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Financial adviser sentenced in Grand Prix scheme Curtis Boggs gets 2 years, ordered to pay restitution A man who told investors and Cincinnati leaders he could bring a Grand Prix auto race to the city has been sentenced to more than two years in prison and ordered to pay more than $350,000 in restitution. Related NKY bank robber with 2 dozen previous... Prosecutor: Toddler wounded in... After 19-month renovation,... Cincinnati Streetcar involved in... Oktoberfest Zinzinnati moves over so... Financial adviser Curtis Boggs was sentenced Wednesday in federal court in Cincinnati on charges of wire fraud and money laundering. Authorities say the 54-year-old Boggs fled Cincinnati months ago after it became apparent the race wasn't going to happen. The FBI arrested him last October, when he tried to re-enter the United States from Mexico. Prosecutors say Boggs solicited investments in a company called Cincinnati Grand Prix and obtained more than $350,000. Authorities say he used some of the money to buy a luxury car and make mortgage and property tax payments. Curtis Boggs It happened around 12:30 a.m. in the 300 block of Warner in Clifton Heights, near the University of Cincinnati campus.

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Property Prices Keep the Locks on Myanmar Office Space in Yangon the Most Expensive in Region Shibani Mahtani BiographyShibani Mahtani @ShibaniMahtani [email protected] Updated Sept. 17, 2013 11:51 p.m. ET For years, international companies wanting to set up in Myanmar were stifled by Western sanctions or rebuffed by the country's military government. Now, as the country opens up, global corporations are finding a new hurdle: real-estate prices. Lauren DeCicca for the Wall Street Journal Top-quality office space in prime locations in Yangon, the commercial capital of the poorest country in Southeast Asia, is now the most expensive in the region at $78 a square meter ($7.33 a square foot) per month, according to research from real-estate firm Colliers International. By comparison, office rentals in a booming market like Jakarta are $24 a square meter. Even in Manhattan, the average asking rent is lower, at $49.95. Serviced apartments and condominiums remain in short supply, pushing up costs for new expatriates and businesses, with additional units still a few years away. A client of Myanmar Deals Leasing recently toured three apartments before lunch, only to learn that all were taken by other interested parties by the end of that same day, according to the real-estate firm, which specializes in high-grade properties for businesses and diplomats. Peter Witton, an expatriate in Yangon who works as a director at investment and advisory firm Anthem Asia, has spent recent days searching for a new apartment. He says one- or two-bedroom flats in poorly built buildings that include business space and, in some cases, schools are going for about $1,800 a month, three times what they would have cost a year ago. "It is a bit depressing when you start looking around and seeing what's available," Mr. Witton says. And the worst isn't over, property analysts say. Looking Up in Myanmar A three-wheeled rickshaw and a local Burmese man at the corner of Bo Galay Bazzar Street and Mahabandoola Street in Yangon. Lauren DeCicca for The Wall Street Journal "We expect prices to go up even more, as foreign direct investment goes up and the investment climate improves," says Tony Picon, managing director at Colliers International in Myanmar. With decent living and working spaces in such short supply, some of these professionals are less inclined to move their families to the market, