investing world, Black Friday refers to the gold crisis of September 24, 1869. It sometimes also refers to the New York Stock Exchange crash of September 19, 1873. In the retail world, Black Friday is the day after Thanksgiving (which is always on a Thursday). The day marks the advent of the holiday shopping season and the point at which most retailers begin making profits (also known as going in the black). How it works/Example: The Black Friday of 1869 was the result of a government scandal that shook the core of Ulysses S. Grant's presidency. In his inaugural address in January 1869, Grant demonstrated his commitment to gold-backed currency by insisting on repaying the war bond debt from the Civil War with gold. He also planned to use gold to purchase dollars from citizens at a discount and replacing those dollars with gold-backed currency. Jay Gould and Jim Fisk, two financiers already infamous for their involvement in a bribery and fraud scandal surrounding the Erie Railroad, were attempting to corner the gold market at the time by driving the price of gold up and then selling it all for huge profits. Gould and Fisk heard of Grant's plan to sell gold and knew their scheme would not work (the increased supply of gold in the markets would keep the price too low). So to prevent the government sale, Gould and Fisk enlisted the help of Grant's brother-in-law, Abel Rathbone Corbin. The three met Grant at several social gatherings and attempted to persuade him that his monetary policy was a mistake. Corbin also successfully urged Grant to name General Daniel Butterfield as the assistant treasurer of the United States. Butterfield was responsible for handling the government's gold sales, and he agreed to give Gould, Fisk, and Corbin advance notice of when the government was going to sell gold if they would pay him in return. Assuming that their efforts to stop the government's gold sale were successful (and widely advertising that they were), Gould and Fisk bought as much gold as they could on September 20, 1869, and prices rose by 20%. However, Grant was suspicious of his brother-in-law's interest in the gold markets and later found a letter from his sister to First Lady Julia Grant about the entire matter. Furious, Grant ordered Corbin to put an end to his scheme and then quietly ordered a government sale of $4 million of gold. When the government gold hit the market on September 24, 1869, the price fell and panic ensued. Many investors had purchased gold on margin and others were locked into purchase contracts. When the price fell, not only did these investors face financial disaster, but other commodity prices destabilized, foreign trade was nearly halted (because it was conducted in gold), and the stock market nearly came to a halt. Abel Corbin lost significantly, but Gould sold his gold before the market fell and went on the control the Western Union Telegraph Company and the Manhattan Elevated Railroad. Butterfield was fired following a Congressional investigation, and Jim Fisk was shot dead by another financier, Edward Stokes, in 1872, after the two got into an argument over money and Broadway showgirl. Why it Matters: Over time, the term has come to describe any Friday on which a terrible event occurs. Related Terms View All Plowback Ratio Internal Rate of Return (IRR) Laddering Overhead Net Interest Margin Debt-to-Equity Ratio Balance Sheet Term of the Day Best Execution Best execution refers to the imperative that a broker, market maker, or other agent acting on behalf of an investor is obligated to execute the investor's order in a way that is most advantageous to the investor rather than the agent. Continue reading... About Us Five-Star Stocks InvestingAnswers Alert Launched in 2009, InvestingAnswers` mission is to help individual investors build and protect their wealth by providing a comprehensive and educational website. With hundreds of free articles, educational tutorials and the industry`s most investor-friendly financial dictionary on the web, InvestingAnswers is one of the premier educational resources for thousands of investors around the world. Copyright © 2001-2014. InvestingAnswers, Inc. All Right Reserved.

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[ Movies Index | Show Times | Silicon Valley | Metroactive Home | Archives ] Photograph by Wyatt McSpadden Masterminds: Enron's Ken Lay (left) and Jeffrey Skilling jobbed the system, investors and rate payers for billions. The Big E Richard von Busack talks to director Alex Gibney about his documentary 'Enron: The Smartest Guys in the Room' THE MOTTO of Enron was "Ask Why." After the Houston-based energy-broker was the subject of the largest bankruptcy in American history, there were plenty of people who did ask why. Among those questioners is documentary maker and producer Alex Gibney, whose film Enron: The Smartest Guys in the Room, is the idiot's guide to the amazing and appalling swindles of Enron. Gibney gave an interview during his film's appearance at the San Francisco International Film Festival. After promoting his film, Gibney will be continuing work on a number of projects, including Exiles On Main Street, a series of short films all about cultural collision, by talents ranging from Sherman Alexie to Wayne Wang to Mira Nair. He is also working on a series called The Ten Commandments, akin to Kieslowski's Decalogue. On the subject of the recent wave of political documentaries, Gibney notes, "I think there's a hunger for them. They're not only being made, they're being seen. One of the reasons for that is that TV news has become so bankrupt, because they don't want to offend anybody. I also think ironically, commercial TV has helped. Reality shows have helped documentaries: An 'unintended consequence,' as the economists say. People feel they can see films without actors and be entertained." METRO: Were there times when you thought the mystery of Enron was going to be too impenetrable to make a film about? GIBNEY: Well, from the outside Enron didn't seem a subject to make a film about. Because it seemed like it was all about obscure accounting rules. But then I read the book by Peter Elkind and Bethany McLean. It's not just a story about numbers, it's a story about people and about how good people go bad. Our system not only allowed it to happen, but also almost encouraged it. So for all those reasons I thought that would make a good film. METRO: But the Enron labyrinth involved the deregulation of electricity in California-as a historical problem, it sounds like what was said of the Schleswig-Holstein Question, "Only three people understood it, and one of them was driven mad thinking about it." GIBNEY: When you start getting into the details of that story, you almost could go crazy. Electricity trading is very complicated. Ultimately, I needed to understand the basics of it, but I could short circuit a lot of the explanation. I wasn't making a story about the intricacies of energy deregulation, I was making a film about moral behavior. There were traders who said that many of these mechanisms that we did were market rational: it made sense to game the market. It wasn't illegal. It was our job to make money for our shareholders so that's what we did. That's true, but you can take a step back and say yeah, but you're shutting down the grid! METRO: What do you think the outcome will be of the Ken Lay-Jeff Skilling trial? GIBNEY: I think that it's a different issue than the film, since the film is an ethical report card. The case against Lay and Skilling will be hard to try because it's become extremely complicated. I think Lay and Skilling will try to make it as complicated as possible, and the Justice Department will try to make it as simple as possible. It's taking them a long time to come up with the indictments, because they want to make sure they have the goods on them. The Lay case is a little bit different from the Skilling case, because Lay really was not that involved in a day-to-day basis. After Skilling left, the question is Did Lay hide the true financial condition of the company, in an attempt to prop the stock up? METRO: It's an infuriating story. GIBNEY: It's not just Lay and Skilling and Andrew Fastow. People are reserving a lot of rage for the banks, for one. Look at those emails-and I just included one of many: "We know what we're doing is dirty, but the money's just too good." What does that tell us about our financial system? That's what I find so intriguing about the videotape where Fastow is pitching to the bankers this new concept for this company that will only do deals with Enron. The bankers are sitting there thinking, "Yeah, man!" T

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Schafer: Talent is the key to Twin Cities' cluster of giant firms LEE SCHAFER Myles Shaver has been puzzling over the unusually large number of Fortune 500 companies in the Twin Cities almost since joining the faculty of the University of Minnesota’s Carlson School of Management in 2001. People throw out a wide range of theories, from the abundance of natural resources to winters so cold executives may as well spend extra time at the office. But his research over the past couple of years points to a different conclusion, and a convincing one: Our region has enjoyed a “virtuous circle” of strong managers who build companies that grow. That, in turn, attracts more talented people, and then they help build more growing companies into big ones, and so on. He is from Edmonton, Alberta — an even colder spot than the Twin Cities but with no similar set of big companies — and started his career at New York University. His colleagues at other universities can’t easily grasp that a mid-sized metro area like the Twin Cities, one that is a long way from New York or Silicon Valley and has terrible winter weather, has so many corporate headquarters. Shaver said even locals can be surprised by the data. In a presentation Shaver made last week at the university using 2011 data, he showed that Minnesota’s 20 Fortune 500 companies made it No. 1 in such headquarters per capita, close enough to Connecticut that the top spot could flip-flop from one year to the next. In looking at the data another way, by comparing the number of Fortune 500 corporate headquarters to the size of the state’s overall economy, Minnesota topped the list by such a large margin that no year-to-year fluctuation in Fortune’s ranking will knock Minnesota from the top. Shaver looked back even further than the first Fortune 500 ranking in 1955, to documents like the 1929 Census of Manufactures. He found that in the ratio of headquarters officers to total manufacturing employees, once again Minnesota was near the top, right between New York and California. “We really are a headquarters-intensive business community,” he said. “And we have been for a really long time.” It’s a dynamic situation as well. Since Fortune’s 1955 ranking, 40 Minnesota companies at one time or another moved onto the list, and at some point 31 moved off. Minnesota’s big headquarters companies, the likes of Target, 3M, UnitedHealth Group and Ecolab, are homegrown, too. Headquarters companies don’t uproot somewhere else and plant themselves in the Twin Cities, like the Boeing Co. did in Chicago. Here, companies grow their way onto lists like the Fortune 500. Shaver does not attribute that to a small set of visionary chief executives or other C-suite officers. He’s still digging into the question and hopes to better verify talent as the key determining factor, but he stressed that the managerial talent he is talking about is the big pool of supervisors, managers, directors and vice presidents that staff these big organizations. “It flows from company to company, and not just within industries but across industries.” That’s where his idea of a virtuous circle comes into it. A thriving company attracts top managerial talent and then some of that talent moves around the market. People may jump to a start-up opportunity, feeling comfortable that if the start-up doesn’t work out they can always go look for a good job at one of the big companies. Having a regional job market with lots of well-run employers creates opportunities for people to sharpen their skills and move ahead in their careers, and it’s great also for the companies here to be able to recruit managers with experience at other well-managed companies. Then there are the folks recruited from out of state. Shaver suspects he may have had two dozen conversations with headhunters and recruiters who all made roughly the same point, that it can be very difficult to get a professional person to consider moving to the Twin Cities but nearly impossible to get them to later consider leaving. Managers in the Twin Cities have a slew of good career options — plus have their kids in good schools, live in safe neighborhoods with manageable commutes to work and have lots of interesting choices of how to spend their free time. So there’s your circle, with big successful companies attracting talented people who tend to stay in the area, and those talented people then helping to build successful companies that grow to attract even more top talent. There were a lot of heads nodding up and down as Shaver finished his remarks last week, amid encouragement to forge ahead with his research. Bonnie Holub, a technology consultant who holds the Honeywell Endowed Chair in Global Technology Management at the University of St. Thomas, was one who sat in on Shaver’s talk. She later called his work “a thoughtful, authoritative, quantifiable validation of a feeling many of us have had for a while” about the origins of our deep and vibrant corporate community. But Shaver pointed out that no one should just assume that a great story that developed over many decades will endure decades longer. Virtuous circles like the one he described, he said, “are always at risk. The same thing that makes us a virtuous circle can make us a vicious circle. If this doesn’t stay an attractive place for people to live, they will leave.” [email protected] • 612-673-4302 more from business 4 questions about missing Malaysian plane answered Health care site flagged in Heartbleed review Cost of saving blacksmith shop could hit $400K get related content delivered to your inbox

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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. 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

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Timothy Smith Senior Vice President and Director of ESG Shareowner Engagement Walden Asset Management Timothy Smith serves as Senior Vice President of Walden Asset Management's Environment, Social and Governance Group. Tim joined Walden in October 2000. His primary responsibilities include overseeing shareholder advocacy, public policy, assisting in client services and acting as the spokesperson for Walden on social issues. Walden Asset Management manages approximately $1.7 billion for individual and institutional clients. Walden has been a national leader in responsible investing for over 35 years working on dozens of issues like the environment, sweatshops and climate change, Apartheid in South Africa, executive compensation, corporate governance and equal employment opportunity in the U.S. among others. Walden also provides professional social screening and a community investing service for clients who have invested $8 million in empowering poorer communities. Previously Tim served as Executive Director of the Interfaith Center on Corporate Responsibility (ICCR) for 24 years. ICCR co-ordinates action for some 275 religious institution investors bringing social concerns to corporations' attention and assisting religious investors with their responsible investing decisions. ICCR has been a primary player in the corporate responsibility movement and social investment community. In December 2007 Tim was named by Ethisphere Institute as one of top 100 most influential people in Business Ethics. Tim is immediate past Chair of the Board of Social Investment Forum, the industry association for socially concerned investors where he served for 5 years. He serves on the boards of Shared Interest, a South Africa Development Fund, World Neighbors, an international development organization, and is a member of the newly created Kimberly-Clark Sustainability Advisory Board. In 2008 Tim was elected as a Board member of the General Board of Pension and Health Benefits of the United Methodist Church, one of the largest pension funds in the U.S., with approximately $16 billion of assets under management. Previously, Tim served on the Boards of Domini Social Equity Fund for 10 years and the Calvert New Africa Fund and chaired the Advisory Council for the Calvert Group's social investment funds. Tim has a Masters in Divinity from Union Theological Seminary and a BA from the University of Toronto.

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Release No. 7619 / December 23, 1998 Release No. 40830 / December 23, 1998 Investment Advisers Act of 1940 File No. 3-9716 In the Matter of SEAN P. BRENNAN, and KEITH E. WALSH, Respondents. ORDER MAKING FINDINGS, IMPOSING REMEDIAL SANCTIONS AND CEASE- AND-DESIST ORDER Sean P. Brennan has submitted an Offer of Settlement for the purpose of disposing of the issues raised by this proceeding. Solely for the purposes of these proceedings and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, and prior to hearing and without admitting or denying the findings set forth herein, Brennan consents to the entry of this Order Making Findings, Imposing Remedial Sanctions and Cease-and-Desist Order ("Order"). The Commission has determined that it is appropriate and in the public interest to accept the Offer of Settlement from Brennan, and accordingly is issuing this Order. Based on the foregoing, the Commission finds that: 1 A. Respondent Sean P. Brennan, age 37, resides in Merrimackport, Massachusetts. During the relevant time, Brennan was the Vice President of Sales and Marketing for the Investment Management Group of CS First Boston Investment Management Corporation ("CSFBIMC") 2 . CSFBIMC was registered with the Commission as an investment adviser pursuant to the Investment Advisers Act of 1940 ("Advisers Act") at all relevant times and was an affiliate of CS First Boston ("First Boston"), a registered broker-dealer. CSFBIMC was the investment adviser for The CS First Boston Offshore Cash Reserve Fund (the "Offshore Fund" or the "Fund"). Brennan was responsible for, among other things, selling the Fund to institutional investors. B. The Formation of the Fund During the fall of 1993, CSFBIMC made plans to create, develop and market an unregistered offshore fund, eventually called the "CS First Boston Offshore Cash Reserve Fund," designed for sophisticated institutional investors. Unlike a traditional money market fund subject to Rule 2a-7 under the Investment Company Act of 1940, the original concept of the Fund was to be an offshore, near money market fund with an enhanced yield, which would be obtained by investing in instruments with a longer weighted average maturity than the 90-day weighted average maturity required for Rule 2a-7 money market funds. CSFBIMC’s internal plan was to have the Fund’s secu

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E-mail Print Comments Share Tweet Google+ The Two-Way India's PM Tries To Reassure Country Over Rupee's Slide Originally published on Fri August 30, 2013 1:03 pm By Julie McCarthy Indian Prime Minister Manmohan Singh during a diplomatic signing ceremony with Iraqi Prime Minister Nouri al-Maliki in New Delhi last week. Prakash Singh India's Prime Minister Manmohan Singh addressed a steep slide in the country's currency in recent weeks in a rare public speech on Friday, hoping to assuage concern over the rupee's sudden depreciation and blaming the opposition for inaction in Parliament that he said was sending the wrong signals to the markets. "There is no reason to believe that we are going down the hill," said Singh, a veteran economist who has been prime minister for nearly a decade. They were Singh's first remarks since the rupee began tumbling in recent weeks. As he attempted to soothe worries over the economic crisis enveloping Asia's third-largest economy, the rupee staged a mild comeback on Friday, having lost fifteen percent of its value since May. Singh said he believed that the country's currency had slipped below its true value. But he said the depreciation also had an upside. "To some extent, depreciation can be good for the economy as this will help to increase our export competitiveness and discourage imports," he said. Singh said the rupee's slide was due to the expected winding down of the U.S. Federal Reserve's monetary stimulus which has pumped cheap money into the wider economy, including emerging markets such as India. Foreign investors have pulled their money out of India in recent weeks in anticipation of the Fed's tapering, which would signal a renewal of the U.S. economy and thus make it a better bet for investors. Singh said Indians need to reduce their $50 billion a year gold-buying habit, which drains foreign reserves and ties up assets in a non-productive holdings. He repeated a mantra of his government, saying, "We need to reduce our appetite for gold." Singh lashed out at the opposition BJP party, which he accused of hurting investor sentiment by repeatedly disrupting the work of Parliament. The 80-year-old prime minster also mildly admonished rich countries, hinting that the U.S. Fed's move should think of its impact on the rest of the world. "In a more equitable world order, it is only appropriate that the developed countries – in pursuing their fiscal and monetary policies – should take into account the repercussions on the economy of emerging countries," he said. Singh — who as finance minister was the architect of an overhaul of the Indian economy in the 1990s that helped the country become an international powerhouse — emphasized that there was no going back. He said the government was not going to impose controls or reverse its reforms. But some of those reforms are costly. A food security program proposed on Monday would provide huge food subsidies in the form of wheat, rice and coarse grains – some 800 million people would be eligible for the program. Its $20 billion price tag sent markets sharply down over worries of India's rising fiscal deficit. Moody's said that the measure will worsen India's economic imbalance and is a negative development for the country's sovereign rating.Copyright 2013 NPR. To see more, visit http://www.npr.org/. View the discussion thread.

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Dog Brothers Public Forum Politics, Religion, Science, Culture and Humanities Politics & Religion Canada-US Topic: Canada-US (Read 1502 times) Canada-US Some good and interesting posts have been made in the last couple of days on the Political Economics thread and we are blessed to have Canadian Tricky Dog chiming in. Lets continue that conversation here.Not only are the Canadians our very good friends and neighbors, our cultures, our legal systems, and our political systems all originated principally in England. This seems to me to lessen the usual amount of static that comes from cross-cultural comparisons. Re: Canada-US I would kick things off my challenging the oft-stated notion that Canada survived the bubble due to regulations they have that we do not.While partially true (and I have begun to reconsider my inattention to our repeal of the Glass-Steagall Act sp?) I think this blurs a very important point-- that it was precisely the intervention of our government via the FMs guaranteeing loans, CRAP (Community Reinvestment Act Program which forced banks to lend to the unqualified in the name of racial parity of results) and the deranged interest rate policy of the Fed that created the bubble. trickydog So regardless of whether you blame the government or the corporations for the American experience, you are essentially concluding from the Canadian experience that, in general, strong regulation is needed for financial services?Thus the need is for better government, whether or not that means less government? Regulation necessarily means bureaucracy.Or is there a free-market (i.e. unregulated) solution to keep banks from doing this again? Logged Canadian corporate tax breaks - and stagnant private money As mentioned in the previous thread (Political Economics), the Harper government in Canada just dropped corporate taxes by 1.5% to 15%. That will equate roughly to 33 billion annually given back to Canadian corporations.Harper has recently been complaining about the 3/4 trillion sitting in corporate coffers stagnant - most enterprises sitting back during the rough economic times to hold onto their surpluses. This break will allow them to hold even more money stagnant. The assumption seems to be that corporations are going to spend us out of tough times by growing, investing, and otherwise freeing up those stagnant funds. But that does not really seem to be happening. Like spooked consumers, they are sitting on the money to see how this plays out. Which of course just drags out the recovery.In the case of consumers, you can sometimes get them to start spending even when they probably should remain cautious or work hard at reducing their debt. Corporations on the other hand are run by some of the most saavy financial types to be found. They know better than most when to move and when to sit still (although no guarantee of good sense). And you can expect corps to do what is best whether they get a tax break or not.I can see the long term benefit of tax breaks - attracting more foreign business, encouraging investment and innovation, etc. But in a stale or limping economy where the future is uncertain, I do not see why this is a good move, at least in the short term. Why would corps start spending significantly under these circumstances? The only real use of corp reserves seems to be the usual M&A activity that accompanies a slow economy.So is there any reasonable expectation that lowered corp taxes will help jump start an ailing economy? No matter if it's the US, Canada or Hong Kong, I think there is a desire and need for some degree of regulation of financial markets. In designing systems that have a important role, it's important to structure the system so it fails gracefully rather than catastrophically. As business failure is a required element of a free market (creative destruction), it makes sense that there should not be such a thing as a business/bank "too big to fail". At the same time, much like every complex system, there is a law of diminishing returns at work as well. While intelligent and properly enforced regulations are important, there comes a point where too much regulation does more harm than good.So, it's a matter of finding the sweet spot between the extremes of structure and chaos. "So is there any reasonable expectation that lowered corp taxes will help jump start an ailing economy?"Because businesses/corps ultimately pay no taxes? Meaning that any taxes imposed on a business ultimately are passed on to the consumer of the goods/services the business provides. "So regardless of whether you blame the government or the corporations for the American experience, you are essentially concluding from the Canadian experience that, in general, strong regulation is needed for financial services?"Not necessarily. Although I am reconsidering the merits of the Glass Steagall Act, I submit that in the US the principal cause was the guarantee of the Federal govt, via Fannie Mae and Freddie Mack, of bad mortgages. With this, the discipline of the market was removed and reckless behavior thus enabled. This humongous error was dramatically multiplied by the intervention of the Fed with its low interest rates-- in post inflation, post tax dollars, interest rates have been essentially negative or zero for quite some time now. This punishes savers, encourages desperate and reckless investing, and accelerated the housing bubble. I would add that the Humphrey-Hawkins Act, which added full employment to the Fed's responsibility of price stability, another market meddling piece of Keynesian interventionist drivel, is also a major factor in the damage that the Fed causes."Thus the need is for better government, whether or not that means less government? Regulation necessarily means bureaucracy." As I see it the issue is the concept by which the regulation is justified. If the regulation is to enforce transparency in mortgage language, that is in support of free market principles and as such is fine. If the regulation is to �encourage home ownership�, that is government intervention in the market and, as we see from the economic chaos that has ensued from such policies it is NOT fine."Or is there a free-market (i.e. unregulated) solution to keep banks from doing this again?"The solution is to let failure fail, not to punish savers to benefit the banks and other friends of the Congress e.g. AIG. "the issue is the concept by which the regulation is justified. If the regulation is to enforce transparency in mortgage language, that is in support of free market principles and as such is fine. If the regulation is to �encourage home ownership�, that is government intervention in the market and, as we see from the economic chaos that has ensued from such policies it is NOT fine."Yes. The justification for bank regulation was - don't take bad risks because we insure your deposits. From there we jumped to encouraging home ownership above requiring creditworthiness based on a different justification for government action: 'Hey, we amassed all this power, let's do some good with it!'"whether you blame the government or the corporations ... is there a free-market (i.e. unregulated) solution to keep banks from doing this again?"Looking at it the other way, 'what can the people can do to keep their government regulators from doing this again'? "As mentioned in the previous thread (Political Economics), the Harper government in Canada just dropped corporate taxes by 1.5% to 15%. That will equate roughly to 33 billion annually given back to Canadian corporations."TD, do you intend to say there will be no recovery of the lost revenues from new revenues generated? Corporate income is a fixed number? I disagree. Let's see in a year."33 billion annually given back to Canadian corporations"A funny way of looking at it. Even at a lower rate, the who is giving to whom seems backwards. Not that corporations give freely, but govt is now taking at a slightly lower rate. When a retailers lowers their price do they assume the same amount of transactions? If so why do they do it? Assuming corporations are in the business of making money, why would they not use that 'gift' to make more money, build, buy, hire, expand which all lead to a host of other taxes to be paid including more corporate income tax. If they will not use the money for those purposes, why not? "the issue is the concept by which the regulation is justified. If the regulation is to enforce transparency in mortgage language, that is in support of free market principles and as such is fine. If the regulation is to �encourage home ownership�, that is government intervention in the market and, as we see from the economic chaos that has ensued from such policies it is NOT fine."I agree, the government has no business being in the business of encouraging home ownership. Doug, are you therefore saying that the mortgage deduction (government intervention) should be immediately repealed? It would seem that this very costly benefit has no purpose other than to "encourage home ownership". Note, personal home mortgage payments are not deductible in Canada, yet home prices and banks seem to do just fine. China gets the Keystone pipeline that Obama rejected China's Canadian Energy Play Alberta's oil sands will be developed, no matter what U.S. greens say..President Obama may not want to exploit the energy buried in Canada's Alberta oil sands, but China sure does. Think of Monday's $15.1 billion offer by China's state-owned Cnooc to buy Canadian energy giant Nexen as a post-Keystone XL Pipeline bid to replace the U.S. as Canada's biggest energy investor and market. Nexen offers Cnooc a sweeping North American energy footprint, with assets from heavy oil and shale gas in Alberta to offshore leases in the Gulf of Mexico. Part of the bet is also on Canadian politics, which could block the investment on nationalist grounds but which so far hasn't been captured by the anticarbon fevers that dominate Washington. Canada seems to understand that its resources are a gift that can raise national prosperity. And as extraction technology has improved, Canada's proven oil reserves have climbed to at least 180 billion barrels, putting it behind only Saudi Arabia and Venezuela. Unlike the U.S., Ottawa cedes most energy decisions to the provinces, which have encouraged production. A decade ago Alberta reduced to 1% the royalty that companies must pay until they have earned back their capital costs; then the rate reverts to 25%. The incentive kick-started the oil sands investment boom. Enlarge ImageCloseAssociated Press A Nexen oil sands facility near Fort McMurray, Alberta, Canada..Canada is also looking for oil from shale, drilling in the Arctic, and even producing in the Atlantic�offshore of Nova Scotia, within spitting distance of Maine. All of this has produced a gusher of oil, tax revenue and jobs. The oil sands alone are estimated to have accounted for one-third of Canada's economic growth in 2010 and 2011, according to Canada's national statistical agency.Contrast that to the U.S., where President Obama has spent tens of billions on failed green energy schemes while making fossil-fuel exploration harder. This week the White House issued a veto threat against a House bill that would restore pre-Obama plans to allow greater offshore exploration. Alaska oil production is so low that there are worries about the viability of its pipeline. Shell Oil, which has plowed $4.5 billion into an Arctic investment, has been waiting the entire Obama Presidency for permits. The EPA is also waiting for a second term to impose national regulations on shale fracking. Mr. Obama's rejection of the $7 billion Keystone XL has no doubt concentrated Chinese and Canadian minds. The pipeline would have moved oil from Canada and North Dakota to refineries on the Gulf Coast, and Mr. Obama's bow to American greens was a direct snub to Canada, which provides nearly 30% of U.S. imports. Prime Minister Stephen Harper promptly said that Canada needs to diversify its energy markets, perhaps by building a pipeline from Alberta to the West Coast to export to Asia. Energy-hungry China couldn't be happier. Chinese bids for North American companies haven't always been welcomed�see the rejection last year of a Chinese consortium's $38.6 billion hostile bid for Canada's Potash Corp. But Cnooc executives might figure that Canadian regulators will be more welcoming to this nonhostile bid in the wake of the Keystone fiasco. Canada needs capital to exploit the oil sands and the markets to buy what is produced. Cnooc can help with both.The lesson for America, and especially Democrats, is that Canada's oil sands will be developed, whether their green financiers like it or not. If the U.S. doesn't want the oil, China and the rest of Asia will gladly take it. The world wants to grow�must grow to reduce poverty�and it needs abundant, cheap energy to do it. Why is that so hard for some Americans to understand? O'Grady: How Canada Saved Its Bacon Deep cuts in government spending pulled Canada back from an epic fiscal crisis in the 1990s.By MARY ANASTASIA O'GRADY..Former Canadian Prime Minister Paul Martin has a stern warning for the U.S. political class: Get real about the gap between federal revenues and spending, or get ready for disaster. Mr. Martin knows of what he speaks. In 1993, when he was Canada's finance minister, his country faced a daunting fiscal crisis. It wasn't Greece, but by 1994 Canada's federal debt-to-GDP ratio was getting close to 80%, and the cost of servicing the debt had begun to eat up an incredible one-third of government revenue. The central lesson from that crisis, Mr. Martin told an American Enterprise Institute audience in Washington last week, is that delay only ensures that the inevitable adjustment will be more painful.Truer words were never spoken. Nor has it ever been more likely that they will fall on deaf ears, at least as long as Federal Reserve Chairman Ben Bernanke keeps financing the partying in our nation's capital. When the Liberal Party government of Prime Minister Jean Chr�tien took power in October 1993, Mr. Martin was charged with pulling his nation out of the fiscal death spiral. He did it with deep cuts in federal spending over two years that amounted to 10% of the budget, excluding interest costs. Nothing was spared. Even federal transfers to the provinces to fund Canada's sacred national health-care system got hit. The federal government also cut and block-granted money for welfare programs to the provinces, giving them almost full control over how the money would be spent. In the 1997 election, the Liberals increased their majority in parliament. The Chr�tien government followed with tax cuts starting in 1998 and one of the largest tax cuts�both corporate and personal�in the history of the country in 2000. The Liberals won again in 2000. What drove the left-of-center Liberals to shoulder the burden of downsizing government in the 1994 and 1995 budgets�Mr. Martin takes great pains to point out�was not ideology but "arithmetic." That is to say that everyone recognized that the magnitude of the debt, and the cost of servicing it, was unsustainable. The problem had been building over many years. In 1965, federal spending had been 15% of GDP. By 1993 it was 23%. Markets didn't like it. Between February and March of 1994, the three-month Canadian Treasury bill rate went to 5.82% from 3.85%. The Mexican peso crisis in December of that year didn't help. By February 1995 the interest rate on the Canadian Treasury bill reached 7.8%. In a world of increasing uncertainty and a flight to quality, Canada was paying dearly for its deteriorating risk profile. As the exchange rate sank, Canadians were getting poorer and the government was speeding toward a wall.Another speaker at the American Enterprise Institute conference (which was co-sponsored by the Ottawa-based MacDonald-Laurier Institute) was Janice McKinnon, the finance minister for the center-left New Democratic Party government of the province of Saskatchewan in 1993. Ms. McKinnon told her own war stories. In 1991, when her government took over, the "province was on its knees." In 1992, according to Ms. McKinnon, Standard & Poor's reported that Saskatchewan's "tax-supported debt was 180% of its annual revenue." "When our credit rating dropped to triple B rating, we had trouble borrowing money."Ms. McKinnon described some of what followed: "In one budget we closed 52 hospitals, many schools and thousands of people lost their jobs. But we knew we had no choice, and we couldn't look back." Ms. McKinnon likened the U.S. today to Saskatchewan in the 1980s. You are "not to the point where you are in a crisis, people aren't saying 'maybe we won't lend you money.' " And that means that the politicians can still put things off. "Before you actually realize 'we've got to do this because there is no choice,' there is a lot of denial," Ms. McKinnon explained. "I think you're at that stage."She's right. Market discipline doesn't exist in Washington, which has the "privilege" of an accommodating central bank issuing the world's reserve currency. The big spenders don't need to pay attention to pesky numbers. As Stanford University economist John Taylor has noted, the Fed bought 77% of all new federal debt last year. It is doing so at rock-bottom interest rates. By holding the short-term fed-funds rate low while it buys up long-term securities, Mr. Bernanke is helping our political class ignore the real cost of rising federal indebtedness.Of course these battle-scarred Canadians fully understand that the U.S. will reach a day of reckoning when the Fed has to constrain the money supply and interest rates start going up. "Our only plea," Ms. McKinnon said, "is that if you start tackling it before you hit the crisis stage, it's going to be a heck of lot easier. The longer you wait, the worse it gets."Write to O'[email protected] Logged We might learn something , , , "To achieve this the Harper government did something you might more expect to see in the private sector. Clement made history in Canada by tying bonuses of senior bureaucrats to the success of government-wide objectives for reducing expenditures. Get this, about 40% of the bureaucrats� bonuses were linked to a �Deficit Reduction Action Plan.� Yeah, bureaucrats got bigger bonuses when they proposed ways to make bigger cuts.Clement explained, �Forty percent of this at-risk pay for senior managers was based on how much they contributed to the target of least $4 billion a year in permanent savings. This is just part of how we�re changing the attitude of government officials from spending enablers to cost containers.�http://www.forbes.com/sites/frankminiter/2012/07/24/what-president-obama-doesnt-want-you-to-know-about-canada/OTOH, there is this:http://globaleconomicanalysis.blogspot.com/2012/11/canada-bleeding-private-jobs-vancouver.htmlhttp://globaleconomicanalysis.blogspot.com/2012/10/canada-gdp-unexpectedly-shrinks_31.html POTH: long standing territorial dispute . AT a time when territorial disputes over uninhabited outcrops in the East China Sea have led to smashed cars and skulls in China, a similar, if less dramatic, dispute over two remote rocks in the Gulf of Maine smolders between the United States and Canada. Machias Seal Island and nearby North Rock are the only pieces of land that the two countries both claim after more than 230 years of vigorous and sometimes violent border-making between them. Except for the occasional jousting of lobster boats, this boundary dispute floats far below the surface of public or official attention, no doubt reflecting the apparent lack of valuable natural resources and a reluctance to cede territory, no matter how small. But if we are unlikely to resort to arms anytime soon, the clashes in Asia have shown how seemingly minor border disputes can suddenly stoke regional and nationalistic tensions. Our relaxed attitude toward these remote rocks may well be a mistake. While the United States and Canada have other maritime boundary disputes along their 5,525-mile border, the world�s longest, this is the only one left that involves actual chunks of land. Machias Seal Island is a 20-acre, treeless lump that sits nearly equidistant from Maine and New Brunswick. It, and the even smaller North Rock, lie in what local lobstermen call the gray zone, a 277-square-mile area of overlapping American and Canadian maritime claims. The disagreement dates back to the 1783 Treaty of Paris that ended the Revolutionary War. The treaty assigned to the newly independent 13 colonies all islands within 20 leagues � about 70 miles � of the American shore. Since Machias Seal Island sits less than 10 miles from Maine, the American position has been that it is clearly United States soil. But the treaty also excluded any island that had ever been part of Nova Scotia, and Canadians have pointed to a 17th-century British land grant they say proves the island was indeed part of that province, whose western portion became New Brunswick in the late 18th century. Perhaps more important to the Canadian case, the British built a lighthouse on Machias Seal Island in 1832, which has been staffed ever since. Even today, two lighthouse keepers are regularly flown to the island by helicopter for 28-day shifts to operate a light � even though, like every other lighthouse in Canada, it is automated. While abundant legal arguments surround Machias Seal Island, natural resources are far less evident. No oil or natural gas has been discovered in the area, nor has it had any strategic significance since it served as a lookout for German U-boats during World War I. Tour boats from Maine and New Brunswick carry strictly limited numbers of bird watchers to the island to see nesting Atlantic puffins. And the surrounding waters contain lobsters that, thanks to different regulatory schemes and overlapping claims, have occasionally sparked clashes between Maine and New Brunswick lobstermen, although a bumper lobster crop this summer has slackened demand for gray zone crustaceans. But the lack of hydrocarbons and the current lobster glut make this an ideal time to color in the gray zone. The United States and Canada settled all their other maritime differences in the Gulf of Maine in 1984 by submitting their claims to the International Court of Justice for arbitration. They could have included the gray zone in that case, but did not. The Canadians had refused an earlier American arbitration proposal by saying their case was so strong that agreeing to arbitration would bring their title into question. This attitude calls for re-examination. The fact that so little in the way of resources appears to be at stake, far from justifying the status quo, should be the main reason for resolving the issue. And for those concerned about blowback from �giving away� territory, letting the international court decide the case provides the most political cover. As China and Japan can attest, border disputes do not go away; they fester. And when other factors push them back to the surface � the discovery of valuable resources, an assertion of national pride, a mishap at sea � the stakes can suddenly rise to a point where easy solutions become impossible. Before that happens, we should put this last land dispute behind us, and earn our reputation for running the longest peaceful border in the world. Stephen R. Kelly is the associate director of the Center for Canadian Studies at Duke University and a retired American diplomat who served twice in Canada. R.I.P. John Sheardown John Sheardown, Canadian Who Sheltered Americans in Tehran, Dies at 88 By DOUGLAS MARTIN Published: January 4, 2013 NYT When militant radicals seized the United States Embassy in Iran in November 1979, they intended to take all its employees hostage. But five were elsewhere in the embassy compound and escaped capture. After six tense days of furtively moving around Tehran, one of them, Robert Anders, placed a call to a Canadian diplomat with whom he played tennis, and asked for help. �Hell, yes, of course,� the diplomat, John Sheardown, answered. �Count on us.� The five employees had by then been joined by a sixth. Four ended up being hidden for nearly three months in the home of Mr. Sheardown, the Canadian Embassy�s No. 2 official, who died on Sunday at 88. The other two found refuge with the Canadian ambassador, Ken Taylor. The episode, which came to be known as the �Canadian caper,� was a footnote to the Iranian hostage crisis, in which young Iranian revolutionaries seized the American Embassy and held 52 people hostage for 444 days to try to force the United States to return the deposed shah from New York, where he was being treated for cancer. After the shah died in July 1980 in Egypt and war erupted between Iran and Iraq, negotiations with the United States led to the release of the hostages in January 1981. The concealment and extrication of the American diplomats by the Canadian government and the Central Intelligence Agency inspired the recent movie �Argo.� Though Mr. Sheardown is not mentioned in it � public recognition always gravitated to Mr. Taylor, who is portrayed in the film as a hero � his role was nevertheless consequential. �Without his enthusiastic welcome, we might have tried to survive on our own a few more days,� Mark Lijek, a retired Foreign Service officer, wrote in Slate last year. �We would have failed.� Mr. Sheardown�s avuncular, pipe-puffing manner led his houseguests to call him Big Daddy. He bought groceries at different stores to disguise his household�s suddenly larger appetite. He bribed the garbage collector with money and beer for the same reason. Surveillance, including tanks at the end of the street, was constant. Strangers knocked on the front door, suspicious calls were commonplace, their car was repeatedly searched. �We were already living in danger,� Mr. Sheardown�s wife, Zena, said in an interview on Wednesday. �And certainly the danger was compounded because we were hiding, literally hiding, fugitives.� Mr. Sheardown, she said, died in Ottawa, where he lived, after being treated for Alzheimer�s disease and other ailments. John Vernon Sheardown was born on Oct. 11, 1924, in Sandwich, Ontario, a small town absorbed by Windsor in the 1930s. At 18, he joined the Canadian Air Force and flew a bomber in World War II, once crash-landing near an English village after limping back from an attack on Germany. He broke both legs, but was able to crawl to a pub door at 3 a.m. and rouse the owner. He asked for a glass of Scotch, which the owner gave him. The owner then asked for payment while Mr. Sheardown waited for an ambulance � a story Mr. Sheardown relished. He joined Canada�s immigration service in the early 1960s and later transferred to the foreign service, where he specialized in immigration matters. He was busy in Tehran with Iranians who wanted to leave the country, as well as with Afghans who had fled their country after the Soviet Union invaded it in December 1979. His houseguests became an official part of his responsibilities after the Canadian Parliament held its first secret session since World War II to approve the rescue mission, which included issuing the Americans fake Canadian passports. While in Tehran, the Americans in his rented 20-room house occupied themselves by listening to news on a shortwave radio, reading, playing Scrabble and cards and, by their own admission, drinking copiously. They had to leave the house only once, when the owner had a real estate agent show it to a potential buyer. The two Americans staying with Ambassador Taylor were spirited to the Sheardown house for Thanksgiving and Christmas. The diplomats posed as members of a film crew who had supposedly been scouting locations. They had been taught how to speak like Canadians � for instance, by ending sentences with �eh?� One was given a Molson beer key ring. Mr. Sheardown�s first marriage, to Kathleen Benson, ended in divorce. Besides his wife, the former Zena Khan, he is survived by his sons, Robin and John; his sisters, Jean Fitzsimmons and Betty Ann Whitehead; six grandchildren; and 10 great-grandchildren. After being awarded a high honor, the Order of Canada, Mr. Sheardown fought for his wife, a British citizen, to receive the same award. She had been legally excluded from consideration because she had never lived in Canada. He argued that she had had the tougher job because she seldom left the house while living in danger. She received the honor in 1981. After �Argo� appeared in theaters, Ms. Sheardown said, its director, Ben Affleck, called to apologize for leaving her and her husband out of the movie. In an interview on Thursday, Mr. Affleck said he had been fully aware of the Sheardowns� heroism before the film was shot, but had reluctantly omitted it for reasons of length, drama and cost. �They got lost in the shuffle,� Mr. Affleck said. �It really did break my heart a bit.� Canada-US border trivia http://www.flixxy.com/the-bizarre-border-between-canada-and-the-united-states.htm Canada passes US http://danieljmitchell.wordpress.com/2013/12/13/the-most-pro-capitalism-place-to-live-in-north-america-is/

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Ben Bernanke: Too soon to claim victory despite job gains By: Josh Boak January 25, 2012 03:02 PM EDT Despite recent job gains and renewed consumer confidence, Federal Reserve Chairman Ben Bernanke hesitated to claim victory, as the nation’s central bank said it would hold interest rates close to zero through late 2014. “I don’t think we’re ready to declare that we’ve entered a stronger phase at this point,” Bernanke said at a news conference. “We’ll continue to look at the data.” The Fed has emerged as a magnet for criticism among Republican presidential candidates for cutting interest rates to next to nothing in an effort to bolster the economy. Bernanke declined to comment at the news conference about what a Republican win would mean for the Fed, saying, “I’m not going to be thinking about hypothetical situations in the future.” The Fed announced Friday that the economy was “expanding moderately” as employment and household spending has improved, yet the recovery will continue to crawl along slowly as home values remain depressed. In a sign of continued weakness, the Federal Open Markets Committee voted 9-1 to keep its key federal funds rate close to zero through late 2014. Fed officials previously expected to hold the rate that low through 2013. “I was surprised that the consensus was that far out into the future,” former Fed Vice-Chairman Alan Blinder told CNBC, adding that the country would be in a “hyper stimulative mode for some time.” By planning to keep interest rates near zero for a longer period of time, the Fed seems to be focused on the lingering weaknesses of the U.S. economy instead of the possibility that Europe implodes because of its sovereign debt crisis. “When people fear horrible Lehman-like scenarios out of Europe, they’re talking about 2012,” Blinder said. “That might only have a modest effect if you’re talking about 2013 and 2014.” Compared to their November projections, Fed officials anticipated slightly worse economic growth through 2014 but a rosier employment situation, with core inflation staying at or below its target of 2 percent. Their new forecast estimates unemployment — now at 8.5 percent — would end the year somewhere between 7.8 and 8.6 percent. The Fed mandate is to maximize employment and maintain stable prices by limiting inflation. It began with its January forecasts to disclose its inflation projections as a way of providing more transparency. “These are welcome and important steps toward openness,” said Sen. Lamar Alexander (R-Tenn.) in a statement. “Letting the rest of us know more about what the leaders of the Federal Reserve Board and its banks are doing and why they are doing it should increase understanding of and build confidence in the Fed’s decisions.”

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Forget Boomers and Millennials — Here's Why Gen X Has the Most to Worry About By Mandi Woodruff .Forget Boomers and Millennials — Here's Why Gen X Has the Most to Worry About In the battle of the generations, who's the biggest loser? If you go by numbers alone, Millennials may come first to mind. They have the worst unemployment rate, lowest credit scores, and are saving the least for retirement. And then there are the Boomers, aka the sandwich generation, who not only have to financially support their jobless adult children but will wind up losing $300,000 in wages and benefits over their lifetime caring for their aging parents.In our opinion, however, Generation X is worst off by a landslide.Confronted by a rapidly growing income gap, depleted retirement savings and sky-high debt loads, people in their early 30s and mid-40s faced some of the biggest financial hurdles of any other generation this year. We took a look back to see just how far Gen X has come since the recession — and how far they have left to go.The real 'Gap' generation View gallery.(Bankrate.com)The income gap in America has reached Grand Canyon-sized proportions, but in no generation is the middle class shrinking faster than Gen X, which has seen its income gap — the level of inequality between the richest and poorest people — grow at a rate of 21% over the last two decades alone, according to a new report by Bankrate.com.That’s twice as fast as both millennials and older boomers, often considered the two generations that suffered the most during the Great Recession. In reality, it wasn’t the youngest or even oldest Americans but Generation Xers — those born roughly between 1965 and 1980 — who were in the most vulnerable financial position when the recession hit. “There’s a lot of conjecture about why this particular age group [is getting hit] the most, but I think when you really look at what’s happening it’s easy to understand,” says Judy Martel, senior editor at Bankrate.com. For starters, before the housing crisis brought about the Age of the Renter and effectively put homeownership out of style, it was the “Reality Bites” generation, in their early 30s and 40s, who were starting families and snapping up homes at the peak of the housing bubble. When the real estate market went bust, they were hurt most, watching their home equity tank by 27%, compared to early boomers’ loss of 14% and seniors’ 19%, according to a May 2013 report by the Pew Research Center. All in all, Generation X lost a whopping 45% of their overall net worth, the most of any other generation. It’s not that older boomers didn’t have mortgages and cash-strapped millennials at home to support, but they at least had a couple of decades’ worth of savings and were better equipped to manage their debt ahead of the recession. For many Gen Xers, the recession hit at the precise time they should have been close to the peak of their earning potential, moving into higher positions at work and beefing up their personal bottom line. The financial crisis had all but stymied that crucial period of growth.“They were just starting out in their careers and were on their way and everything hit them at once in terms of job promotion and wage decreases,” Martel says. “If you look at the the labor market, it’s still struggling.”Leaning on debt View gallery.Numbers don't always tell the full story.With the all the ballyhoo over the nation’s $1 trillion student loan debt crisis and what it means for 20-somethings, you’d think millennials would carry the heaviest debt burdens. They do carry a sizable chunk — about 40% — but nearly 50% of student loan debt is actually held by borrowers age 30 to 49, according to a June 2013 Urban Policy Institute study.Debt is obviously a problem when you don’t have the assets to pay it off, and unfortunately for Gen X, they often come up short. While boomers and seniors had assets four and 27 times higher, respectively, than their total debt after the recession, Gen Xers only carried just twice as much in assets as debt, according to the Pew study.As a result, Gen X has struggled to whittle down their debt load, and it shows in their credit history. When it comes to overall debt, a November report by Experian shows that Gen Xers are deepest in the red. Since 2011, they've taken on more debt than any other generation. They carry more than $30,000 worth of credit card debt today, up from $26,000 in 2011. By comparison, millennials today carry $23,000 on plastic and boomers carry $29,000. Gen Xers also carry the most debt per credit card, averaging $5,343 per card in 2013, up from $4,489 in 2011.And when those bills come due, Gen Xers are least likely to be able to make their payments on time, Experian found. They’ve got the credit scores to show for it, too. Only millennials’ average a lower credit score (628) than Gen X (653). Both scores are lower than the national average of 681, but youngsters can at least blame some of their shortcomings on a shorter credit history.Falling behind on retirement View gallery.FidelityThe fact that the recession hit when older Gen Xers should have been entering their highest earning years hasn’t boded well for their retirement accounts. One of the common reactions to a financial uncertainty is for investors to get more risk averse, and Gen X’s caution could be costing them. Forty percent of this age group have 50% or less of their investment in stocks, making for a portfolio that’s “too conservative for their age,” according to a December report by Fidelity.On top of their lower tolerance for risk, Gen Xers aren’t contributing nearly as much as they should to retirement funds. Nearly 60% said they are saving less than 10% of their income for retirement, and 43% of those are contributing less than 6%. The ideal retirement savings rate for most people is between 10% and 15% of their income, according to Fidelity.Their retirement time horizon is a little off by some counts, too. “Younger generations are really underestimating the age that they’re planning to retire,” says Lauren Brouhard, senior vice president of retirement for Fidelity. “On average, they’re planning to retire at age 65 and the reality is that we’re all living longer have higher expectations of being active in retirement, which can really create a financial squeeze. People need to have a more realistic expectation of how long they’ll continue to work, whether they’ll work part-time in retirement, and so on.” The outlook for Gen X in 2014So where does Generation X go from here? The good news is that millennials aren’t the only ones with time on their side, and the challenge for Gen X will be to maximize their working years in a way that not only helps them achieve their goals but also makes up the ground they lost during the recession. Financial Finesse, a financial education firm that offers guidance to employees of Fortune 500 companies, takes an annual look at the challenges facing each generation. Their 2013 data isn’t in yet, but we spoke with Eric Carter, senior resident financial planner at the firm, who’s taken an early look at the report and says it looks like the tide may be turning somewhat in Gen X’s favor. “I’m very cautiously optimistic [for Gen X],” Carter says. “They’re still the furthest behind other generations but one of the things that came out in our research is that they are the most aware of the difficulties they’re in. They know they’re in trouble.” It may not sound like much but in the emotional roller coaster that is personal finance, self-awareness is often the most important step toward getting your finances together. Says Carter: “The question is, will they improve in 2014 and will it be enough? That’s something we aren’t going to know for a while.”——We’d love to hear how other Gen Xers fared in 2013: [email protected]. Personal Finance - Career & EducationInvesting Education

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JP Morgan donate millions to NYPD prior to arrests Posted 2 years ago on Oct. 16, 2011, 9:52 a.m. EST by Ambush http://www.naturalnews.com/033779_JP_Morgan_Occupy_Wall_Street.html The rich guys personal security force. by DirtyHippie Whether it was given in 2010, in May or June of 2011, or two weeks ago, it's questionable because JPMorgan is in the municipal bond underwriting business. Money they give to any municipal locality is supposed to be reported to the SEC because of the inherent conflict of interest. Giving money to the City of New York, or any of its agencies, could be a solicitation to city officials, for future municipal bond underwriting business. That's a violation of industry regulations. It would be interesting to know if the SEC is doing their job on this. by howRya NYC Police Foundation is a non-profit, independant organization. Read up: http://www.nycpolicefoundation.org/NetCommunity/Page.aspx?pid=224 And while you are at it, you can take a look at the donors that give to this organization. They cut across an extremely large cross section of this city. If you are going to condemn Chase then you must condemn them all. You don't understand. Are the other donors in the municipal bond underwriting business? This has to do with the highly regulated way that new issues of municipal bonds come to market to be sold to the public. The amount of money that the underwriter is paid is fundamental and subject to strict regulation. JPM is required to make a formal disclosure to the SEC and I'm curious to know whether they've done so. Well, I would think JPM did so since they posted their donation on their website and their name is posted as a donor on the NYCPF's website. If they wanted to be sneaky about something illegal then I would think they would do a much better job of covering it up. An old saying crossed my mind when I read this rumor: "No good deed goes unpunished." I encourage you to educate yourself about the securities business, also known as investment banking, also known as Wall St. It's somewhat frustrating at times, to see all the clamor about "Wall St" by people who don't know the first thing about it. There are some knowledgable people here though. I know JPM features the donation on their website. I know it was in the news. But that's not how the disclosure to the SEC is made. It's a formal process, required by law, under the Securities Act of 1933. It's not the SEC's job to hunt down this type of information, or keep an eye out for it in the newspapers. Since JPM currently has 10,000 legal cases pending where they are named as the defendant, according to their own word, as published in their own 2010 annual report, everything they do, or fail to do, is of interest. This has nothing to do with rumors or punishing good deeds. Well, I'm sure there is a whistleblowers hotline where you could report this possible violation. I would only hope that if it is true that JP Morgan Chase made these donations in an honest and aboveboard manner that you, or anybody else, that has been dragging this donation through the mud would apologize. But I'm sure that won't happen, because they are enemy #1 so even if they weren't guilty this time, they MUST be guilty of something. What bothers me is that you have this laissez-faire, let's-give-them- the-benefit-of-the-doubt attitude that led to the mess we're in. We should not only expect, but demand, that they do business in an honest and ethical way that's transparent to the public. I'm not being laissez-faire and resent the implication that I don't give a crap about ethics. I give such a crap about ethics that I don't like smearing anybody without proof of their guilt. Don't you think that it is unethical to spread rumors of paying off a police department unless all the facts are present? In all the pages I read spreading this rumor NONE OF THEM said anything about these donations being made in 2010 and I suspect it is because it didn't fit into story that people wanted to spread. Listen, I try to treat anybody the way I want to be treated. I wouldn't want somebody hanging something around my neck based upon incomplete stories and omitted facts. And I wouldn't do it to anybody else either. Sure, Chase may guilty of something but this looks to be an open-handed, aboveboard donation and to accuse them otherwise unless you have proof is unethical in my books. by CarryTheGripsUpToTheAttic ANYTIME the "99%" police come down to the park, gently ENCOURAGE them to leak documents/information about this crackdown! Hold up signs describing where to leak documents, and how to switch to our side! Follow them! Gently, but CONSTANTLY plead with them to help us! by MossyOakMudslinger from Frederick, MD True. There is no limit to Jamie Dimon's corruption and apparently no limit for the NYPD's corruption either. Um, that money was given in 2010. http://www.jpmorganchase.com/corporate/Home/article/ny-13.htm by Democracydriven Thanksfor pointing that out. It appears the other link tried to spin it. New York City Police Foundation — New York Beginning in 2010, JPMorgan Chase donated technology, time and resources valued at $4.6 million to the New York City Police Foundation, including 1,000 new patrol car laptops. The gift was the largest in the history of the foundation and will enable the New York City Police Department to strengthen security in the Big Apple. New York City Police Commissioner Raymond Kelly sent CEO and Chairman Jamie Dimon a note expressing "profound gratitude" for the company's donation. "These officers put their lives on the line every day to keep us safe," Dimon said. "We're incredibly proud to help them build this program and let them know how much we value their hard work." by BenBernanke wowww I read this on a time line of the Great Depression •In 1933 Alarmed by Roosevelt's plan to redistribute wealth from the rich to the poor, a group of millionaire businessmen, led by the Du Pont and J.P. Morgan empires, plans to overthrow Roosevelt with a military coup and install a fascist government modelled after Mussolini's regime in Italy. The businessmen try to recruit General Smedley Butler, promising him an army of 500,000, unlimited financial backing and generous media spin control. The plot is foiled when Butler reports it to Congress.

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Best Buy, Founder End Deal Talks Sharon Terlep, Ann Zimmerman And Dana Cimilluca Updated Feb. 28, 2013 8:26 p.m. ET Best Buy Co. has ended talks with founder Richard Schulze over a deal in which he and a group of buyout firms were proposing to take a minority stake in the firm in exchange for three seats on the board, according to people familiar with the matter. With that proposal off the table, it appears Mr. Schulze won't be able to execute the buyout of the beleaguered electronics retailer that he had proposed last year, the people said....

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hide Analysis: Hospital investors sold on U.S. health reform despite bumps Wednesday, June 19, 2013 1:05 a.m. EDT By Susan Kelly CHICAGO (Reuters) - Shares of U.S. hospital operators have been on a tear this year, on average posting triple the gains of the broader stock market, as investors tallied up the benefits of President Barack Obama's healthcare reform. While some on Wall Street have held back amid signs of trouble as U.S. states prepare to implement the reform law, long-term investors still see more reward than risk on the horizon for hospital stocks. They expect company earnings to strengthen as more Americans gain insurance coverage and hospitals lose less money treating the uninsured. The reform law has spurred consolidation among hospitals, and further merger activity could lift valuations. "We believe there is still a significant amount of upside in the stocks, particularly if you believe these companies have the ability to sustain their earnings growth through acquisitions," said Jessica Bemer, analyst with Snow Capital Management. Snow Capital identified the potential in hospital shares early on and has holdings in Community Health Systems Inc and Health Management Associates Inc. Since the start of the year, shares of the largest publicly traded hospital chain, HCA Holdings Inc, are up 34 percent, while No. 2 Community Health has climbed 71 percent. Tenet Healthcare Corp and Universal Health Services Inc each have risen 50 percent; and Health Management, fueled by takeover rumors, has leaped 79 percent. The Standard and Poor's 500 index, by comparison, is up 15 percent. For the top five hospital operators, analysts are projecting combined growth of 21 percent in adjusted earnings per share in 2014, according to Thomson Reuters I/B/E/S data. That would represent a price to earnings ratio for the group of 12.76, based on 2014 estimates and current share prices, compared with 14.5 for the S&P 500. Once investment underdogs, the stocks began to take off after the Supreme Court upheld most of Obama's health reform law last June, paving the way for millions of uninsured Americans to obtain coverage in 2014. The rally stumbled this spring when hospital companies reported surprisingly low admissions, and government estimates suggested that not everyone who is eligible will sign up for "Obamacare" on day one. Other investors have expressed concern about the many variables still to be worked out, including whether key Republican-led states like Texas and Florida will accept federal funding to expand their Medicaid programs for the poor, helping pay for the care that hospitals in those regions now deliver for nearly no compensation. "It will be rough, it will be rocky, and it will take time," said Tim Nelson, analyst with Nuveen Asset Management, which owns shares of Universal Health. Nelson believes other names in the sector are fully valued. ROLLING OUT REFORM The biggest benefit from health reform is expected to be an influx of patients whose treatment will be paid for either through expanded Medicaid programs or with private insurance obtained from state-based exchanges that will take effect on January 1. That should help drive down the percentage of revenue now being written off as bad debt for treating the uninsured, which can be up to 20 percent or greater for some hospital chains. "They definitely will be winners at least in the near term under healthcare reform," said Jeff Jonas, a portfolio manager for Gabelli Funds, which hold shares of HCA and Tenet. "We should see some pretty significant reductions in their bad debt in particular and maybe a little increase in volume." Jonas estimates HCA and Tenet stocks each could add another 10 percent this year. Another positive for companies in the sector has been the ability to refinance debt loads at significantly lower interest rates. "They've locked it in for years to come," said Jonas. Hospitals are also managing their own expenses better than in the past. Efforts to centralize supply sourcing are driving annual decreases in prices for medical devices such as heart stents and orthopedic implants. Bringing doctors on staff by acquiring physician practices has also helped to control costs. "It is going to be a multiyear period of benefiting from health reform," Jonas said. The drive for efficiency is accelerating consolidation across the industry, as hospitals partner with other facilities within geographic regions to form networks that can offer a wider range of specialties or reduce duplication. Many uncertainties remain. Hospitals still don't know how they will be reimbursed under health plans sold on the state insurance exchanges. The extent to which employers drop commercial coverage for their workers and direct them to the exchanges is another major variable. And states are progressing at different rates in setting up their exchanges. The federal government hopes to get 7 million Americans to sign up for health plans on the exchanges in their first year, and 24 million by 2016, aided by subsidies to purchase coverage. Enrollment begins October 1 for plans that take effect in January. Perhaps the biggest wildcard for hospitals is the expansion of Medicaid, which is being determined state by state and will affect companies differently based on where their facilities are located. HCA's stock performance, for example, has lagged its peers, Nelson said, because of its concentration of hospitals in Florida, where the state legislature has blocked Republican Governor Rick Scott's support for Medicaid expansion. Nelson said there was a real opportunity to reduce the amount spent on treating uninsured people for free, but he added: "How real it is and how big just depends upon the geographic footprint." If high-deductible health plans, which have become increasingly popular with small employers, predominate on the insurance exchanges, hospitals may not see as great a reduction in bad debt expense as hoped, because they will still need to collect the uncovered portion of a patient's bill, he said. Weak demand for healthcare services dragged on hospitals' earnings in the first quarter, exacerbated by the still-high jobless rate and the rising number of patients with high-deductible health plans who are staying away from the doctor. Some do not see that picture improving soon. "The economy isn't picking up fast enough. I think the hospitals are in a holding pattern at least through the summer and possibly into fall, until we get clarification on Obamacare," said Les Funtleyder, healthcare strategist at investment firm Polliwog, which does not own hospital stocks. "Over time, if the economy improves and we get visibility on Obamacare, the valuations still have a little bit of room on the upside," he said. "I wouldn't short them." (Reporting by Susan Kelly in Chicago; Editing by Michele Gershberg and Claudia Parsons)

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hide Long-suffering Bankia shareholders set for more losses Thursday, December 27, 2012 11:07 a.m. CST People are reflected on the windows of the headquarters of Spain's Bankia bank in Madrid November 28, 2012. REUTERS/Andrea Comas By Julien Toyer and Sonya Dowsett MADRID (Reuters) - Spain's Bankia will wipe out the investments of 350,000 shareholders, many of them small savers and pensioners, after it emerged that losses on bad loans at the troubled bank were even worse than expected. The measure will hit small investors drawn in by aggressive marketing just last year after Bankia was formed from a merger of provincial savings banks. But it is described by officials as vital if the company, which was nationalized in May, is to return to profit in order to be sold on again. Bankia will receive 18 billion euros of European Union money by Friday and launch a capital increase in the first half of January when current shareholders will lose practically their entire investment, a source close to the Bank of Spain said. "Are we looking into leaving shareholders with something? Yes. How much? That's too soon to say. Will it be very little? For sure," the central bank source said on condition of anonymity. "But that will be purely symbolic. I can assure you they will lose up to the shirt on their back." Under the EU plan to prop up Spain's banking sector, devastated by a burst real estate bubble, shareholders must be the first in line to accept losses. That was the case in Ireland, another victim of the global credit crisis, where shareholders in Anglo Irish Bank were left with nothing. Bankia had negative equity - or an excess of debt over assets - of 4.2 billion euros, Spain's bank rescue fund, known as FROB, said on Wednesday. That measure will be used to help determine shareholder losses. Bankia's parent company BFA had negative equity of 10.4 billion euros. How much shareholders will lose will be unveiled when the capital increase takes place in January following discussions with EU authorities, the source said. "A TOTAL COCK-UP" Hundreds of thousands of Spaniards, some of them retirees with little awareness of financial affairs, ploughed savings into Bankia shares when the bank was listed in July 2011. The stock has lost more than 80 percent of its value since then. Small savers also bought billions of euros of other Bankia instruments, such as preference shares or subordinated debt, on which they will also suffer steep losses. "It seems to be to have been managed extraordinarily badly. It is a total cock-up," said Enrique Marquez, 66, a retired technician who invested 7,000 euros in ordinary shares and more than 70,000 euros in preference shares with Bankia. "I've been duped on the preference shares and I've been duped on the ordinary shares. It's been an abuse of trust," added Marquez, who said he had been told by his bank manager the stock could be very profitable in the medium term. Many of Bankia's more than 20,000 employees also invested in the shares in the 2011 initial public offering and are set to lose their money even as thousands face job cuts enforced as a condition of receiving European aid. Speaking of his fellow staff at Bankia, one employee at a branch in northern Spain said: "I don't know anyone who didn't buy the shares. I did and my family heavily invested in them too." He spoke anonymously and said he now feared for his job. About 6,000 workers will be axed in Bankia's restructuring while remaining employees are being asked to take a 40- to 50-percent pay cut, trade unions said. Shares in Bankia fell a further 16 percent to 0.58 euros on Thursday after the FROB disclosure of its negative equity. Bankia will be taken out of Spain's blue-chip index, the Ibex 35 <.IBEX>, as of January 2, the stock exchange said on Thursday. SLIMMED DOWN, SOLD OFF Bankia must reduce its balance sheet by 60 percent over the next five years as a condition of receiving aid. Bankers say the lender could be put up for sale after it is slimmed down and stripped of its toxic property assets, which will be siphoned off into a special vehicle, or 'bad bank'. However, the lender, which accounts for around 10 percent of Spain's banking market, is probably too big to be swallowed by a larger rival, as other state-rescued lenders have been: "The large Spanish banks would struggle to take on something of that size," one Madrid-based investment banker said. Bankia is unlikely to be sold until around 2017, bankers said. Around 10 percent of a stabilized market, flush with rescue cash and stripped of toxic real estate assets, may be an attractive investment proposition for a foreign bank, they said. Another possibility for the government to extricate itself from Bankia would be a public share offering, bankers said, although they admitted Spain would have to wait so any sales operation wouldn't come too soon after the ill-fated 2011 IPO. Separately, the FROB also announced it would take over 99.9 percent of Banco de Valencia before it is sold to CaixaBank , while shareholders in other nationalized lenders NCG Banco and Catalunya Banc will be fully wiped out. In the case of Anglo Irish Bank (AIB), shareholders whose equity was once worth 13 billion euros were left with nothing following the bank's 4-billion-euro recapitalization and immediate nationalization in January 2009. AIB ultimately needed another 25.3 billion euros of state money, which was funded by a "promissory note", or government IOU, that Ireland is now trying to restructure. Spain's four nationalized lenders will receive a total of 37 billion euros of EU funds. It will also tap another 4.4 billion euros to set up the 'bad bank' and recapitalize smaller banks. ($1 = 0.7563 euros) (Additional reporting by Laura Noonan in Dublin and Sarah White in London; Editing by Giles Elgood and Alastair Macdonald)

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Top SAC Capital Manager Guilty Of Insider Trading Share Tweet E-mail Comments Print By Scott Neuman Originally published on Wed December 18, 2013 7:42 pm Michael Steinberg (left) departs federal court in Manhattan on Wednesday after being found guilty on charges that he traded on insider information. Lucas Jackson Michael Steinberg, a top portfolio manager at SAC Capital Advisors, has been found guilty of insider trading — the latest conviction stemming from a years-long federal investigation into the hedge fund's activities. Steinberg was found guilty on five counts of conspiracy and securities fraud. Reuters writes: "Prosecutors said he traded on confidential information that was passed to him by an employee, who later admitted to swapping illegal tips with friends at other firms." The New York Times' DealBook says Steinberg is "the highest-ranking employee of SAC Capital Advisors to become ensnared" in the crackdown. Last month, we reported that the Stamford, Conn.-based hedge fund owned by Steven A. Cohen pleaded guilty to wire and securities fraud related to insider trading and agreed to pay at least $1.2 billion in fines. DealBook reports: "While an acquittal might have had a chilling effect on the investigation, Mr. Steinberg's conviction instead raised the likelihood that Mr. Cohen, after avoiding criminal charges for years, would face another round of scrutiny. "Agents with the F.B.I. are continuing to investigate allegations that some employees of SAC used inside to information to make trades in shares and options of Weight Watchers, Intermune and Gymboree, according to a person briefed on the matter. "The verdict came as something of a surprise, after Mr. Steinberg's legal team poked holes in testimony from the government's star witness, another former trader at SAC. Prosecutors also privately conceded that the case had flaws, as they relied on circumstantial evidence like emails and trading logs rather than the sort of incriminating wiretaps that underpinned past insider trading trials." Copyright 2013 NPR. To see more, visit http://www.npr.org/. View the discussion thread.

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Mutual funds attract record amount of cash in 1Q MARK JEWELL AP Personal Finance Writer BOSTON (AP) -- The stock market hit a record high during the first quarter, and so did the flow of cash into mutual funds.Stock funds and bond funds attracted a combined $193 billion in the first three months of 2012, industry consultant Strategic Insight said on Wednesday. That tops the previous record of $140 billion in net deposits during the first quarter of 2007.It also was a record when factoring in exchange-traded funds, which hold less cash than mutual funds but are growing at a faster pace. Net deposits into conventional mutual funds and ETFs totaled $246 billion. The previous record of $173 billion was set in last year's first quarter.This year's figures suggest that investors are getting comfortable with stocks again following the financial meltdown and market plunge of 2008-2009.Withdrawals from U.S. stock mutual funds exceeded deposits for the past six years in a row, while bond funds attracted more than $1.3 trillion in net deposits. This year investors have added $48 billion to U.S. stock mutual funds and $60 billion to funds investing in foreign stocks.Deposits into stocks helped push the Dow Jones industrial average toward a record reached on March 5, and the market has since pushed higher. A broader index, the Standard & Poor's 500, has risen 11 percent this year and also is at a record high. Investors have been encouraged by strong earnings reports, improvement in the economy and housing market, and by the Jan. 1 agreement between Congress and the White House to avert the worst effects of the fiscal cliff.Avi Nachmany, Strategic Insight's research director, said two trends appear to be playing out. Investors are becoming less risk-averse and adding cash to stocks. And cash is being shifted from low-risk investments like money-market mutual funds to relatively conservative income-generating investments like bonds and dividend-paying stocks."As investors move from the sideline, we observe two great rotations in parallel, and both should persist," Nachmany said.Here are more details about how investors moved their money in March, according to Strategic Insight:U.S. STOCK FUNDS: A net $13 billion was added to these funds, compared with $9 billion in February and $26 billion in January. It's a big shift from 2012, when withdrawals exceeded deposits over the final 10 months of the year.FOREIGN STOCK FUNDS: Investors this year have been adding more cash to funds investing in foreign stocks than they have to U.S. stock funds, and the trend extended into March. A net $15 billion was deposited into funds primarily investing in international stocks, down from $22 billion in February.BOND FUNDS: The huge cash haul of recent years into bond funds shows no sign of ending. Net deposits totaled $20 billion in March, compared with $23 billion in February and $42 billion in January. Bonds typically generate smaller long-term returns than stocks but with less chance of short-term losses. Even with currently low yields, bonds are expected to continue to attract retiring baby boomers and others who want reliable income.EXCHANGE-TRADED FUNDS: Investors in March deposited a net $15 billion into ETFs, which bundle together investments in a particular market index. That's up from $8 billion in February. A net $12 billion was deposited last month into ETFs investing in U.S. stocks, while a net $2 billion was withdrawn from foreign stock ETFs. About $4.9 billion was added to ETFs investing in bonds.Unlike mutual funds, ETFs can be traded during daily sessions just like stocks. They have attracted more than $100 billion in new cash for the past six years in a row, growing at a far more rapid pace than mutual funds. However, assets in mutual funds are still about seven times larger than the total in ETFs.

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From the March-10, 2010 issue of Credit Union Times Magazine • Subscribe! Calif. CU First New Fiserv Core By March 10, 2010 • Reprints Christian Community Credit Union in San Dimas, Calif., has become the first U.S. credit union to commit to the Acumen core processing platform from Fiserv Inc. The Acumen solution was introduced to the U.S. market last fall after it was developed in Canada under the iSpectrum name. The solution was built for large credit unions and provides scalability, real-time processing, global capabilities and 360-degree member views. Christian Community CU has been a Fiserv client since 1985 and chose Acumen platform because of its flexible architecture and ability to support commercial accounts. "Our industry is quickly evolving and an open system will allow us to keep pace with changing consumer and business demands now, and five years from now," said John Walling, president/CEO for $520 million Christian Community CU. Commercial lending accounts for more than 60% of the 30,000-member credit union's portfolio and it is committed to helping to fund and provide financial services to an international network of Protestant churches, missions and outreach ministries.

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Bacino: 'Regulators Hate' FHLBs’ Super Lien Position February 06, 2013 • Reprints When it comes to the NCUA adding Federal Home Loan Banks to its final emergency liquidity rule, credit union lobbyist and consultant Geoff Bacino said the banks’ so-called “super lien” is a disadvantage. Bacino, who has served on the boards of both the NCUA and the Federal Housing Finance Agency – the FHFA regulates the FHLBs – said “regulators hate” the FHLBs’ superior lien position on collateral pledged against borrowings. “When an institution fails, the home loan banks are first in line,” he said. The FHLB’s position is superior to the insurer and insured depositors. Bacino said the position even earned him a call from Sheila Bair in 2008, who was FDIC chairman at the time. The former NCUA Board member, who was appointed during a congressional recess in late December, 2000, said he can see both sides of the issue. He said he understands why the credit union regulator has previously said it does not consider the Federal Home Loan Banks to be an appropriate emergency liquidity provider, and can also appreciate the banks’ position that they are. “I could make some arguments that they are. For example, when the housing crisis started in 2007, the Federal Home Loan Bank system carried the brunt of (the liquidity shortage),” he said. “But, the Fed is set up to be the lender of last resort and Federal Home Loan Banks aren’t.” Show Comments

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Understanding Life Expectancy Fairmark.com Tax planning and compliance for investors Free Online Guides General Taxation Your Tax Bracket Tax Rules for Gifts Roth Retirement Accounts Taxation of Investments Compensation in Stock and Options Kids/College Taxation of Minors UGMA/UTMA Accounts Coverdell Accounts OtherResources Fairmark Forum AboutFairmark.com About our author Social Security Understanding Life Expectancy By Kaye A. Thomas Your life expectancy changes as you grow older. Knowing your life expectancy can help you make informed decisions about retirement in general, and social security benefits in particular. Many people underestimate their life expectancy because they don't realize it changes as they grow older. Basic Life Expectancy We sometimes hear statistics about what might be called basic life expectancy. This is simply the average age at which people die. Find the ages of all the people who died in a relevant period, add them together and divide by the number of people, and you have life expectancy. The actual process is more complex, but that is the basic idea. Life Expectancy at a Later Age Your life expectancy changes as you grow older because the formula leaves out the people who died at ages younger than your current age. For example, if we're trying to determine your life expectancy at a time when you're 50 years old, we don't average in the numbers for people who died before reaching age 50. At this point we're asking what is the average number of years people live beyond age 50, once they've reached that age. That's a higher number than the average for all people, because we're eliminating people who died when they were younger. Here are some numbers from this table on the web site of the Social Security Administration: You can see that a male at birth is expected to live to an average age of 74, but having reached age 50 he is expected (on average) to make it to age 77.6. Gaining Ground At age 50 you haven't gained much ground in the life expectancy sweepstakes. The average date of death for people who reach that age isn't much later than for all people in general, because it's a small minority of people who die before that age. As you move into later years, you gain ground more rapidly, because you're surviving past years when a larger number of people died. At age 65, a male is expected to survive almost 16 more years, to about age 81, and a female almost 19 more years, to about age 84. Some people are surprised by these numbers. All their lives they heard about life expectancies somewhere in the 70's, so at age 65 they figure the odds of living another decade aren't very good. In reality, at age 65 the average male can expect to survive past his 80th birthday, and the average female even longer. It can be a big mistake to plan your retirement around the idea that you're going to die in your 70's. You Aren't Average You aren't the average person, of course, and you can't count on living as long as the tables say, no matter what your current age. The tables are based on the broad population, including smokers and non-smokers, marathoners and couch potatoes, and people with all sorts of good and bad indications for longevity. You may get a more realistic picture if you adjust what you read in the tables based on knowledge of your own factors. Playing the Odds In any event, you have to allow for good or bad luck. Some people plan to run out of money when they die, but forget to die on schedule. Make sure your needs will be covered even if you live longer than you might expect based on the life expectancy tables and your own health factors. You don't know how long you're going to live, of course, but it may help to know the average life expectancy of people your age. You can find that in this table on the web site of the Social Security Administration. The numbers there tell us that the average person does better by waiting until full retirement age. For example, a 63-year-old male has a life expectancy of 17.25 years. If a man with a full retirement age of 66 begins his benefit at age 63, he can expect (on average) to live 27 months (two and one-fourth years) past the break-even point, when the later benefit catches up with the earlier benefit. His twin (the one who waits until full retirement age to begin benefits) comes out better. For a woman, the difference is greater. Her life expectancy at age 63 is about 20.5 years, giving her 66 months (five and one-half years) after the break-even point. For the average person, the choice to start receiving retirement benefits early will ultimately mean receiving a smaller total lifetime benefit. If you have reason to believe your personal life expectancy is shorter than average, you may come out better by starting your benefit early, especially if you're a male. People with average or better life expectancy, especially females, should think twice about starting the benefit early. You may still want to make that choice for other reasons, such as having money to travel while you're young enough to enjoy it, but the long-term consequences of that decision won't be favorable if you live far beyond the break-even point. Guide to Social Security Retirement Benefits (top page of this guide) Guide to Roth Accounts (free online guide) Fairmark Forum (post questions and comments) That Thing Rich People Do The fastest, easiest way to learn the principles of investing. Go Roth! Our complete guide to Roth IRAs and Roth accounts in 401k and similar plans: choosing, creating, building and using these accounts. Consider Your Options A plain-language guide for people who receive stock options or other forms of equity compensation. Equity Compensation Strategies A text for financial advisors and other professionals who offer advice on how to handle equity compensation including stock options. Capital Gains, Minimal Taxes Tax rules and strategies for people who buy, own and sell stocks, mutual funds and stock options. A publication of Fairmark Press Inc. Copyright Kaye A. Thomas 1997 - 2013

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More Political Ire for Wal-Mart? Brian Gorman | Nowadays, when Wal-Mart (NYSE: WMT ) sneezes, the market catches a cold. Yesterday, the mega-retailer reported that same-store sales in November fell 0.1%; at market close, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq all posted steep declines. It's reasonable to assume that investors unloaded in part out of fears that consumer spending won't be very robust during the all-important holiday season. However, Wal-Mart's soft November may have stemmed more from problems the company was having with a core group of customers, rather than from broad consumer trends. What's more, the retailing giant's recent appeasement of these formerly upset shoppers could help sales in the coming weeks. In April, I wrote that the retailer had sparked the ire of Christian conservatives by selling DVD copies of BrokebackMountain, a movie that portrays a love affair between two men. April's spark recently turned into an inferno, according to a fried of mine who follows such things. Leading the recent charge against Wal-Mart was the American Family Association, a national Christian group that has opposed what it calls the "homosexual agenda" by, among other things, boycotting Ford (NYSE: F ) and Disney (NYSE: DIS ) for gay-friendly policies. For most of November, the AFA urged its 3 million supporters to boycott Wal-Mart on the Friday and Saturday after Thanksgiving because the company was contributing to gay and lesbian rights groups. The AFA called off the boycott late on the Tuesday before Thanksgiving after Wal-Mart released a statement indicating it would avoid contributing to groups involved in "highly controversial" issues. However, given that the AFA's cancellation came so close to the holiday, lots of people may have missed the message and eschewed their local Wal-Marts. Wal-Mart has long taken heat from those on the left side of the political spectrum. But with this recent turn of events, the company appears to have become an equal-opportunity cultural target. While the AFA boycott certainly can't account for all of Wal-Mart's November softness, it could have had an effect, especially as a variety of other Christian groups key off the AFA's messages. However, now that Wal-Mart is back in the AFA's good graces, December may be a much merrier month for the retailer. For more on Wal-Mart: Wal-Mart in Cultural Crossfire The Greening of Wal-Mart? Wal-Mart Expands Online and Overseas Wal-Mart is aMotley Fool Inside Valuerecommendation, and Disney is aMotley Fool Stock Advisorselection. Try out any of our investing newsletter services free for 30 days. Fool contributor Brian Gorman does not own shares in any the companies mentioned. DocumentId: 517632, ~/Articles/ArticleHandler.aspx, 4/19/2014 1:01:22 AM CAPS Rating: DIS

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Choose a Broker Motley Fool Pro New! Ready-Made Millionaire RSS Headlines SiteMap/More Topics Lessons From Japan? At the end of this month, Japanese banks for the first time will have to report their stock holdings at market value, rather than purchase value. Trouble is, many of these securities have been worthless for years, and so the banks are currently selling them as quickly as possible now that there is no benefit to holding them. Japan's stock market recently bounced off a 16-year low, and with the U.S. economy stalling and the Nasdaq falling the two are commonly compared. Bill Mann reports that the differences are enormous. Reuse/Reprint Greenspan's Japan Problem Japanese Banks Start to Pull the Plug Chipping Away in Japan Fool on the Hill Japan (Nikkei 225) Bill Mann (TMF Otter) We Fools enjoy harping on one of the tried and true statistics about investing: that the U.S. market, represented by the S&P 500, has returned, on average, about 11% per year over the last half century. The fact that investing in equities has provided the best long-term generator of wealth for our future has become axiomatic. In the last year, for the first time in our history, the number of American households invested in common stocks surpassed 50%. Unfortunately, this landmark coincided with one of the worst drops in stock market history -- though this is likely no coincidence). The recent swoon, however, has done little to cloud the big picture: The U.S. stock market offers the opportunity for superior long-term gains. To this, the average Japanese investor says: "Are you mental?" Earlier this month, Japan's Nikkei 225 index, its equivalent of the S&P 500, hit 11,819 -- its lowest level in more than 16 years. (The Nikkei remains more than 65% below its all time high, recorded in the first week of 1990.) Imagine this for a second: The stock market in Japan is at the same level that is was when Ronald Reagan was president. Americans are crying in pain due to a falling stock market that has now lasted slightly longer than one year. Expand this out to 16 years, with no sign of recovery. Clearly, the United States markets are going through some turmoil right now, but consider recent history in Japan: Not only are investors there losing money, but the length of the downdraft means they've lost a significant amount of opportunity cost as their money has essentially done nothing for more than a decade and a half. Take your investing assumptions and extrapolate out to 2017 -- then imagine that when that day rolls around, you've got the same amount of money as you do today. Fortunately, the majority of Japanese citizens ran long ago from their stock market like scalded dogs. Unfortunately, they have instead chosen to hoard their money in savings accounts offering interest rates that are effectively zero. In other words, the average Japanese has abandoned the concept of compounding to assist him in saving for retirement, choosing instead to put his current earnings in what amounts to a piggy bank. The Japanese government has sought to compensate for the lack of individual and corporate investment by instituting huge federal spending projects, all the while lacking the political will to institute needed reforms to "fix" the commercial and banking sectors. For a decade Japanese banks have teetered on the verge of insolvency, the government has taken on a boatload of debt, and individuals are still resistant to spending or investing. Why should they put their money into something that has been such a resounding destructor of wealth? We often discuss the idea that stock prices will eventually track the performance of their underlying companies. If true, this must mean Japan's companies are, for lack of a more delicate term, big freaking disasters. As it turns out, they are: According to noted economist Martin Wolf, in 1998 the accounting book value for public Japanese companies was 6.5 times higher than their aggregate market values. To translate, the market treats companies in Japan as if they are mass destructors of capital, not creators. The insularity and limited disclosure requirements upon Japanese companies, meanwhile, shield them from any real accountability to shareholders. Essentially, the lack of disclosure or shareholder protection in Japan -- while allowing the scions of industry to maintain face -- has dissuaded much investment in Japanese markets from foreign or domestic sources. The yen stops hereJapan's banks have been selling off their stock market assets in advance of the end of the fiscal year, at which time -- for the first time -- their equity holdings will be carried at their market value. This will pull just one of the myriad veils away from Japanese corporate accounting: Investors will see the devastating losses in principal these banks have endured and how many walking-dead companies' stocks the banks have relied upon in order to make their balance sheets seem less like a train wreck. At least one big company, Toyota Motor (NYSE: TM) is using this opportunity to buy back more than $2 billion of its stock from banks, a good move for its shareholders. Different as night and dayAlthough pundits like equating the danger to the U.S. economy caused by the pop in the Nasdaq to the pop of the Japanese bubble and its effects on Japan, the reality is that these events are as different as night and day. (For another look at how the U.S. might see Japan's problems, please re-read Tom Jacobs' column of last week.) Where Japanese investors have been convinced by past corporate performance and a deflationary environment that they are better off hoarding their money in interest-free vehicles, the U.S. has too little savings among individuals and over-borrowing by companies that now must service these debts. Japan's companies must do something to increase investor confidence in their ability to create capital above the rate of inflation (of which there is none). In the U.S., on the other hand, we're feeling the effects of over-dependence on the stock market to provide us with sufficient gains, forsaking our need to save. NEC (Nasdaq: NIPNY) has long reported its earnings using U.S. accounting conventions in order to attract investors from outside Japan. Other Japanese companies would be well-served to follow NEC's lead, for while Japanese law allows companies to operate without much accountability to shareholders, it is accountability that attracts foreign investment to the U.S. and European markets. In the U.S. market, it is estimated that more than $1 trillion, or 10%, of the risk capital comes from overseas sources, compared with a minuscule percentage in Japan. Lack of accountability has allowed Japanese companies to continue to invest their retained earnings -- which represent only 7% of the operating surplus in Japan, as opposed to 33% for U.S. companies -- into low-return investments rather than paying it back to shareholders in the form of a dividend. This is a problem that today exists only for the worst of American companies, many of which have developed the debt problems of their Japanese counterparts yet have continued to provide returns on retained capital. In fact, the mere danger of this last point, particularly with the capital-intensive telecom industry, is what has caused a fair portion of the current swoon in U.S. equities in the first place. Fortunately, U.S. central bankers and corporate executives have both the tools and the motivation to respond quickly to this risk. Those companies that destroy capital will be cut off by both the equity and the debt markets and will be replaced. Japan's longtime habit of propping up these companies has gotten it into the crisis it has before it now, but it is simply -- and unfortunately -- too late to let them fail en masse. While there is nothing actually preventing the U.S. from falling into a long, Japan-style recession, our capital markets' tendency toward allowing companies to sink or swim on their own merits, while unforgiving, helps us avoid the greater evil of having to throw good money after bad to prop up companies that need nothing more than to be allowed to die. Fiat Fool! Bill Mann, TMFOtter on the Fool Discussion boards Bill Mann guarantees that his articles will shave two to three strokes off of your game. At the time of publication, Bill owned none of the companies mentioned in this article, though he does own a sweet Elvis bust, which may or may not have been made by NEC. To view his holdings, please visit his profile. Home � 1995 - USEQ\WEB24 31ms

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Citigroup exit: Was it Pandit vs. the board? Former Citigroup Chief Executive Officer Vikram Pandit. File. / JIM WATSON AFP/Getty Images by Adam Shell, USA TODAYby Adam Shell, USA TODAY Filed Under NEW YORK �?? One of the main theories on why Citigroup CEO Vikram Pandit stepped down is a dust-up with board chairman Michael O'Neill, according to Wall Street banking analysts. "The board chairman at Citi is a no-nonsense guy," says Anthony Polini, analyst at Raymond James. "This is all about Pandit and about the Citi board wanting a change at the top." "Recall, in April Michael O'Neill replaced Richard Parsons as chairman of the board," says Jason Goldberg, analyst at Barclays. "This could have facilitated this move. We believe the company held a board meeting yesterday." O'Neill joined Citi's board in 2009 and became chairman in April. "Once O'Neill took over the chairman's role earlier this year, that is when things started to change," Polini says. O'Neill, 65, is the retired chairman of Bank of Hawaii. He was a lieutenant in the Marine Corps from 1969-71, and vice chairman and chief financial officer at Bank of America from 1995-99. While Citi had just posted a strong profit report Monday and is in good shape three years after the financial crisis nearly destroyed it, analysts suspect the board chairman was intent on replacing Pandit. Pandit was viewed as a big-picture manager, while incoming-CEO Michael Corbat is seen as a leader who is operationally focused and, therefore, a better fit to increase the bank's profitability and inject more consistency into its quarterly profit results. Corbat also has less baggage with regulators, which is critical as the bank gears up for the next round of stress tests in the spring. Back in March, because of its financial position, the Federal Reserve rejected Citi's request to start paying dividends again, which was a setback for Pandit. "While the timing is odd, it shows the forecefulness and determination of Citi's board," says Polini. "It would have been better for Pandit to announce at yesterday's earnings call with analysts to say, the good news is the quarter is strong, the bad news is I am stepping down at the end of the year." But it didn't play out that way. In the bank's statement Tuesday, Pandit said "Citi has emerged from the financial crisis as a strong institution, (and) is well-positioned for continued profitability and growth, having refocused the franchise on the basics of banking." Pandit also lost the backing of investors earlier this year when they rejected his board-approved $14 million-plus compensation package in a non-binding vote. That controversy resulted in Pandit losing the allegiance of shareholders, which was a negative. Some analysts say squabbles over his pay also might have also been a factor in his stepping down. Going forward, Wall Street wants to see Citi get back on a path to higher returns and higher return on equity. And they are looking for Corbat, who was Citi's CEO of Europe, Middle East, and Africa, to drive profitability, not just growth. Copyright 2014 USATODAY.comRead the original story: Citigroup exit: Was it Pandit vs. the board? Analysts believe conflict between Pandit and board chairman Michael O'Neill could have caused Pandit's exit. A link to this page will be included in your message.

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Tips To Help You Avoid Being Audited By Thursday Bram Filed Under: Accounting, Personal Tax The number of audits by the IRS has been edging upwards. According to the Daily, since 2009, the number of annual audits has increased by 12%. With tax revenues down since the credit crisis, the IRS has become more aggressive about seeking out potential problems. The Audit ProcessThe IRS chooses tax returns to examine in-depth in a variety of ways, including certain tax practices that raise red flags, computer scoring (where computer analysis indicates that the tax return seems incorrect), or if a business partner or investor has also been chosen for auditing. The process is a review of all the documents related to your tax return, such as receipts and invoices. Because mismatched tax documents (like your tax return not matching what your employer reported on their taxes) can trigger an audit, it is important to go over the original documents. The IRS will notify you of specific documents that you need to present. You can choose whether to represent yourself or have a tax professional accompany you. Depending on the situation, you may be able to complete the audit process via mail or you may need to complete an in-person interview with an IRS agent. You have the right to appeal any decision reached by the auditor.What You Need to Survive an AuditIn order to survive an audit, or even come out with a refund, it's important to keep accurate records now, rather than trying to sort through boxes of old documents down the road. At a minimum, you need records to be able to prove the deductions you claim on your tax return, as well as records of your income. Keep three years' worth of records and organize them as you go. In the event that your tax return is audited, it's usually a good idea to bring in a professional, such as a CPA or a tax attorney. Professionals familiar with the audit process can help you move through it quickly. It's also important to make sure that you address the issues behind the audit and nothing more. Provide only the records the agent conducting the audit requests and don't volunteer information. While it's important to be helpful, volunteering unrelated information or records can sometimes result in new investigations, beyond the original scope of an audit.How to Avoid Being AuditedBefore you worry too much about an audit, take a look at your gross income. In 2010, almost one-third of taxpayers bringing more than $10 million per year were audited, but less than 1% of taxpayers earning below $100,000 were audited. There is still an increased chance of audits in general, but the chances of an audit are still low overall. In total, 1,724,728 tax returns were audited in 2011, out of 184,596,616 tax returns filed.The Bottom LineYou can also reduce your chance of being audited with a few simple steps. Most importantly, review your tax return for any errors: math errors routinely force the IRS to do an audit. Regardless of whether you use a tax preparer, double check the math and other details (like whether you've signed your tax return), before sending it off. There are also certain deductions that can catch the IRS' attention, particularly because there are more opportunities for abuse or errors. The two deductions that are particularly likely to catch an auditor's eye are those for donations and home offices. By making sure that there are no potential problems with those two deductions on your return, you'll decrease your chances of being audited. by Thursday Bram Thursday Bram has covered personal finance and small business topics for a number of publications. She became interested in these because she needed to pay off her student loans. For more information on Thursday visit her personal site thursdaybram.com. More From Thursday Bram.. 6 Tax Deductions That Might Get You Audited Best Social Media Tools For Your Small Business How To Revitalize Your Small Business Please enable JavaScript to view the comments powered by Disqus. I Didn’t File Taxes, Now What? How Powerful Is The IRS? Need To Enroll In Obamacare? File Your Taxes What To Do When You Can’t Pay Your Taxes How To File A Tax Extension Trading Center

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OECD Home › Economics Department › Economic surveys and country surveillance › Regional Economic Integration and Globalisation Economic surveys and country surveillance Economic surveys and country surveillanceEconomic outlook, analysis and forecastsMonetary and financial issuesPublic finance and fiscal policyRegulatory reform and competition policyLabour markets, human capital and inequalityProductivity and long term growthEconomic policies to foster green growth Regional Economic Integration and Globalisation Regional Economic Conference on Euro-Zone Challenges and Opportunities Speech by Angel Gurria, OECD Secretary-General Bratislava, Slovakia, 4 April 2007 I am pleased to participate in this conference, which is examining the challenges and benefits of Slovakia’s adoption of the Euro in January 2009. When the Slovak Republic became a member of the OECD in 2000, it joined some of the world’s most industrialised nations, demonstrating its attachment to basic values shared by all OECD members. It adopted OECD’s instruments, practices and policies, which have served as a powerful tool for progress. Like accession to the OECD, joining the EU three and a half years later represented another important step towards further integration into the global economy. In both cases, accession spurred Slovakia to adopt policies that have permitted it to become more open and more competitive. In the past few years, Slovakia has provided us with a remarkable example of a country that has not only acknowledged the need for major reform but which has moved quickly and decisively to actually implement it. The upcoming adoption of the Euro represents the next stage in Slovakia’s integration into the European Union and the global economy. This integration is proceeding apace. The Slovak Republic has become an attractive location for Foreign Direct Investment not only from other European Union countries, but also worldwide. Annual foreign direct investment inflows, which amounted to only a few hundred million 10 years ago, reached two billion dollars in 2005. Investors from outside the EU can enjoy a favourable regulatory and tax environment together with access to the world’s largest internal market: the EU. The openness of the Slovak economy is demonstrated by remarkable growth in import penetration – that is, the proportion of imports of goods and services as a percentage of total final expenditure. Import penetration grew from 34.7% in 1995 to 48.5% in 2005, or twice as much as for the OECD as a whole. Slovakia has promoted policies and institutions that strengthen its capacity for sustained economic growth and improved productivity. GDP per capita has risen to 51 per cent, in PPP terms, of the EU15 average in 2005, from 44 per cent in 1998. This trend should continue, with steady convergence towards the EU average. The gains for the Slovak economy can also be seen in the increasing importance of exports in the country’s GDP, especially to Germany and the Czech Republic. Your success in building a modern automobile industry is a perfect example of economic integration at work. It demonstrates the contribution that regional integration can make towards improved competitiveness not only within the European economy but also as a building block for competitiveness in the global economy. Volkswagen, PSA Peugeot-Citroen and Kia all have major assembly plants here and automotive parts companies have followed, from Europe, North America and Asia. Their activities are fully integrated into the European economy. Moreover, you are benefiting from the growing interaction between the automotive industry and its universities and training centres, creating the opportunity to move up the value-added ladder. It is not surprising that the automotive industry has become a source of pride for Slovaks. And it is not just the automotive industry. There are other interesting foreign investment plans for the future. Slovakia’s plan to adopt the Euro at the start of 2009 can only add to its potential. Meeting the conditions for adoption of the Euro will further strengthen the fundamentals of the economy. Once the Euro is adopted, you will enjoy lower interest rates, access to the very deep and liquid euro credit markets, and exchange rate stability with your major trading partners in the euro zone. The removal of exchange rate constraints and transaction costs linked to the use of a separate currency will make Slovakia even more attractive as a business location. But capturing these benefits will depend on the development of a sound environment for business. It will depend as well on success in pursuing responsible fiscal policies and achieving a pro-competitive regulatory environment. And it will depend on sharing the benefits of growth in an equitable way. In joining the Euro area, Slovakia can learn from the experiences of countries like Spain, Portugal and Greece, well documented by the OECD. In Portugal, the lower interest rates that came with the euro led to a short-term economic boom. But because fiscal policies were not tight enough, imbalances began to build up, including a large external account deficit and high household and corporate debt. By the time the government intervened to tighten fiscal policy, private demand was already weakening. The result was a particularly sharp slowdown and protracted weak economic performance. Slovakia must be attentive to avoid a similar boom-and-bust cycle. Spain, too, enjoyed a mini-boom, but the government took early advantage of windfall gains from strong government revenue growth and lower interest payments on government debt to reduce the public deficit. Rapid fiscal consolidation may have dampened growth, but it helped to prevent a boom-bust cycle following the adoption of the euro. Continued prudent fiscal policies have helped Spain to keep economic growth at a relatively steady pace ever since. The principal lesson to be drawn from these experiences – and from that of Greece, which joined the euro zone in 2001 – is the need for fiscal policy to offset the boom in private demand that is likely to result from lower interest rates. In addition, with the adoption of the Euro, Slovakia will lose the shock-absorber capacity that it currently enjoys thanks to its own exchange rate and monetary policy. Your economy will have to become more flexible – in order to adjust quickly and positively to changes in circumstances, and at the lowest cost. Slovakia is clearly on the way to creating many of the conditions for success. Indeed, one can foresee that it one day could become a “Slavic tiger” ready to rival Ireland’s “Celtic tiger”. Before we get to that stage, however, there is much more to be done if Slovakia is to achieve its full potential. Employment opportunities, especially for older workers and young women, must be improved. More of the benefits of economic growth need to be shared with low-income earners. Greater competition in energy and telecommunications would bring clear benefits. More investment is needed in research and development. More can also be done to encourage entrepreneurship. For example, it still takes too long to establish a new business in Slovakia – 25 days, compared to 2 days in Australia, 3 days in Canada and 5 days in Denmark. Above all, improving the outcomes from the education system is critical, since what we refer to as human capital is an indispensable asset for competitiveness. The OECD has strong policy experience in all of these areas. As the date for euro membership draws closer, we look forward to working closely with Slovakia in continuing to improve the capacity of the country for further gains in competitiveness and productivity, learning from other OECD members’ experiences, both the successes and the failures. Tomorrow, we will publish the OECD’s latest Economic Survey of the Slovak Republic, which will highlight some of the necessary reforms that lie ahead. I will reserve further comment for tomorrow, but leave you with this thought: Slovakia is on the right track, and it is well-positioned to take advantage of the opportunities offered by globalisation. I am convinced that Slovakia can face the challenges I have just mentioned successfully, and take its place in the euro zone and in the global economy. Thank you. Countries list

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James Quinn Co-op's £2.5bn loss is just the start of the bad news A Evans-Pritchard Europe’s hawks, doves, and a lot of posturing on Russia Money surgery: Book Club Associates? Now I've got their number Why do so many companies persist in treating customer service departments as necessary evils - on a level with, say, stationery supplies or maintenance - rather than as a vital part of the business like, for example, sales and marketing? It beats me. Everyone knows that it's a thousand times easier (and cheaper) to retain a good reputation than to regain one, but it's amazing how many senior managers choose to forget this incontrovertible fact - until it's too late. Take Book Club Associates, a subsidiary of the major German company, Bertelsman, whose 20-plus book clubs include the Mystery and Thriller Club, Just Good Books, The Softback Preview, Fantasy and Science Fiction, the Military and Aviation Book Society and Escape Book Club. At the beginning of September, I wrote about the difficulties encountered by one unfortunate customer when trying to get BCA to release him from the unmerited attentions of a debt collector - and was promptly inundated by letters from other victims of this quite astonishingly incompetent company. All related remarkably similar tales of unwanted, or duplicated, deliveries, failed attempts to have unordered books collected and increasingly aggressive demands for money they did not owe. On the rare occasions when call centre staff on the risibly-titled "customer care line" managed to answer the phone, they appeared powerless to help. Responses to e-mails and letters, when they arrived at all, were computer-generated and irrelevant. The only service in full working order was the payments line, used all too frequently by people paying for books they didn't want and hadn't ordered rather than face more threats of court action and computer blacklists from BCA's army of debt collectors. "It is only fair to warn you that an unsatisfied court judgment will be recorded by the various credit reference bureaux," said one such letter to a customer who was disputing an initial demand for £14.01 (subsequently bumped up to £109.01 by various late payment and legal charges). "This will adversely affect your applications for credit. Suppose you can't get a mortgage, or buy a car, or furniture, TVs and clothing? DO NOT LET THIS HAPPEN." A spokesman for the Trading Standards Institute admits that BCA is well known to trading standards officers, but says nothing could be done as no laws appeared to have been broken. But John Bridgeman, the chairman of the Direct Marketing Authority, begs to differ. He reckons that complaints to the authority about BCA, which reached "unprecendented levels" in the first half of last year, contain fertile grounds for prosecution on a number of fronts - which, coming from a former boss of the Office of Fair Trading, doesn't do much for confidence in trading standards. However, Bridgeman concedes that measures introduced by George Saul, who joined as chief executive of BCA a year ago, finally appear to be stemming the flood of complaints. Saul himself blames two separate factors for the earlier communications meltdown - a new computer system installed in summer 2004 and (crucially) a decision to outsource customer complaints soon after - "thus wiping out several thousand years of accumulated experience among in-house staff", as he puts it. "It's hard to ramp up the business after [my predecessors] threw away all that experience, but we're getting there." Saul won't say how many customers have quit in disgust, ("lots" was the furthest he'd go), or how many have since returned (though some apparently have). Meanwhile, he's given me a special phone number for Sunday Telegraph readers to call with complaints. I'm sending it to all those who've written in, or who do so in the future. [email protected] Trading Standards Central Direct Marketing Authority In Finance Test: Are you an average spender? New statements to show how your tax money was spent Pay rises are making a comeback - here's how we make sure they stay Money printing, search for yield and the mirage of financial stability Telegraph E-mail » Sign up for our daily 8am business email

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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. Chairman Bernanke Tracks Risks Central bank’s policies have the potential to alter markets and erode confidence in the Fed, the chairman warns. By Milton Ezrati September 25, 2012 • Reprints Now that the Federal Reserve has launched its third, open-ended, quantitative easing (QE3), investors need to consider the risks. Certainly Fed Chairman Ben Bernanke has. He outlined them recently at the Kansas City Fed’s annual conclave in Jackson Hole, Wyo. There, in addition to providing considerable perspective on the extraordinary steps the Fed has taken since the 2008-2009 financial crisis, the chairman reviewed four critical risks involved in non-traditional policy tools and procedures. He probably could have added a fifth. Bernanke’s first concern has to do with liquidity. The massive size of the Fed’s quantitative easings, he said, leads him to worry that the markets in which the Fed operates could take on an administered character. That quality could drive out private trading and, with it, the price discovery and liquidity on which markets rely. Bernanke went so far as to say that the lack of a “free-trading” aspect in Treasuries and agencies, to use his words, could erode the lead these markets have offered in pricing and yield, making overall financial markets less efficient as well as weakening the overall effect of future Fed policy moves. A second concern involves confidence. The chairman worries that the expansion of the central bank’s balance sheet will raise doubts about its ability to adjust monetary policy, in particular its ability to exit from its present, highly accommodative stance. Even if that concern is unjustified, Bernanke emphasized, such a loss of confidence could drive up long-term inflation expectations and thwart the Fed’s otherwise carefully developed plans to “normalize monetary policy” at some future date. Sadly, he failed to review those plans. Stability was third on the chairman’s risk list. He worries that non-traditional policies, by driving down long-term yields on Treasuries, agencies, and mortgages, will induce investors to make an “imprudent reach for yield” that could in time produce losses and destabilize financial markets. Bernanke was quick to point out that the Fed saw no evidence of such a move as yet and would actually welcome more risk-taking by investors, at least within reasonable bounds. But he did recognize that the underlying risk exists. The chairman’s fourth and final concern dwelt on the potential for losses in the Fed’s now immense security holdings. Since the Fed turns all its profits over to the U.S. Treasury, any such losses would effectively add to the government’s budget deficit. Against this concern, Bernanke offered reassurance that the Fed’s purchases actually benefit taxpayers by reducing the federal government’s deficit and debt, presumably by holding down the cost of debt servicing. But he acknowledged that containing government debt is less important than the Fed’s efforts to stimulate the economy and so the country’s living standards. These four concerns revolve around what Chairman Bernanke referred to as the Fed’s “balance-sheet tools,” but the Fed’s new “communications tools” raise a fifth and potentially serious risk. A great potential for heightened volatility lies in policy makers’ new practice of expressing their longer-term expectations of where interest rates are headed. When the Fed makes an interest-rate forecast, it effectively invites all investors to position themselves in a consistent way. Though the Fed qualifies its expectations by explaining that they depend on unfolding economic and fina

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PART V. ADMINISTRATIVE, FINANCIAL, AND FACILITIES POLICIES CHAPTER 1: ACCOUNTS (Amended 12/96; 10/99; 7/02; 3/10; 5/12) 1.1 Treasurer's Office 1.2 Budget Allocations and Expenditures for Funds Receiving Support from State Appropriations 1.3 Other Accounts 1.4 Departmental Credits 1.1 TREASURER'S OFFICE. (Amended 7/02; 3/10; 5/12) The University Treasurer's Office has overall responsibility for administering and overseeing the banking, debt service, and investment programs for the University. The following is provided to communicate information on the services of the Treasurer's Office and the guidelines for using those services. a. Banking and Debt Services. The Treasurer's Office administers banking, cash management, and debt services for the University. This includes the establishment and maintenance of University bank accounts, contracting for new banking services including ATM and retail credit card processing, domestic and foreign wire transfers, foreign drafts/collection, stop payments, and ACH transactions. The Treasurer's Office also serves as the bond registrar and paying agent for the majority of the bonds issued by the University. b. Bank Accounts. Only the Senior Vice President for Finance and Operations and Treasurer, the Director of Financial Management and University Secretary, and the Director of Treasury Operations are authorized to establish and maintain University bank accounts. Requests for bank accounts or other banking services must be submitted to the Treasurer's Office for prior review and approval. c. Prohibition of Use of University's Name and Tax Identification Number. The University strictly prohibits the use of The University of Iowa's name or tax identification number by any person or organization in any bank account except as specifically authorized by the Senior Vice President for Finance and Operations and Treasurer or the Director of Treasury Operations. Banks are periodically surveyed to identify any accounts utilizing the University's name or identification number. These accounts are independently reviewed for proper authorization. d. Bequests. The Treasurer's Office records and invests all funds that are designated as endowment and payable directly to The University of Iowa. Both the General Counsel and the Treasurer's Office are responsible for the initial review of all bequests to determine whether any portion has been designated as an endowment under the terms of the will. Beneficiary documents, estate notices, or any communication indicating a possible beneficiary status of bequests and gifts to the University shall be forwarded directly to the Office of the General Counsel for official handling. Wherever justified, the funds will be transferred to The University of Iowa Foundation, the University's preferred channel for private gifts. e. Investments -- Operating, Endowment, and Quasi-Endowment Funds. Operating, endowment, and quasi-endowment funds are invested in compliance with the investment policy of the Board of Regents, State of Iowa. (See Regents Policy Manual 7.04.) Investments are independently reviewed and audited monthly and quarterly in accordance with Regent policy. Internal procedures and practices with regard to participant accounting, spendable earnings, and the charging of costs (i.e., investment management, banking and custody fees, and where applicable stewardship and donor-related services costs) are developed in consultation with the University's Investment Advisory Committee and the Treasurer's internal committee of administrative officers. f. Guidelines for Establishing and Maintaining an Endowment or Quasi-Endowment. (1) Endowments. Endowment funds are invested for the long-term benefit of University programs with the objective of generating a reasonable spending payout while maintaining the real value of funds over time. Restrictions as to principal are imposed by the donor. A review to verify compliance with donor restrictions will be performed annually. All endowments are invested in a long-term investment pool which includes equities and fixed income securities. Spending payout amounts are calculated and communicated annually. (2) Quasi-Endowments. Quasi-endowment funds are invested for the mid- and long-term benefit of University programs using investment philosophy similar to the endowment. However, in the case of quasi-endowments, current investment income and capital gains may be spent and the inflation-adjusted value of the principal need not be maintained over time. Restrictions as to principal are determined by the University. Based on the intended use of funds, quasi-endowments are invested in either or both the long-term investment pool and the intermediate investment pool. Quasi-endowment funds may be withdrawn once per fiscal year at the end of the third fiscal quarter (March 31). Written notice of the intention to withdraw funds must be received in the Treasurer's Office by March 1. Written requests to withdraw quasi-endowment funds must be signed by an authorized departmental representative. Under unusual circumstances the Treasurer may permit withdrawal at other times. (3) Authorization. Endowment or quasi-endowment accounts may be established only when authorized by the University Treasurer's Office and University Controller. Additional contributions to established endowment or quasi-endowments accounts, other than investment earnings, also must be authorized by the University's Treasurer's Office and University Controller. Endowment determinations will be made based upon an interpretation of donor or other restrictions that apply, while quasi-endowment determinations will be based upon the proposed long-term uses and intentions of the department. Any request for the establishment of a quasi-endowment must be accompanied by a specific programmatic plan for those funds and should contemplate commitment of the corpus for a minimum of three years. (4) Investment Earnings. Endowment or quasi-endowment funds deposited with the University will be transferred to a fund manager for investment at the next endowment valuation date -- usually at the end of the calendar quarter following receipt of the funds. Investment pool earnings will begin accruing to the recipient department at that time. Balances in individual endowment or quasi-endowment income accounts will become part of the University pool investments; earnings on these balances will not accrue to either the fund principal or the associated income account, except where authorized by the Treasurer. (5) Spendable Income. An amount determined by The University of Iowa's endowment spending rules will be transferred from the endowment or quasi-endowment fund to the associated income account on a quarterly basis. Periodically, in consultation with the Regents' investment advisor, the University evaluates guidelines for income distribution. Internal procedures are developed by Treasury Operations and approved by the Senior Vice President for Finance and Operations and Treasurer. For internal procedures and additional information, contact Treasury Operations or refer to the following Web address: www.uiowa.edu/~fustreas. [top] 1.2 BUDGET ALLOCATIONS AND EXPENDITURES FOR FUNDS RECEIVING SUPPORT FROM STATE APPROPRIATIONS. a. Salary and Supplies and Services Accounts. Separate salary and supplies and services accounts are maintained for each department. Allocations to these accounts are available for the fiscal year beginning July 1 each year and are based on annual budgets approved by the Board of Regents, State of Iowa, and supplemental allocations recommended through regular administrative channels and approved by the President of the University. Supplemental allocation requests are made on the Request for Transfer or Allocation of Funds form. Charges to salary accounts are based on payrolls in accordance with approved appointments. The University portion of retirement and group insurance premiums and taxes are charged to salary accounts by the University Business Office in accordance with the base salaries on which they are applied. Charges to supplies and services accounts include all charges except those charged to salary and equipment accounts, and are based on requisitions and vouchers approved by departmental executive officers (and other administrative officers as required) and on University-wide contracts for services (such as telephone service and equipment maintenance service). Expenditures and commitments must be limited to the allocations provided. Requisitions for items to be charged to the current year's budgets must be filed in the Purchasing Department not later than June 10 each year. Free balances in supplies and services accounts are not carried forward to the following year but are lapsed as of June 30 each year. A free balance is the balance remaining after deducting the expenditures and outstanding orders (encumbrances) from the departmental allocation(s). Amounts encumbered for outstanding orders as of June 30 each year are carried forward to the following year to the extent that June 30 balances are available and providing that delivery and payment is completed prior to October of the following year. Expenditures and commitments are not authorized in excess of the amounts allocated. If, by reason of unforeseen expense, or otherwise, a supplies and services account is overdrawn on June 30 of any year, the overdraft becomes a first charge against the departmental supplies and services account for the following year. Amounts are not encumbered for orders outstanding to University stores and service departments as of June 30 each year. b. Equipment Accounts. Separate equipment accounts are maintained, and encumbrances and balances for equipment accounts are handled in the same manner as supplies and services accounts. Allocations to these accounts are based on requests processed through administrative channels for specific items, as approved by the University administration. Special forms for equipment allocation requests are made on the Request for Equipment form. Following the notice of approval of the equipment allocation, departmental executive officers should submit requisitions to the Purchasing Department for purchases to be made in the regular manner. [top] 1.3 OTHER ACCOUNTS. Separate accounts are maintained in the University Business Office for all current restricted, income, and revolving accounts. These accounts receive no allocations from the University general fund and balances do not lapse to the general fund. Salaries are paid from these funds on the basis of approved budgets in the same manner as for accounts receiving budget allocations. The same procedure and general regulations apply to expenditures from these funds as apply to expenditures from allocated funds. a. Income Accounts. Income accounts are those which are set up for activities or enterprises which are supported solely by the income received from the sale of goods or services. These include a limited number of organized educational activities, auxiliary enterprises, the stores, service departments, and revolving funds. b. Current Restricted Accounts. Current restricted accounts are those set up for funds received from various sources outside the University. These accounts are comprised of grants, contracts, fellowships, and other sponsored agreements received from both federal and nonfederal organizations in support of a wide range of University activities. Also included in the current restricted accounts are gifts to the University to be used for a variety of special purposes. All charitable gifts, regardless of their form, are to be acknowledged by The University of Iowa in accord with the quid pro quo requirements and substantiation requirements imposed by the Internal Revenue Service. The University has previously designated The University of Iowa Foundation (Foundation) as its primary development arm and its preferred solicitor and recipient of and channel for private gifts intended to benefit the University. To the extent possible, deans, directors, and departmental executive officers should encourage current and prospective donors to direct their gifts to the Foundation so they may be properly acknowledged for tax purposes and so they may receive consultation and advice on gift and tax procedures appropriate to their needs, including charitable lead trusts, charitable remainder trusts, life estates, and testamentary dispositions. Monetary gifts payable to the University are reported on a Money Received form with the appropriate donor information noted or attached and forwarded to the Business Office. The Business Office deposits the monetary gift in the appropriate University gift account and forwards the donor information to the Foundation which, in turn, provides official acknowledgment to the donor on behalf of the University. Non-monetary gifts made to the University should also be reported to the Business Office with the appropriate donor information. This information will also be forwarded to the Foundation, which, in turn, provides official acknowledgment to the donor on behalf of the University. c. Accounts Receivable. All sales of materials or services must be reported to the University Business Office for collection. Exception to this rule may be made only upon special approval by the University Business Office. [top] 1.4 DEPARTMENTAL CREDITS. Income from departmental sales or services is credited to the University General Educational Fund, and is not automatically available to a department to supplement budget allocations. [top] Go forward one step to V-2 Allocation and Transfer of Funds Or return to the Operations Manual Table of Contents, Index, or Search Page last updated June 2013 by Office of the Senior Vice President for Finance and Operations

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For taxpayer advocate, a familiar refrain By Michelle Singletary, It’s not nice to tell people “I told you so.” But if anybody has the right to say that, it’s Nina E. Olson, the national taxpayer advocate. Olson recently submitted her annual report to Congress and top on her list of things that need to be fixed is the complexity of the tax code, which she called the most serious problem facing taxpayers. Let’s just look at the most recent evidence of complexity run amok. The Internal Revenue Service had to delay the tax-filing season so it could update forms and its programming to accommodate recent changes made under the American Taxpayer Relief Act. The IRS won’t start processing individual income tax returns until Jan. 30. Yet one thing remains unchanged — the April 15 tax deadline. The IRS said more extensive changes could result in some people not being able to file their returns until late February or into March.Because of the new tax laws, the IRS also had to release updated income-tax withholding tables for 2013. These replace the tables issued Dec. 31. Yes, let’s just keep making more work for the agency that is already overburdened. Not to mention the extra work for employers, who have to use the revised information to correct the amount of Social Security tax withheld in 2013. And they have to make that correction in order to withhold a larger Social Security tax of 6.2 percent on wages, following the expiration of the payroll tax cut in effect for 2011 and 2012.Oh, and there was the near miss with the alternative minimum tax that could have delayed the tax filing season to late March. The AMT was created to target high-income taxpayers who were claiming so many deductions that they owed little or no income tax. Olson and many others have complained for years that the AMT wasn’t indexed for inflation.“Many middle- and upper-middle-class taxpayers pay the AMT, while most wealthy taxpayers do not, and thousands of millionaires pay no income tax at all,” Olson said.As part of the recent “fiscal cliff” deal, the AMT is now fixed, a move that the IRS was anticipating. It had already decided to program its systems on the assumption that an AMT patch would be passed, Olson said. Had the agency not taken the risk, the time it would have taken to update the systems “would have brought about the most chaotic filing season in memory,” she said in her report.The tax code contains almost 4 million words. Since 2001, there have been about 4,680 changes, or an average of more than one change a day. What else troubles Olson (and most of us)? Here’s what:● Nearly 60 percent of taxpayers hire paid preparers, and another 30 percent rely on commercial software to prepare their returns.● Many taxpayers don’t really know how their taxes are computed and what rate of tax they pay. ● The complex code makes tax fraud harder to detect.● Because the code is so complicated, it creates an impression that many taxpayers are not paying their fair share. This reduces trust in the system and perhaps leads some people to cheat. Who wants to be the sucker in this game? So someone might not declare all of his income, rationalizing that millionaires get to use the convoluted code to greatly reduce their tax liability.● In fiscal year 2012, the IRS received around 125 million calls. But the agency answered only about two out of three calls from people trying to reach a live person, and those taxpayers had to wait, on average, about 17 minutes to get through.“I hope 2013 brings about fundamental tax simplification,” Olson pleaded in her report. She urged Congress to reassess the need for the tax breaks we know as income exclusions, exemptions, deductions and credits. It’s all these tax advantage breaks that complicate the code. If done right, and without reducing revenue, tax rates could be substantially lowered in exchange for ending tax breaks, she said.But of course it’s not that simple. “The perennial challenge in enacting fundamental tax reform is that while most taxpayers support a simpler tax code in concept, many of us are reluctant to give up our existing tax breaks,” Olson said. In other words, we want other people’s tax loopholes to be eliminated.Still, Congress should make it a priority to simplify the tax code. I know I’m tired of Olson telling us so, while year after year nothing gets done to truly push for change. Readers can write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to postbusiness.com.

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Dr David Gruen 15 April 2010 11:24:28 For a copy of Dr Gruen's Speech from NatStats2010 click here. Dr David Gruen is the Executive Director of Macroeconomic Group at Australian Treasury. He joined the Treasury in January 2003. Before that, he was Head of Economic Research Department at the Reserve Bank of Australia from May 1998 to December 2002. He worked at the Reserve Bank for thirteen years, in the Economic Analysis and Economic Research Departments. Before joining the Reserve Bank, he worked as a research scientist in the Research School of Physical Sciences at the Australian National University. With financial support from a Fulbright Postdoctoral Fellowship, he was visiting lecturer in the Economics Department and the Woodrow Wilson School at Princeton University from August 1991 to June 1993. He holds PhD degrees in physiology from Cambridge University, England and in economics from the Australian National University. Back to Speakers Page Home News Program and Papers Session Recordings Poster Session Recommendations NatStats Awards Speakers & Presentations Registration Venue & Accommodation Sponsorship & Exhibition Social Program About NatStats NatStats Photos Terms of Use NatStats08

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Tips for Maximizing Your Credit Score When It Counts Most By Susan Johnston When the 2012 Summer Olympics opened in London, thousands of athletes from around the world came to compete in pursuit of that elusive gold medal; their years of training, sweat, and hard work culminating in a few key moments of competition. Outside of these elite athletes, most of us will never feel the rush of completing a perfect dismount from the balance beam or finishing the 200-meter breaststroke ahead of an internationally ranked rival. But that same hard work and tenacity could be applied to boosting our credit score in anticipation of a major life event. Adrian Nazari, founder and CEO of CreditSesame.com, which offers free credit-analyzing tools for consumers, sees parallels between Olympic athletes' preparations chasing a gold medal and consumers preparing their credit score to apply for a mortgage or a refinance. "They want to make sure that their credit score peaks when they want to make a big financial decision," he says. "If they don't have the right credit profile, that could cost thousands of dollars." [See the 10 Questions That Will Help You Earn More Money.] Here are seven strategies for improving your credit in anticipation of a loan application or refinance: 1. Start early. "Just like an Olympic athlete who dedicates himself to practice way ahead of the Olympics, consumers should start early," says Nazari. Credit report errors could take several months to clear up, so check your report well in advance of applying for a mortgage or car financing. If you spot mistakes like an incorrect balance or a missed payment that you actually paid on time, Nazari suggests contacting a credit bureau. "Say 'look, I made the payment on time' or 'my balance was reported wrong,'" he suggests. Collect any documentation that proves your case as backup. Buying your FICO score from MyFico.com is also smart, according to Liz Weston, author of Your Credit Score and The 10 Commandments of Money, because that's the score that financial institutions actually use to determine creditworthiness. [See 4 Times You Shouldn't Care About Your Credit Score.] 2. Lower your credit utilization ratio. Credit utilization--that is, the ratio between your credit card balance and credit limit--is a major part of your credit score, so bringing down that ratio by lowering your balance can help boost your score. Thirty percent or less used to be a good standard, but Beverly Harzog, an independent credit card expert and consumer advocate, says to shoot for 10 percent if possible. But don't be too quick to close old cards. "If you close a credit card account, you take away some of your credit limit, so that can make your utilization ratio go up," says Harzog. "If there's an annual fee and you want to close that card, put that off until you've got approved for a mortgage." Requesting a credit increase could help lower your credit utilization, but if you have a high balance or other potential red flags, the credit card issuer may actually lower your limit. "If you've got a pretty clean slate and you're not in debt, you'd have a good argument to get an increase," says Harzog. "But if you're at the other end of the spectrum, don't try that. It could very likely make things worse." 3. Keep high balances off your card. Even if you pay off your credit card balance every month, large purchases can still haunt you due to timing issues. "The balance that's reported to credit bureaus is on a random day from before the end of that statement period," says Weston. "You could have paid the balance off before and it still wouldn't say zero." Leading up to a mortgage application, it may be wise to avoid large purchases--or to at least pay cash to keep them off your statement. 4. Don't make hard credit inquiries. Hard inquiries on your credit--such as applying for a retail credit card--can lower your score temporarily, so avoid those activities in anticipation of a mortgage or loan application. "At a department store, you're looking to get 10 percent off that, but to creditors, it looks like you're shopping for credit," says Nazari. "You could wind up paying a lot more in interest over time compared to the 10-percent discount you could get from the store." Soft inquiries--such as checking your own credit--do not impact your score. [See How to Avoid a "Hard Pull" on Your Credit Report and Still Borrow Money.] 5. Make timely payments. Pay your bills on time to demonstrate your creditworthiness. According to Weston, "a single skipped payment can knock 110 points off your score." Also be vigilant about any bills that might wind up in collections. Weston says that medical bills in particular may slip through the cracks due to complicated insurance and hospital billing systems, so consumers may not know about the bill until they see it on their credit report. "If you've gone to the hospital and haven't gotten a bill, call and ask about it," suggests Weston. "If you're calling the billing department of your medical provider and your insurance company, it's unlikely it will go to collections." 6. Stay in your current job if you can. Switching jobs right before you apply for a mortgage or refinance could be a red flag for lenders. "If you're currently employed and your plan is to change jobs, stick with your current employer," says Harzog. "Don't make any major lifestyle changes until you get approved. You want to look as stable and as risk-free as possible." 7. Don't stress over less than perfection. Olympic athletes strive for gold, but of course, silver and bronze are also impressive. Once you reach a certain level, increasing your credit score doesn't improve your interest rate. "If you're in the market for a mortgage and you're over 740, you're going to get the best rate," says Weston. "With other kinds of loans, you might need a 760 or above. There's no point in having a score of 850 or even a score over 800. You don't get any bonus points for being super high."More From US News & World Report 6 Ways You Might Be Hurting Your Credit Score5 Smart Credit Moves for College StudentsThe 10 Youngest Billionaires in the Worldcredit scorecredit card © Copyright 2012 U.S.News & World Report, L.P

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Heartland Events Hester Peirce - Dodd-Frank: What It Does and Why It's Flawed 1 S. Wacker Drive #2740 Chicago, Illinois See map: Google Maps March 21, 2013, 11:30 AM - 1:30 PM More than 360,000 words in length, the Dodd-Frank Wall Street Reform and Consumer Protection Act is the longest and most complex piece of financial legislation in American history. The nature and magnitude of its effects, both intended and unintended, will become clearer as regulators exercise the broad discretion given to them under the law. In Dodd-Frank: What it Does and Why It's Flawed, Hester Peirce and a team of contributors ask whether the law is an effective response to the financial crisis that so deeply rattled our nation. Taking a hard look at the law's celebrated objectives, they reveal that it not only fails to achieve many of its stated goals, it also creates dangerous regulatory pathologies that could lay the groundwork for the next crisis. ABOUT THE AUTHOR: Hester Peirce is a Senior Research Fellow at the Mercatus Center at George Mason University. Before joining the Mercatus Center, Hester Peirce served as Senior Counsel to Senator Shelby's staff on the Senate Committee on Banking, Housing, and Urban Affairs. In that position, she worked on financial regulatory reform efforts following the financial crisis of 2008 and oversight of the regulatory implementation of the Dodd-Frank Act. Among the issues Peirce focused on were derivatives regulation, the use of economic analysis in the development of financial regulations, the regulation of investment advisers and broker-dealers, corporate governance, and the regulation of credit rating agencies. Her oversight work on the Banking Committee focused primarily on the activities of the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Financial Stability Oversight Council, the Financial Industry Regulatory Authority, and the Public Company Accounting Oversight Board. Peirce served as counsel to Commissioner Paul S. Atkins at the Securities and Exchange Commission from 2004 to 2008. Prior to that, she served as a staff attorney in the Division of Investment Management at the Securities and Exchange Commission. Before joining the staff of the Securities and Exchange Commission, Peirce clerked for Judge Roger B. Andewelt on the Court of Federal Claims and was an associate at a major Washington, D.C. law firm. Hester Peirce earned her B.A. in economics from Case Western Reserve University and her J.D. from Yale Law School. She also studied in Vienna, Austria on a Fulbright grant. Watch the video of Hester Peirce talking about Dodd-Frank at Heartland's luncheon on March 21, 2013: James Franko: New Ed Reforms... Richard McKenzie: Minimum... Isaac Orr: No Frac Sand for...

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Record Low Interest Rates Raise Inflation Concerns Share Tweet E-mail Comments Print By Annie Baxter Listen View Slideshow The Federal Reserve plans to keep short-term interest rates near zero until 2014, and some critics are concerned about the risk of inflation and the message it sends about the economy. Karen Bleier AFP/Getty Images Federal Reserve Chairman Ben Bernanke is testifying before a House committee Wednesday about what the Federal Reserve has done to help the economy. Jim Watson The goal of the Federal Reserve's low interest rate policy is to juice the economic recovery. The low rates should make it easier for people to borrow money, which they'll hopefully spend; the increased demand for goods and services is then supposed to translate into more hiring. That's what the Fed is banking on. It hopes low interest rates will help with its mandate of achieving maximum employment, but it also has another mandate: to keep prices stable. "In many cases, those two conflict," says economist Joe Gagnon of the Peterson Institute for International Economics. Gagnon says you can understand the conflict of the Fed's dual mandate with this analogy: Imagine you have a big family, and you need an equally big car to cram them all into. "You also don't want to pay a lot for gas, so you want a fuel-efficient car," he says, "but in many cases, the largest cars tend to have the worst fuel economy." Gagnon says you often have to trade off between the two, and that it's the same for the Fed. "When they try to push the unemployment rate down, in other words to increase employment and get the economy to grow faster, that can raise inflation, which jeopardizes the stability goal," he says. Gagnon thinks the Fed can safely do both at once: It can try to help the labor market without stoking inflation. It can get a big car with good gas mileage. But critics of the Fed's current policies disagree, and some of those critics come from within the Fed system. The president of the Federal Reserve Bank of Minneapolis, Narayana Kocherlakota, has voted against the Fed's easy-money policies because of the inflation risk they pose. He's not currently a voting member of the rotating committee that makes decisions on interest rates, but his concerns about inflation persist. "We're going to have to pay some costs in terms of inflation if we're going to go down this path of using accommodative monetary policy to go after long-term unemployment or try to bring people back into the labor force who are not currently in the labor force," Kocherlakota says. He worries that inflation could climb above the 2 percent range the Fed deems acceptable, as it already has during the recovery. A big, sudden jump could send the Fed scrambling to raise rates. "The concern is that if you go down this path, [then] you'll see realizations of inflation that will trigger a lack of trust in the central bank's ability or willingness to keep that target," he says. "The cost you suffer is the loss of trust." Robert Dye, an economist with Comerica Bank, says he thinks there's a danger to the Fed's own credibility. He says that short-term rates have been near zero since 2008, and to keep them low for another 18 months is, in his view, unprecedented. Among the groups harmed by low interest rates, Dye says, are savers who can't get a good return on deposits; other problems may not even be discernible — yet. "The longer we're in an extreme position relative to historical patterns, the more we risk these unforeseen and unintended consequences," Dye says. One such consequence could have to do with the message the Fed is sending about the economy. It's keeping rates low because the recovery is still weak and needs a boost. Dye and other economists say that vote of no confidence could by itself be harmful.Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/. View the discussion thread.

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sticks and stones When Wall Street and Obama Trade Barbs, Does Anyone Actually Mean It? By Patrick Clark | 10/01/12 6:50pm Wall Street, wounded by President Barack Obama’s anti-Wall Street rhetoric, responded with anti-Obama rhetoric: It’s not a new story, but Chrystia Freeland’s story on Leon Cooperman in The New Yorker today does a nice job of bringing it into focus. Mr. Cooperman, child of the Bronx, alumnus of Goldman Sachs, founder of the hedge fund Omega Advisors, voted for John McCain in 2008 but didn’t become an impassioned critic of the president until viewing an Obama ad chiding millionaires and billionaires to pay their fair share of taxes. “The divisive, polarizing tone of your rhetoric is cleaving a widening gulf, at this point as much visceral as philosophical, between the downtrodden and those best positioned to help them,” Mr. Cooperman wrote in a widely circulated letter to the president. Having gotten that much off of his chest, Mr. Cooperman went on to compare Mr. Obama to Adolf Hitler, first during a conference hosted by CNBC, then in an interview with Ms. Freeland: “You know, the largest and greatest country in the free world put a forty-seven-year-old guy that never worked a day in his life and made him in charge of the free world,” Cooperman said. “Not totally different from taking Adolf Hitler in Germany and making him in charge of Germany because people were economically dissatisfied. Now, Obama’s not Hitler. I don’t even mean to say anything like that. But it is a question that the dissatisfaction of the populace was so great that they were willing to take a chance on an untested individual.” Mr. Cooperman wasn’t the only one to scratch that itch. Blackstone founder Stephen Schwarzman compared an Obama tax proposal to Hitler’s invasion of Poland. Dan Loeb, the founder of Third Point Capital and an erstwhile supporter of the president, compared Mr. Obama to an abusive spouse: “He really loves us and when he beats us, he doesn’t mean it; he just gets a little angry,” Loeb wrote in 2010 in an email to his peers. Anthony Scaramucci, not one to be left out when it comes to zinging off one-liners, described a meeting in which Mr. Cooperman expressed his sentiments towards Mr. Obama as the “activation” of a “sleeper cell” of hedge-fund managers against Obama, according to Ms. Freeland. None of this is so hard to understand: Mr. Obama has himself endorsed such intemperate statements as to compare Bain Capital to a vampire. What’s less clear is whether anyone actually believes any of this. Mr. Obama, of course, is in a heated political campaign against the private equity firm’s founder. Sure the president has called for increased financial regulation; He’s also presided, in part, over a massive bailout of U.S. financial firms. When Mr. Cooperman, meanwhile, takes a conversation with a reporter as an opportunity to mention Mr. Obama and Adolf Hitler in the same breath, it’s hard to take him particularly seriously. What we wonder, though, is whether he speaks as a businessman wounded by anti-business rhetoric, or a hedge fund manager campaigning for a former titan of finance? FacebookTwitterGoogleLinkedInPrintEmail Filed under: Barack Obama, Dan Loeb, Leon Cooperman, Stephen Schwarzman, the Mooch More from our network

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Vox Baby Dartmouth, Of Course, Was His Nirvana Max Speaks, and He Listens and Replies Max Sawicky kindly (and constructively!) responds to my recent post about whether we need to reform Social Security today. His original statement began: There is absolutely no reason at present to make changes in Social Security, except out of political fear of the Right.As I noted, first in "Why is Social Security a Campaign Issue?" and then again in the post to which Max is responding, my reason is that we make the problem about $300 billion worse every year that we delay. This is roughly the interest that we accrue on the unfunded obligation of $10.4 trillion in a year when the real interest rate is 3 percent, as in the 2004 Trustees Report's long-term assumptions. I should reiterate that my preferred solution--raising the age of full benefit entitlement (with some other modifications) for future beneficiaries--does not require new funds to flow into the system today (or ever). And there is no need to do that immediately, except to give people as much time as possible to react to the new law and plan accordingly. If we don't mind giving them one fewer year of notice, then I don't suspect that we would mind enacting the same reforms to plug a $10.7 trillion hole tomorrow rather than a $10.4 trillion hole today. But taking a "wait and see" approach does not strike me as sound fiscal management. In addition, to the extent that the reforms will include raising revenues in the near-term to provide investment returns to support benefits in the future (whether through personal accounts or the Trust Fund), then delay does have distributional consequences across different age cohorts. According to the way Social Security played out in this year's campaign, neither side was willing to ask more of or give less to those cohorts who are "at or near retirement." If an additional year of delay means one more birth cohort crosses the threshold of being "at or near retirement," and thus exempt from its share of filling the $10.4 trillion hole, then we should reform sooner rather than later. I don't think Max and I disagree about the math underlying this calculation, but we do disagree about how relevant it is. Max writes: I don't get excited about measures of the present value of unfunded liabilities from now till forever because I think they are jive. It's a way of ginning up a huge number. If you want to do that, compare it to the present value of GDP.Fair enough. In "How to Reform Social Security, Part I," I noted: Once new revenues are being added to the system, then it becomes important to figure out where they should go--the Trust Fund or personal accounts. Confronted with that choice, I opt for personal accounts. For me, an immediate and permanent contribution of 3.5 percent of taxable payroll into personal accounts for all workers, in addition to the 12.4 percent payroll tax that they and their employers already pay, is preferable to the current system. The contributions are 3.5 percent because that is the amount that the Social Security actuaries say is required to restore solvency even if invested entirely in Treasury bonds. But such a reform, though preferred to the current scenario, is also far from ideal.The 3.5 percent figure is roughly what Max is asking for in the way to make the comparison. (The small difference is that taxable payroll is projected to fall by about 5 percentage points relative to GDP over the next 75 years.) Max and I can differ on how much confidence we have in the Social Security actuaries' projections. The Trustees Report does contain some sensitivity analyses and additional projections that factor in uncertainty, but not on these two measures. The latter projections do suggest that there is essentially no chance that the system won't be running annual deficits in 75 years. Factoring in the uncertainty suggests to me that there is more, not less, of a need to act sooner rather than later. Max also wonders: One thing that is baffling about this whole privatization campaign is why a knowledgeable person like Andrew would prioritize the 2042 problem over the 2018 problem. The latter date is of course about when income tax revenue will be needed to redeem obligations to the Trust Fund and, by extension, Social Security beneficiaries.In fairness, I have never thought of this as a 2042 problem, or even a 2018 problem. (That was, if I recall, the third paragraph in this post by Max.) To me, it is a 2004 problem that I don't want to mushroom into an even bigger problem, in 2005, 2018, 2042, 2080, or any year at all. Entitlement programs should be projected to be in balance--period. Accomplishing that requires changes in the programs in the future (if not the present). Those changes should be debated and legislated sooner rather than later, so that the changes can spread the burden as evenly as possible across cohorts. Max concludes with some statements about the politics of reform: As far as politics goes, you can hardly blame the Dems for declining the opportunity of leading with their chins with tax increases and benefit cuts, in the face of a hugely fiscally irresponsible Administration.What does he mean? Of course I can blame them, like I did here. And I can also try to point them to "Democrat-friendly" reforms like the Diamond and Orszag plan, like I did here. Social Security's unfunded obligations are not a creation of the Bush administration and have been widely discussed for over a decade. The Democrats and Republicans alike have had ample opportunity to behave responsibly on entitlements. Some have, but most have not, and the sooner the first group can prevail, the better off we'll be. Perhaps you can blame the Democrats, but no one will take you seriously about the politics of Social Security. I'm willing to venture a prediction: no matter what Social Security reform the Bush administration eventually comes up with, if anything passes it will, at best, keep the unfunded obligations of Social Security the same and will, more likely, will increase them substiantially. The reason I am confident about this is because, unless you honestly believe the government can make money by borrowing it and investing it in the stock market (which, at bottom, is what assuming greater returns from private accounts means and sounds quite dubious to me) the only way to cut the unfunded obligations of Social Security are to increase funding or cut expenditures - neither of which this administration has shown any inclination to do on any issue. (1) Do you think that the Bush administration is at all likely to back the kind of proposal that you favor?(2) Assuming arguendo that the current reports of the likely Bush proposal - i.e., merely diverting a portion of current social security taxes to private accounts, without other reforms - do you favor such a reform (as opposed to doing nothing for now)? As suggested by the above comment, wouldn't such a proposal just make the short and medium term (2018) problem worse, without making the long term problem (2042) much (if at all) better? LRose There are a group of debt mongers, mongering end of the world figures for affording Social Security and Medicare. The figures are stretched out over much of a century, when we have trouble planning accurately for 5 or 10 years, and the figures are so glum as to suggest we begin asking our parents not to bother going on living past 60. Nonsense. Social Security is fine for another 38 years, and we can surely extend the fineness beyond with ease if we care to. We can as well afford to care for our parent's medical needs. Enough with the end of the world stories that are simply designed to erode support for Social Security and Medicare, and the heck with those who need the programs. A friend just sent me an investment portfolio that was put together several years ago by an adviser at Bank America. The portfolio is rather large. What startled me was the way in which the only thing that seemed to matter to the adviser was making sure the funds chosen had absurdly high yearly fees and 5% sales charges. Since the portfolio is quite large, simply increasing the size of investments in a given fund with a sales charge could easily have been used to cut the size of the charge. Nope.The idea of most investment companies gaining access to private Social Security accounts, strikes me as most dangerous. Wonder what Eliot Spitzer thinks? The problem I have is generally agreeing with you, and wishing I did not. We took a regressive payroll tax that was supposed to have generated enough of a surplus to support baby boomers, especially those will most need the support, and used the excess funds for general spending. Now, we learn there is a problem and our precious children will be sore pressed to support us. Good grief.I care about us and I care about the children, and I find the idea of weakening the intergenerational commitment to Social Security most disheartening. An aside: Two subjects that economists are paying scant attention to are the investigations of Eliot Spitzer, now on insurance brokers and insurers; and, the problems surrounding the use of Vioxx and possibly Bextra long after warnings about the drugs were steadily sounded. The Vioxx of the warning on Vioxx was so complete, the only reason the drug was pulled from the market was because Merck was trying to expand its use and funded a double blind study thinking there was a separate use for the drug, You or Brad might post on such issues now or then. http://www.nytimes.com/2004/11/14/business/14merck.html?hp&ex=1100494800&en=9d9c398ab2a955a2&ei=5094∂ner=homepage Despite Warnings, Drug Giant Took Long Path to Vioxx Recall By THE NEW YORK TIMES This article was reported and written by Alex Berenson, Gardiner Harris, Barry Meier and Andrew Pollack. In May 2000, executives at Merck, the pharmaceutical giant under siege for its handling of the multibillion-dollar drug Vioxx, made a fateful decision. The company's top research and marketing executives met that month to consider whether to develop a study to directly test a disturbing possibility: that Vioxx, a painkiller, might pose a heart risk. Two months earlier, results from a clinical trial conducted for other reasons had suggested such concerns. But the executives rejected pursuing a study focused on Vioxx's cardiovascular risks. According to company documents, the scientists wondered if such a study, which might require as many as 50,000 patients, was even possible. Merck's marketers, meanwhile, apparently feared it could send the wrong signal about the company's confidence in Vioxx, which already faced fierce competition from a rival drug, Celebrex. 'At present, there is no compelling marketing need for such a study,' said a slide prepared for the meeting. 'Data would not be available during the critical period. The implied message is not favorable.' Merck decided not to conduct a study solely to determine whether Vioxx might cause heart attacks and strokes - the type of study that outside scientists would repeatedly call for as clinical evidence continued to show cardiovascular risks from the drug. Instead, Merck officials decided to monitor clinical trials, already under way or planned, that were to test Vioxx for other uses, to see if any additional signs of cardiovascular problems emerged. It was a recurring theme for the company over the next few years - that Vioxx was safe unless proved otherwise. As recently as Friday, in newspaper advertisements, Merck has argued that it took 'prompt and decisive action'' as soon as it knew that Vioxx was dangerous. But a detailed reconstruction of Merck's handling of Vioxx, based on interviews and internal company documents, suggests that actions the company took - and did not take - soon after the drug's safety was questioned may have affected the health of potentially thousands of patients, as well as the company's financial health and reputation. The review also raises broader questions about an entire class of relatively new painkillers, called COX-2 inhibitors; about how drugs are tested; and about how aggressively the federal Food and Drug Administration monitors the safety of medications once they are in the marketplace. The decisions about how to test Vioxx were made in a hothouse environment in which researchers fiercely debated how the question should be pursued, and some even now question whether the drug needed to be withdrawn. It also took place amid a fierce battle between Vioxx and Celebrex in which federal regulators said marketing claims ran ahead of the science. Today Merck faces not only Congressional and Justice Department investigations, but also potentially thousands of personal-injury lawsuits that could tie the company up in litigation for years and possibly cost it billions to resolve. In late September, more than four years after that May 2000 meeting, Merck announced that it was pulling the drug off the market because a long-term clinical trial showed that some patients, after taking the drug for 18 months, developed serious cardiovascular problems. The data that ultimately persuaded the company to withdraw the drug indicated 15 cases of heart attack, stroke or blood clots per thousand people each year over three years, compared with 7.5 such events per thousand patients taking a placebo. But the company never directly tested the theory that it used to explain the worrisome results of the clinical trial in 2000. Merck was criticized for what some charged was playing down the drug's possible heart risks; in one case, it received a warning letter from the Food and Drug Administration for minimizing 'potentially serious cardiovascular findings.'' And when outside researchers found evidence indicating Vioxx might pose dangers, Merck dismissed their data. In 2001, Dr. Deepak L. Bhatt, a cardiologist at the Cleveland Clinic, proposed to Merck a study of Vioxx in patients with severe chest pain. Merck declined, saying the patients proposed for the study did not reflect typical Vioxx users. In Dr. Bhatt's view, the company feared what it might find if it directly examined the dangers of Vioxx, one of Merck's biggest products, with sales last year of $2.5 billion. 'They should have done a trial like this,' Dr. Bhatt said. 'If they internally thought this drug was safe in patients with heart disease, there was no reason not to do it.' Merck executives said last week that the company acted responsibly, voluntarily withdrawing Vioxx as soon as it had clear evidence the drug was harmful. And they said that even if they had conducted the type of study they discussed internally and rejected in 2000, the company might not have detected Vioxx's risks any sooner. 'Merck wasn't dragging its feet,'' said Kenneth C. Frazier, the company's general counsel. 'It's pretty hard for me to imagine that you could have done this more quickly than we did.' The F.D.A., which Merck consulted, also agreed that designing a trial to specifically assess Vioxx's cardiovascular risks would have been difficult and, unless constructed to provide benefits to patients, would have been unethical as well. But the F.D.A. itself is now under scrutiny for its handling of Vioxx. Congressional investigators are looking at whether the agency, which is charged with protecting Americans from dangerous medicines, was too lax in its monitoring of the mounting evidence against Merck's drug. Internal memos show disagreement within the F.D.A. over a study by one of its own scientists, Dr. David Graham, that estimated Vioxx had been associated with more than 27,000 heart attacks or deaths linked to cardiac problems. So far, no clinical evidence has linked the next best-selling version, Celebrex, to cardiovascular risks. But its maker, Pfizer, has acknowledged that its other COX-2 drug, Bextra, has been shown to pose risks to patients after heart surgery. Scientists outside the company say there is evidence that Bextra's problems may affect wider groups of patients. I can too write! Oh dear...The warning on Vioxx was so completely masked, the only reason the drug was pulled from the market was because Merck was trying to expand its use and funded a double blind study thinking there was a separate use for the drug, You or Brad might post on such issues now or then. http://www.nytimes.com/2004/11/14/books/review/14HALL.html?'The Truth About the Drug Companies' and 'Powerful Medicines': The Drug LordsBy STEPHEN S. HALL DURING the past year, when I was driving my children to school, I'd hear the same advertisement on the radio again and again. You've probably heard it too: as somber music played in the background, a young man, his voice cracking, explains how he developed a rare and deadly form of cancer. He wonders if he will ever play baseball with his son, and then relates how, thanks to a company called Novartis and its new cancer treatment (never mentioned, but a drug called Gleevec), he's been given a new lease on life. What is most fascinating about this ad is that it should seem necessary. As Marcia Angell points out in ''The Truth About the Drug Companies: How They Deceive Us and What to Do About It'': ''Truly good drugs don't have to be promoted. A genuinely important new drug, such as Gleevec, sells itself.'' So why advertise a cancer drug that cures a fatal leukemia and has no competition? The answer, of course, is that Novartis is not advertising Gleevec, but the company itself -- and the virtues of the drug industry as a whole. Why? Because, as Angell notes, a ''perfect storm'' of indignation -- on the part of consumers, regulators+and even doctors -- may be developing around the pharmaceutical business. In just one week this summer, the news included reports that Schering-Plough pleaded guilty to cheating Medicaid; the city of New York sued leading pharmaceutical companies, including Amgen, Bayer, Bristol-Myers Squibb, Eli Lilly, Johnson & Johnson and Merck, for inflating costs and defrauding taxpayers; Janssen Pharmaceutica Products admitted it had withheld from the public information about potentially fatal side effects in a schizophrenia drug it markets; and Wyeth settled yet another in the multibillion dollars' worth of lawsuits against it by people who suffered permanent injury from use of the fen-phen weight-loss drugs. All this against a broad public perception of price-gouging, lack of innovation and bombastic self-congratulation. And that brings me back to the Novartis ad. An alternative history for Gleevec is recounted in both Angell's methodical multicount indictment of the drug industry and Jerry Avorn's entertaining jeremiad, ''Powerful Medicines: The Benefits, Risks and Costs of Prescription Drugs.'' In this less heroic version, several decades of dogged research by academic scientists -- much of it paid for by American taxpayers through the National Institutes of Health -- had teased out the molecular details of chronic myelogenous leukemia, a rare and fatal hematological cancer. Researchers at Novartis (then Ciba-Geigy) created several compounds that in theory might throw a monkey wrench into the process by which blood cells become cancerous. But these potential miracle drugs sat on the shelf untested, until Brian Druker, a researcher at the Oregon Health and Science University, asked for the compounds and became the first to discern their anticancer properties in the lab dish. Even that wasn't enough. As Avorn tells it, ''Novartis had so little interest in committing resources to the drug's development that cancer researchers had to resort to the bizarre tactic of sending a petition to the company's C.E.O., signed by scientists in the Leukemia and Lymphoma Society of America, imploring him to make more drug available for clinical studies.'' Novartis has overcome its lack of enthusiasm -- it now charges $27,000 for a year's supply of Gleevec. But those heart-warming ads, now the centerpiece of the Novartis corporate identity, say more than intended about how today's pharmaceutical industry takes credit where little is due. As both Angell and Avorn lay out in painstaking, often enraging, detail, a self-serving mythology -- promulgated on a scale possible only in a business with annual worldwide revenues of $400 billion -- has enveloped the pharmaceutical industry. Angell and Avorn cut through the haze, arguing persuasively that Americans are paying an enormous amount of money for some very mediocre medicines. The rising voices of disillusionment have the credentials to back up their scorn. http://www.nytimes.com/2004/11/14/business/yourmoney/14drug.html?pagewanted=all&position= Do New Drugs Always Have to Cost So Much? By EDUARDO PORTER AMERICAN politicians are so perplexed about how to deal with prescription drug prices that the best solution they can offer is to effectively import a Canadian law - by buying drugs subject to Canadian government price controls - rather than pass one of their own. There are, however, more straightforward ways to get cheaper drugs than by borrowing price fixes from across the border. Some economists say the government can reduce pharmaceutical prices by changing how the nation pays for innovation. Prescription drugs are expensive by design. They cost a lot to invent but are relatively cheap to make, so companies receive patents from the government that grant them a monopoly and enable them to sell the medicine at a premium. In doing so, the idea goes, drug makers recoup their investments in research and development and are encouraged to invent more. But some economists say that there is no inexorable economic reason for drug prices to be as high as they are. 'Patents are one way to get medical innovation, but they are not a fact of nature,' said Michael R. Kremer, an economics professor at Harvard. 'It is worth looking for alternatives.' Strong patent protection has allowed substantial spending on innovation. American drug companies invested $33 billion in it last year, according to the Pharmaceutical Research and Manufacturers of America, a lobbying group. But this arrangement has a measurable economic cost, keeping drugs from consumers who would buy them if they were priced like other competitive commodities - marginally above production costs. That is not the only inefficiency that patents breed. In the insured health market, where neither patients nor their doctors actually pay for drugs, drug companies are subject to all manner of perverse incentives. For instance, they can reap more from investing in marginal improvements over existing therapies - and buying ads to persuade patients to pay big markups for them - than from investing in riskier, ground-breaking drugs. The Food and Drug Administration has classified only about 20 percent of the drugs developed over the last 10 years as qualitative breakthroughs. Even though they spend more on research, pharmaceutical companies are finding fewer new drugs. In a report this year, the F.D.A. said that the way drugs are developed 'is becoming increasingly challenging, inefficient and costly.' One alternative is to have the government pay directly for research, which some economists say could maintain innovation while reducing drug prices. The government already spends almost $30 billion a year on basic drug research at National Institutes of Health laboratories and at universities, much of which results in new drugs. It would be relatively straightforward to extend this to cover the research now done in drug company labs, economists say. There are other alternatives. For example, the government could compensate drug companies for their inventions as an incentive for them to keep innovating. How to determine how much an innovation is worth? One possibility would be for the government to selectively buy patents at a premium over the price a private bidder was willing to offer, and then put them into the public domain, Professor Kremer said. Aidan Hollis, an assistant professor of economics at the University of Calgary in Alberta, devised a different approach: the government would set up a fund to compensate drug companies based on how much their new drugs improve the quality of life and how often they were used. These alternatives would carry several benefits, economists say. In addition to making drugs available at lower prices, they would make it much less profitable for pharmaceutical companies to spend millions of dollars to develop drugs, like Nexium and Clarinex, that are protected by patents but offer little improvement over similar drugs already on the market. The goal is not to spend less to develop new drugs, Professor Hollis said, but to get more therapeutic bang for the buck - by channeling investment to where it matters most - as well as to increase access to the resulting drugs. 'This can be done within the same budget as we devote to pharmaceuticals now,' he said. I am a Professor of Economics and the Director of the Nelson A. Rockefeller Center at Dartmouth College. I am on the boards of Ledyard Financial Group (LFGP) and the Montshire Museum of Science. I blog about economics, politics, and current events at http://samwick.blogspot.com. The opinions expressed here, there, and everywhere do not necessarily reflect the views of Dartmouth College or any other institution with which I am affiliated. Your Philanthropy Help Cure Cystic Fibrosis Social Security Archives The Nonpartisan Social Security Reform Plan Part I: 10/2004 - 05/2005 Part II: 05/2005 - present budget policy Links to Vox Baby BlogSearch The Econoblogosphere Business and Econ Blog Rankings Top 100 Economics Blogs Some Good Reads This is a personal weblog. None of the opinions expressed here should be construed to represent the opinions of Dartmouth College, the Rockefeller Center, or any other group with which I am affiliated.

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hide Insurer USAA can't cash in on Residential Re cat bonds: S&P By Sarah Mortimer LONDON (Reuters) - U.S. insurer USAA will not be able to cash in on two of its catastrophe bonds, because losses from superstorm Sandy and other 2011 natural disasters were not high enough to trigger a payout, Standard & Poor's said. Insurers and reinsurers use "cat bonds" to manage their exposure to natural disasters by transferring some of the risk to capital market investors. Cat bond investors such as pension funds receive an income in return for agreeing to pay some of the issuers' claims if an earthquake or hurricane strikes and losses from it meet a predetermined amount. Ratings agency S&P took the two bonds - 2011 and 2012 class 5 notes sold through USAA's Residential Re vehicle - off CreditWatch Negative, meaning it now considers them to be less risky for investors than it previously estimated. It downgraded the two cat bonds in November, believing at the time that the risk to investors had increased as a result of Sandy, which crashed into the U.S. east coast in October, causing billions of dollars' worth of damage as it wrecked homes and businesses. The transactions are structured as "aggregate" bonds, meaning they only result in a payout if there are enough losses on an annual basis to reach a pre-agreed trigger point. Losses for USAA from Sandy and other natural disasters in 2011, such as tornadoes that struck central and northeast U.S. in June, did not amount to enough to trigger a payout, S&P said. The trigger points were $1.365 billion for the Res Re 2011 notes and $1.571 billion for the Res Re 2012 bond. Both are due to mature on May 31. S&P said it had received updated loss estimates from USAA concerning Sandy and the U.S. tornadoes and the new estimate of covered losses from the four events was less than the total estimated in November. - For more details on cat bond transactions, see the Thomson Reuters Insurance Linked Securities Community, click on http://financial.thomsonreuters.com/ils. (Reporting by Sarah Mortimer; Editing by Helen Massy-Beresford)

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You can work more hours, but you'll share more with Uncle Sam by AccountingWeb on Feb 14 2000 printer friendly I have an opportunity to work a lot of overtime this year, which will generate more money for me. If I shoot into a new tax bracket (over $50,000 in income), should I go ahead and work the overtime and get more money, or would I get taxed so much that it wouldn't be worth my while? S.P., Indianapolis Isn't it wonderful that we live in a society in which the harder you work, the more the government penalizes you? The more of your own time you give up to try to earn a living and better your own life, seeking that elusive American dream, the bigger percentage of your livelihood the government takes away from you. The very people we vote for and elect tell us that this philosophy is fair and reasonable, and we continue to vote for them, so fair and reasonable it must be. I do hope we never reach a point when we truly feel it isn't worth our time to work harder, to endeavor to get ahead, to attempt to earn a better living, because the government we hold so dear will simply take our added wealth away, in the name of fairness. In your case, as your income climbs above $50,000, 28 cents of each dollar is headed for the federal government in the form of income tax. Another 7.65 cents goes toward Social Security and Medicare, 3.4 cents goes to the Indiana Department of Revenue, and Marion County takes .7 cents. The total tax bite is 39.75 cents for each dollar you earn, leaving you with 60.25 cents per dollar. If your overtime pay is $20 per hour, you actually receive $12.05 per hour. At overtime of $30 per hour, you take home $18.08 per hour. The choice, apparently, is yours. Do you want to give up your free time for $12-$18 per hour? This raises another interesting issue. Say your overtime rate is $30 per hour, which you are working by choice. By choice you are giving your time to generate $8.40 per hour in federal income tax ($30 times 28%). If you were to make a donation to the government of $8.40 for each hour of overtime you work (in addition to the tax being withheld), this donation would be considered a tax-deductible charitable contribution. So why isn't the $8.40 withholding tax deductible too? For that matter, why isn't all of our income tax withholding tax deductible as a contribution? (Just a thought, Uncle Sam ) This Spring I settled a lawsuit (I was hospitalized after being hit head-on by a drunk driver), and I received money for lost wages, medical bills, and pain and suffering. Is this money taxable as earned income? S.P., Indianapolis The money you received from your lawsuit is not taxable. You are, however, welcome to make a tax-deductible contribution to the government if you feel guilty keeping all of the money Should I be keeping track of expenses for over-the-counter medicine such as aspirin and cold remedies? What about medicine that I used to get by prescription but that is now available without a prescription? S.M., Indianapolis Unfortunately, the days of deducting anything that seemed remotely related to a medical condition are gone. No more deductions for band-aids and toothpaste. Medicine you obtain with a prescription qualifies for a medical deduction, other medicine does not. Medicine you used to obtain with a prescription but that is now available over-the-counter no longer qualifies for the medical expense deduction. That of course makes a lot of sense. The pills you took last week, that were recommended by your doctor, were deductible because you had to ask a pharmacist for them. This week, no more deduction, because you can find them on the shelf yourself. It doesn't matter that you're just as sick this week as you were last week. It's just one of the many ways in which our tax laws work for the greater good. Deductions for medical expenses are tough to claim anyway, due to the generous rules that allow you to only deduct those medical expenses that exceed 7.5% of your adjusted gross income. You have to be really sick, or have really low income (in which case you probably won't itemize your deductions anyway) to claim the medical deduction.

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Study is Positive on U.S. Exchange Betting Date Posted: 4/25/2011 11:30:35 AM The outcry among pari-mutuel bettors in the United Stakes for lower takeouts and the growth of online consumer spending make the U.S. an ideal market for exchange wagering, concluded a study commissioned by TVG, a subsidiary of Betfair, the world’s leading exchange wagering operator. “The conclusions are fairly clear,” said Eugene Christiansen, the head of by Christiansen Capital Advisors, which spent more than a year looking at wagering and economic trends in the United Kingdom and Australia, where betting exchanges have been available for several years. “People like exchange betting. Exchange betting appeals to people who were not currently involved in fixed-odds betting, or bookmaking, or pari-mutuel betting. It seems to have reinvigorated betting in the UK and Australia. We have no reason to suppose it would have a different effect in the United States.” The study released April 25 is entitled “Exchange Betting and the United States Thoroughbred Racing Industry.” Among the factors examined were the business cycles of wagering in the U.S., United Kingdom, and Australia over two decades; the maturation of wagering initiatives like offtrack betting and full-card simulcasting; the introduction and expansion of alternative gambling options, including state-run lotteries, casino games, internet gambling, and offshore rebate shops; and the demographics of the wagering public. Betfair began offering exchange betting 10 years and now handles over five million transactions a day. Exchange betting is essential an online trading system that matches two people who want to wager on the outcome of an event. They could be betting on a horse to win. They could be betting on a horse to lose. Exchange wagering has been criticized, particularly in the UK, for taking money away from bookmakers and not returning enough to the racing industry through the levy, which contributes to purses. The study's positive conclusion was challenged during a media press conference by Carlo Zuccoli, former consultant for the European Pari Mutuel Association. “In England, they are struggling for prize money,” Zuccoli said. “The levy has gone down 40%. Betfair is draining a huge amount of money from the tote and the bookmakers.” Betting exchanges also generate fears of corruption. Zuccoli said the latest scandal in Europe involves six UK jockeys that were allegedly being paid 5,000 pounds per race by a big player betting on horses to lose (also known as layers). “Corruption and peanuts and prize money going down,” he said. Christiansen responded to Zuccoli by saying the UK has adopted fundamental structural changes as of 2009 in how purses are funded by the UK levy. “The shock waves from these changes are still working their way out,” Christiansen said. He added that Betfair has been working actively with regulatory agencies to ensure the integrity of the sport. A key criticism of the study was that it did not assess how exchange wagering might impact U.S. purses or affect wagering through the existing pari-mutuel system. Christiansen said, while important, this issue could not be adequately addressed because Betfair doesn’t know how its product might be priced in the U.S. As of now only two states have legalized exchange wagering—California and New Jersey—but it has not been implemented yet. “We did not have a price model to analyze,” Christiansen said. “If we listen to what the U.S. consumer has been saying, that he wants lower prices—and we really can’t read the numbers in any other way—then the only way to address that concern is to bring the price of wagering down. That is a serious statement. If you cannot at the same time grow the pie, then the long-term outlet is simply not good. This is a serious situation that cannot be addressed with rhetoric.” In looking at U.S. purse and handle trends for the first quarter of the year, Christiansen said he noticed purses were up 5.3% but handle is down 8.5%. Because casino gaming (slot machines, video lottery terminals, and card games) contributed 30% to Thoroughbred purses in 2009, the upward trends in purses indicated that people were spending money, just not directly on horse racing. “Something has to be done,” he said. “Exchange wagering is extremely important since it is something the consumer has said very clearly in the UK and Australia that he likes.” Christiansen Capital Advisors has made the 150-page report online.

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Heaven Help Us If The Rest Of China Crashes As Hard As Wenzhou Jun. 13, 2012, 11:24 AM 14,696 livepine on flickr See Also Jiang Xiangsong has 18 days to pay a 2 million yuan ($314,000) bank debt or his suitcase company in eastern China will go bankrupt. He’s close to tears as he realizes his last hope, a government-backed office, won’t help. “This is totally useless: If I had any collateral, why the hell would I come here?” he yells at an official in Wenzhou’s state-run loan service, set up to help small businesses after rising bankruptcies and suicides prompted Premier Wen Jiabao to visit in October and pledge support. Wenzhou’s more than 400,000 businesses make everything from shoes in dusty side streets to synthetic leather in dilapidated factories, much of it financed by unregulated lenders that spread during China’s record 2009-10 credit boom. The decline of so-called shadow banking in the city, triggered by Wen’s move to rein in a national property bubble, has left Wenzhou bearing the brunt of the country’s economic slowdown. China’s plans for a more targeted stimulus than the 4 trillion yuan package unveiled in 2008 ($586 billion at the time) mean Wenzhou may see little reprieve. Wen’s administration in March picked the city, five hours by train south of Shanghai, for a trial program designed to boost capital for private companies, an effort that’s failed to quell locals’ gloom. “In previous years, it was difficult,” Chen Xijun, a director at the city’s Chamber of Commerce, said in a June 6 interview in the city. “This year it’s completely dark. We have no sense of direction where the economy is heading.” Inventory Buildup In Wenzhou’s largest shoe market, 70-year-old Lin Yunlai agrees as he dozes in the booth he has run for two decades. “This is the worst year,” he said as he waited for customers to buy sneakers from his half-empty shelves. “This place used to be packed with buyers from around the country, now it’s full of unsold shoes.” Lin plans to sell his remaining 1,000 pairs and shut the business. The 70,000 yuan revenue he expects to make this year won’t cover his 160,000 yuan rent. “I’m done with it,” he said. The first place to embrace private enterprise when China began opening in 1978, Wenzhou lured 2.8 million migrant workers over the decade following the country’s entry into the World Trade Organization in 2001. Seven out of 10 businesses in the city rely on exports, mostly in labor-intensive industries, leaving it vulnerable as Europe’s crisis crimps expansion. Weaker Exports China’s growth has slowed for five quarters, with gross domestic product rising 8.1 percent in January-to-March, the least in almost three years. While exports exceeded forecasts in May, the pace of gains eased to 9 percent so far this year, from 26 percent in the same period of 2011. The central bank lowered interest rates for the first time since 2008 on June 7, and cut banks’ reserve ratios for the third time since late November. The yuan has fallen 1.2 percent against the dollar this year, trading at 6.3720 per dollar as of 9:54 a.m. in Shanghai today. The economy’s downshift has been uneven. Guangdong, the largest exporting province and one that’s focused on upgrading production to higher-value goods, has seen resilience in its job market. Stanley Lau, deputy chairman of the Federation of Hong Kong Industries, whose members have garment, watch, toy and footwear plants in Guangdong, said in an interview last week that most factories are still 5 percent to 10 percent short of workers or technicians. Quiet Streets Back in Wenzhou, a once bustling city center is in decline. On a recent morning, a single coach pulled out of Wenzhou’s main long-haul bus station into an almost empty street. A few years ago, the road was a permanent traffic jam, clogged with buses and migrant workers arriving from other provinces, according to Liu, a taxi driver who like many people in China declined to give his full name. On Wuma Street, the city’s most famous pedestrian shopping area, three sales staff wait idly for customers in a branch of the Red Dragonfly shoe chain. Posters advertising 40 percent discounts show the shop’s annual summer sale of leather sandals and high heels has started a month early. Businesses are suffering because of weak demand, higher raw material costs and rising wages, as well as the breakdown in the system of unregulated money lenders who fund much of China’s enterprise, said Zhou Dewen, head of the Wenzhou Small- and Medium-size Enterprise Association. “Wenzhou’s private lending system was built on trust, and now that trust is gone,” said Zhou. He estimates there is about 1 trillion yuan of idle private capital in the city because “nobody is willing to lend to others.” China's Detroit? Wenzhou's Empty Streets And Struggling Businesses Could Be A Sign Of What's To Come As small businesses sought finance to expand, the city of 9 million became one of the nation’s biggest centers for shadow banks, unregulated lenders that demanded 21.6 percent on loans in April, compared with 7.6 percent from commercial banks, according to central bank figures. Wenzhou had the worst non-performing loan ratio among the 21 cities tracked by Shenzhen Development Bank Co. last quarter. About 60 business owners fled the city in the first two months of the year to avoid paying their debts, China Business News reported. The exodus has continued, said Zhou. The city was chosen by China’s cabinet in March for a trial program to broaden funding for private companies, including setting up the Wenzhou Private Lending Registration Service Center that rejected Jiang’s application. The office was designed to help control shadow lending by matching individuals holding excess capital with small businesses in need of funds. “The Wenzhou reform is a worthwhile effort if it could succeed in overcoming long-standing obstacles for private capital to enter the state-controlled financial sector,” said Fred Hu, founder of Primavera Capital Group and former chairman for Greater China at Goldman Sachs Group Inc. Since Wenzhou’s private lending service opened on April 26, 40 million yuan of deals have been done, one tenth of the amount of capital registered, said Chen at the Chamber of Commerce. Suitcase exporter Jiang, 45, said that before last year he would have had no problem raising the 2 million yuan he needs with a few phone calls to friends and fellow businessmen. Now, nobody answers the phone. Last week, Jiang’s landlord refused to give him more time to make a payment on the 200,000 yuan rent for his factory because the landlord himself is short of cash after closing down his apparel business. “Everyone around me is struggling,” said Jiang, whose company’s sales have dropped 60 percent this year. Wenzhou’s growth moderated to a 5 percent pace last quarter, the weakest in at least four years. By comparison, Chongqing, where ousted party boss Bo Xilai championed state-led development, grew 14.4 percent, local government data show. Limited Plans With the divergence in the degree of economic weakening, there’s been little sign policy makers will embrace the type of credit surge that saw 17.5 trillion yuan in new loans in 2009-10. The State Council in a May statement omitted any reference to expanding credit, and state-run Xinhua News Agency reported on May 29 there was no plan to introduce measures on a 2008 scale. During the boom times in the last decade, Wenzhou drew migrant workers eager to take part in China’s economic growth. Now, the flood of labor has dried up and many are looking elsewhere for jobs in higher-technology industries that have been less affected by the slump, or simply plan to return home. Liu the taxi driver, who came to Wenzhou more than 10 years ago, said he’s taking his family of four back to Anhui province next week. Even working more than 12 hours a day, his income has dropped to a monthly 3,000 yuan, from 5,000 yuan a year ago. Food takes half his earnings and he can only afford 400 yuan a month for a cramped apartment, he said. “This is no longer the city I had dreamed of,” he said. “No matter how hard I work, I can’t save enough to buy an apartment here. I’m not coming back.” Property in Wenzhou remains out of reach for thousands like Liu even after home prices slumped 12.3 percent in April, the fastest drop in the country. Apartments still cost an average 30,000 yuan per square meter -- the equivalent of the city’s annual per capita disposable income in 2010, according to the local government website. Prices in Majestic Mansion, one of Wenzhou’s most expensive residential projects and developed by Greentown China Holdings Ltd., more than doubled to 70,000 yuan a square meter in the three years after its start in late 2007. Now the price is about 40,000 yuan, according to real estate broker SouFun Holdings Ltd. Soaring national property prices were one effect of the government’s stimulus plan in 2008. At the government lending office in Wenzhou, Jiang leaves empty handed, worrying how he will tell his remaining 30 workers that he won’t be able to pay them. “Once the workers are gone, there’s no way to restart the business even if the market picks up,” he said, his face buried in his hands. “All the big talk I heard on helping small businesses here is empty. The government is turning a blind eye.” --Jun Luo. With assistance from Kevin Hamlin in Beijing. Editors: Adam Majendie, Chris Anstey To contact Bloomberg News staff for this story: Jun Luo in Shanghai at [email protected] To contact the editor responsible for this story: Paul Panckhurst at [email protected] A city in disrepair.

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W.Va. delegation to study future fund in N.D. CHARLESTON, W.Va. -- A delegation of West Virginia lawmakers is planning a trip to North Dakota to learn more about its legacy fund, according to a news release. Senate President Jeff Kessler says the trip is tentatively scheduled for late this summer. Members of the delegation will be named at a later date. "If we can create the fund and begin investing now, it will send a powerful message to Wall Street that West Virginia, during these tough economic times, is not only balancing its budget but also saving for the future," Kessler said in the news release. The North Dakota Legacy Fund was created in 2011 and is funded by oil and gas tax revenue. It reached the $1 billion milestone in only 20 months. Kessler has proposed a similar fund called the West Virginia Future Fund. He says a permanent endowment will create wealth and opportunity that will last long after the natural gas boom is gone. Kessler has tried to create the fund through legislation several times, with no success. He co-sponsored a bill during the 2013 legislative session: it did not advance from the Senate Finance Committee. New House of Delegates Speaker Tim Miley, D-Harrison, also championed the trip. In the news release he said a future fund "holds tremendous potential" and he's interested to see what lawmakers will learn on the trip. The trip stems from legislation that allows the leaders of both the House and Senate to appoint job creation workgroups. The total cost of the trip won't be known until all the members of the delegation are determined, a Kessler representative said.

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Federal Reserve Bank of Cleveland: http://www.clevelandfed.org home | news & media | careers | site map About Us Our Annual Report Officers & Boards Indicators & Data Financial Reporting & Data Banking Contacts Home > For the Public > News and Media > Press Releases > 2008 > For Immediate Release June Gates [email protected] Federal Reserve Bank of Cleveland Announces Official Appointments The Federal Reserve Bank of Cleveland has announced the following organizational changes and official appointments, effective August 15, 2008. Kelly A. Banks has been named vice president, Community Relations. Banks will lead the Community Relations Department, which will be the Cleveland Reserve Bank’s principal point of contact for its relationships with colleges, universities, school systems, and civic organizations. She will be in charge of setting the strategic direction for this newly created department, establishing departmental priorities, overseeing the Bank’s Learning Center and Money Museum, developing economic education programs, and promoting the tour program. Banks joined the Cleveland Reserve Bank as public information manager in 1998 and was appointed assistant vice president in 2001 with responsibilities for public information, web services, the Learning Center, and Bankwide public programs. Banks is active in the Fourth District’s civic community, serving as a board member of the Ohio Council on Economic Education, diversity chair for the Cleveland chapter of the Public Relations Society of America, leadership council member for Beech Brook, and marketing committee member of the Greater Cleveland Partnership’s Commission on Economic Inclusion. Banks holds a bachelor’s degree in communications from Miami University in Oxford, Ohio, and an Accreditation in Public Relations (APR) from the Public Relations Society of America. Susan M. Kenney has been appointed a vice president in the eGovernment Treasury Services area. Kenney will maintain her responsibility for the U.S. Treasury’s Pay.gov area – an internet portal that provides individuals and businesses the option of processing federal government transactions electronically. Additionally, Kenney oversees customer service for over 400 U.S. government agency programs including Customs, the U.S. Mint, the Department of State, the Tax and Trade Bureau, and the Department of Education. Kenney joined the Bank in 1976 as a programmer in data systems support. In 1999, she was promoted to information technology services coordinator. In 2003, she joined the eGov function where she assumed major responsibility for the design and implementation of the Pay.gov application. She was appointed assistant vice president the same year. She has a bachelor’s degree in mathematics from John Carroll University in Cleveland and is currently the secretary for the board of trustees for the Waiting Child Fund, a vehicle for influencing the successful adoptive placements of children with special needs. Henry (Hank) P. Trolio has been appointed vice president of Information Technology Services. Trolio will assume additional responsibility for the Treasury’s Bureau of the Public Debt and other national information technology (IT) projects. Trolio has responsibility for the day-to-day delivery of IT services at the Cleveland Reserve Bank and its two branches. He has served as project manager for numerous Federal Reserve System projects, leading software development at the direction of the U.S. Treasury, and providing direct support for the Federal Reserve System’s server storage leadership team. Trolio joined the Bank in 1978 as a check programmer/analyst. He worked as coordinator of data communications and networking and was later assigned additional responsibility for systems programming support. He was appointed assistant vice president in 1990 and served as the Bank’s deputy Equal Employment Opportunity officer from 1993 to 2003. He earned a bachelor’s degree in mathematics from Kent State University in Kent, Ohio. George E. Guentner has been appointed assistant vice president. In his new role, the scope of his work with the Bureau of the Public Debt of the U.S. Treasury will expand. He will also provide support in overseeing the Federal Reserve Bank of Cleveland’s information technology services. Guentner joined the Bank in 2000 as manager of information technology for the Pittsburgh branch. Guentner has a bachelor’s degree in computer science from Point Park University in Pittsburgh and a master’s degree in public management with a minor in computer science from Pittsburgh’s Carnegie Mellon University. The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that, along with the Board of Governors in Washington, D.C., comprise the Federal Reserve System. As the nation’s central bank, the Federal Reserve System formulates U.S. monetary policy, supervises certain banks and all bank holding companies, and provides payment services to depository institutions and the U.S. government. Payment services include check clearing, electronic payments, and the distribution and processing of currency and coin. The Federal Reserve Bank of Cleveland, including its branch offices in Cincinnati and Pittsburgh, serves the Fourth Federal Reserve District, which includes Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia. Careers | Diversity | Privacy | Terms of Use | Contact Us | Feedback | RSS Feeds

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Shorter Timeframe, More Risky Back in March the Food and Drug Administration issued Chelsea Therapeutics (Nasdaq: CHTP ) a complete response letter asking for data demonstrating a durable response of two to three months for Northera, its treatment of symptomatic neurogenic orthostatic hypotension, characterized by low blood pressure on standing that can cause dizziness and fainting. After meeting with the FDA, the company believes it'll only need data for two weeks after patients have reached their correct dose, which you'd think would be good news. Instead shares fell 12%. While the data might come sooner than expected, I think investors are right to be worried. According to management, the FDA is now more concerned that one of the clinical trial sites in its pivotal study enrolled a disproportionate number of patients and the data from that site was better than the average. The FDA takes the integrity of clinical trial data very seriously. The agency rejected Johnson & Johnson's (NYSE: JNJ ) antibiotic ceftobiprole essentially because of problems with its clinical trial sites. Pfizer (NYSE: PFE ) got a warning letter from the agency for failing to adequately monitor its clinical trial testing its antipsychotic Geodon in children. There were rumbling about MannKind (Nasdaq: MNKD ) having issues with its ex-U.S. sites, but I don't think anything came of it. There's no evidence of improprieties here. Chelsea did two independent reviews of the site before turning in data to the FDA and the agency reviewed the site as well. None of the audits resulted in any issues. I think the bigger issue here is the sudden change from when the CRL was issued to now. Did the company misread the important aspects of the letter, or did the agency suddenly change its mind? It doesn't really matter which. Both inept management and/or an agency that doesn't know what it wants are signs of a very risky drug approval. Chelsea plans to use the patients in a clinical trial that's currently enrolling patients to get the data the FDA requested, but it'll have to change the primary endpoint of the trial. That's another big red warning flag, although changing it because it's what the FDA wants is better than changing it hoping to get a better result. The FDA hasn't signed off on the plan yet, but assuming the agency does, Chelsea thinks it'll be able to complete the trial by the first quarter of next year, which would put a potential approval in the third quarter of 2013. Chelsea had $52 million in the bank at the end of the first quarter and expects to burn through more than half of that this year, leaving just $17 million to $20 million. Once the trial is complete, the spend should go down, so Chelsea estimates the cash should allow it to get into the second quarter of next year. Clearly it'll need to raise more cash to get through the FDA decision and launch, but if the new study is positive, shares should go up, and it won't be as costly. Chelsea also has a phase 2 rheumatoid arthritis drug that could be out-licensed to raise cash. Chelsea might be a good long-term buy here, but only for the most risk-tolerant investors. There's still a lot that could go wrong. Everyone else should look elsewhere for their high-growth kicks. Analysts at the Motley Fool's Rule Breakers have a suggestion. Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Pfizer and Johnson & Johnson. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. at 12:56 PM, WCoastGuynCA wrote: Mannkind probably has the greatest upside in its current share price (below $2.00) of any company with a potential blockbuster drug in phase three trials. It should be obvious that Al Mann has the financial capacity and the intention to fund the company through the F.D.A. approval of Afrezza. Obviously a big pharma partnership would make it substantially easier for him to do so.Risk/reward favors buying shares in the company. at 2:56 PM, WCoastGuynCA wrote: Receiving an estimated $300,000,000 from last month's sale of Stellar Micro Electronics certainly put Mr. Mann in the position of having substantial flexibility in his options regarding funding Mannkind for the next twelve months. Chelsea Therapeuti… CAPS Rating: MNKD MannKind Corp

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Economic Fundamentals Strong, No Cause For Concern: Government New Delhi: Seeking to assuage investors worried over declining value of the rupee and falling stock markets, the Finance Ministry today said country's economic fundamentals are "very strong" and there is no cause for concern. "Current Account Deficit (CAD) is below $50 billion. Foreign exchange reserves are (at) all-time high. We have very strong fundamentals...I don't think that there is any cause of worry," Economic Affairs Secretary Arvind Mayaram told reporters. He was responding to a query regarding the decline in the value of the Indian rupee, which has slipped to 62.75 against the U.S. dollar. The stock markets too plunged, with the benchmark BSE Sensex declining over 300 points in early trade. Mayaram further said that there was no reason for the Indian currency to be impacted by something happening in Argentina. "I do not see any correlation," he added. He was apparently referring to the massive fall in the value of the Argentina's currency peso last week. The rupee, he said, "will remain range-bound and we should not get overtly concerned." Every currency behaves based on the strength of its own fundamentals, he said, stressing there had been considerable improvement in the CAD situation. The CAD, which is the difference between inflow and outflow of foreign exchange, slipped to all time high of $ 88.2 billion in 2012-13 or 4.8 per cent of the GDP. Situation has improved with the government and the Reserve Bank taking series of steps to contain the CAD. In the current financial year it is expected to fall below $ 50 billion. On whether the recent decision of the RBI to withdraw pre-2005 currency notes was aimed at curbing black money, Mayaram said it was "not an effort to tackle black money which is a complex thing." Also, he added, withdrawal of a series of notes which have fewer security features cannot be termed a demonitisation of currency notes.

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You are here: Home >> Free for all >> Dom P more prestigious than Cristal Dom P more prestigious than Cristal 27 Nov 2006 by JR This report from the Luxury Institute (www.luxuryinstitute.com) is just in, and making interesting reading in view of my article earlier today about Dom 1998. But this is a strictly American survey with no mention of the likes of Krug, Bollinger, Pol Roger, Salon or the more obviously connoisseur champagnes. NEW YORK, November 27, 2006 As the holiday season approaches, which brands of champagne and sparkling wine do wealthy consumers rate the most prestigious? According to the Luxury Institute’s Luxury Brand Status Index (LBSI) survey of Champagnes and Sparkling Wines, the iconic LVMH brand, Dom Pérignon, is the clear winner. The brand ranks first overall, and in three out of the four critical metrics: uniqueness and exclusivity, used by people who are admired and respected, and making those who consume it feel special across the entire experience. High net worth consumers cite Dom Pérignon’s consistently high quality, superb taste and social status. According to the wealthy, “The name has become synonymous with the best in champagne”. Cristal is the second-highest ranking brand among the 20 champagnes and sparkling wines rated. Respondents who recommend the brand above others cite its “smooth, delicious taste”and its reputation among those they respect. La Grande Dame by Veuve Clicquot, another LVMH brand, ranks third for overall LBSI, but is top-ranked in terms of consistently superior quality. It’s also the brand most perceived as worthy of a significant price premium and the brand wealthy consumers are most willing to recommend. Twenty leading brands were rated, including: Cristal (Louis Roederer), Dom Pérignon, Domaine Chandon, Domaine Ste. Michelle, Etoile, Freixenet, J, Korbel, Krug, La Grande Dame by Veuve Clicquot, Laurent-Perrier, Moët & Chandon, Mumm, Nicolas Feuillate, Perrier-Jouët, Piper Sonoma, Piper-Heidsieck, Schramsberg, Taittinger, and Veuve Clicquot Ponsardin. “The emotional attachment wealthy consumers have with Dom Pérignon makes it clear that they think they actually own this iconic LVMH brand. Of the hundreds of brands that we ask wealthy consumers to rate every year across scores of luxury categories, Dom Pérignon is one of the world’s most prestigious, and therefore, most valuable, luxury brands,” said Milton F Pedraza, CEO of the Luxury Institute. “Of course, it is one thing is to intuit that, and quite another to have wealthy consumers themselves validate this in their own voices. The premium wines, liquors and spirits industry has many wonderful connoisseurs and experts. However, we think there is room for wealthy consumers who vote with their tastes and wallets, to create independent, peer-to-peer reviews. The mission of the Luxury Institute is to facilitate that impartial process for the benefit of companies and consumers alike.” A nationally representative sample of 1,200 wealthy consumers, who have consumed or purchased alcoholic beverages in the past six months, was surveyed online. Respondents had an average household income of $340k and average net worth of $2.7m. Survey results are weighted to match the demographic and net worth profile of the same audience according to the latest Survey of Consumer Finances from the Federal Reserve. Tags: champagne [Back to top]

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Give the Beeb a break and target the tax avoiders Last updated at 14:14, Thursday, 15 November 2012 There is a huge amount of energy and hot air being expended on the future of the BBC and whether its ex-Director General should be given a full year’s pay-off for resigning. The Corporation seems to be in a state of meltdown at the moment, with people calling for it to be reorganised, programmes to be scrapped and various people’s heads to decorate the railings of Buckingham Palace.All this pales into insignificance compared to the tax avoidance trails and tangles used by some of our major High Street names.Whether or not George Entwistle is paid £450,000 severance is chickenfeed compared to the billions that this country is owed in taxes by big business.You may have missed it, but the head of Google UK and top brass from Starbucks and Amazon appeared before the Public Accounts Committee in the House of Commons this week to discuss their tax payments. Or lack of them.Starbucks has reported a taxable profit only once in its 15 years of operating in the UK.All three companies admitted they use favourable tax deals with other European nations to avoid full tax payments in this country. Margaret Hodge, who chairs the parliamentary committee, said she thought it was right for customers to boycott the three companies.It would be better if she urged the Government to clamp down on such avoidance schemes.As for the Beeb, we need to think more clearly and calmly about all of this.The integrity of the Corporation has been called into question over two appalling errors of judgement. But they must be taken into account in context and judged alongside its massive output and past performances.It’s just one example, but everyone seems to have forgotten about the brilliant exposé by Panorama of the abuse of residents at the Winterbourne View private care home in Bristol.We are currently engaged in trial by troll. The internet should be used as a tool for information and entertainment. Not as a court of law.The integrity of the BBC was upheld by Radio 4 Today anchorman John Humphrys when he interviewed under-fire director general George Entwistle on Saturday morning.Entwistle’s poor performance under the presenter’s hard and forensic questioning is said to have forced his resignation.I can’t think of any other organisation where an employer would have thought of questioning their boss so fiercely, let alone have been allowed to.I don’t remember Rupert Murdoch appearing on Sky TV at the height of the News of the World furore...ITV has not been held to account for the stupid stunt by Philip Schofield of handing over a sheet of names of suspected paedophiles that he had trawled the internet for.There has been an apology, but no mention of reprimands for him, the show director or studio manager for such a crass move and which David Cameron handled so well.Changes are probably needed at the BBC. Management could be tightened and should be more transparent.But we all need to take a deep breath and calm down and focus on what is more important for the country.Like tightening and making more transparent our business tax regulations. news and star, do you check the articles you print ? there is a massive difference between the BBC and the listed companies mark green uses to compare it with. this is a "non article" and a waste of space. Posted by craig on Business Tax Regulations"All three companies admitted they use favourable tax deals" - yes, and all LEGAL otherwise they would have been prosecuted surely.If you are reading this are you guilty of : Having an ISA? Buying duty free goods? Making a "favourable" entry on your tax return? Living abroad? Living on the Isle of Man? Having a bank account on the Isle of Man or in Switzerland? any other method of legitimate tax relief?These companies have been doing this for years; it's a legitimate method of maximising profit, and I for one don't blame them, what with the stupid rates of purchase, income and corporation tax in this country compounded with minimum rates of pay, high property rates & rents, it's really difficult to see how a shop on the high street can pay it's way these days. I guess they got to buy cheap and sell expensive then cut any other costs when and where they can. Yeehaw ! Posted by Derek on

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Feds: S&P defrauded investors, fueled crisis U.S. Attorney General Eric Holder at a news conference with attorneys general from eight states and the District of Columbia at the Justice Department, Feb. 5, 2013, in Washington, D.C. / Chip Somodevilla, Getty Images by Kevin Johnson and Kevin McCoy, USA TODAYby Kevin Johnson and Kevin McCoy, USA TODAY Filed Under WASHINGTON -- Standard & Poor's defrauded investors of billions of dollars by issuing falsely inflated credit ratings on financial instruments at the heart of the national financial crisis, U.S. Attorney General Eric Holder alleged Tuesday. Holder accused S&P of falsely claiming that its high ratings were independent and objective. In reality, Holder charged, the ratings were influenced by conflicts of interest and the firm's drive to reap higher profits by pleasing bond issuers at the expense of investors. Federal investigators found evidence of more than $5 billion in losses to institutional investors from mortgage-backed bonds rated by S&P between March and October 2007, the period just before the financial crisis. "During this period, nearly every single mortgage-backed, collateralized debt obligation that was rated by S&P not only unperformed, but failed," Holder said during a news briefing Tuesday at the Department of Justice. "Put simply, this conduct is egregious, and it goes to the very heart of the recent financial crisis." The case is the government's first major action against one of the credit rating agencies that stamped their seals of approval on Wall Street's mortgage bundles. It marks a milestone for the Justice Department, which has been criticized for failing to make bigger cases against the companies involved in the crisis. Holder called the case "an important step forward in our ongoing efforts to investigate and punish the conduct that is believed to have contributed to the worst economic crisis in recent history." Acting Associate Attorney General Tony West said investors, financial analysts and the general public "expected S&P to be fair and impartial in issuing credit ratings, but the evidence we have uncovered tells a different story.'' The allegations detailed in the government's lawsuit date to 2003, when agency analysts "raised concerns about the accuracy of the rating system, as well as the underlying methodology.'' "S&P executives allegedly ignored these warnings, and between 2004 and 2007 concealed facts, made false representations to investors and�?�took other steps to manipulate ratings criteria and credit models to increase revenue and market share,'' West said. West said the alleged scheme was akin to "buying sausage from your favorite butcher and he assures you the sausage was made fresh that morning and is safe. What he doesn't tell you is that it was made with meat he knows is rotten and plans to throw out later that night.'' S&P defense lawyer Floyd Abrams noted that the Federal Reserve, the Treasury Department and other government agencies also underestimated the risks posed by mortgage-backed securities that helped cause the financial crisis. He also said that rival firms awarded similarly high ratings to some of the bonds rated by S&P. "We find ourselves now being accused of acting in bad faith, while everyone else acted in good faith, presumably," Abrams told Bloomberg Television. "The fact is everyone tried and everyone failed to make good predictions about the future, and it is wrong for S&P to be accused in these circumstances." Rating agencies are widely blamed for contributing to the financial crisis that crested in 2008 and caused the deepest recession since the Great Depression. They gave high ratings, indicating little risk for investors, to pools of mortgages and other debt assembled by big banks and hedge funds. That gave even risk-averse investors the confidence to buy them. Some investors, including pension funds, can only buy investments that carry high ratings. In effect, rating agencies like S&P greased the assembly line that allowed banks to push risky mortgages out the door. When the housing market turned in 2007, the agencies acknowledged that mortgages issued during the bubble were far less safe than the ratings indicated. They lowered the ratings on nearly $2 trillion worth, spreading panic that spiraled into a crisis. S&P, a unit of New York-based McGraw-Hill (MHP), has denied wrongdoing. It says the government also failed to predict the subprime mortgage crisis. The government's lawsuit says S&P was more concerned with making money than issuing accurate ratings. It says the company delayed updating its ratings models, rushed through the ratings process and kept giving high ratings even after it was aware that the subprime market was flailing even as it gave high marks to investments made of subprime mortgages. In 2007, one analyst forwarded a video of himself singing and dancing to a tune about the deterioration of the subprime market, with colleagues laughing. The government, for its part, has been widely criticized for not pursuing financial crisis wrongdoing as doggedly as some might have hoped. Lance Roberts, chief economist at Streettalk Advisors in Houston, Texas, called the lawsuit "about three years too late." "The government's just now getting around to filing a lawsuit?" Roberts said. "It seems disingenuous to me. Why is there actually no regulation that occurs at the front end?" Stuart Delery, chief of the Justice Department's Civil Division, said the inquiry required the review of "millions of pages of documents'' and interviews with more than 150 witnesses, including former S&P executives. Delery called the described the inquiry as an "enormous task" that required a team of nearly 24 government attorneys drawn from the U.S. Attorney's Office in California and the Justice Department's Civil Division. Associate Attorney General Tony West declined to address questions about the possible culpability of other entities, saying the legal action was specific to Standard & Poor's. Ratings agencies like S&P are a key part of the financial crisis narrative. When banks and other financial firms wanted to package mortgages into securities and sell them to investors, they would come to a ratings agency to get a rating for the security. Many securities made of risky subprime mortgages got high ratings, giving even the more conservative investors, like pension funds, the confidence to buy them. Those investors suffered huge losses when housing prices plunged and many borrowers defaulted on their mortgage payments. This arrangement has a major conflict of interest, the government's lawsuit says. The firms that issued the securities could shop around for whichever ratings agency would give them the best rating. So the agencies could give high ratings just to get business. The government's lawsuit says that "S&P's desire for increased revenue and market share ... led S&P to downplay and disregard the true extent of the credit risks" posed by the investments it was rating. For example, S&P typically charged $150,000 for rating a subprime mortgage-backed security, and $750,000 for certain types of other securities. If S&P lost the business - for example, if the firm that planned to sell the security decided it could get a better rating from Fitch or Moody's - then an S&P analyst would have to submit a "lost deal" memo explaining why he or she lost the business. That created sloppy ratings, the government said. "Most rating committees took less than 15 minutes to complete," the government said in its lawsuit, describing the process where an S&P analyst would present a rating for review. "Numerous rating committees were conducted simultaneously in the same conference room." According to the lawsuit, S&P was constantly trying to keep the financial firms - its clients - happy. A 2007 PowerPoint presentation on its ratings model said that being "business friendly" was a central component, according to the government. In a 2004 document, executives said they would poll investors as part of the process for choosing a rating. "Are you implying that we might actually reject or stifle 'superior analytics' for market considerations?" one executive wrote back. "...What is 'market perspective'? Does this mean we are to review our proposed criteria changes with investors, issuers and investment bankers? ... (W)e NEVER poll them as to content or acceptability!" The lawsuit says this executive's concerns were ignored. A 2004 memo said that "concerns with the objectivity, integrity, or validity" of ratings criteria should be communicated in person rather than through email. Also that year, an analyst complained that S&P had lost a deal because its criteria for a rating was stricter than Moody's. "We need to address this now in preparation for the future deals," the analyst wrote. By 2006, S&P was well aware that the subprime mortgage market was collapsing, the government said, even though S&P didn't issue a mass downgrade of subprime-backed securities until 2007. One document describing the performance of the subprime loans backing some investments "was so bad that analysts initially thought the data contained typographical errors," the government lawsuit said. In March 2007, one analyst who had conducted a risk ranking analysis of 2006 mortgage-backed securities wrote a version of "Burning Down the House": "Going - all the way down, with/Subprime mortgages." A video showed him singing and dancing another verse in front of S&P colleagues, who laughed. Another analyst wrote in a 2007 email, referring to ratings for mortgage-backed investments: "The fact is, there was a lot of internal pressure in S&P to downgrade lots of deals earlier on before this thing started blowing up. But the leadership was concerned of p(asterisk)ssing of too many clients and jumping the gun ahead of Fitch and Moody's." The government filed its lawsuit in U.S. District Court in Los Angeles late Monday. The government charged S&P under a law aimed at making sure banks invest safely, and said that S&P's alleged fraud made it possible to sell the investments to banks. If S&P is eventually found to have committed civil violations, it could face fines and limits on how it does business. The government said in its filing that it's seeking financial penalties. The action does not involve any criminal allegations. Critics have long complained about the government's failure to bring criminal charges against any major Wall Street players involved in the financial crisis. Criminal charges would require a higher burden of proof and carry the threat of jail time. McGraw-Hill shares dropped $2.65, or 5.3%, to $47.65 in morning trading Tuesday after plunging nearly 14% Monday in anticipation of the filing of the lawsuit. Shares of Moody's (MCO), the parent of Moody's Investors Service, another rating agency, lost 2.2% Tuesday after closing down nearly 11% Monday. Contributing: USA TODAY's Kevin Johnson in Washington and Kevin McCoy in New York; The Associated Press Copyright 2014 USATODAY.comRead the original story: Feds: S&P defrauded investors, fueled crisis Justice Dept.'s civil suit alleges S&P fueled financial crisis, 'misled investors.' A link to this page will be included in your message.

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Taxpayers have until April 17 to file returns, pay Taxpayers across the nation will have until Tuesday, April 17, 2007, to file their 2006 returns and pay any taxes due, the Internal Revenue Service announced today. Taxpayers will have extra time to file and pay because April 15 falls on a Sunday in 2007, and the following day, Monday, April 16, is Emancipation Day, a legal holiday in the District of Columbia. "This year, taxpayers have additional time to file and pay beyond the traditional April 15 deadline," said IRS Commissioner Mark W. Everson. "As we always do, we encourage taxpayers to get an early start on their taxes to make sure they have plenty of time to accurately prepare their return." This means the entire country has an April 17 deadline. Previously, the April 17 deadline applied just to individuals in the District of Columbia and six eastern states who are served by an IRS processing facility in Massachusetts, where Patriots Day will be observed on April 16. The April 17, 2007 deadline will apply to any of the following: •2006 federal individual income tax returns, whether filed electronically or on paper. •Requests for an automatic six-month tax-filing extension, whether submitted electronically or on Form 4868. •Tax year 2006 balance due payments, whether made electronically (direct debit or credit card) or by check. •Tax-year 2006 contributions to a Roth or traditional IRA. •Individual estimated tax payments for the first quarter of 2007, whether made electronically or by check. •Individual refund claims for tax year 2003, where the regular three-year statute of limitations is expiring. Other tax-filing and payment requirements affected by this change are described in IRS Publication 509, Tax Calendars for 2007, available at the IRS website at http://www.irs.gov/publications/p509/index.html. Most taxpayers will not have to change their plans in response to this announcement. Three out of four individual filers get refunds. Typically, returns claiming refunds are filed early in the tax season. By law, filing and payment deadlines that fall on a Saturday, Sunday or legal holiday are timely satisfied if met on the next business day. Under a Federal statute enacted decades ago, holidays observed in the District of Columbia have impact nationwide on tax issues, not just in D.C. Under recently-enacted city legislation, April 16 is a holiday in the District of Columbia. Officials recently became aware of the intersection of the national filing day and the local observance of the new Emancipation Day holiday after most forms and publications for the current tax filing season went to print. Even with the extra time, taxpayers can skip the last-minute rush and avoid needless mistakes by filing early, taking advantage of the speed and convenience of electronic filing, choosing direct deposit for any refunds and paying any taxes due by direct debit or credit card. IRS.gov has further details on electronic filing and payment options and links to companies providing these services.

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Banks turn their focus to growing female client base Female-oriented banking is not about frivolity and bows, but about profit. As the gender gap closes, targeting a hitherto ignored clientele is very big business By Antoinette Odoi / THE GUARDIAN , LONDON Sun, Nov 11, 2007 - Page 12 The floor is littered with toys and children tussle with each other in a play fight. At the other end of the 28m2 room, a woman periodically looks over as she enjoys a cup of coffee in the calming earth tones of her surroundings.But this is not a creche but a bank -- Raiffeisenbank Gastein in Austria. The town of Bad Gastein might be a sleepy looking ski resort with only 5,600 inhabitants, but it is home to one of the most innovative banking concepts around: female-oriented banking.With the introduction of the euro, Raiffeisenbank Gastein's currency exchange business broke away in 2002, leaving a large, unused space.The banking consultancy Emotion Banking was called in to drum up ideas on how to use the space and increase local business. It found that while 13 percent of women in the Gastein valley were self-employed and required high-level banking strategies, 50 percent were housewives with more basic banking needs. The consultancy devised a strategy to target the wealth of opportunity among Gastein's women, and "female-banking" was born.Now, a year after its official opening, Raiffeisenbank's headquarters has been transformed. It operates a "branch in branch" concept with separate areas devoted to separate clientele. That its female customer base has seen double digit-growth for the first time in 20 years shows female-oriented banking is not about frivolity and bows but profit and the bottom line.Emotion Banking's chief executive, Christian Rauscher, says that until now banks have failed to tap into the lucrative female market."Fifty-one per cent of [banking] clients worldwide are female ... more women are standing on their own feet and deciding their own finances ... [banks] tend to address men in their communication, which is not necessarily the best way to be successful," Rauscher says.He also makes the point that women have more financial clout than is often attributed to them, for example, overseeing household finances. As more women break through the glass ceiling, it is clear that tailoring services to them will be an expanding area for banks. Another bank determined to focus on their growing power is the private UK bank Coutts.Sarah Deaves, who became Coutts's first female chief executive, says a spur for the bank is the growing number of rich women in the UK. About one-third of Coutts' 60,000 clients are women."Women are increasingly becoming a substantial segment," Deaves says, citing figures from a 2006 Center for Economic Business Research study, which estimated 53 percent of millionaires are likely to be female in 2020. Additionally, figures from the independent research firm Datamonitor suggest there are 448,000 women in Britain classified as "high net-worth," with ¥200,000 (US$420,820) in liquid assets. Of those, 112,000 -- or 25 percent -- have ¥500,000 in liquid assets, the criteria for holding a Coutts account.The Datamonitor study also revealed the wealth gap between males and females is narrowing. Last year, the average female millionaire was worth ¥1.97 million, while the figure for men was ¥2.96 million. This compares with ¥1.28 million for women in 1998 and ¥2.71 million for males.Deaves says there has been a noticeable change in the way women acquire wealth. No longer reliant on divorce settlements or inheritances, women are now making their own money. Some 38 percent of Coutts' clients gained wealth through salary, 19 percent did so from their spouse, 7 percent inherited it and the remainder acquired it through unknown means."People are able to make their mark [in business] earlier. Women are coming through in investment banking they're becoming corporate executives and are earning lots of bonuses," she says.Coutts' aim is to create a culture that fosters female entrepreneurship. What started as a small lunch program two years ago has grown into an array of networking events, charity fundraisers and the launch of Coutts Woman online magazine, which had 6,000 hits in July.The private bank is also making a niche for itself by linking finance to fashion, and is sponsoring an exhibition of designer Matthew Williamson's work at London's Design Museum.But Catherine Tillotson, a partner at the wealth management consultancy Scorpio Partnership, says private banks are often guilty of "wrap[ping] up their services in pink ... now it's becoming [clearer] the issue is not about whether women should be treated differently. [Banks need] a different marketing approach, rather than different service."She says British banks were at the vanguard of female-oriented banking 10 years ago but banks on the European mainland had now moved ahead."It's a shame because the UK is such a strong financial centre ... and a major honeypot for very high net-worth individuals," she says.North American banks are also addressing women's needs. Just two decades ago, it was commonplace for a female entrepreneur to have to get her husband to co-sign a loan, says Kris Depencier, national manager of small business and women's markets at Royal Bank of Canada (RBC). After setting up a business specifically for women, RBC hoped to address this.Fifteen years on, the success of women entrepreneurs has shown the idea to be fruitful and still relevant today."[Women] don't have the same legacy of established networks and availability of mentors that perhaps some of their male colleagues have had," she says. "I would suggest that is changing rapidly as more and more women go into business."But do female-oriented strategies render women a homogeneous group and contradict their shared underlying mission to emancipate them?Rauscher disagrees."[Female banking] is just a concept so employees can be more sensitive to women's lifestyle approaches and the goals and dreams that they have. It's still important to ask women individually [what their needs are]," he says. http://www.taipeitimes.com/News/bizfocus/archives/2007/11/11/2003387268

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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. U.S. Default Poses Minimal Risk to Money Funds, Fitch Says Rating agency says funds have cut their holdings of the Treasuries that would be most immediately affected. By Christopher Condon, Bloomberg October 10, 2013 • Reprints Money-market mutual funds can cope with a short-term default in U.S. Treasuries as long as it doesn’t trigger the kind of investor run that followed the collapse of Lehman Brothers Holdings Inc. in 2008, according to Fitch Ratings. The funds have reduced their holdings of Treasuries that would be most immediately affected by the failure of the U.S. to extend its borrowing capacity, and have high levels of short-term liquidity, the ratings company said today in a report and in an interview. Fund managers wouldn’t be forced to sell Treasuries in the event of a default and would be free to continue buying non-defaulted Treasuries, said Roger Merritt, managing director of fund and asset management at Fitch. “Mark-to-market declines on U.S. government exposures are probably manageable assuming any default is short-lived and absent significant redemption activity,” according to the report, which Merritt wrote with two colleagues. Money-market funds give millions of households, companies and other institutions a safe parking spot for cash and channel $2.5 trillion to issuers of short-term debt including the U.S. government, financial institutions and companies. A run on funds that hold corporate debt after the collapse of Lehman Brothers in September 2008 helped freeze global credit markets. U.S. money funds held about $475 billion in Treasury securities as of Aug. 31, and an additional $156 billion in repurchase agreements collateralized by Treasuries, according to research firm Crane Data LLC in Westborough, Massachusetts. Crane Data estimates that about $74 billion in Treasuries held by money funds matures from Oct. 24 to Nov. 15. Assets in U.S. money funds declined by $9.4 billion, or about 0.4 percent, in the seven days through yesterday as clients pulled money, according to data compiled by research firm iMoneyNet, also based in Westborough. Institutional funds that focus almost exclusively on debt backed by the U.S. government dropped $14.4 billion, or 2 percent of assets. Money-fund assets can be influenced not only by market conditions but also by corporate deadlines, such as those for making payroll or paying taxes. ‘Simple’ Lesson Republican lawmakers in Washington have refused to approve new funding for the U.S. government, triggering a partial shutdown of operations since Oct. 1. They have also vowed not to approve an increase in the government’s debt limit unless President Barack Obama and his Democratic Party agree to change the Patient Protection and Affordable Care Act of 2010, known as Obamacare. Treasury Secretary Jacob J. Lew has said “extraordinary measures” to avoid breaching the debt limit will be exhausted no later than Oct. 17. Paul Schott Stevens, president of the Investment Company Institute, a Washington-based trade group representing mutual fund companies, urged Congress to resolve the standoff before a default in the text of testimony he plans to deliver tomorrow to the Senate Banking Committee. “Once Treasury has exercised the option to delay payments, investors will learn a lesson that cannot and will not be unlearned -- even after all missed or delayed payments have been made g

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European Union Fines Banks Billions For Rigging Interest Rates Share Tweet E-mail Comments Print By Bill Chappell Originally published on Wed December 4, 2013 10:45 am EU Competition Commissioner Joaquin Almunia announces fines against eight large banks, in a scandal over rigging interest rates. Georges Gobet European regulators have fined eight large banks a total of more than $2 billion over an illegal cartel scheme to fix interest rates. The fine, the largest ever issued in such a case by the European Union, comes after a two-year investigation into banks' collusion. And the inquiry isn't yet complete. Two American banks — JPMorgan Chase and Citigroup — are included in the list of financial institutions fined as part of a settlement deal. Several banks that cooperated with investigators saw their fines reduced or eliminated. "Barclays received full immunity for revealing the existence of the cartel and thereby avoided a fine of around 690 million euros [$938 million] for its participation in the infringement," according to a news release from the EU. Similarly, UBS also received immunity from what would have been a fine of around 2.5 billion euros — about $3.4 billion — in return for its cooperation. For NPR's Newscast unit, Teri Schultz reports from Brussels: "EU regulators found traders at some of the world's largest banks joined forces to manipulate borrowing rates, the euro interbank offered rate, or Euribor, and London interbank offered rate, or Libor. A record fine of about $2.3 billion dollars will be shared among eight institutions including Citigroup, Deutsche Bank and Royal Bank of Scotland. "EU competition commissioner Joaquin Almunia says if the public could hear the conversations between traders found to be manipulating benchmark interest rates they would be 'appalled.' " 'They discussed confidential, commercial and sensitive information that they are not allowed to share with other market players according to the antitrust rules,' Almunia says. "Almunia says today's fines are not the 'end of the story,' as regulators continue their investigations." The two remaining banks are Société Générale and RP Martin. The collusion centered on interest rate derivatives denominated in two currencies: the euro and the Japanese yen. The overall fine of more than 1.71 billion euros reflects a reduction of 10 percent that was given to the institutions for agreeing to settle the case. The New York Times has this explanation of how Libor and Euribor rates are set: "Banks submit the rates at which they would be prepared to lend money to each other, on an unsecured basis, in various currencies and varying maturities. Those rates are averaged, after the highest and lowest ones are eliminated, and that becomes that day's rate."Copyright 2013 NPR. To see more, visit http://www.npr.org/. View the discussion thread.

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« United Bankshares Inc. incre... Local waffle restaurant crea...» Business Roundup for November 17 Save | Coldwell Banker welcomes new associate BERKELEY SPRINGS - Coldwell Banker Premier Homes recently announced that Bill Paxson has joined the firm as a sales associate. Paxson's career background includes more than 35 years of construction experience, during which he built and developed three subdivisions and numerous custom homes. Paxson also became certified to perform home inspections in 2009. Article Photos Bill Paxson Paxson can be reached at Coldwell Banker Premier Homes' Berkeley Springs office at 304-258-2200 or by email at [email protected]. The office is located at 200 S. Washington St. in Berkeley Springs. --- Three locals named to SMART529 honor roll MARTINSBURG - Joanne Wadsworth of BB&T Investment Services Inc. in Martinsburg, Ethan Loewen of Edward Jones in Martinsburg and George Alwin of Edward Jones in Shepherdstown have been named to the 11th annual SMART529 Honor Roll for encouraging families to save for higher education. West Virginia residents have the option of opening SMART529 college savings accounts either directly with the program of through investment professionals located in banks, investment firms and other financial service businesses through the state. SMART529 is a program of the West Virginia College Prepaid Tuition and Savings Program Board of Trustees of which state Treasurer John Perdue is chairman. For more information about the SMART529 program, go to wvtreasury.com. --- Glory Days Grill honored as Employer of the Year MARTINSBURG - Glory Days Grill, located in Ranson, received recognition as the Martinsburg District Employer of the Year from the West Virginia Division of Rehabilitation Services. The restaurant has previously hired DRS clients, but most recently agreed to become a work skills assessment site for a client. Glory Days Grill employees provided job skills training to this individual and will provide an opportunity for employment when a position becomes available. Distinguished Employer awards were presented to other businesses in the district: County Pride Foods, Romney West Virginia Division of Highways, Burlington Pilgrim's Pride Corporation, Moorefield DRS, a division of the West Virginia Department of Education and the Arts, is the state agency responsible for the federal vocational rehabilitation program in West Virginia. DRS assists people whose physical or mental condition is interfering with their ability to get or keep a job. Employers play a critical role in the success of those participating in the vocational rehabilitation program. DRS offers individualized service to assist employers in retaining valued employees or in hiring qualified employees. DRS can provide consultation related to disability, as well as information about assistive technology, disability resources, potential tax credits, workplace accommodations and other benefits to employers. For more information about DRS and its programs, call 1-800-642-8207 or visit the division's website at wvdrs.org. In the Martinsburg district, call 304-267-0005. --- WVU Urgent Care now open in Inwood INWOOD - WVU Urgent Care in the Inwood medical building is now open. The clinic is staffed by board-certified WVU faculty physicians and physician assistants with extended hours, seven days a week. Individuals seeking urgent medical care can visit the new WVU Urgent Care at 5047 Gerrardstown Road (W.Va. 51), Suite 2A in Inwood. Urgent Care is open from noon to 8 p.m. Monday through Friday; from 8 a.m. to 8 p.m. on Saturdays; and from noon to 8 p.m. on Sundays. No appointment is necessary. Most insurances are accepted. Urgent Care treats patients of all ages and is the appropriate treatment facility for non-life-threatening injuries such as lacerations or cuts, strains, and sprains. Urgent Care physicians will also treat patients with acute illnesses, like strep, flu, ear infections, pink eye, rashes, urinary tract infections and other illnesses. Flu shots and sports physicals are available too. Patients with a life-threatening illness, injury or symptoms such as chest pain should be seen at the nearest emergency room. Urgent Care helps those with busy lives fit healthcare into their day. Appointments are never required and extended evening and weekend hours allow people to seek healthcare when convenient. WVU Urgent Care has a second location in Ranson, across the street from Jefferson Medical Center. For more information on either location, visit uhpurgentcare.com. © Copyright 2014 journal-news.net. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Next Fiat Money: How Else You Gonna Kill 600,000 Americans? A few years ago on these pages, I harshly criticized an article urging New Yorkers to "eat local," and went so far as to dub the young lady's column, "The worst economics article ever." I am here to report that her record has been smashed. Floyd Norris's recent New York Times article on the greenback is hands down the worst economics article I have ever read. Not only is it jam-packed full of false history, but it uses the falsehoods to justify monstrous crimes, both in the past and present. The reader with a strong stomach will have to click the above link to appreciate the full enormity of Norris's accomplishment, but for those with limited attention spans I'll detail some of its biggest problems below. Bernanke Saved the Credit Markets? The article opens up with claims about the health of the world economy that are misleading at best: Six months after the financial world seemed to be coming to an end, the world's economies appear to be recovering. Banks that seemed to be on the brink of failure less than a year ago are now able to pay back investments made by the Treasury. It is too early to declare victory, but the world looks much safer than it did only a few months ago. Credit markets are recovering, to the point that the junk bond market will have its best year ever if it manages not to lose any money over the rest of 2009. The stock market has just finished its best six months since 1938. If victory is to be had, it will owe a lot to the willingness of American policy makers to set aside cherished policies and simply create money. And that is one reason it is appropriate to pause and celebrate an unheralded bicentennial: The father of the greenback, Elbridge Gerry Spaulding, who was born 200 years ago, in 1809. (emphasis added) Now hold on just a second. I want to challenge this claim that things are now recovering. Concerning banks paying back their TARP money, I have dealt with that issue here. Regarding the stock market, Norris is right: it's way up (so far) in 2009. But I don't remember Henry Paulson, Timothy Geithner, Ben Bernanke, or Presidents Bush and Obama ever justifying their rescue programs by saying, "We need to do this to resuscitate the stock market." I grant you, they may (and probably did) say that the stock market would be helped by their programs, but pumping up stock prices was never the justification given to the American public. As I recall, the justifications were all about J-O-B-S. Specifically, Paulson told Congress that he needed the $700 billion TARP package to save the banks, not because anybody cares about Wall Street fat cats, but because plenty of businesses needed short-term financing to meet their payrolls. (A lot of us wondered at the time what types of businesses paid their employees with borrowed money, but solving that kind of mystery is why the Treasury secretary makes the big bucks.) And of course, the Obama administration warned everyone that without pushing through the $787 billion "stimulus" package, aggregate demand would collapse even more and the unemployment rate would skyrocket. So let's check up on these two things. Below is a chart (reproduced from Greg Mankiw's blog) showing what the administration forecasts were for the unemployment rate, with and without the stimulus package: (Original image source here.) So just to be clear, Obama's economic team warned America that without their stimulus plan, unemployment might flirt with 9 percent, whereas with the Keynesian shot in the arm, unemployment wouldn't break 8 percent. After getting the stimulus, the actual unemployment rate is now nearly 10 percent. It's true, this awkward set of facts doesn't prove that the stimulus was a bad idea. It is theoretically possible that Obama really did inherit an economy in worse shape than his team realized back in January, and that without the stimulus, the actual unemployment rate now would be, say, 14 percent. But since plenty of free-market economists were warning that deficit spending just transfers productive resources into the bloated government sector, doing nothing to really help the economy, the above chart should be embarrassing indeed for the Keynesians. Yes, it's not the whole story, but it certainly is evidence that the free marketeers were right. Now what about this issue of the credit markets? Norris isn't original in his description; the conventional wisdom now is that the credit markets were on the verge of collapse, but that the unprecedented Treasury and Fed countermeasures (concentrated in September and October 2008) turned the situation around. According to this story, it wasn't just the overleveraged Wall Street firms that were in trouble; the amount of credit available to regular, mid-sized businesses — who hadn't dabbled in mortgage-backed securities or credit default swaps — was shriveling up. Paulson and Bernanke swooped in to save the day. Suppose for a moment, just for fun, that this story about the credit markets is just as backwards as the story about the stimulus package. What would that mean, if the story is 100% wrong? Well, I guess it would mean that the total amount of business loans was actually rising and in fact at an all-time high, up to the point when Paulson and Bernanke decided to throw caution to the winds. And then after their heroic intervention, the total amount of business loans fell like a stone. Can we agree that something like this would mean the story Norris has repeated is exactly backwards? Well feast your eyes on this: Now let's be fair. Someone could plausibly argue that the business loans dried up when they did, in response to the collapse of Lehman and so forth. In this view, the drop that we see in the chart above would have been far greater were it not for the Fed's rescue efforts and TARP. (There are other indicators people point to, such as the spreads between different types of debt.) But notice the similarity with the unemployment situation. Here too, the raw facts and Occam's razor suggest that the interventions have hurt the ability of average businesses (not just the huge beneficiaries of the bailouts) to obtain financing. The chart above doesn't prove that the TARP and Fed rescues were bad, but by no means should Norris be talking as if the recovery of the credit markets is a self-evident fact. Fiat Money a Tool for War Now that we've cleared that up, let's return to Norris's breathtaking article. Spaulding was that rarest of creatures, a man who succeeded in both business and politics; a congressman who saw a problem coming and had a solution ready. It was he who, at the end of 1861, figured out that the American government simply needed to print money to pay for the Civil War. It was economic heresy then, but without it this country might not have survived. Such an idea was then dismissed by some as "fiat money," money that is money not because it is backed by gold or silver, but because some government says it is money. That such currencies can fail to work is obvious, as those who lived in Weimar Germany or present-day Zimbabwe have found out. But notwithstanding those examples, the last 20 years deserve to be remembered as the age of fiat money. For much of that time, central bankers were revered as heroes for engineering long booms and short, shallow recessions. (emphasis added) Wow, this guy Norris is easy to please! If you throw out the examples where fiat money literally destroyed two economies (and, arguably, allowed Hitler to seize power in Germany) then it's got a pretty good track record. And to show when it really "worked," Norris points to the Civil War (or "War Between the States" for those readers who insist that words matter). Yes, it was economic heresy, but how else could the Union and Confederacy have managed to kill more than 600,000 Americans? (The Confederacy famously resorted to the printing press as well.) It is strange that so few of those who are passionately opposed to war also come out strongly against fiat money. People ranging from Floyd Norris to Milton Friedman acknowledge that one of the primary "virtues" of fiat money is that it allows the government to spend more on war than citizens would tolerate in taxes or deficits. Forget arms control agreements — we need spending control! Fiat Money Didn't Lead to Price Inflation? This is an economics article, not a tract on military matters. If you have never heard someone challenge the notion that the Civil War was a boon for human liberty, let me introduce you to Thomas DiLorenzo and his articles on Abraham Lincoln. Now we have to return to Norris's bogus economic history. Spaulding, wrote [Cornelius Vanderbilt biographer T.J.] Stiles, "performed a true miracle: he conjured money out of nothing, and so contributed more toward the Union victory (and the future of New York's financial sector) than any single battlefield victory." How did he do that? A congressman from Buffalo, and a banker before and after he was a politician, he was chairman of a House Ways and Means subcommittee when the government was in danger of running out of money to pay for the Civil War. He wrote a law that allowed the government to print money and declare it had to be accepted as legal tender. Until then, the only circulating paper money was notes issued by banks. Those notes were supposed to be convertible into gold, although the banks had been forced to suspend such conversions at the end of 1861. There was no central bank. To opponents, Spaulding's plan was simply immoral. "It will infinitely damage the national credit," warned Representative Justin S. Morrill of Vermont, adding that it was "a breach of the public faith" that would lead to rampant inflation. … In the end, Spaulding was proved right. "It was at once a loan to the government without interest and a national currency, which was so much needed for disbursement in small sums during the pressing exigencies of the war," he wrote years later in his book, "History of the Legal Tender Paper Money." … Contrary to the expectations of Representative Morrill, paper money did not set off sharp inflation over time, and when the paper money eventually was made convertible into gold, there were no lines of people wanting to trade in paper for bullion. (emphasis added) It's a bit odd for a journalist to declare that a politician was "proved right" and then proceed to quote from that same politician's description of his own plan. If Norris were writing about the Vietnam War, would his first source be Henry Kissinger's memoirs? In reference to the claim that the new paper money didn't set off sharp inflation, I invite the reader to Google "inflation civil war." Of course prices rose when the two sides began printing money to pay for the war — disastrously (and famously) in the Confederate states, but also in the Union. At this fairly official site, we find the following information (adapted from Table 4): Granted, when it comes to runaway price inflation, the Confederate states win the prize. But in the two years following the introduction of Spaulding's "true miracle," Union prices rose at an average compound rate of about 25 percent annually. Stepping back and looking at the broad sweep of US history, we see that when the dollar was anchored to gold, its purchasing power was on average constant for large stretches. I'm not sure what the results would have needed to be, in order for Norris to admit that Representative Morrill had been right in his warnings. You can't believe everything you read, especially when it's from the New York Times. Printing green pieces of paper doesn't make an economy richer. If done without restraint, it leads to runaway price inflation. As an added downside, it also allows governments to slaughter millions of people. (The world wars could not have been waged if the belligerents had stuck to the gold standard.) Those who adore the all-powerful state should obviously be enchanted with fiat money. Decent people should loathe it. Send him mail. See Robert P. Murphy's article archives. Comment on the blog.

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COLUMBUS — Officials of Galloway Chandler McKinney Insurance Agency Inc. (GCM) announced the execution of an agreement by which previous owners and several associates of GCM have purchased the company back from Cadence. Terms were not disclosed. The ownership change concludes 10 years of a mutually beneficial relationship in which GCM operated as a wholly-owned subsidiary of Cadence Bank. The ownership change was effective Sept. 1, 2009. “The sale of GCM Insurance was not influenced by any regulatory body or organization,” said Jimmy Galloway, president of GCM. “We have actually been having discussions on and off with Cadence officials for a number of months regarding the possibility of this transaction. We have enjoyed a wonderful relationship with Cadence and will remain supporters of the bank. Each company has a desire to focus on their core business, and we believed this was the best way to accomplish that.” Galloway also serves as a member of the board of directors of Cadence Bank. Lewis F. Mallory Jr., chairman and CEO of Cadence Bank, expressed similar thoughts. “GCM is a first-class company that provides excellent service and products to its customers. Our association with them and their people has been a valuable one and will continue to be in the years ahead. We believe they will continue to be the leading agency in this area of Mississippi,” said Mallory. With partners’ sons Brandt Galloway and Kyle Chandler IV, of Columbus and West Point, plus William Hilbun of Starkville, now working for GCM, the purchase of the agency will allow GCM to continue to grow and expand with a new generation of leadership. “We’re taking this opportunity to get back into the traditional independent insurance agency business, and once again be a family- and friends-owned and independently-operated agency,” said GCM officer Kyle Chandler III.

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The University of Sydney - Faculty of Arts and Social Sciences University You are here: Home / Faculty of Arts and Social Sciences / News & Events Browse AlumniIn the mediaInternationalOther newsResearchStudentsNews Archives 2014 Archive2013 Archive2012 Archive2011 Archive2010 Archive2009 Archive ShortcutsSubscribeUnsubscribeRSS feedsPodcasts News More money, more problems? The quantitative easing quandary14 December 2012More money, more problems? The quantitative easing quandaryBy Graham White, University of SydneyIn an attempt to bolster the economy, the Federal Reserve announced a fresh round of bond purchases to replace Operation Twist, the stimulus program that is set to expire this month. It will spend $US45 billion a month to buy treasury bonds, in addition to the $US40 billion of mortgage bonds it has been buying since September.Senior lecturer in the School of Economics at the University of Sydney, Graham White, explains the concept of quantitative easing.The term "quantitative easing" is typically used to refer to central bank actions in recent years - namely in Japan during the early 2000s and in the US, England and Eurozone since 2007 - to inject liquidity into the financial system as a means of providing a monetary stimulus to the economy at a time when the normal mechanics of monetary policy are difficult to apply.To understand this a bit better, it is useful to consider first the similarities and differences between quantitative easing and conventional monetary policy.Conventional monetary policyConventional monetary policy operates by manipulating the quantity of short-term liquid reserves that banks hold with the central bank (called exchange settlement accounts in Australia). This is done to maintain a particular target rate of interest on funds lent between banks in the overnight market. In Australia this is known as the cash rate, and in the US as the Federal Funds rate.Monetary policy changes in Australia typically involve the Reserve Bank changing the target overnight rate and supporting that new target by injecting funds or withdrawing funds from these accounts. It does this by purchases or sales of short-term securities with banks.By changing the cash rate, it is hoped that this will ultimately feed through into other interest rates, in turn affecting expenditures by consumers and firms and, eventually, inflation.Quantitative easingBy contrast, quantitative easing comes into play when there is a need to stimulate economic activity and/or prevent deflation (falling prices), but the overnight target rate of interest (and the preferred instrument of monetary policy in "normal times") is near its lower limit - in other words, close to zero.If this occurs, the central bank would purchase financial assets across a wider spectrum rather than only short-term securities to inject liquidity into the system.The central bank may also inject funds through lending to some financial institutions usually at a rate (in the US known as the discount rate) above the target rate of the central bank.For example, early US Federal Reserve responses to the GFC involved reducing the discount rate and also widening the pool of institutions that could access funds this way.In effect, the policy of quantitative easing renders the asset balance sheets of the banks and other institutions involved more liquid. The balance sheet of the central bank becomes bigger as it purchases more assets and correspondingly injects more of its own liabilities into the system, which is another way of looking at currency and liquid reserves of the banks.The act of the central bank purchasing these types of assets may push their prices up and their yields down.In terms of affecting a sluggish economy, quantitative easing is therefore intended to work by making banks more liquid and affecting longer-term interest rates somewhat more directly.A key aim of this type of policy is to bolster confidence in the liquidity of the financial system. In turn, it's hoped this confidence will support the financing of the real side of the economy in the face of the depressing effects of shocks like the GFC.In other words, it is hoped that the policy will support the financing of expenditures by households and firms which drives aggregate demand for goods and services, the rate at which the economy is growing and what's eventually going to happen to the unemployment rate.But "conventional" monetary policy - as it's sometimes referred to - need not be just about bolstering liquidity for the whole financial system; it can be just as much about strengthening particular parts of the financial or credit market.This is the view taken by Chairman of the US Federal Reserve Ben Bernanke, who prefers to call the US version of the policy "credit easing".For Bernanke, it's about focusing on asset purchases and loans to the parts of the financial system that most "affects credit conditions for households and businesses".Does it work?How successful is quantitative easing likely to be?The answer depends on whether the key constraint facing sluggish economies is the banking and financial sector's willingness to lend and thus whether the key problem is what one may call a because economies are liquidity-constrained. If they are, then quantitative easing may be useful.On the other hand, if the problem is a general expectation of low growth constraining investment expenditure by firms, and uncertainty about income and employment constraining expenditure by households, then liquid credit markets and cashed-up banks alone will not necessarily do much to help.In these cases, quantitative easing may be likened to "pushing on a string", as noted by Keynes in the 1930s.Arguably, this may have been the problem for the lack of success of this kind of policy in the case of Japan between 2001 and 2006.As noted by Shigenori Shiratsuka from the Bank of Japan, while the Bank's quantitative easing may have helped stabilise Japan's financial system, "such stimulatory effects failed to be transmitted to outside of the financial system" with "limited effects on aggregate variables such as output" (Bank of Japan Discussion Paper, 2009).In this regard, it is tempting to suggest that quantitative easing — to use the words of the economic theorist — is at best a necessary but not sufficient condition for stimulating depressed economies. To borrow a phrase,which is usually used inappropriately by politicians to excuse under-resourcing of the public sector and which seems more appropriate in relation to quantitative easing, throwing money at the problem may not be the solution.Graham White does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations. The Conversation This article was originally published at The Conversation. Contact: Kate MayorPhone: 02 9351 2208, or 0434 561 056Email: 0a574123761c033520012a1217105a5d3d450b20477b0d2c © 2002 - 2014 The University of Sydney. ABN: 15 211 513 464. CRICOS Number: 00026A. Phone: +61 2 9351 2222. Authorised by: Dean, Faculty of Arts and Social Sciences. Contact the University | Disclaimer | Privacy | Accessibility Glossary | Abbreviations |

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hide Court backs AIG bid for new venue in big Bank of America fraud case The logo of American International Group (AIG) is seen at their offices in New York in this file photograph from September 18, 2008. REUTERS By Jonathan Stempel (Reuters) - American International Group Inc won a legal victory over where a mortgage fraud lawsuit it brought against Bank of America Corp should be heard, a two-year-old case that has largely been on hold because of the dispute over venue. The 2nd U.S. Circuit Court of Appeals on Friday agreed with AIG that the case belongs in state court, not federal court as Bank of America preferred. It threw out an October 2011 lower court ruling that had denied AIG's bid to move the case back to the New York state court where it had begun two months earlier. Writing for a three-judge appeals court panel, U.S. Circuit Judge Pierre Leval rejected Bank of America's argument that the case belonged in federal court under the Edge Act, a 1919 law governing international banking. "Removal from state to federal court was not authorized by the statute," he wrote. AIG had sued Bank of America for $10 billion. It accused the bank and its Countrywide and Merrill Lynch units of engineering a "massive" fraud by misrepresenting the quality of more than $28 billion of residential mortgage-backed securities in 349 trusts it bought, and lying to credit rating agencies about the underlying loans. Shares of Bank of America plunged 20.3 percent on the day the lawsuit was announced. The case is part of AIG's effort to recover from activities that it says helped trigger its near collapse in 2008, leading to $182.3 billion of federal bailouts. It is unclear how Friday's decision affects the part of AIG's case relating to Countrywide, which has been moved to the court of U.S. District Judge Mariana Pfaelzer in Los Angeles. Bank of America spokesman Lawrence Grayson called Friday's decision "a narrow procedural ruling." AIG spokesman Jon Diat said the insurer was pleased with the decision. But the venue issue may not be over, because the 2nd Circuit said Bank of America may pursue an alternative argument to keep the case in federal court. Venue disputes often arise when parties expect more favorable results in particular courts. 27 LOANS The Edge Act was adopted to help federally chartered banks compete more effectively in offshore banking. To help free those banks from extra burdens from state regulators, it lets federal courts hear lawsuits against U.S. companies over banking transactions that are international or in a U.S. territory. In keeping the case in federal court, U.S. District Judge Barbara Jones in October 2011 recognized that a handful of the underlying home loans concerned properties in Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands. But AIG countered that the securities it bought were created and sold entirely in the United States. It also said that of the 1.7 million home loans underlying the trusts, just 27 involved property in U.S. territories. Leval accepted AIG's argument, and called Bank of America's broader interpretation of the admittedly ungrammatical Edge Act statute "arbitrary and illogical." He did not address the merits of AIG's damages claims. Jones has left the federal bench, and U.S. District Judge Lewis Kaplan now oversees the case in Manhattan federal court. Pfaelzer oversees a variety of litigation over the former Countrywide Financial Corp, which Bank of America bought in July 2008. Her approval is required for the bank's record $500 million settlement, announced on Wednesday, with investors who claimed Countrywide misled them into buying risky mortgage debt. The case is American International Group Inc et al v. Bank of America Corp et al, 2nd U.S. Circuit Court of Appeals, No. 12-1640. (Reporting by Jonathan Stempel in New York; editing by John Wallace, Gerald E. McCormick, Leslie Gevirtz and Phil Berlowitz)

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Reengineering the appraisal: A return to market fundamentals Co-hosted by the Collateral Risk Network and AEI Thursday, August 09, 2012 | 8:15 a.m. – 12:30 p.m. AEI, Twelfth Floor 1150 Seventeenth Street, NW, Washington, DC 20036 (Two blocks from Farragut North Metro) Video Post Event SummaryThe housing market remains a drag on the U.S. economy, and according to panelists at an event cosponsored by AEI and the Collateral Risk Network on Wednesday and Thursday, current appraisal practices are part of the problem.Several panelists highlighted the issues with the current system. Stephen Oliner of AEI presented data indicating that land values are the most volatile element of the housing bubble cycle. Ed Pinto of AEI outlined government policies that forced the abandonment of fundamental lending principles, which would warn of an impending housing boom. Others argued that Fannie Mae appraisal forms are outdated and are preventing appraisers from performing effective analysis.A wealth of specific -- and often, emphatic -- calls for reforms that would address these issues emerged from the conference. Morris Davis of the Wisconsin School of Business demanded access to the data warehouses at Fannie Mae and Freddie Mac to enable more accurate appraisals and eliminate duplication of efforts. Jordan Petkovski of Quicken Loans stressed that appraisers are frustrated with all talk and no action and emphasized the need for cooperation between mortgage lenders and policymakers to move forward. Michael Sklarz of Collateral Analytics focused on how appraisers can use data to more accurately select comparable properties at a neighborhood level instead of looking at aggregate prices across a wide area. Representatives from the appraisal industry noted that the industry needs to universally accept a broad range of values, produce a confidence score for data and create a national repository of real property data. Other experts suggested that the American housing sector could learn from Germany, which has kept its housing market stable by creating an industry of highly qualified appraisers and instituting a culture based on credit. Pat Sheehy of Chase Home Mortgage concluded the conference by stressing that the entire housing industry must collaborate to restore confidence and stability in the housing market.Financial housing market stakeholders agreed that the ideas shared during the conference need to be fashioned into a detailed implementation plan for the housing industry to regain market confidence. --Emily RappEvent DescriptionWhat role have appraisers played in the U.S. housing crisis? Appraisers didn’t directly cause values to decline, nor did they lead homeowners to stop paying their mortgages. However, as we examine the housing boom and bust, it is clear that the appraisal process failed to distinguish between housing prices and values. Determining the price at which a property may be sold or refinanced is quite different than providing a value analysis that helps lenders determine the maximum amount that may be prudently lent on a property. This conference will bring together researchers, appraisers, lenders, investors, analysts, regulators, rating agencies, trade groups and policymakers to discuss best practices that are consistent with sustainable market values.All presentations are at the bottom of this page. Agenda 7:45 AMCoffee 8:15 AMWelcoming RemarksEdward J. Pinto, AEIJoan Trice, Collateral Risk Network8:30 AMPanel I: The Historical Perspective — Booms, Bubbles and Busts Presenter: Stephen Oliner, AEI Discussants:David Crowe, National Association of Home BuildersRobert Dorsey, FNC Inc.10:00 AMBreak 10:15 AMPanel II: Definition of Value — Market Value and Stabilized Values Presenter:Stefan Hilts, Fitch Ratings Discussants:Jacquie Doty, CoreLogicWolfgang Kälberer, Association of German Pfandbrief Banks Reiner Lux, HypZert 12:00 PMBuffet Lunch — Housing Finance and the Importance of FundamentalsPresenter:Edward J. Pinto, AEI1:30 PMPanel III: Approaches to Value — Construction Costs, Land Value and Rents Presenters:Morris Davis, Wisconsin School of Business at the University of Wisconsin-Madison Svenja Gudell, Zillow Discussants:Scott Andrew, Marshall and Swift Sean Campbell, Federal Reserve Board Alan Hummel, Forsythe Appraisal3:30 PMBreak3:45 PMPanel IV: Approaches to Value — Sales Comparison Approach Presenter:Michael Sklarz, Collateral AnalyticsDiscussants:John Brenan, Appraisal FoundationRick Langdon, Wells Fargo Mark Linné, Bradford Technologies 5:15 PMReceptionThursday, August 9:7:45 AMCoffee8:15 AMRecap from Day 1Edward J. Pinto, AEIJoan Trice, CRN8:30 AMPanel V: Collateral RiskPresenter:James Gaines, Real Estate Center at Texas A&M UniversityDiscussants:Charles Mureddu, Quality Valuation ServicesBill Rayburn, FNC10:00 AMBreak10:15 AMPanel VI: Reengineering Plan Presenter:Penny Reed, Wells Fargo Home MortgageDiscussants:Chad Davis, U.S. Senate Banking, Housing and Urban Affairs CommitteeLiz Green, Rel-e-vant SolutionsJordan Petkovski, Quicken LoansPat Sheehy, Chase Home Mortgage12:15 PMClosing remarks Event Contact Information For more information, please contact Emily Rapp at [email protected], 202.419.5212. Media Contact Information For media inquiries, please contact Véronique Rodman at [email protected], 202.862.4871. Speaker Biographies Scott Andrew serves as a property valuation industry and government liaison for Marshall & Swift/Boeckh. In this role, Andrew regularly educates on and advocates for issues surrounding construction costs and the role they play in property appraisal, lending, collateral valuation and hazard insurance. Andrew is an active participant in appraisal and valuation associations and frequently meets with lawmakers and regulators to advance discussions on property valuation. Previously, Andrew spent six years leading a service professional team that managed relationships with America’s largest property insurers. John Brenan has been the director of appraisal issues at The Appraisal Foundation since October 2003. He serves as the foundation’s senior staff contact for the Appraisal Practices Board, the Appraisal Standards Board and the Appraiser Qualifications Board, as well as its advisory councils: The Appraisal Foundation Advisory Council, the Industry Advisory Council and the International Valuation Council. He also manages the support staff for the foundation’s boards. Previously, Brenan spent over eight years as the chief of licensing and enforcement for the California Office of Real Estate Appraisers (OREA), where he administered the largest real estate appraiser licensing program in the U.S. and issued licenses to applicants that met federal and state requirements. Brenan was also responsible for managing California’s enforcement program; for educating and disciplining licensees who violated laws, regulations and Uniform Standards of Professional Appraisal Practice and for working with local, state and federal law enforcement agencies on fraud cases. Before joining OREA in February 1995, he worked as both a staff and fee appraiser for several large financial institutions, appraising residential and non-residential real estate for a wide variety of property types. Sean Campbell is a deputy associate director in the Division of Research and Statistics at the U.S. Federal Reserve Board, where he has served as an economist since 2004. Before joining the Fed, Campbell was on the faculty at Brown University’s Department of Economics. His research focuses on the intersection of finance and macroeconomics and on the economics of housing markets. Campbell's research has been published in a number of peer reviewed academic journals, including the Journal of Financial and Quantitative Analysis, the Journal of Business and Economic Statistics, the Journal of Monetary Economics and the Journal of the American Statistical Association. David Crowe is the chief economist and senior vice president at the National Association of Home Builders (NAHB), where he is responsible for NAHB’s housing and economic trends forecast, its survey research on the home building industry, its consumer preferences and its microeconomic analysis of housing-related government policies. Previously, he served as NAHB’s senior vice president for regulatory and housing policy. Today, Crowe also manages the development and implementation of an innovative model for predicting the local economic impact and fiscal cost of new home construction, which has already been applied to over 500 local markets. His past research has concentrated on home ownership trends, tax issues, demographics, government mortgage insurance, local land use ordinance impacts and the impacts of housing on local economies. Before joining NAHB, Crowe was the deputy director of the Division of Housing and Demographic Analysis at the U.S. Department of Housing and Urban Development (HUD). He has also served on federal advisory committees for the U.S. Census Bureau and HUD. Chad Davis is a professional staff member in the U.S. Senate Committee on Banking, Housing, and Urban Affairs, where he specializes in housing and mortgage finance. Davis has served as a lead policy staff member to the committee’s Republican members, including Ranking Member Richard Shelby (R-Ala.), since 2009. Previously, he served as a legislative assistant to Sen. Richard Shelby (R-Ala.), concentrating on economic issues, and to former Rep. E. Clay Shaw Jr. (R-Fla.), where he handled tax and trade portfolios for the former senior U.S. House Ways and Means committee member. Davis began his professional career with the National Retail Federation as the director of government relations. Morris Davis is the academic director of the James A. Graaskamp Center for Real Estate. Since 2006, he has served as an associate professor in the Department of Real Estate and Urban Land Economics at the School of Business at the University of Wisconsin-Madison. Davis is a member of the Federal Reserve Bank of Chicago’s Academic Advisory Council, a fellow of the Lincoln Institute of Land Policy and an independent director of both the American Capital Agency Corporation and the American Capital Mortgage Investment Corporation, two publicly traded mortgage real estate investment trusts. Previously, Davis was an economist at the U.S. Federal Reserve Board. Davis’s widely published research and publications focus on U.S. housing markets and developing price indexes for land in residential use. He is also a frequent lecturer at universities and central banks worldwide. Robert Dorsey is a co-founder of FNC — a mortgage technology company — and, since 2007, has served as its chief data and analytics officer. Previously, Dorsey was FNC’s chief operating officer and had been a member of the University of Mississippi’s economics faculty. He has published more than 30 articles in professional journals and is a co-author of a book on corporate financial forecasting. His most recent publication in the Journal of Housing Economics discusses the FNC housing price index’s derivation. His academic research centers on experimental economics and the econometrics of non-linear optimization. Before his career in economics, he worked as a risk manager, an engineer and a physicist. Jacquie Doty is the vice president and product line manager at CoreLogic, where she handles the company’s strategic planning, research and development, collateral risk management services and automated valuation models and their cascades. Doty formerly served as the collateral risk management director for Freddie Mac, where she oversaw residential real property valuation, directed policy development, implemented risk management plans and worked with customers, government agencies, regulators, trade organizations and the media. During her time at Freddie Mac, she had also served as the offerings management director and product manager. Beforehand, Doty was the vice president of consumer lending for Mellon Bank, managing consumer loan and mortgage originations including home equity line of credit portfolio growth, cross-selling strategies and loss mitigation activities. Earlier in her career, Doty held a series of positions with Wells Fargo Credit Corporation, Manufacturer’s Hanover Credit Corporation and Equifax. James Gaines is a research economist for the Real Estate Center at Texas A&M University, focusing on housing and land d

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Management Strategies Longtime Diebold CEO Swidarski Out After 17 Years Bryan YurcanSee more from BryanConnect directly with Bryan Bio| Contact The company, a major manufacturer of ATMs, said the move was "in our stakeholders' best interests to make a change in leadership at this time." Tags: Diebold, ATMs, CEO Canton, Ohio-based ATM manufacturer Diebold announced that longtime CEO Tom Swidarski will leave the company, as it also reported disappointing preliminary Q4 results. Swidarski had spent the past 17 years at the company, including the past seven as its chief executive. "We wish to thank Tom for the leadership and integrity he provided during his 17-year career at Diebold – the past seven years as our chief executive. This was a very difficult decision, and we wish Tom all the best in the next step in his career," said Henry D.G. Wallace , Diebold executive chairman of the board, in a prepared statement. "Progress has been made over the past several years in many areas. However, the board's judgment is that given the company's ongoing performance and pace with which it is delivering tangible value, it is in our stakeholders' best interests to make a change in leadership at this time." Additionally, George Mayes, Jr., EVP, global operations, has been promoted by the board to the newly created position of chief operating officer, reporting directly to Wallace. Wallace will assume regular oversight of the company until a new CEO is hired; Mayes will be responsible for daily operations. The search process for a new chief executive is currently underway, said Diebold. The company also reported preliminary 2012 fourth quarter revenue of approximately $840 million and a loss from continuing operations of 12 cents per share. Diebold said it expects relatively flat revenue in 2013, blaming a slowdown in the U.S. regional bank sector and higher costs in the American service business, among other factors. [Related: Long Live the ATM: Automated Teller Machines Are Still An Important Delivery Channel for Banks]

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Welcome to the new Becker-Posner Blog, maintained by the University of Chicago Law School. « Why the Warnings were Ignored: Too many False Alarms-Becker | | Has the Market Economy Failed? Posner » The Financial Crisis: Why Were Warnings Ignored?--Posner When Becker and I blogged on the financial crisis last Sunday, the bailout had just been announced. The reaction of the stock markets and of senior government officials here and abroad suggests that the premise of the bailout--that the financial crisis is a liquidity crisis that can be resolved by the government's buying the assets of troubled banks at prices equal to the value the assets would have if there were a market for them (that is, if there were adequate liquidity to enable transactions)--was mistaken. The crisis appears to be one of solvency rather than (or perhaps along with) one of liquidity; banks, along with insurers of bonds and other securities, are undercapitalized and so, as I suggested last week, require a capital infusion rather than just a purchase of frozen assets. All of which merely underscores the enormous cloud of uncertainty that has enveloped the crisis and left economists struggling to understand the causes, magnitude, future course, and cures of what is shaping up as the biggest economic bust since the Great Depression of 1929 to 1933. Last week's stock market crash may also reflect doubts about the government's competence to deal effectively with the crisis. There is a sense that its reluctance to take an equity stake in the banks reflects a doctrinaire hostility to public ownership. But here is the biggest mystery of all: why was the crisis not foreseen? An article on the front page of the business section of yesterday's New York Times attributes that blindness to "insanity," more precisely to a psychological inability to give proper weight to past events, so that if there is prosperity currently it is assumed that it will last forever. This explanation is implausible--often people fail to adjust to change because they expect the future to repeat the past--and unhelpful, especially when one remembers that the academic specialty of Federal Reserve Board chairman Bernanke is the Great Depression. We can get more help in answering the question of unpreparedness, or neglect of warning signs, from the literature on surprise attacks, notably Roberta Wohlstetter's great book Pearl Harbor: Warning and Decision (1962). As she explains, there were many warnings in 1941 that Japan was going to attack Western possessions in Southeast Asia, such as the Dutch East Indies (now Indonesia); and an attack on the U.S. fleet in Hawaii, known to be within range of Japan‚Äôs large carrier fleet, would be a logical measure for protecting the eastern flank of a Japanese attack on the Dutch East Indies, Burma, or Malaya. Among the factors that caused the warnings to be disregarded are factors that may also have been decisive in the neglect of the advance warnings of the financial crisis now upon us: priors (preconceptions), the cost and difficulty of taking effective defensive measures against an uncertain danger, and the absence of a mechanism for aggregating and analyzing warning information from many sources. Most informed observers in 1941 thought that Japan would not attack the United States because it was too weak to have a reasonable chance of prevailing; they did not understand Japanese culture, which placed a higher value on honor than on national survival. Securing all possible targets of Japanese aggression against attack would have been immensely costly and a big diversion from our preparations for war against Germany, deemed inevitable. And there was no Central Intelligence Agency or other institution for aggregating and analyzing attack warnings. Much the same is true of the warning signs of the current financial crisis. Reputable business leaders and economists had been warning for years that our financial institutions were excessively leveraged. In mid-August of this year the New York Times Magazine published an article foolishly entitled "Dr. Doom" about a perfectly reputable academic economist, a professor at New York University named Nouriel Roubini, who for years had been predicting with uncanny accuracy what has happened. In September of 2006--two years ago--he had "announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac." By August of this year, when the Times article was published, Roubini's predictions had come true, yet he continued to be ignored. Until mid-September, the magnitude of the crisis was greatly underestimated by government, the business community, and the economics profession, including specialists in financial economics. Bernanke had repeatedly stated that it was unlikely that the mortgage defaults that accelerated after the housing bubble burst in mid-2006 would spill over to the financial system or the broader, nonfinancial economy. In May of 2007, for example, he said: "Importantly, we see no serious broader spillover to banks or thrift institutions from the problems in the subprime market." It has been more than two years since the housing bubble burst. One might have thought that that was enough time to enable the experts to discover that our financial system was in serious trouble. Why were the warnings ignored rather than investigated? First, preconceptions played a role. Many economists and political leaders are heavily invested in a free market ideology which teaches that markets are robust and self-regulating. The experience with deregulation, privatization, and the many economic success stories that followed the collapse of communism supported belief in the free market. The belief was reinforced, in the case of the financial system, by advances in financial economics, and relatedly by the development of new financial instruments that were believed to have increased the resilience of the financial system to shocks. Borrowing and then lending the borrowed funds is inherently risky, because you have fixed liabilities but (unless you invest in risk-free assets such as short-term Treasury Bills) risky assets. But it was believed that the risks of borrowing had been reduced and therefore that leverage (the ratio of borrowing to capital) could be increased without increasing risk. Bayesian decision theory teaches that when evidence bearing on a decision is weak, prior beliefs will influence the decision maker's ultimate decision. Second, doing something to reduce the risks warned against would have been costly. Had banks been required to increase their reserves, this would have reduced the amount they could lend, and interest rates would have risen, which would have accelerated the bursting of the housing bubble--and then Congress or the Administration would have been blamed for the fall in home values and the increase in defaults and foreclosures. In addition, it is very difficult to receive praise, and indeed to avoid criticism, for preventing a bad thing from happening unless the probability of the bad thing is known. For if something unlikely to happen doesn't happen (as by definition will usually be the outcome), no one is impressed; but people are impressed by the costs of preventing that thing that probably wouldn't have happened anyway. This is why Cassandras--prophets of doom--are so disliked. It usually is infeasible as a practical matter to respond to their warnings--but if the prophesied disaster hits, those who could have taken but did not take preventive action in response to the warnings are blamed for the disaster even if their forbearance was the right decision on the basis of what they knew. The deeper problem is that it is difficult and indeed often impossible to do responsible cost-benefit analysis of measures to prevent a contingency from materializing if the probability of that happening is unknown. The cost of a disaster has to be discounted (multiplied) by the probability that it will occur in order to decide how much money should be devoted to reducing that probability. No one knew the probability of a financial crisis such as we are experiencing. Even Roubini did not (as far as I know) attempt to quantify that probability. Which brings me to the last and most important reason for the neglect of the warning signs, because it suggests the possibility of responding in timely fashion to future risks of financial disaster. That is the absence of a machinery (other than the market itself) for aggregating and analyzing information bearing on large-scale economic risk. Little bits of knowledge about the shakiness of the U.S. and global financial systems were widely dispersed among the staffs of banks and other financial institutions and of regulatory bodies, and among academic economists, financial consultants, accountants, actuaries, rating agencies, and business journalists. But there was no financial counterpart to the CIA to aggregate and analyze the information--to assemble a meaningful mosaic from the scattered pieces. Much of the relevant information was proprietary, and even regulatory agencies lacked access to it. Companies do not like to broadcast bad news, and speculators planning to sell a company's stock short do not announce their intentions, as that would drive the stock price down, prematurely from their standpoint. In any event, no effort to determine the probability of financial disaster was made and no contingency plans for dealing with such an event were drawn up. The failure to foresee and prevent the 9/11 terrorist attacks led to efforts to improve national-security intelligence; the failure to foresee and prevent the current financial crisis should lead to efforts to improve financial intelligence. Of all the puzzles about the failure to foresee the financial crisis, the biggest is the failure of foresight of professors of finance and of macroeconomics, with a few exceptions such as Roubini. Some of the media commentary has attributed this to economics professors' being overly reliant on abstract mathematical models of the economy. In fact professors of finance, who are found mainly in business schools rather than in economics departments, tend to be deeply involved in the real world of financial markets. They are not armchair theoreticians. They are involved in the financial markets as consultants, investors, and sometimes money managers. Their students typically have worked in business for several years before starting business school, and they therefore bring with them to the business school up-to-date knowledge of business practices. So why weren‚Äôt there more Roubinis? I do not know. And why, if not more Roubinis, not more financial economists who took the warning signs sufficiently seriously to investigate the soundness of the financial system? I do not know that either. TrackBack URL for this entry:http://www.typepad.com/services/trackback/6a00d8341c031153ef013482fed3d1970c Listed below are links to weblogs that reference The Financial Crisis: Why Were Warnings Ignored?--Posner: many people said it's greed effect. When atmosphere like this, is alarm still heard? zahidayat |

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From the August 21, 2013 issue of Credit Union Times Magazine • Subscribe! Berger Reshuffles NAFCU Employee Deck August 21, 2013 • Reprints NAFCU announced Aug. 12 the promotion of several employees as well as the separation of its marketing and communications functions that resulted in the dismissal of an executive. President/CEO Dan Berger, who took over leading the trade association Aug. 1, said NAFCU is calling the new direction “extreme member focus.” “Everything we’re doing will be prioritized through the filter of what’s in the best interest of our members,” Berger told Credit Union Times. “We’ve always done a good job of that, we just want to make sure across all departments that everybody is on the same page.” Senior Vice President of Marketing and Communications Karen Tyson, who joined NAFCU in 2011 from the Independent Community Bankers of America, was released in the marketing and communications reorganization. Effective immediately the marketing department will report directly to Anthony Demangone, executive vice president and chief operating officer, and the communications department will report directly to Berger. “These changes will help us achieve even greater effectiveness and efficiency in serving our members,” said Berger. “We appreciate Karen Tyson’s contributions to NAFCU during her tenure as senior vice president of marketing and communications and wish her well in her future endeavors.” The most high-profile promotion was that of Carrie Hunt, who is now senior vice president of government affairs and will remain NAFCU’s general counsel. “Carrie is one of the hardest working people in the credit union industry,” Berger said, adding that the promotion was well deserved. Hunt has served as NAFCU’s staff liaison to the federal regulatory agencies, and in 2012, was named one of Credit Union Times’ Women to Watch for her direct, cooperative leadership style. Beyond Hunt’s regulatory advocacy efforts, she has also worked with NAFCU’s legislative department by analyzing and developing policy issues that directly impact credit unions. "I am thrilled and thankful for the opportunity to serve NAFCU members in my new capacity. I look forward to leading our dynamic government affairs team as we work to champion credit union causes and foster a positive legislative and regulatory environment for the industry,” she said in a release. Other promotions include: Steve Van Beek, to vice president of compliance from director; Lisa Cox, to vice president of events and education from director; Eric Miller, to vice president of information technology from director; Katherine Marisic, to vice president of political affairs from director; Liz Santos, to vice president of marketing from director for NAFCU Services Corp.; Susan Broaddus, to director of news services and managing editor from senior managing editor, news; Jillian Pevo, to director of legislative affairs from senior associate director; and Curt Long, to senior economist from staff economist.

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Help | Connect | Sign up|Log in Tim Worstall, Contributor I write about business and technology. Why Coca Cola Is Leaving Greece Coca Cola Hellenic is leaving Greece. Sounds like a strange thing for a company with that name to do but it does make great sense. However, the real point of the move is a little more complex than the one most commentators have picked up. It is indeed true that the Athens stock exchange is a lot smaller than it used to be. That prices of all companies there are depressed by the general economic malaise in the country. And that’s what most people have concentrated on when discussing how the company is going to move its domicile from Greece to Switzerland and the stock listing from Athens to London. However, while all of that will help to increase the wealth of the shareholders (which is what a company is for after all) I don’t think that#s the really important point. Which is this from the FT: Coca-Cola Hellenic Bottling Company, Greece’s biggest quoted company, is quitting the debt-stricken country in favour of a London listing and Swiss domicile. The drinks bottler, which accounts for roughly one-fifth of the Greek stock market and has a capitalisation of about €5.7bn, is decamping after credit rating agencies downgraded its credit on the back of a sovereign downgrade. The credit rating agencies are very unhappy at the idea of allowing a company a higher credit rating than the sovereign nation in which they are domiciled. This isn’t a hard and fast rule, we can find plenty of exceptions. But it is a tendency. And when a sovereign gets a downgrade (as Greece of course has) then corporates based in that country will see their own credit rating downgraded. And that can be significantly expensive for a company. Someone like Coca Cola Hellenic would expect to have an investment grade, and at the top end of the investment grade as well, rating. Being domiciled in Greece as Greece gets downgraded can threaten that and add percentage points to financing costs. Nothing else is going to change, even the tax paid to the Greek Government is unlikely to change. But it does get the company out from under the sovereign credit rating problem. Apple Is Worth More Than The Stock Markets Of Spain, Portugal, Greece and Ireland: Together The Lights Are Going Out in Greece What Will Be Left of the Eurozone When Greece Leaves? The Value of Foreign Law in Investing: Greece Pays Out on English Bonds I'm a Fellow at the Adam Smith Institute in London, a writer here and there on this and that and strangely, one of the global experts on the metal scandium, one of the rare earths. An odd thing to be but someone does have to be such and in this flavour of our universe I am. I have written for The Times, Daily Telegraph, Express, Independent, City AM, Wall Street Journal, Philadelphia Inquirer and online for the ASI, IEA, Social Affairs Unit, Spectator, The Guardian, The Register and Techcentralstation. I've also ghosted pieces for several UK politicians in many of the UK papers, including the Daily Sport. More from Tim Worstall Follow Tim Worstall on Twitter Tim Worstall’s RSS Feed Tim Worstall’s Profile Tim Worstall’s Website

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Engagement trends are negative, but Jewish funders see validation in Pew study by Uriel Heilman, JTA October 7, 2013 | 10:17 am A 2009 event in the Washington area was part of an effort by groups focused on engaging young American Jews. If you’re pouring hundreds of millions of dollars into Jewish identity building, what do you do when a survey comes along showing that the number of U.S. Jews engaging with Jewish life and religion is plummeting? That’s the question facing major funders of American Jewish life following the release last week of the Pew Research Center’s survey on U.S. Jews. The study — the first comprehensive portrait of American Jewry in more than a decade — showed that nearly one-third of Jews under age 32 do not identify as Jewish by religion, that American Jews are intermarrying at a rate of 58 percent (71 percent if the Orthodox are excluded) and that most intermarried Jews are not raising their kids as Jews. For many of the Jewish world’s biggest funders, the answer to this question is clear: Stay the course. “We’ve known about these issues and many of us have been working in our own ways to address them,” said Sandy Cardin, president of the Charles and Lynn Schusterman Family Foundation, which with more than $2 billion in assets is one of the Jewish world’s largest foundations focused on bolstering Jewish identity and community among young people. “We haven’t done it yet, and by no means is success assured, but I do think as a community we have identified significant ways to address these challenges,” he told JTA. “It’s too soon, I think, to see the immediate impact of what many of us in the community have been doing over the past five to 10 years.” The logic to this approach is relatively straightforward: The findings in the Pew survey mostly upheld the assumptions upon which major givers in Jewish life already have been operating. In their view, the survey validates their own philanthropic priorities — even if they disagree about what to prioritize. “This new study reinforces the idea that we need an energizing nucleus which is literate in Hebrew, and which is engaged in intensive and immersive education and committed to Jewish life and Jewish institutions,” said Yossi Prager, executive director in North America of Avi Chai, a major investor in Jewish education. Andres Spokoiny, CEO of the Jewish Funders Network, drew a different conclusion: “Those that were investing heavily in Jewish culture and alternative venues for Jewish identity were right,” he said. “Given that a lot of Jews define themselves as secular or atheist, it’s critically important that while investing in traditional venues in Jewish life, it’s important to explore and find and foster venues for encouraging Jewish identity through non-traditional ways — through culture, through arts,” Spokoiny said. “I think that’s a key message.” Mark Charendoff, president of the Maimonides Fund, said the study demonstrates a remarkable failure to achieve many of the central goals adopted by the Jewish community in the wake of the 1990 National Jewish Population Survey, which showed what many considered alarmingly high assimilation rates. “As a community, we made a decision a couple of decades ago to focus on Jewish continuity and Jewish identity, and we don’t seem to have moved the needle by even one degree,” Charendoff told JTA. “I would love to tell you I think it’s a wakeup call, but I don’t think anyone’s waking up.” Jewish foundations need to get on the same page to develop a comprehensive strategy to begin to reverse the negative trends, he said. “Donors by and large are focused on particular efforts and not focused on the field as a whole,” Charendoff said. “There needs to be more coordination, more resources. We’re only going to have that impact if there’s alignment and not 10,000 people doing God’s work but without regard to what their neighbors are doing.” Whether the Pew study will prompt a systemic response, or even an attempt at one by Jewish funders, remains to be seen. Next month, the Jewish Federations of North America will convene its annual General Assembly, which draws fundraisers and leaders from federations throughout the United States. Jerry Silverman, the umbrella group’s CEO, told JTA that this year’s confab is not the place for beginning a communitywide conversation about the Pew study results. This year’s G.A. will be held in Jerusalem and focus on the Israel-Diaspora relationship. The Pew study will not be on the agenda, he said. “You really need to bring together thinkers and thought leaders who can really think this through. I don’t think that’s the G.A. population,” Silverman said. “That’s not the forum to think this through.” Chip Edelsberg, the executive director of the Jim Joseph Foundation, which has awarded about $280 million in grants for Jewish education and engagement since 2006, said his foundation needs more time to delve into the Pew data to figure out what changes are necessary, if any, to their strategies for engaging young American Jews. “It will certainly animate our discussions and have a bearing on the foundation’s decision making, because it is actually good data,” he said. Michael Steinhardt, the mega-philanthropist behind Birthright Israel, Hebrew-language charter schools and a host of other Jewish community programs, said the results of Pew are hardly news: Separate community studies over the last few years have made the trends clear. “We should not need the Pew study to give us a reality check,” he said. “The question is what to do about it.” Steinhardt says he isn’t optimistic that the Jewish community will respond effectively. “Nothing’s a galvanizing event for the Jewish community,” he said. “I don’t see the community thoughtfully dealing with it.”

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Tags: Money Downgrade Poll: 75% of Money Managers Fear New US Downgrade Wednesday, 14 Dec 2011 07:36 AM Print | A A About half of U.S. institutional money managers fear the eurozone is headed for a breakup while just shy of 75 percent fear the U.S. will suffer another credit ratings downgrade, a poll shows. A Merrill Lynch/Bank of America Securities poll finds that 44 percent feel at least one country to leave the 17-member eurozone, a third saying such a scenario will unfold by the end of next year, MarketWatch reports. Meanwhile, 70 percent predict a fresh of downgrade U.S. sovereign debt, and 48 percent predict such a move will happen as early as 2012, about a year after Standard & Poor's stripped the U.S. of its coveted AAA rating last August. ALERT: Wall Street Whistleblower Warns of Meltdown — See His Uncensored Interview. ________________________________________________________ "The gloom wasn’t just about Western government finances, either. A large balance of money managers expect the global economy to weaken and for earnings to fall over the next year, and nearly all of them expect the Chinese economic juggernaut to slow," MarketWatch reports. In Europe, governments are rolling out austerity measures with the aim of convincing investors not to punish their debt, which increases pressure on some governments to default and abandon the currency. Some, however, say austerity measures, including public-sector layoffs and tax hikes, may do more harm than good in that they eventually lead to less taxes coming back into the government, thus choking off growth in the process. "The expansionary fiscal contraction story says that you cut, you show you are serious about cutting and then the confidence fairy will come along and she will start pulling in private investment," says Stephen Kinsella, professor of economics at the University of Limerick, according to Reuters. "The expansionary fiscal contraction story is a lie. You don't cut your way to growth." © 2014 Moneynews. All rights reserved.

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It's Debt-Ceiling Madness Again. Why You Should Stay Calm (Sort Of) It's Debt-Ceiling Madness Again. Why You Should Stay Calm (Sort O... It's Debt-Ceiling Madness Again. Why You Should Stay Calm (Sort Of) It's Debt-Ceiling Madness... It's Debt-Ceiling Madness Again. Why You Should Stay Calm (Sort Of) 2011 all over again? Let's hope not. (AP Photo/Carolyn Kaster) The nation’s borrowing limit will be reached once again on May 19. Even though the Treasury Department can take so-called extraordinary measures to push the real deadline for default out to sometime this summer, it sounds an awful lot like 2011 when the country stood ready to default. But a feeling is growing among some economists and political experts that the markets won't be as jittery this time. In 2011, U.S. markets slid 15 percent between the week leading up the Aug. 2 deadline for raising the debt limit and the early days of trading after credit-rating agency Standard & Poor’scut the country’s top rating due to the debt-limit fighting. Congress temporarily suspended the debt ceiling with much less fanfare in February. What's changed in 2013 is the politics. Analysts at Eurasia Group say that's because both sides are willing to go small. “Obama will use his budget to renew calls for a 'grand bargain' that remains out of reach; ultimately he will sign either a short- or a long-term debt-ceiling increase later this year,” they wrote in a recent research note. “Republicans will present an initial hard-line position on their debt-ceiling demands, but will ultimately accept a smaller debt-ceiling increase if a bigger deal cannot be agreed.” “While rhetoric will heat up and negotiations will drag through the summer, we expect that well in advance of a likely August deadline it will become clear Washington is choosing between a small or a large debt-ceiling increase rather than a fiscal deal or default, which should put a floor under market concern,” they said. The rhetoric has already begun to heat up. Sen. Rob Portman, an Ohio Republican, said Tuesday that the debt limit has “been, frankly, the most effective way” to talk about deficit reduction. “I think this is an opportunity and I think the timing is actually pretty good,” Portman said at a breakfast hosted by Politico. “So let’s deal with it, let’s use the debt limit, you know, as leverage.” House Republicans, for their part, have indicated a desire to move forward with legislation that would direct the Treasury Department to prioritize payments in the event the debt ceiling is reached. Democrats say this is an attempt to minimize the impact of reaching the debt limit. But if analysts feel that some sort of agreement to raise the ceiling in advance of the deadline is more likely now than it was two years ago, the economy could change that. “If the economy were to suddenly soften, I think that might make a [fiscal] deal less likely because people would say ‘enough already’ [with deficit reduction],” said Greg Valliere, chief political strategist at the Potomac Research Group. Although economic data of late has been softer, the economy is stronger than it was in 2011, and better able to withstand shocks. Still, if it does come to an eleventh-hour showdown over the nation's creditworthiness this summer, a la 2011, economists have mixed views about how markets would respond. Some say markets are tired of lurching from crisis to crisis and would be less jittery in response to the latest fiscal fight. The country has definitely seen its share in recent years: the spring 2011 government-shutdown fight; the summer 2011 debt-ceiling showdown; the winter 2011payroll-tax debate; the winter 2012 fiscal-cliff fight; the debate over the March 1 automatic spending cuts known as sequestration. Europe has also had its share of crises, most recently the tempest surrounding Cyprus’s banking sector and whether the measures to keep Cyprus afloat set a dangerous precedent for the rest of the eurozone. “We’ve just had a lot of crisis fatigue,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank. “We’ve gone through a number of these things and it does seem likely that at this point, until there’s a reason — a very clear reason — to worry about a failure to increase the debt limit, markets may assume that it simply will happen,” said Alec Phillips, an economist at Goldman Sachs. Not everyone agrees. Research from the Federal Reserve Bank of New York suggests that a new debt-ceiling showdown could be worse than 2011, not better. “The relatively benign effects of the 2011 U.S. debt-ceiling crisis on U.S. financial markets appear to have been serendipitous, as the U.S. and European debt crises occurred concurrently,” Fed economists wrote in a post last month, referring to very real fears that Greece would collapse and bring the euro down with it. “Money funds nevertheless reacted to the increased riskiness of Treasuries by dramatically decreasing the maturities of Treasuries held in their portfolios during the debt-ceiling crisis. This behavior suggests that we can’t be sure that the effects of future fiscal crises on financial markets will be similarly benign,” they continued. Of course, the calculus completely changes if the country actually fails to raise the debt limit and enters into default. Pretty much everyone agrees that would be very, very bad for the economy, calling the country's creditworthiness into question for the first time in history. But — at least at this point — that doesn't seem likely.

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Euro collapse imminent, experts believe Ethan A. Huff The future does not look very promising for the euro, the flailing currency of the European Union (EU). Speculation among many bankers, company executives, investors, government officials, and others that the euro is about to completely unravel are actually helping to fuel the currency’s decline, say some, a process that many others, including euro architect Otmar Issing, have long believed was inevitable anyway. The ongoing debt crisis in the “Eurozone,” or the bloc of European countries that are part of the EU, is only continuing to worsen, and EU officials have been unable to come up with a viable policy solution to jump start the EU economy. Meanwhile, the local economies of Greece, Italy, and Spain are in rapid decline with no end in sight, and countries like Germany and Finland that have had to continually prop them are up are growing weary of having to keep the ship afloat, so to speak. Many European banks have stopped lending across their own countries’ borders, investors have pulled their assets out of European markets, and the Constitutional Court of Germany, one of the key countries holding the EU together, will soon determine whether or not its continued bailout efforts for the worst performing countries in the EU are even legal in the first place. All the signs, in other words, are pointing to an eventual euro collapse. “Banks, investors and companies are bracing themselves for the possibility that the euro will break up — and are thus increasing the likelihood that precisely this will happen,” writes Martin Hesse for Spiegel Online. “The most radical option to protect oneself against a collapse of the euro is to completely withdraw from the monetary zone.” Euro architect admits currency in decline Even Issing, the former chief economist at the European Central Bank who originally helped found and establish the euro, believes the currency was merely an “experiment,” and one that the financial markets of the world are no longer taking seriously. Over the course of this slow debacle, many investors have switched to tangible investments like real estate, rather than take their chances on the euro. Even the U.S. dollar, which has been on a downward spiral of its own, is viewed by many as more viable than the euro. Because the dollar is perceived as being weak rather than structurally unsound, it is preferable to the euro, and is considered to be the “lesser of two evils.” And it is becoming increasingly obvious that no matter what policy measures are put into place at this point in time, there may be no way to save the euro. “Over the long term, the monetary union (of the euro) can’t be maintained without private investors,” says Thomas Mayer, a former chief economist at Germany-based Deutsche Bank. If politicians keep trying to prop up the currency with bailouts and other failed policies, he adds, the euro “would only be artificially kept alive.” Sources for this article include: http://www.spiegel.de http://www.businessweek.com Euro Survival ‘Silly’ Question: Ex-ECB Board Member The Collapse Of The Euro, The Death Of The Euro And The End Of The Euro UK’s huge new euro bailout: As rescue talks collapse in chaos, our taxpayers face ANOTHER massive bill to prop up single currency The Collapse of the Euro Euro Plunges To 4-Year Low After German Trade Ban This article was posted: Thursday, August 30, 2012 at 2:57 am

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American firms say Chinese protectionism rising JOE McDONALD April 26, 2011 AP Photo/Ng Han Guan In this photo taken on April 16, 2011, Chinese workers set up a signboard showing the American flag for a shop selling cruise motorcycles in Beijing. Chinese protectionism has increased since the 2008 global crisis and U.S. companies are being hurt by Beijing's policies aimed at developing its technology industries, a business group said Tuesday, April 26, 2011. BEIJING — Chinese protectionism has increased since the 2008 global crisis and U.S. companies are being hurt by Beijing's policies aimed at developing its technology industries, a business group said Tuesday. A report by the American Chamber of Commerce in China adds to mounting complaints that Beijing is violating the spirit of its free-trade pledges by limiting market access and trying to shield its fledgling technology industries from competition. Beijing has alarmed foreign companies by pushing them to hand over technology in fields from high-speed rail and renewable energy to mobile phones. The communist government says it will favor Chinese suppliers when it purchases computers and other technology and has ordered banks and other companies to limit use of foreign data security products. The report comes ahead of next month's meeting of the U.S.-China Strategic and Economic Dialogue, a Cabinet-level gathering aimed at defusing trade tensions and promoting cooperation in health, the environment and other areas. The American chamber said a group of members will visit Washington next week to give copies of its report to U.S. officials. Access to the world's second-largest economy is especially sensitive at a time when other governments are trying to create jobs following the global crisis. The American chamber said 26 percent of its member companies responding to a survey said they are being hurt by China's "indigenous innovation" policies. It said more companies expect to be hurt by them in the future. "Protectionism increased during and following the global downturn. Key manufacturing sectors remain only partially open and services are especially restricted," the report said. Despite three decades of reform, China's heavily regulated economy is dominated by state-owned companies. Beijing is trying to build up "national champions" in a range of industries from banking to oil to shipping, prompting complaints it is violating the spirit of pledges it made when it joined the World Trade Organization in 2001. A European group, the European Union Chamber of Commerce in China, complained in a report last week that foreign companies are treated unfairly in government procurement, a market worth an estimated 6.8 trillion yuan ($1 trillion) a year. In the American chamber survey, over half of companies responding said foreign enterprises cannot obtain the same licenses as domestic competitors or the process is more complicated or takes longer. Companies said market conditions had improved due to China's quick rebound from the global crisis. Some 85 percent of respondents reported higher revenues in 2010 and 78 percent said they were profitable. The report reflected complaints that foreign-owned companies in China have seen less benefit from its rebound, due in part to Beijing's efforts to support domestic industries by reserving fast-growing market segments for them. While foreign companies in some industries are growing quickly, in others "you do still see that the growth of foreign companies is restricted by the regulatory environment," said the chamber's president, Christian Murck, at a news conference. The chamber said banking, insurance and finance are heavily restricted, and foreign companies are allowed little access. Foreign life insurance companies were reducing their investments in China due to their inability to obtain licenses required to expand to the size necessary to be efficient and profitable, said a chamber board member, Matthew Estes. Murck said, however, he did not expect tensions over China's industrial policy to result in formal complaints against Beijing in the World Trade Organization by Washington and other trading partners. "It can't be solved by simply referring it to the WTO," he said. "It has to be negotiated, and it has to be negotiated in a spirit of contributing to China's development of a sustainable innovation within the economy." Death notices for April 18, 2014 UPDATE: Four arrested after Janesville bar fight Auditions set for Lake Geneva Theater Company Edgerton officials: I-90/39 project could boost downtown traffic, commerce Steven M. Leahy, Elkhorn, WI (1968-2014) Mike Sheridan files for candidacy for Senate seat Most read

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Moms Everyday Job Search Europe Summit Surprises With Bold Moves By: CBS News, Posted by Chelsey Moran Posted: Fri 11:26 AM, Jun 29, 2012 By: CBS News, Posted by Chelsey Moran Home / Article German Chancellor Angela Merkel leaves an EU Summit in Brussels on June 29, 2012. (AP) BRUSSELS - After 18 disappointing summits, Europe's leaders appeared Friday to have finally come up with a set of short-term measures and long-term plans that show they are serious about solving their crippling debt crisis. Meeting for the 19th time since the debt crisis exploded, leaders of the 17 countries that use the euro currency agreed they will let funds intended to bail out indebted governments funnel money directly to struggling banks as well. They said the move will "break the vicious circle" of bank bailouts piling debt onto already stressed governments. European Council President Herman Van Rompuy called it a "breakthrough." The decision is a victory for Spain and Italy, whose borrowing costs have risen to near unsustainable levels despite their efforts to cut spending and reform their labor markets. In Germany, Chancellor Angela Merkel is likely to face a grilling from a skeptical German Parliament later. Heading into the summit, Merkel had stuck to her line that any financial help from Europe's bailout fund must come with tough conditions, so the decision allowing easier access without countries was widely seen as a defeat by the German press. Merkel insisted the funds will still only be released when it is clear countries are undertaking serious reforms. "We remain completely within our approach so far: Help, trade-off, conditionality and control, and so I think we have done something important, but we have remained true to our philosophy of no help without a trade-off," Merkel told reporters in Brussels. Leaders of the full 27-member European Union, which includes non-euro countries such as Britain and Poland, also agreed to a long-term framework toward tighter budgetary and political union, though those plans will require treaty changes and won't be realized for years. The scale of the moves were unexpected and provided investors a reason for optimism, even as analysts cast doubt on the plans' feasibility and noted that some fundamental problems with the common currency remain. "I think the elements we put together will reassure the markets," said Eurogroup President Jean-Claude Juncker. Stocks around the world surged Friday, with markets in countries on the front line of the crisis doing particularly well. Italy's FTSE MIB and Spain's IBEX indexes each rose 3 percent. Perhaps more importantly, the yield on Spain's 10-year bond dropped by 0.32 percentage points to 6.58 percent. Italy's was down by 0.14 percentage points to 5.94 percent. Both countries have seen their rates edge toward the 7 percent level which is seen as unsustainable over the long term. The importance of recapitalizing banks directly from the bailout fund became evident this month when Spain was offered 100 billion euro ($125.6 billion) for its shaky banks. Previously the bailout loan would have to be made to the Spanish government, which would lend it on to the banks. The prospect of having that debt on the government's books spooked investors, who began demanding higher interest rates to reflect the risk of a Spanish default. Lending the money directly to the banks avoids putting more debt on the government's books. Analysts remain skeptical about whether the moves will be enough to fix Europe's debt crisis, especially as the amount of money available to help in the crisis - some 500 billion euro - is dwarfed by the amount of debt across the continent. Italy alone has outstanding debt of 2.4 trillion euro. "These steps are the obvious ones to take to try to restore some confidence in the market in the short term," said Gary Jenkins, managing director of Swordfish Research in London. "Alone, they do not solve the underlying problems but they might buy a bit of time, which is probably about the best they can do right now." European Central Bank President Mario Draghi, who is to be given additional powers to oversee the bailout funds by July 9, and to oversee big European banks by the end of the year, said he was "very pleased" with the result of the discussions. Though welcoming the measures that were taken, analysts think more will have to be done. "If the aim is to take to ease tensions on the Italian and Spanish bond market on a more sustainable basis, we probably will need to have more assurance on the fire power," said analyst Carsten Brzeski of ING in a note. Brzeski said more liquidity support from the ECB "looks inevitable" and may come as soon as Monday. As well as trying to fix the euro, the EU leaders also agreed to devote 120 billion euro in stimulus to encourage growth and create jobs, though half of it had already been earmarked and it includes only 10 billion euro in actual new commitments. France had pushed for the growth package, arguing that austerity measures are stifling growth and making things worse. The 27 leaders of the EU agreed on "four building blocks" of a tighter union - but postponed specifics until a study due in October. The building blocks, which include sharing debt in the form of jointly issued Eurobonds, were laid out in a sweeping document presented by Van Rompuy and colleagues before the summit. Van Rompuy said the report would be "a specific and time-bound roadmap for the achievement of a genuine economic and monetary union." "The aim is to make the euro an irreversible project," he said. He did not say, however, whether the general agreement on the tighter union included any commitment on eurobonds from Germany and other stronger economies that have firmly opposed sharing debt with more profligate countries such as Greece. One key factor in the negotiations was that France's president Francois Hollande appeared to turn against Merkel and lobbied instead on behalf of the southern states frustrated at the failure of austerity measures to solve their problems. "The best way to get other people to move is to move yourself," he said. Germany and France have been the traditional drivers of European policy, but the Socialist Hollande and conservative Merkel differ over how to tackle this crisis.

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« New business spotlight on Th... Still tinkering» Save | Regional firm names president for bank Joseph E. Kluger, chairman of the board for Luzerne Bank, and Richard A. Grafmyre, president and CEO of Penns Woods Bancorp, Inc. recently announced the appointment of Robert J. Glunk to the position of president at Luzerne Bank. The appointment will be effective on Oct. 1. Glunk, a news release said, will replace Robert C. Snyder, who will be retiring from the position of president and CEO. Snyder will become special adviser to the CEO through the end of this year. Formerly the senior vice president and chief operating officer for Jersey Shore State Bank - affiliated with Penns Woods Bancorp. - Glunk supervised the retail branch system, as well as the computer, sales and deposit operations for the organization. "The members of the Board of Directors are proud to welcome Rob to Luzerne Bank," said Kluger. "He brings a wealth of knowledge and years of valuable experience in community banking to the position of president. We are excited to have him on board with Luzerne Bank." "Rob has earned his position by demonstrating his leadership skills especially since being promoted to senior vice president at Jersey Shore State Bank, a 'sister' organization to Luzerne Bank," said Grafmyre. "Successfully managing a variety of staff and line functions in his 28 year banking career, Rob has always done what was in the best interests of the bank, its customers and his colleagues." Glunk is a graduate of Lycoming College and the ABA Stonier Graduate School of Banking. He currently is president of the Jersey Shore Hospital Foundation, a board member and Finance Committee member of the Jersey Shore Hospital, treasurer of the Jersey Shore Library and member of the Williamsport Chamber of Commerce Industrial Properties Corp. Penns Woods Bancorp, Inc. is the $1.2 billion parent company of Luzerne Bank and Jersey Shore State Bank. Luzerne Bank operates eight branch offices providing financial services in Luzerne and Lackawanna counties. Jersey Shore State Bank operates thirteen branch offices providing financial services in Lycoming, Clinton, Centre, and Montour counties. Attorney on 'best lawyer' list Marshall, Parker & Weber's managing attorney Tammy Weber announces that Jeffrey A. Marshall, founding attorney of the firm, has been selected by the legal community for inclusion in The Best Lawyers in America 2014 in the field of Elder Law, according to a news release. Marshall has spent more than three decades protecting the rights of Pennsylvania's senior and disabled populations. This is the 5th consecutive year that attorney Marshall has been named to the Best Lawyers list. A native of Lock Haven, he resides in Williamsport. He received his law degree from Stanford University in 1972. "Selection for The Best Lawyers in America is very meaningful to me," said Marshall. "I am honored to be selected for this particular award because it represents the opinions expressed by lawyers who are familiar with me and the quality of my work." Regarded as the definitive guide to legal excellence in the United States, Best Lawyers is based on an exhaustive peer-review survey in which almost 50,000 leading attorneys cast nearly five million votes on the legal abilities of other lawyers in their practice areas, the news release said. Corporate Counsel Magazine has called Best Lawyers "the most respected referral list of attorneys in practice." A long-time leader of the Pennsylvania legal community, Marshall is immediate past president of the Pennsylvania Association of Elder Law Attorneys and serves on the Governing Board of the Pennsylvania Bar Association's Elder Law Section. He is a recipient of the Pennsylvania's Bar Association's "Excellence in Elder Law Award." He has been a member of the National Academy of Elder Law Attorneys since 1988 and has been certified as an elder law attorney by the National Elder Law Foundation. In 2009, Marshall received the NAELA outstanding state chapter member award for Pennsylvania. Bank recognizes years of service Six Citizens & Northern Bank employees have been recognized for a combined 110 years of service to the financial institution. Recognized during the September service awards luncheon were: James Shelmire, vice president and director of MIS systems and analyst programming, Wellsboro, 40 years. Wendy Smith, deposit operations manager, Wellsboro, 20 years. Peter Boergermann, vice president and MIS technical support manager and information security officer, Wellsboro, 15 years. Janet Watters, customer service representative, Mansfield, 15 years. Tracy Watkins, vice president and director of human resources, Wellsboro, 10 years. Amy Wherley, assistant vice president and community office manager, Knoxville, 10 years. Service awards luncheons are held regularly and hosted by bank chairman, president and CEO Charles H. Updegraff, Jr. In 2013, the bank will recognize 20 employees for a total of 300 years of service to Citizens & Northern Bank. Citizens & Northern Bank is a local, independent community bank providing complete financial, investment and insurance services through 26 offices throughout Cameron, Potter, McKean, Tioga, Bradford, Sullivan and Lycoming counties in Pennsylvania and in Canisteo and Hornell, N.Y. Real estate office honors 2 employees Announcement was made by William Hodrick, president of Prudential Hodrick Realty, of the Williamsport office's monthly awards for August 2013. The award for the sales associate with top production in listings was presented to Jodi Wolfe while the top sales award went to Tom Hartland. "The performance of Jodi and Tom comes as no surprise. Both have had distinguished careers in real estate and have won numerous awards," said Hodrick. "As consumers continue to seek out real estate professionals who offer value in the services they provide and are able to make things happen, I expect to see these two agents continue at the top of their profession and win many more awards." Save | Subscribe to Williamsport Sun-Gazette Williamsport Weather Forecast, PA

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Citywire Money > Newspaper Summaries Monday Papers: Scandals spark new push on bank risk And big investors urge Barclays chief to wield axe on its investment unit. Markets by Himanshu Singh on Nov 26, 2012 at 03:04 Financial Times: Several high-profile scandals for banks, ranging from JP Morgan’s hefty trading loss to UBS’s rogue trader, have sparked a new regulatory drive to force lenders to spend more time and probably hold more capital guarding against such operational risks. Financial Times: Some of Barclays’ biggest investors have urged Antony Jenkins, the bank’s new chief executive, to take an axe to its investment bank. Financial Times: BlackRock, the world’s biggest manager of money, is to launch its first foray into the global infrastructure debt market as it seeks to fill the void left by banks that are no longer prepared to invest in big government projects. The Guardian: BAE has confirmed it is considering closing one of its major shipyards in Portsmouth or Glasgow in a move that could threaten more than 1,000 jobs. The Independent: Investors pinning their hopes on a New Year windfall with a Twitter IPO may have to wait a little longer yet as the markets grow more cautious about social media investments in the wake of Facebook's rocky path to life as a public company. The Daily Telegraph: The International Centre for Financial Regulation, a City think tank dedicated to improving financial practice, has suspended a senior manager while investigating the alleged embezzlement of funds at the organisation. Business and economics Financial Times: European real estate companies are closing in on a record year of bond issuance having raised €15.4 billion in the first nine months of this year, compared with €8.3 billion in 2011, highlighting the industry’s growing disenchantment with the bank funding market. Financial Times: The British Treasury is poised to seize control of the sale of public land owned by Whitehall departments after losing patience with the slow pace of the government’s land disposal programme. The Independent: Chancellor George Osborne's attempts to cling onto the nation's triple-A credit rating look doomed but the loss would be "symbolic, not catastrophic", HSBC says. Daily Mail: The Bank of England could name its new governor this week amid pressure to appoint a successor to Sir Mervyn King before the Chancellor's autumn statement. Financial Times: EU finance ministers must urgently dispel doubts over their “political will” to create a single bank supervisor so talks do not drag on and upset “fragile markets”, Michel Barnier, the EU commissioner who oversees financial regulation, has warned. The Guardian: European authorities will transfer €35 billion to Spain's state bank rescue fund on 15 December in exchange for massive layoffs at the country's four nationalised banks, including the state-rescued Bankia, according to reports. Financial Times: The UK’s tough approach to making banks hold more capital could be hitting lending to small and medium sized businesses, according to TheCityUK. Financial Times: The global financial and economic crisis has weakened central bank independence, a report co-authored by Ernst & Young and OMFIF suggests, as bankers’ increased responsibilities have earned them higher profiles and politicised their work. The Independent: Under-funded pension schemes could cripple several of Britain's biggest companies and wreck prospects for economic recovery, an analysis by PricewaterhouseCoopers warns. Financial Times: With a 15 December deadline looming, Argentina will appeal on Monday for US judges to suspend an order for it to pay $1.3 billion to holders of defaulted debt. Financial Times: Foreign investors are threatening legal and other action in protest against government intervention in Brazil’s electricity industry, following a move to slash power tariffs that has hit the country’s biggest electricity generator Eletrobras. Financial Times: AmBev, the Latin American arm of Anheuser-Busch InBev, the world’s biggest brewer by sales, is considering a rollout of branded bars across Brazil. Financial Times: Microsoft has examined the European market as the next region to open its flagship retail outlets as the US technology giant bolsters its roster of devices and appliances across its software platforms. Financial Times: Adverts on mobiles could become a thing of the past after Eyeo, the company behind the world’s most downloaded online ad-blocking software, AdBlock Plus, announced plans to launch a mobile version of its product. Financial Times: Online sales jumped more than 20% in the US at the traditional start of the Christmas shopping season as the growing use of tablet computers fuelled “couch commerce”. Daily Mail: Based on sales so far, Tesco's online grocery warehouse, which opened in February, will deliver almost £80 million of shopping to homes a year, even though it is still only working at 50% of capacity. Daily Mail: The publisher of The Dandy and The Beano is facing a £600,000 loss following the collapse of printer Newsfax International. Financial Times: Dupont Pioneer and Monsanto, two of the world’s largest producers of agriculture products, are seeking to launch production of high-quality seeds and other farming technologies in Ukraine to help the nation double its harvests. Daily Mail: Moonpig.com, founded by former commodities trader Nick Jenkins in 2000, raised turnover from £38.3 million to £45.8 million since being bought last year by online photo service photobox.co.uk; pre-tax profits grew from £10.9 million to £12 million. Share tips, comment and bids Financial Times: Kuwait’s Investment Dar is in talks with two potential bidders - India’s Mahindra & Mahindra and European buyout group InvestIndustrial - for a 50% stake in Aston Martin, the famous sports carmaker known for its vehicles’ starring role in Skyfall and other James Bond films. Financial Times: Discovery Communications and Providence Equity Partners, the two remaining bidders for Nordic broadcasting business SBS, are expected to submit offers below the €1.4 billion that its owners had hoped for. Daily Mail: McCarthy & Stone, Britain’s biggest builder of retirement homes, is gearing up for a return to the London Stock Market. The Daily Telegraph: US private equity firm Apollo is in talks to buy Aurum – the owner of jewellery retailers Goldsmiths and Mappin & Webb – from Landsbanki, one of the Icelandic banks that collapsed during the 2008 credit crisis, for about £180 million. Financial Times: The Hong Kong stock market and regulators are working on rule changes to make foreign company listings on the city’s stock market simpler and easier for investors to understand. The Guardian (Comment): If nations were able to go bankrupt like companies it would benefit everyone, especially society's poorest. The Guardian (Comment): The world desperately needs a better way of coping with countries that owe more than they could ever repay. The Daily Telegraph (Comment): How much of slack does the economy have is critical. If there is a good deal then, as soon as the economy recovers, much of the fiscal problem will disappear like melting snow. The Daily Telegraph (Comment): There is only one real answer - split the banks. Financial Times (Lex): Bank consolidation: Deutsche co-chief has a point when he says mergers are an unintended consequence of new regulations as lenders retreat to core markets. Financial Times (Lex): China insurers: use of a record 17 banks, with more than half the shares pledged in advance, suggests the people’s insurer does not expect an easy sell. Email me when someone comments on this article The Guardian (Comment) The Daily Telegraph (Comment) Financial Times (Lex) Other stories in November 2012

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NC economy improving as key tax collections arrive Economist: North Carolina economy improving, but population growth keeps jobless rate high By Gary d. Robertson, Associated Press RALEIGH, N.C. (AP) -- North Carolina's economy is improving slowly and steadily, the legislature's chief economist said Tuesday, but April revenue figures that are needed to prepare the two-year state budget are more uncertain than in past years due to federal and state tax changes. State government revenues through March, or three-quarters of the fiscal year, are $110 million above the targeted amount needed to carry out the current year's $20.2 billion budget, according to a presentation for House and Senate finance committee members. Income tax collections are 1.5 percent ahead of expectations, while tax collections are below the target by a nearly identical percentage, the report from economist Barry Boardman said. Boardman held out the possibility of a large swing in either direction as Department of Revenue workers keep opening tax return envelopes. April 15 was the due date for 2012 tax payments and for companies and individuals to make estimated payments for the first three months of 2013. The "April surprise" is important because an unexpected surplus would give legislators more money to spend in the budget now being drawn up for July 1 through mid-2015. A shortfall would mean less money is available. April usually brings in more than $3 billion in tax collections, or twice as much any other month, Boardman said. Boardman told legislators the April 15 collections are particularly volatile this year because of a 2011 law that allows business owners to exempt their first $50,000 of net income from income taxes. He said it's also unclear how much taxpayers shifted their incomes to the 2012 calendar year in December to avoid tax increases and changes approved by Congress in early 2013. "We think those shifts were significant," he told lawmakers. Boardman said the General Assembly's nonpartisan staff may know the April 15 revenue numbers by next week. The House and Senate will use the numbers to work up separate budget plans and then work out a compromise they hope Gov. Pat McCrory would sign into law before July 1. The raw tax collections total show North Carolina's economy is improving. The amount of tax withheld from workers' paychecks and sent to the state is 5.6 percent higher through the first nine months of the fiscal year compared to the same period a year ago, Boardman's presentation said. Although the state's unemployment rate fell in March to 9.2 percent, it remains stubbornly high and ranks among the highest in the nation. Boardman said North Carolina's jobless rate remains high because job creation can hardly keep up with population growth and the annual arrival of college graduates entering the workforce. While the state added nearly 64,000 jobs last year, the labor force grew by 64,500 during the same period. North Carolina's economy is "not strong enough to overcome the growth in our workforce to significantly lower our unemployment rate," he said after the meeting. Job growth won't reach that level until mid-2014, he wrote. Across-the-board federal spending cuts initiated earlier this year could drag down North Carolina's economy this summer given the state's strong military presence, Boardman's report said. Budget, Tax & EconomyPolitics & GovernmentNorth Carolina

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LivingSocial Gets $25M for Group Buying Mar. 11, 2010 - 4:30 AM PDT Mar. 11, 2010 - 4:30 AM PDT 10 Comments A We know there are lot of entrants in the group deals space — see my recent piece Groupon and the Wannabes — but now the competitors are seriously bulking up. LivingSocial is today announcing it’s raised a $25 million Series B round. We know there are lot of entrants in the group deals space — see my recent piece, Groupon and the Wannabes — but now the competitors are seriously bulking up. LivingSocial — which has more than a million daily email subscribers — is today announcing it’s raised a $25 million Series B round led by U.S. Venture Partners and including Grotech Ventures and Revolution Capital, bringing the company to a total of about $35 million raised. That follows Groupon’s $30 million B round from Accel Partners and New Enterprise Associates announced in December. Setting up group deals does require capital, because you need salespeople on the ground to find desirable venues and negotiate with them — and given the now tens of competitors in some cities, elbow out your rivals’ salespeople. LivingSocial is currently in 13 cities (it launches four more today), still quite a bit behind category leader Groupon, which is in 40. But armed with this new capital, LivingSocial CEO Tim O’Shaughnessy said the company hopes to rapidly expand its business. O’Shaughnessy said LivingSocial’s angle, beyond deals, is to help small businesses grok social media in order to keep in touch with their customers. The Washington, D.C.-based company, which has been around for two and a half years with products like online book reviews and drink coupons, launched the deals product last summer. “We’re basically creating marketing budgets for people who never had marketing before,” he said. “There are not a lot of ways to guarantee customer foot traffic like we do.” LivingSocial, which is not currently profitable as it expands (again, regret the incessant Groupon comparisons, but they say they have been turning a profit for a while), takes a 30-50 percent split of revenue collected from its deals, but it only pays out if its customers spend money, so there’s little financial risk for participating businesses. It primarily brings in customers through daily emails, but it also has an iPhone app with push notifications and a Facebook presence. O’Shaughnessy pushes off the competitive angle, saying many more merchants want to work with his company than they have space for, but says he’ll work to stand out from the crowd with the launch of an affiliate program today and soon launching more personalized subscriptions. P.S. For those of you who are skeptical of group buying and competing in such a jam-packed space, I should say I’m a total believer. In the course of writing this article, I happily bought a half-off coupon for my neighborhood sushi joint, which happened to be LivingSocial’s San Francisco deal of the day. Speaking from personal experience, group deals totally spark spending and loyalty. Related content from GigaOM Pro (sub req’d): How Social Networks Will Help Yelp, Not Kill It Mar. 11, 2010 - 4:30 AM PDT Uber hires former Amazon/Groupon exec as chief product officer Feb. 14, 2014 Uber has hired Jeff Holden, until recently a vice president at Groupon, to become its chief product... How the age of design-centric e-commerce might not lend itself to sales Jul. 25, 2013 We've seen a rise of e-commerce companies recently that have tackled the dual problems of discovery and... Eliza Kern Why retailers should forget showrooming and turn to in-store Wi-Fi May. 5, 2013 Given the documented ability of mobile apps, search, and social networking to lift sales, it makes forehead-smacking... laurielamberth How are they going to scale with the team of salespeople touching local businesses? I think this is the beginning of recession business — when local businesses are willing to lower their prices to cover excess capacity. I don’t think they will be incentive to lower price after they have adjusted their cost structure. Sundar Krishnamurthy This is a race to the bottom in terms of margins and profits. Assume the market leader, Groupon, keeps 50% of the price negotiated with the provider or vendor. It is very easy for a competitor to drop its margin so the vendor gets to keep more of the money. Vendors would also try multiple services to see what works and who lets them keep most of the money. To scale, these businesses will have to use call centers in India or other cheaper locations to source the deals, further removing them from the providers. This will also help lower selling costs but only for so long. Lack of barriers to entry will only accelerate this downward trend as more players enter the market. Very soon, there will be very little margin left. You make an excellent point Sundar. Groupon’s prices seem way to high and if LivingSocial or another well funded competitor could undercut that 50%, the business owner would definitely be interested in earning more than 25%. However, the strength of Groupon is their ability to bring in tons of sales for their clients. I’ve seen promotions on there get nearly 20,000 sales in just one day. If a competing group buying site can catch up to them then it will all boil down to pricing. That is, of course, if Tippr doesn’t temporarily derail everything with their patents. Either way, the next few months should be interesting to watch and the competition will be good for everyone. I’m trying to keep track of all the new group buying sites that are launching every day. Many are just simple copies but a few have some other features that set them apart. I’ve created a list and comparison chart of these group buying sites here: The 50% cut that Groupon takes is pretty steep and the business owner usually ends up barely breaking even with this kind of promotion. The benefit is more of a long term investment to gain new customers and brand awareness. The competition should help to bring down that standard 50% share of the revenue generated per promotion as well as drive innovation. I’m trying to track all these group buying sites and identify any unique features that are developing out of this trend. You can find the rolling list and a comparison chart here: http://tomuse.com/group-buying-sites-coupon-deals-discount-savings Sanjay Maharaj I like it simply because as a user I really have nothing to loose but most to gain. I can see how margins will erode quickly so this will have to scale veyr fast and be an accepted utility where users don’t leave home without it so so speak Is the Groupon Economy Big Enough for Side Businesses? – GigaOM [...] recently to buy and sell unused purchases in the $100 billion gift card market. Though interest (and venture funding) in Groupon-type businesses is exploding, it’s not there [...] HomeRun: Like Groupon, But Ridiculously Social [...] base, $100 million in revenue and profitability. Not to mention folks like LivingSocial, which has raised $35 million to take Groupon on. And these sites have grown to their current stature without HomeRun’s [...] I find the advancements in this segment very interesting and I will certainly be watching to see how this all unfolds. After Groupon’s Big Round, LivingSocial Nabs More Cash, Too [...] had previously raised a $25 million Series B round in March and a $5 million Series A-1 round in January. But although that may lead you to think CEO [...] After Groupon’s Big Round, LivingSocial Nabs More Cash, Too - A Collection of Latest Happening in Technology Field LivingSocial and the Future of Local Group-Buying: Tech News « [...] backers that included U.S. Venture Partners, Grotech and Revolution Capital. The company also raised a $25 million Series B round in March and a $5 million Series A-1 round in [...]

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CEO Spotlight The Master Builder How former corporate litigator and home-improvement maven Doug Yearley helped build Toll Brothers into the country's largest luxury-home developer—and what the outlook is from here. Leslie P. Norton After four years as a corporate litigator, Doug Yearley so detested his job, working on Superfund cases that would take years to resolve, that instead of racking up billable hours, he spent every spare moment working on his 60-year-old colonial house in New Jersey—ripping the wallpaper off the walls, reframing the attic, and finishing the basement. Late at night, he'd grab a beer and fantasize about different careers. It was 1990. The economy was deep in the throes of a recession. Perhaps he could buy old houses, he thought, renovate them, and flip them. But in the morning, that seemed like a bad idea. Resolved to quit his job and find another, he answered a newspaper ad for an executive assistant at Toll Brothers (ticker: TOL), a local builder. When Yearley's résumé landed on the boss's desk, the boss, who also founded the company, hummed to himself in delight. "Cornell!" he exclaimed. He had attended the same school. "A lawyer!" The boss was a lawyer, too. But why hadn't the candidate gone to a more prestigious law school? The boss mulled that a bit, then asked the secretary to bring him in. Enlarge Image Yearley expanded Toll Brothers beyond the suburbs into urban luxury condos, where the risks are greater—as are the rewards Dave Moser for Barron's The young man was trim, well groomed and losing his hair. It was his 30th birthday, and he had a smile that was "a million miles wide." After about two seconds, the boss, Bob Toll, realized that Yearley was not just bright but also unusually affable. So he set aside his Ivy League snobbery toward Rutgers Law School. His mind was already made up. "He had the right stuff," says Toll. "His background was perfect. I knew that his job would be to take my job." Home-building was not exactly a hot industry. In the wake of the housing bust and the savings and loan crisis, developers were going into foreclosure all around the country. Toll Brothers, which had been a public company for just three years, had a tiny footprint, mostly around Philadelphia and up into the Northeast. In 1990, it built just 727 homes. Land went for a song, and the company's most effective acquisition strategy, up until then, involved plying local farmers with whiskey. Yearley's brief was to take it up several notches, going into bank boardrooms to sell consulting services, evaluating distressed-asset portfolios and then bidding on them. In his first deal, he snapped up a weed-choked plot of land with five houses from a local bank, but soon moved on to megadeals with the Resolution Trust Corp. From there he learned the business from the ground up, developing new projects from scratch; dealing with buyers, contractors, and sales teams; acquiring other developers; running the company's regional operations; and moving into cities from the suburbs to develop condos. In two decades, he helped transform Toll Brothers into the country's largest builder of luxury homes—McMansions, as they've been dubbed—and condo projects with apartment price tags in the eight figures. Buyers include New York Giants quarterback Eli Manning, and a host of the well heeled. COMING OUT OF THE recent downturn—the worst in more than 25 years—Yearley is ebullient about the outlook for luxury housing. "We are in an early but solid stage of recovery," says the CEO, 52. "It has now been sustained for a better part of a year, and we feel good. There is so much pent-up demand from people who've been on the sidelines for five years." Not to mention 30-year mortgage rates of 3¼%. Toll's profits hit $487 million, or $2.86 a share, in the fiscal year that ended in October, helped by a large tax benefit, on revenue of $1.9 billion. Signed contracts soared 75% in the fiscal fourth quarter, and the company's backlog jumped 70%. The average price of homes delivered hit $582,000, up from a low of $541,000 in the second quarter of 2011. This year, the company thinks that number could rise to $630,000. And while housing starts are still weak, they're climbing fast. In December, median existing-home prices jumped 11.5%. Toll Brothers is also embarking on a diversification inspired by the downturn. "Historically, this country rolled through local recessions," Yearley told Barron's during a wide-ranging interview in December at the company's Horsham, Pa., headquarters. "If you diversified nationally"—as the company did in the '90s—"you could avoid a complete collapse, because Dallas was on a different cycle than Northern California. But during this last downturn, the whole country went." That sent Toll and Yearley to China, but they decided the regulations were too onerous, particularly after Beijing changed the rules to encourage lower home prices. Then they headed to São Paulo. But on a visit earlier this month, they decided the location they were scouting was all wrong. "I want to focus on the corner of Main and Main," Yearley told the local staff, repeating a mantra they had all learned from Bob Toll. "It's going to be in the best area." They're still on the hunt for a beachhead abroad, but for now, their City Living division, with condo projects in New York City, Philadelphia, and Washington, D.C., is posting strong profits. City Living accounts for 10% to 15% of revenue. That could go much higher as Toll moves abroad, where countries are rapidly urbanizing. Enlarge Image But it can also be a risky business. Yearley says that a luxury development in Bucks County, Pa., might cost a builder $60 a square foot. The same space in Manhattan costs at least five times that, and the capital required is enormous. In the suburbs, when money is scarce, you simply quit laying road and building infrastructure, Yearley explains. But you have to see a skyscraper all the way through. Thus, Yearley insists on higher profit margins. "I don't think I'd say it's double the margins, but it's significantly better," he says. SOME OF THE BIGGEST RISKS became apparent during the downturn. Toll started work on its first Manhattan high-rise in 2006. The day after Lehman Brothers collapsed in 2008, clients began canceling contracts, even after having put down $100,000 deposits, fearing that apartment values would fall by even more. Cancellation rates surged to 37% across the company. Toll slowed building dramatically and let go thousands of employees. In 2005, the company built 8,800 homes. By 2011, that number had fallen to 2,600. At the peak it employed 7,200 people; today it employs 2,400. But Yearley kept building up Toll's land inventory, just as he had during the 1990 recession. The fiscal-cliff discussions also sent some nice properties the company's way. One big seller unloaded two big lots in Manhattan in advance of higher capital- gains tax rates. As a result, Toll picked up prime properties in SoHo and midtown. In all, the company now has 23 properties under development in the city. Though the financial-services industry, long the mainstay of New York residential real estate, is still suffering, wealthy foreigners have replaced bankers as buyers at the high end, with Mexicans, Russians, and South Americans especially looking for a safer home for their capital, Yearley says. FOR A CEO, YEARLEY has an unpretentious way about him. Ivy Zelman, the celebrated housing analyst, says, "There's humility, but definitely a high level of confidence. He is very candid and honest. Nothing about him feels off-limits." Case in point: When it comes time for a tour of Chapman's Corner, a Toll community 45 minutes away in the heart of Bucks County, Yearley bundles a Barron's reporter into the front seat of his 2010 BMW 7 Series, sets the GPS, and takes the wheel. We drive through pastures and small towns, and Yearley points out the challenges: More and more towns want to preserve land, rather than give it up for development. He muses about the seamlessness of his transition to CEO. Bob Toll, he confides, was a wildly generous mentor who spent every Monday evening going through the weekend sales data with headquarters staff, teaching them about home-building in what he called "Toll University." Toll's last meeting, at 10:30 on Monday nights, was invariably with Yearley. How does one take over from a CEO whose name is on the door? By spending 900 Monday evenings with him, Yearley laughs. It helped that Yearley wasn't intimidated by Toll's persona. After all, his father, Doug Yearley Sr., had been the CEO of Phelps Dodge and, in his heyday, sat on the boards of J.P. Morgan and Marathon Oil. When Yearley was growing up, however, his father was still rising through the ranks. Yearley says he held a half-dozen jobs concurrently during high school, including night janitor, house painter, and caddy. Which brings us to that thorny question: Why did he attend Rutgers, not that it isn't a fine law school, rather than Harvard or Yale? Yearley chuckles remembering his first interview at the company. During the interview, he says, Toll hammered him for 20 minutes. "I've heard of your dad," Toll said. "Your dad is a CEO! I'm a shareholder. You're telling me he didn't pay for your education?" "You can call him right now," Yearley retorted. His father had told his children—three boys and one girl—that he would pay for college, but not graduate school. Rutgers was affordable, Yearley reasoned, and he would probably end up practicing law in New Jersey, anyway. AFTER A SERIES OF wrong turns, we arrive at a model house at Chapman's Corner. Yearley leads the way through the sales office to the front hall of the home, featuring a set of dual staircases, with a living room on one side, a dining room on the other, a study over here, a mud room over there. The rooms flow into one another, and each has an opulent finish—cherry wood here, marble over there. It's a model, after all, and must show the range of what Toll can provide. The CEO scarfs down a couple of chocolate-chip cookies set out for prospective buyers. He has been talking nonstop for two hours. He's clearly proud of the home and chats affably with the sales representative demonstrating the model's sumptuous fixtures. The house is lit up like it's Neiman Marcus: You get the sense it's usually like that. Since the bottom of the market, Toll shares are up 165%, to $37.98, and trade at a nosebleed 42 times 2013 profit estimates. Yearley muses for a moment. "OK, it's not a value play," he says of the shares. "But it's a best-of-breed play. You have to look at 25 years of earnings growth through good times. We are going to continue to lead the recovery with phenomenal order-growth numbers. We are continuing to buy land. We have the longest land supply" of any of the major builders. Home sales have now risen for a year and a half. More gains probably lies ahead. One fan is Zelman. "I don't believe valuation is an impediment," she says. "Both volumes and prices will be better than expectations." How much? Zelman thinks Toll shares will rise by a third in the next two years. E-mail: [email protected] Email

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The Pacific Pivot Clyde Prestowitz March 13, 2012 America needs to try something new when it comes to international trade. On November 12, 2011, I listened as President Barack Obama told business leaders attending the Summit of the Asia-Pacific Economic Cooperation forum in Honolulu that “we’ve turned our attention back to the Asia Pacific region” and announced two vehicles for that return. These were the Trans-Pacific Partnership (TPP) Free Trade Agreement, now under negotiation and to be concluded by the end of this year, and the Pivot to Asia, meaning a redeployment of American priorities and military forces away from Europe and the Middle East to Asia. The president said that Asia will be central to America’s future prosperity and that it was imperative to correct unsustainable trade and financial imbalances while continuing to expand economic ties. This would require that all countries play by the same rules appropriate to the current global economy. The TPP, he said, would be a template for a “21st-century agreement” that would eventually be open to all the countries of the region. He emphasized that this kind of agreement can thrive only in an environment of security and stability, and he underscored that the Pivot to Asia “will allow America to keep its commitments to its allies” in a region characterized by competing territorial claims, uncertain energy supplies, and North Korea’s nuclear threats. In closing, however, he stressed that neither the Pivot nor the TPP is aimed at any particular country—which, of course, meant that it is. The country is China. But these initiatives are also about responding to the pleas of Asian friends, the importuning of U.S. global corporations, papering over inconsistent goals, denying American commercial decline, and clinging to the quasi--American empire. Obama accurately posed the challenges. But do these twin policies accurately define American interests? Are they plausible strategies for achieving them? These key questions have received surprisingly little attention. As it has evolved so far at least, the TPP is anchored in the same orthodox free-trade philosophy that has inspired every U.S. trade negotiation and agreement since the end of World War II. It is also following the same negotiation process as all the old deals. Indeed, the agenda and initial text were largely lifted from the failed Asia-Pacific Economic Cooperation trade agreement of the 1990s and the more recent U.S.–Korea Free Trade Agreement. These texts have been broadened a bit to try to cover some new topics like state-owned enterprises, but essentially they are no different from what has gone before both in substance and procedure. We can’t know the result yet, but in the past, the U.S. trade imbalance has widened after each new agreement. A New Sun The foreign minister of a Southeast Asian country once told me that China is like a new sun entering the American solar system. All the planets, he said, are now shifting their orbital patterns, and the Asian planets especially are entering into orbit around the Chinese sun. He was correct, and this fact has important implications for both the planets and the suns. This same foreign minister made the point that China’s is a hierarchical worldview in which each country and person has an assigned position that is either up or down. In this hierarchy, he said, my country’s position is definitely down, and we therefore prefer not to be controlled by China. On the other hand, he added, there are nice economic benefits in China’s orbit. So, we’d like to be in that orbit but with U.S. gravity keeping it wide and loose. Just so. The rest of Asia is growing, thanks to its Chinese connections, but also fears being overwhelmed. This concern of smaller Asian nations has been exacerbated by the recent rapid displacement of U.S.–made products and technologies in world markets. Despite keeping several of its 11 aircraft carriers and more than 100,000 troops in the region and being the biggest buyer of Asia’s exports, America is said somehow to be ignoring Asia. Thus some governments, such as Singapore, Malaysia, and Vietnam, call for the U.S. to demonstrate renewed commitment by entering into more free-trade agreements and security arrangements. This is partly sincere but is also partly special pleading aimed at allowing them to continue their free ride on America’s unilateral security commitments and open markets. These countries, observing America’s mounting trade deficits with Asia, also fear a possible American shift toward protectionism. They hope to use free-trade agreements to lock in their access to the U.S. market. As for the United States, it has long treated the Pacific Ocean as an American lake and taken on unilateral responsibility for defending its Asian allies while patrolling the Chinese coast and keeping China confined within its own shores. Anxious to keep the planets in proper orbit around the American sun, the U.S. foreign-policy establishment insists that there can be only one solar system and argues that China must become a “responsible stakeholder” in this American system, implying that China is somehow not yet fully civilized and that America must be both mentor and disciplinarian as it brings the Chinese celestial body into orbit around itself. Thus the logic of the new Pacific initiative: a free-trade agreement that includes many of the Asia-Pacific nations along with the United States, but one that is too demanding for a developing and mercantilist nation like China to enter yet. The military Pivot, meanwhile, has America taking on responsibility for defending Asian claims disputed by China; our enhanced role keeps pace with the modernization of China’s forces and maintains U.S. hegemony until such time as China can be declared fully civilized, if ever. Unfortunately, the logic falls apart when the details of the TPP are measured against actual Asian economic practices and geopolitical threats. The Japanese Role Model The call for a 21st-century trade agreement also grows out of long--standing U.S. frustration with most of its late-20th-century trade relationships in Asia. This goes back to the U.S. postwar occupation of Japan. Then, U.S. leaders advised Japan to produce labor-intensive goods like clothing, because Japan’s plentiful supply of inexpensive labor would give it a cost advantage in those kinds of items. American free-trade doctrine held that countries should not protect or subsidize favorite industries but should rather specialize in producing what they could do best and cheapest while trading for the rest. The Japanese rejected this advice. As former Ministry of International Trade and Industry Vice Minister Naohiro Amaya once told me, “We Japanese did the opposite of what [the American authorities] told us.” Thus, Japan rejected direct foreign investment, imposed high tariffs and other protective barriers, compelled a high rate of savings, and channeled the savings through the state-controlled banking system into capital-intensive industries with large economies of scale and rising technology input such as steel, shipbuilding, autos, and later semiconductors and consumer electronics, to name a few. Japan further intervened regularly in currency markets to keep the yen cheap versus the dollar as both a subsidy to Japanese exports and an extra tariff on imports. It also provided a wide range of special loan and investment facilities along with outright subsidies to promote investment in and exports by the targeted industries. This was an export-led mercantilist growth model. Unlike the Anglo/American model in which market outcomes are ends in themselves, this model saw the market as a means to an end, as a tool that could be sharpened if it was not producing the desired result. It was also a tool that aimed to produce chronic trade surpluses and accumulation of dollar reserves. Japan soon became a model for Asia. Singapore’s first prime minister, Lee Kuan Yew, advised his people to learn from Japan. They did, and so did the people of Korea, Taiwan, Malaysia, Hong Kong, and Thailand, which became known as the Asian Tigers as they duplicated Japan’s success. Then in 1992, China’s Deng Xiaoping declared that “to get rich is glorious,” and China became the last Tiger or perhaps the first Dragon. What cannot be overemphasized about this progression is the fact that these countries all adopted an economic-development philosophy that is the opposite of America’s and of the free-trade doctrine on which the World Trade Organization (WTO) and its conception of globalization are based. While operating within a structure that presumes free trade is always a win-win proposition, most East Asian nations have embraced neo-mercantilism, which understands globalization frequently to be a zero-sum proposition (win-lose). While producing miracles in Asia, this circumstance resulted in an unbalanced form of globalization in which the U.S. market was mainly open while Asian markets were relatively protected, and often-subsidized Asian products flooded U.S. markets. After more than 100 years of trade surpluses, the United States went into constant deficit in 1976. By 1981, when I became one of the main U.S. trade negotiators, the deficit was $16 billion ($11 billion with Japan). I was told that the deficit was unsustainable and that it was my job to fix it. By 1987, the U.S. textile, steel, auto, semiconductor, machine tool, and consumer electronics industries, among others, had all been savaged and laid off millions of workers as the U.S. trade deficit grew to $161 billion ($60 billion with Japan). After a dip following Japan’s U.S.–forced yen revaluation in 1986–1987, the U.S. trade deficit hit $230 billion in 1998. By the end of last year, it was $558 billion, of which $295 billion was with China and more than $400 billion was with all of Asia. Behind these statistics is the loss of entire U.S. production industries such as consumer electronics and the loss of millions of jobs and billions in investment (the $558 billion deficit of 2011 represents a loss of six million to nine million jobs). These alarming trends led to virtually constant negotiations to open Asian markets and stop “unfair” trade. Trade talks were also initiated as a way to reward allies and entice doubters and adversaries toward our model. What these talks did not do was reverse Asian neo-mercantilism. Negotiating American Commercial Decline Between 1960 and today, there have been four full-fledged rounds of global negotiations under the aegis first of the General Agreement on Tariffs and Trade (GATT) and then of the WTO that engaged the United States and the Asia-Pacific countries. In addition, there was a continuing series of talks with Japan under rubrics such as the Market Oriented Sector Specific Initiative (MOSS, ridiculed as More of the Same Stuff), the Semiconductor Negotiations, the Nippon Telegraph and Telephone talks, and more. There was the creation of the Asia-Pacific Economic Cooperation association, founded in the early 1990s to spread liberal democratic ideals within the Pacific Rim through trade and investment. There were the negotiations both to bring China into the WTO and for America to grant it permanent “most favored nation” treatment. The North American Free Trade Agreement and bilateral free-trade agreements with Peru, Chile, Singapore, Australia, and Korea are also part of this saga of trade deals that only widened trade imbalances. Each of these projects had its causes, purposes, and dynamics, but certain critical patterns repeated. The premise was that all participants embraced the same free-trade philosophy and rules and that if the rules were set properly, the results would automatically be satisfactory for all. The fundamental difference in philosophy between laissez-faire, free-trade America and export-driven Asia was never directly confronted. One reason for this was that free trade was a kind of religion of U.S. policymakers, for whom any management of results was original sin. Another was that America was long considered economically invulnerable. Yet another was that the purpose of the deals was usually more to cultivate geopolitical allies, to stimulate development of struggling neighbors, or to facilitate U.S. investment abroad. But the agreements were always sold to the U.S. Congress and public as arrangements that would increase U.S. exports, reduce trade deficits, and create jobs. They never did. Rather, the trade deficit relentlessly rose, offshoring of U.S.–based production and jobs accelerated, and trade became a drag on growth of U.S. gross domestic product as well as a cause of rising income inequality. As economic strategy, the trade deals and their logic were unsuccessful, or irrelevant, or both. Enter China Nothing illustrates this folly better than the case of China. By the turn of the century, negotiations to bring China into the WTO had been going on for more than a decade and were now coming to conclusion. The big question was whether the United States would accord China the same permanent most-favored-nation (rebranded as PNTR, or permanent normal trade relations) treatment it accorded other members of the WTO. Some analysts warned that the then–$68 billion trade deficit with China would grow dramatically. But their testimony was drowned out by that of laissez-faire economists, CEOs, trade negotiators, think-tank heads, and political leaders, all of whom emphasized that China was no Japan; the Chinese actually welcomed foreign participation in their economy. The China lobby further argued that America’s exports to China were bound to increase more rapidly than China’s to America because China would be dramatically reducing its tariffs and trade barriers, while America would be making no cuts at all. That, of course, turned out to be utter nonsense. By the time China joined the WTO in 2001, its trade surplus with the United States had jumped to $83 billion. As noted above, by the end of 2011, it had climbed to $295 billion despite an endless series of “strategic and economic dialogues” and cabinet-level trade and development discussions reminiscent of the Japan experience. The reality is that U.S.–Asia trade imbalances tend to grow and accelerate regardless of negotiations and deals—or more likely because of them. But since the charade of shared principles means that failure to fulfill the rosy forecasts cannot be attributed to systemic differences, it has to be blamed on flawed agreements, which then requires negotiation of new agreements covering more items such as protection of intellectual property, banking regulations, or other elements that might possibly serve as market barriers. Thus have talks and deals proliferated, providing few jobs for America aside from lifetime employment for its trade negotiators. Why U.S. Trade Policy Fails There are, however, two clear purposes that all the deals have served. The first is the geopolitical grand strategy objectives of the United States. By making the United States the market of last resort, the trade agreements have helped persuade allies to accept U.S. hegemony. The second purpose served is that of U.S. businesses that profit immensely from outsourcing and offshoring to Asia but that need the security provided by Uncle Sam to do so. These realities reveal the flaws in U.S. trade efforts—misplaced priorities, a false doctrine, and false assumptions. Most misplaced has been the geopolitical priority with its subordination of long-term economic interests to short-term political/military objectives. Washington continually makes concessions, refrains from insisting on application of the GATT/WTO rules, or backs away from taking actions to counter mercantilism on national--security grounds. In the 1980s, the Reagan administration declined to invoke GATT rules against European subsidization of the Airbus, because Secretary of State George Shultz said doing so would shatter the North Atlantic Treaty Organization. Today, Washington declines to respond to China’s blatant currency manipulation. Why? It thinks it needs the Chinese to help with problems like Iran and North Korea. It doesn’t understand that erosion of U.S. wealth-producing capacity is the most important national--security threat. A corollary is the false premise that mercantilists who intervene to distort markets should not face retaliation because they are only hurting themselves and will eventually see that and abandon their policies. Studies have shown that the Airbus subsidies helped rather than hurt the European Union economy. The Airbus killed off all the U.S. commercial aircraft makers except Boeing and cost the U.S. economy many thousands of jobs that won’t be recovered even if Europe stops the subsidies. All the evidence of the past 200 years suggests that mercantilism works and that mercantilists win. The trade deals that the U.S. has been negotiating do not reach the most important elements of Asian mercantilism. For starters, because of foreign-currency intervention policies, the dollar tends to be chronically overvalued versus the currencies of most Asian countries. Although the WTO vaguely calls for not using currency policy to offset tariff reductions, the truth is that currency policy is not seriously covered by any international trade agreement. Thus currency manipulation can be and is used to keep markets protected in the face of apparent market-opening agreements. A second major element is a set of investment packages aimed at inducing the offshoring of production and research-and-development facilities. China, Singapore, Malaysia, and many others offer big tax holidays, free land, cut-rate utilities, free worker training, sweetheart loans, and big capital grants to companies as enticements to invest. Nor are the Asian countries alone. Others such as France, Ireland, and Israel play the same game. In the United States, some of the individual states do this, but their resources and authority (they can’t grant holidays on federal taxes) are limited, and Washington doesn’t play. So it often happens that businesses whose U.S. operating costs are internationally competitive will nevertheless offshore production in order to get the incentives. These packages are not covered in any of the free-trade agreements. A third element is antitrust or competition policy. The biggest barrier to getting into many markets is control of distribution chains by powerful cartels that often have cozy ties to governments. Take autos. In America, foreign automakers can sign up any Detroit auto company dealer to sell its cars as well. Not so in Japan or Korea. Again, antitrust is not covered by any of the free-trade deals. Fourth are “buy national” and indigenous technology-development policies aimed at giving advantages to domestically based production and making market access conditional on developing designated technologies in the market. WTO rules on this apply unevenly, and many countries in Asia exert pressures that favor those producing and developing locally. General Electric, for instance, recently transferred its avionics business into a Chinese joint venture to ensure access to China’s state-controlled aircraft market. Even when banned by agreements, these policies operate in practice because countries with strong bureaucracies wielding broad discretionary authority can easily intimidate companies. Value-added taxes, which tax transactions at each stage of production and distribution, are common in most countries and are rebated for exports while being added to imports. They thus constitute a kind of subsidy for exports and an additional tariff on imports. Because it has no value-added tax, the United States is particularly disadvantaged in international trade. There is also the implicit economic nationalism of public exhortation that plays to cultural pride. The leaders of Asian countries constantly preach the importance of making things domestically, attracting investment, developing indigenous technology, buying locally, and contributing to the national welfare. This is somewhat intangible and yet very powerful. It is, of course, not covered in agreements and probably can’t be. But it is a game that the United States simply doesn’t play and should. Right Impulse, Wrong Strategy America needs to try something new. The Obama administration is right to be seeking a comprehensive 21st-century U.S. trade and globalization policy. Such an effort should begin with a reassessment of national security and geopolitical priorities. It should recognize that the decline of U.S. influence in Asia is not due to lack of military power and presence but rather to eroding competitiveness. Regaining economic strength has become a matter of the highest geopolitical priority. We can no longer subordinate trade to national-security considerations, because trade is national security. A 21st-century treaty would include provisions to prevent or counter currency manipulation. Measures could range from emergency tariffs to surcharges on foreign buying of U.S. Treasury securities to application or development of alternative international currencies. The point is to do something beyond whining. Similarly, a 21st-century deal would include some disciplines on investment incentive packages that countries use to encourage offshoring. These are nothing more than indirect export subsidies and a way to circumvent the WTO prohibition of direct export subsidies. In the same manner, any new deal should include strong anti-cartel provisions that would be adjudicated and enforced by impartial institutions and would measure actual market access to previously closed systems. A 21st-century agreement would include strong penalties for violations of market-access commitments. Even the existence of five-year industry-planning schemes, for example, should trigger investigation of market-access impact. Finally, the primary goal of any 21st-century deal must be to reduce the U.S. trade deficit, to increase production in and exports from America in a measurable way, to increase the flow of technology and investment to America, and to increase U.S. competitiveness. It needs to be results--oriented, not just based on nominal compliance with processes. The TPP and the National Interest How does the TPP measure up? Poorly is the answer. For starters, it is more of a geopolitical effort than a trade/globalization effort. At a White House meeting last year, I asked why we were doing a TPP in view of the fact that we already have free-trade agreements with four (Peru, Chile, Australia, Singapore) of the eight other countries included in the current talks and that those four plus the United States account for more than 85 percent of the trade at stake in the TPP. The reply was that we needed to demonstrate our commitment and engagement in Asia. There was no mention of creating jobs or contesting mercantilist policies that disadvantage our economy. The countries currently participating are an unlikely group, with mostly small economies excepting the United States. They are playing a charade in talking free trade but not practicing it in the sense that American leaders mean the term. Australia, New Zealand, America, Peru, and Chile largely share a free-trade philosophy, but the likes of Singapore and Malaysia embrace strategic industrial policy and export-led growth, and Vietnam is dominated by state-owned enterprises. The negotiating agenda is a list of familiar tunes: better intellectual-property protection, further tariff reduction, government procurement, rules of origin, etc., ad nauseam. Nothing on currencies, investment incentives, antitrust, pressure tactics, or anything else that might impede the continued practice of mercantilism under the facade of a free-trade agreement. The chapter on labor practices is likely to be minimal, while the capital rights will help dismantle important regulatory protections. There is no way that this deal could serve as a meaningful template and docking agreement for creating a truly integrated 21st-century free-trade area around the Pacific Rim. Nor is there any apparent economic benefit to the United States. There may be benefits for the U.S. companies seeking to invest and produce in Asia, but is that in the American national interest? Pivot or Pirouette The TPP also fails as geopolitics. What exactly is the threat the Pivot is meant to counter? Is China going to invade America? Is it going to patrol our coastlines as we patrol its shores? Is it going to invade Japan and Korea? No, no, and no. What about North Korea: Is it going to invade us? Can its bombs reach us? No, and no. Might it invade South Korea or shoot a bomb at Japan? Barely possible, but we already have troops and weapons in place to deal with that. Moreover, North Korea is surrounded by powerhouses like Russia, China, South Korea, and Japan. So why the need for a flexing of U.S. muscles? One answer is that China is modernizing its forces and that while they may not threaten America directly, they have threatened certain claims of countries friendly to us, like the Philippines. We therefore need to support our friends. Maybe, but the rights and wrongs of claims over reefs in the Pacific are unclear. We need to be careful, and, anyhow, nothing is preventing our friends from allying to resist Chinese pressure—except, of course, one thing. They all are doing business like crazy in China and don’t want to risk antagonizing it. So they find it convenient to urge Uncle Sam to increase its security presence while they concentrate on getting rich. Out of habit, pride, and the priority given to geopolitics, America’s knee-jerk reaction is to saddle up. It’s a bad response. For starters, it puts us in a no-win position. China is growing and has a rising stream of wealth and capabilities. It will easily be able to increase and modernize its forces. Conversely, we must reduce military spending. Why give China reason to think we are challenging it to an arms race while our position weakens and theirs strengthens? We could well wind up doing a pirouette rather than a pivot, simulating a get-tough policy with little to back it up. But more important, America’s main job now must be to invest and make more in America. The Pivot not only distracts from that, it is like writing a military insurance policy against the risks of offshoring for all the companies moving production and jobs to Asia. Why do that when we want them to produce and hire in America? By taking full responsibility for Asian security, we are subsidizing the very mercantilists whose competitive inroads we’re trying to reverse. It’s clear that America does need a new 21st-century set of rules for trade and globalization as well as new national-security policies and priorities. It’s also clear that the combination of the TPP and the Pivot are not that. Sadly, they look suspiciously like more of the same old stuff. See the complete issue Clyde Prestowitz is the author of Rogue Nation: American Unilateralism and the Failure of Good Intentions. He is also president of the Economic Strategy Institute, a nonprofit research organization in Washington, D.C. Articles By Clyde Prestowitz RSS feed of articles by Clyde Prestowitz More From This Issue The Age of Double Standards Wolves to the Slaughter Six Portraits of Mitt How to Contain a Nuclear Iran Culture Stacked Decks What's the Point of College? History Lessons Barbarians at the Transom Rachel Maddow, the Lovable Wonk A Nightstick Turned into a Song Up Front The Other Glass Ceiling Departments Don't Fear the "T" Word Hold Off on the Obama Victory Dance Special Report A Stealth Attack on Democratic Governance The Pacific Pivot Not a Great Deal for Asia The Myth of the Level Playing Field Advertisement

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UMDL finding aids home Home Bank of the United States signature book Bank of the United States signature book, 1834-1836 Additional Descriptive Data A first attempt to create a national bank for the United States failed in 1811, but debt accrued from the War of 1812 compelled Congress to charter a second Bank of the United States. At the time of the election of Andrew Jackson to the presidency in 1828, the bank was operating successfully, but the President and several of his political allies believed that such a large private institution would necessarily be vulnerable to corrupting influences. Jackson and the bank's director, Nicholas Biddle, clashed several times throughout the early 1830s, and Jackson refused to re-charter the institution in 1832. That, coupled with the withdrawal of federal funds from its coffers, effectively destroyed the Bank, and it closed in 1836. The headquarters of the Second Bank of United States was in Philadelphia. This volume belonged to the New York branch. Powered by DLXSTo comment or inquire about content, please visit Clements Library ReferenceUniversity of Michigan Digital Library

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FeedIndex I'm always interested in hearing from you ZOETISPfizer, a leader in the pharmaceutical industry, was considering a variety of strategic approaches to grow shareholder value and align its portfolio of businesses with a new strategy for the company. This resulted in Pfizer Animal Health needing to recreate itself as a new spin-off brand. Lippincott worked closely with Pfizer to create this new brand, with a new name. While working at Lippincott I created the visual system for this brand. In that process I defined it's look and feel through imagery, typography, color and layout in various situations and environments. · NEXT · · 1 of 1 WATCH OUT LOVERWatch Out Lover is the third album by Norwegian artist Hearfelt. His most ambitious to date, this album and the world that was built around it was extremely rich. Combining Brutalism and Rococco, this world was opulent as well as aggressive. I worked as Art Director to Hearfelt from conceptualization through the launch of House of Heartfelt, a new entity to hold the creative output surrounding the artist and his collaborations. Watch Out Lover had a timed release that included two singles, Blindfold and The Things. Before the full release much of Norway, and parts of the rest of the world were wallpapered with black and white posters to create anticipation.

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Michael Dell Ups Takeover Bid A group led by Dell's founder Michael Dell on Wednesday raised its offer for the computer maker in hopes of attracting more shareholder support for its plan to take the company private. Dell founder raised his $24.4 billion bid by $150 million but the sweetened offer is contingent on a key change to the shareholder voting rules that will make it easier for him to take the computer maker private. The sweetened $13.75 per share bid by Michael Dell and private equity firm Silver Lake came hours before a rescheduled vote on the buyout proposal, which has drawn strong opposition from major investors including billionaire Carl Icahn and Southeastern Asset Management. The proposed amendments to the merger agreement are as follows: - increase the merger consideration to $13.75 in cash per share of Dell common stock, representing an increase in the consideration to be paid to unaffiliated stockholders of approximately $150 million; and - modify the "Unaffiliated Stockholder Approval" requirement in the merger agreement to provide that the voting requirement is the approval of a majority of the outstanding shares held by the unaffiliated stockholders that are present in person or by proxy and voting for or against approval of the merger agreement at the stockholder meeting. "This is our best and final proposal. We are not willing to discuss any further increase in the merger consideration nor are we willing to increase the merger consideration to $13.75 per share without the change to the Unaffiliated Stockholder Approval requirement described above," michael Dell said. "We believe these amendments are fair and in the best interests of the Company?s unaffiliated stockholders and provide the best alternative available to the Special Committee to maximize stockholder value" The shareholder meeting on the deal will now be held on Aug 2. Dell's special committee said it was evaluating the new proposal. The committee is seeking at least $14 per share from the buyout group in order to consider a potential change in the voting terms, Reuters reported citing a person familiar with the matter.

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Sense & Accountability Isaac M. O'Bannon On Apr 17, 2007 Accountants are often the first to poke fun at their own profession, citing the long hours often spent researching tax code or determining proper depreciation treatments. The client interaction side is often much like any other business, but still, the spreadsheet jokes can be enough to put an actuary to sleep. Accounting can be exciting, though (even to outsiders), especially when you add a little sleuth work, crime solving and court time into the mix on occasion. Think of it as a CPA version of CSI (Crime Scene Investigation). Nancy Koonce does just that. The Idaho CPA is a principal in the Twin Falls, Idaho, firm of Ataraxis Accounting & Advisory Services, Inc. (www.idahocpa.com), and also holds CVA and CFE credentials, for valuation and fraud examination specialties. And while she very much enjoys providing general accounting and tax services to her business clients, these two specialties are what make her job the most challenging. “Fraud investigation is like a puzzle, and going into a client’s office to find where the problem may be is very much a mystery,” Nancy said. All too often, it’s a mystery that can severely hurt a company. While the Enrons and WorldComs steal the spotlight as examples of corporate stock fraud, most business fraud involves theft or misappropriated funds and property, according to Nancy. “Small businesses are especially susceptible to theft, embezzlement and other financial crimes. Nearly 30 percent of the small businesses that close do so because of employee theft,” she said, citing U.S. Chamber of Commerce statistics. “It’s my job to help a business or organization find out what happened to their property or money and to help set up safeguards to prevent similar occurrences in the future. Of course, we also need to know who acted inappropriately, and we want to try to get the money or property back, but that often just isn’t possible.” While her accounting B.S. and MBA from McNeese State University are essential, Nancy says that the key to discovering the problem is often found not from dissecting the financial records, but through questioning of the client’s staff. “As fraud examiners, we don’t have the powers of law enforcement, but we do have specialized training in conducting interviews and gathering information, and as a CPA I also have the know-how it takes to discover questionable bookkeeping practices.” First action, of course, is to ghost copy all computers involved to prevent losing evidence if data is changed or erased. But when the interviews start, you never know what you might find out. At one client’s business, for instance, she discovered that three people were individually stealing money from the company. “The clues get us started in the right direction; then it’s time to gather the evidence.” She works solely for the client, but evidence chain rules and other legal concerns must be addressed in the event of court involvement. “If the client wants to pursue legal action, I will support them as a witness in court, but businesses often decline to request law enforcement involvement or to file a civil suit.” Entities with more regulatory administration, however, are often required to conduct formal inquiries and present evidence, so she is no stranger to the courtroom. Business valuations are also often required in bankruptcy cases and other court dockets, as are court-ordered fraud investigations. And even in more traditional estate planning and taxation roles she has found herself as a witness for her clients in civil and probate actions, most notably in one of the largest estate cases of the past decade. As a principal partner in her previous accounting firm, she did the accounting work for J. Howard Marshall, II, the multimillionaire Texas oil tycoon who, at the age of 89, married Anna Nicole Smith. During the estate battle that ensued following his death and in several court cases since, Nancy has provided witness testimony for the J. Howard Marshall Living Trust and for the Estate of J. Howard Marshall, II. “I met with Mr. Marshall both before and after they married, and I have testified that Mr. Marshall was explicit in his not wanting to amend or otherwise change his estate plan to include Ms. Smith.” In the most recent court action involving the case prior to the death of Anna Nicole Smith, the U.S. Supreme Court overturned a prior California circuit court’s ruling, thereby allowing Anna Nicole, or her estate, to continue to pursue her claims for a greater share of J. Howard Marshall’s estate. “Nothing is simple when there is that much money involved,” said Nancy. So how does Twin Falls fit in? Idaho was always home. Nancy was originally from Twin Falls, but had moved to Louisiana after marrying when she was 17. During the next 29 years, she would get a divorce, raise two daughters and a son, go back to college and get her degrees, work for a variety of financial institutions and law firms, and work her way up to principal partner in an accounting firm. After her last child entered college (to become an actuary), it was time for her to move back to Twin Falls to join her current practice. And after two years with Ataraxis, she bought a principal stake in the corporation when a senior partner retired. Nancy visited Louisiana on a long-planned vacation that just happened to take place a week after Hurricane Rita, the second 2005 hurricane to strike the Gulf Coast. While there, she helped friends and her former in-laws with cleanup and FEMA paperwork. “It was incredible to see this place where I’d lived for nearly 30 years and to not recognize where you were because of the damage to landmarks you took for granted.” Having worked for legal practices while attending college made her very familiar with the courts, and, as an assistant to the CEO of a failed savings and loan, she had some insight into forensic accounting. These experiences, along with her accounting and business education, made fraud examination a natural addition to her professional credentials. She is currently president of the Boise Chapter of the Association of Certified Fraud Examiners, and also gives presentations to area civic clubs and the local Chamber of Commerce on fraud prevention. Nancy is highly aware of the important role that technology has played, both in her traditional practice engagements and in her specialties. “Computerized versions of all tax and accounting programs have made a huge impact, but especially the Internet when it comes to research. I can’t imagine having to go to the courthouse or library to look up documents and records.” Nancy and the other principal partners have continued their investment in technology, and Ataraxis is currently in the process of converting files to a digital management system. Additionally, each of the firm’s 14 staff utilize dual-screen monitors at their workstations. The practice earned a score of 270 on the Productivity Survey, placing it well above their regional peers and above the national average. The Productivity Survey is a free tool that helps public accounting firms assess their use of technology and workflow processes, and provides actionable recommendations for improve ment. The free online survey is located at www.CPATechAdvisor.com/Productivity. Nancy is also active in her community, serving as treasurer of her church and on the boards of the Southern Idaho Learning Center, the Twin Falls Rotary Club, Jazz in the Canyon and the Air Magic Valley air show. She also served as president of an air show in Louisiana for 10 years. Having recently bought a new house, she plans on spending much of her free time (after tax season) in the yard and gardening. She also will soon be jumping out of a perfectly good airplane for the first time. See… accountants can be exciting. Firm Snapshot Firm Name: Ataraxis Accounting & Advisory Services, Inc. Location: Twin Falls, Idaho Productivity Score: 270 Continue Reading Sense & Accountability Home

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From the October 10, 2012 issue of Credit Union Times Magazine • Subscribe! Charter Oak FCU Steers Shipyard to Smooth Sailing By Michelle Samaad October 07, 2012 • Reprints Opened in 1843, the Mystic Shipyard has evolved over the past few centuries from building schooners to a recreational marina that offers yacht space to 165 summer residents. Jeff Marshall typically starts his days early at the Mystic Shipyard, a 169-year old marina with a history steeped in the construction of schooners and iron-clad ships to sail the waterways of New England. Marshall, along with Robert Helbig, are co-owners of the shipyard located in Mystic, Conn. Opened in 1843, the marina was home to several ships, including the Jennie R. Dubois, constructed in 1902 and the largest sailing ship ever built in Mystic, Marshall said. At a cost of almost $100,000, it was designed to carry 3,000 tons of coal or two million board feet of lumber. After a shift to building catamaran power boats called sea sleds for racing and recreation and also as tenders for presidential yachts in the 1940s, the Mystic Shipyard was repurposed again as a recreational marina. It is now home to 165 summer residents and over 300 winter storage customers. The shipyard also offers custom shipwright carpentry, fiberglass repair and refinishing, rigging services, engine repair and re-powering. When Marshall recently started exploring refinancing and additional capital opportunities, he turned to his bank of more than 30 years. Unfortunately, the financial institution was not able to come up with a satisfactory deal, he said. He then went shopping around and three other banks and the $749 million Charter Oak Federal Credit Union expressed strong interest in working with Marshall and his team. In the end, the cooperative in Groton, Conn., brought the most appealing offer to the table and on July 31, provided a multiyear financing package for the Mystic Shipyard that allows the facility to refinance its existing mortgage as well as fund future improvements at the 6.5-acre marina. For Marshall, it came down to working with a lender that was able to meet all of the terms he was seeking. He did not want to disclose the dollar amount or the timeframe of the loan. “Charter Oak jumped through hoops,” Marshall said. “It was primarily the loan size we were talking about. It was dollars and sense, interest rate, terms and conditions.” Brian Orenstein, CEO at Charter Oak, said the Mystic Shipyard loan is among the credit union’s three largest commercial loans to date. “We’re pretty excited. We had some pretty stiff competition from community banks,” Orenstein said. Charter Oak’s financing package will allow the shipyard to undertake planned improvements at the Mystic facility, including possible dock upgrades and a new repair facility. For some time, credit unions have carved a niche within the small business sector working with traditional players providing loans for commercial real estate ventures on the high end to food carts on the low end of the spectrum. With a shift in the type of businesses that have been formed over the past few years, particularly those tied to the Internet, some lenders are open to embracing the change, said Rohit Arora, co-founder and CEO of Biz2Credit, a New York firm that connects small businesses with financial institutions. “There are lot of businesses that are doing things like smartphone wholesales, small modeling agencies and online content translations,” Arora has noticed. “Normally, banks will not fund these businesses because they don’t understand them. Most want hard assets. If they perceive a business as risky, they will shy away from it.” Credit unions and micro lenders tend to be more willing to fund nontraditional businesses, Arora said. With incentives to engage in green businesses, the appeal may be more attractive, he added. Biz2Credit has found that online-based businesses are the fastest growing sector that is receiving loans. Indeed, for the past year, online retailer Amazon has been experimenting with offering loans to some of it high-volume sellers, according to an Oct. 1 American Banker article. Arora said companies like Amazon are going this route because their own merchants are finding it harder to get financing from banks. Amazon did not respond to a request for additional information by press time. Despite the new competitor entry, Arora still sees opportunities for credit unions. “They are focused on helping their members. These are folks who are getting out of corporate jobs and starting their own businesses,” Arora said. “Big banks keep asking ‘why do we keep rejecting so many loans when other non-traditional lenders are lending.’ I tell them the economy is shifting. If you don’t change your underwriting standards, you won’t approve as many loans.” Orenstein said having an in-house team of experienced, former bank commercial lenders officers who’ve been in the business for 25 years and know the local area and a board committee that oversees all loans over $1 million, has kept Charter Oak out of the delinquency pool since it began offering business loans in 2009. The credit union now has $35 million of them in its portfolio. “Certainly, there are risks. We believe that some of the credit unions that got into trouble were either outsourcing or through participations or not having experienced staff,” Orenstein said. In addition to the Mystic Shipyard, Charter Oak’s largest loans were to date provided to a mobile home park and as recently as September, a $1.5 million commercial loan for the Interdistrict School for Arts and Communication in downtown New London, Conn. “We have the skills to underwrite in house. We had outsourced in the past,” Orenstein said. “Using credit scores for commercial lending just didn’t make sense to us.” Charter Oak is open to considering all types of commercial loan requests within legal lending limits, Orenstein offered. By nature, credit unions tend to listen to all member business loan requests to help members whenever possible, said Larry Middleman, president/CEO of CU Business Group LLC, a Portland, Ore.-based CUSO that serves 398 credit unions in 43 states. These member requests certainly involve nontraditional businesses, he added. “From my view, credit unions would like to lend to nontraditional businesses such as home-based start-ups and online businesses, but in reality any loans granted will be in small dollar amounts,” Middleman said, adding these loans would typically be well-secured by residential real estate or other personal assets, as nontraditional businesses don’t often have business assets to pledge as collateral. “Therein lies the big risks of this type of lending. Nontraditional businesses usually do not have several years of demonstrated, successful operations, nor do they have business collateral,” Middleman said. “Credit unions would typically view this type of loan as unsecured, and preferably would obtain an SBA guarantee or some additional repayment assurance.” Still, Middleman continues to see credit unions serving a niche in their markets. For example, a good number of them in California use a state guarantee program that fosters new business growth, which allows lending lend to nontraditional businesses, he pointed out. “However, the majority of credit unions tend to stick to plain vanilla commercial lending which means loaning to businesses with three plus years of profitably operations and solid real estate collateral,” Middleman said. Meanwhile, Marshall at the Mystic Shipyard said he was familiar with Charter Oak before doing business with the credit union and promised the financial institution that it would get the majority of his business going forward. Still, he is not against banks and was puzzled when he found out that efforts are in place to keep credit unions from expanding their business lending authority. “It seems to me that would be fair. Being on the outside looking in, I’m out for what’s best for my bottom line. It doesn’t matter if it’s with a bank, a convenience store or a credit union; I want to achieve the best bottom line.” « Previous Page 2 of 2 Show Comments

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Barbara Nall Retiring from LA Financial; Lake Trust's Carol Galizia Takes Over March 07, 2013 • Reprints Carol Galizia, left, succeeds Barbara Nall as CEO of LA Financial. Barbara Nall, who joined LA Financial Federal Credit Union in 1967 as a member service representative, working her way up to mid-level and senior management positions, becoming the credit union’s CEO/president in 1995, will retire on April 2. Nall will be succeeded at the $356 million institution by Carol Galizia, a 20-year credit union executive who had been senior vice president at the $1.5 billion Lake Trust Credit Union in Lansing, Mich. Reflecting on her 46-year career, Nall said she is most proud of the recent years, successfully leading the Pasadena, Calif., credit union through significant economic challenges. “I truly appreciate the leadership opportunity that I was given,” she said. “I’ve tried to make the credit union the best that it could be and a valuable asset for the members.” Nall joined what was then Courts and Records FCU in 1967 as a member service representative answering phones. At that time, the credit union had under $7 million in assets and served Los Angeles county employees, the majority from the Registrar Recorders office and the LA County Courts. Over the years, she progressed from the call center to the loan department, then to several management positions including loan manager, vice president of operations and vice president of administration. In 1995, she was appointed president/CEO. During her tenure, Nall oversaw the implementation of many of credit union’s landmark programs and changes, including the CU’s name change in 2003 and the transition to a community charter credit union in 2004. Under Nall’s leadership, LA Financial expanded from an employee-based credit union to those who live or work in Los Angeles County, Calif. and Lake Havasu, Ariz. She helped expand the CU’s products and services, which helped LA Financial grow to $356 million in assets and serve more than 35,000 members. Nall also has served on the boards and committees of several trade organizations, such as the local Southwestern CUES board of directors, the California Credit Union League and WesCorp. Show Comments

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Help | Connect | Sign up|Log in William Baldwin, Contributor I write about investing and taxes. IRA Exit Strategy This story appears in the March 3, 2014 issue of Forbes. Take a close look at your retirement account. Do you have Mitt Romney Syndrome? This is an affliction that strikes successful people. They fatten their IRAs and 401(k)s only to discover that compulsory withdrawals, which begin at age 70, hoist them into unexpectedly high tax brackets. While details of the ex-governor’s IRA are not public, it appears that his tax-deferred savings are well into eight-figure territory. When this fact came out in the presidential campaign, a wave of sympathy was felt in tax-planning offices across the country. What a shame that all that money was going to come out at high ordinary income rates. You don’t have to be Romney-rich to confront unpleasantness with your tax rates. In fact, many of the surprises in the code leave the wealthy unscathed while doing a lot of damage to families with incomes between $200,000 and $500,000. There are antidotes. They constitute what Robert S. Keebler, a CPA in Green Bay, Wis., calls “bracket management.” Consider a Keebler client we will call Harry. Harry is a midwestern engineer in his 60s. His retirement assets will, assuming a conservative growth rate, tote to $7.8 million by the time Harry turns 70. At that point he has to start withdrawing the money so the IRS can get a piece of it. The withdrawals would start at $291,000 a year and follow an upward curve, peaking at $642,000. That’s a ticket to high tax brackets, on top of which Harry will have other income, like Social Security payments. Keebler’s solution: prepay some of the tax. Harry will do that with a Roth conversion, turning a portion of pretax 401(k) and IRA money into aftertax Roth money. There’s a tax hit up front, but once savings are Rothified they compound scot-free, with no withdrawal mandate as long as Harry or his wife is alive. Yes, prepaying tax can make you wealthier. So long as you pay the tax bill with cash now outside the account, the maneuver is a clear winner if your tax bracket in retirement is destined to be the same as it is now. Some lucky people can get an even better deal, paying Roth tax at a low rate now and reducing future income that would otherwise be taxed at a higher rate. You might be in this category if you are retired but not yet collecting Social Security. For many people between 55 and 70 a Roth conversion is a wise move–but a tough sell. Tara Thompson Popernik is a wealth planner at AllianceBernstein in New York City. She goes into client meetings armed with stacks of colored charts and Monte Carlo simulations. She might be able to show a couple that converting $1 million of IRAs should ultimately make them $500,000 better off. Still they hesitate. “It’s a hard decision to make and a big check to write,” she says. Bracket management means knowing just how much more income you can take in before you get kicked into a higher bracket. Perhaps you thought there are just two brackets for you–say, 15% for dividends and long-term gains and 35% for everything else. In fact, you may be subject to any of four bracket boosters. First, the health care tax. It adds 3.8 percentage points to your tax rate on investment income. It applies only to the extent this income vaults your AGI above a $250,000 threshold (on a joint return). If you have $240,000 of salaries and $35,000 of dividends and capital gains, then your adjusted gross income is $275,000 and the 3.8% surtax hits the last $25,000 of it. “Investment income” here is what you’re getting off unsheltered assets–say, the dividends on the Chevron shares parked in your taxable brokerage account. The 3.8% tax doesn’t apply to earnings inside a 401(k) or IRA. Nor does it apply to withdrawals from a retirement account. Now look at some interesting tax interactions. A withdrawal from a Roth doesn’t even affect the health tax, since Roth withdrawals aren’t considered income. But a withdrawal from a pretax account (or a conversion) does go into AGI. In other words, mandatory withdrawals from an IRA loft otherwise unaffected dividends into place to be swatted by the tax. This is why it might make sense for you to swallow a large tax bite today in order to get your taxable income down in retirement. Today you do a Roth conversion (creating taxable income) and suffer the 3.8% damage on a single year’s worth of dividends. That may spare you, down the road, from 20 years of surtaxes on your dividends. Get 2 Free Issues of Forbes The Forbes 2014 Retirement Guide Make Your Kid Rich With a Roth IRA A Roth Conversion Formula I write about investment strategies. My philosophy is that it is hard, but not impossible, to beat the market, and that it is easy, and imperative, to save on taxes and money management costs. I graduated from Harvard in 1973 with a degree in linguistics and applied math. I have been a journalist for 38 years, and was editor of Forbes magazine from 1999 to 2010. Tax law is a frequent subject in my articles. I have been an Enrolled Agent since 1979. More from William Baldwin William Baldwin’s RSS Feed William Baldwin’s Profile

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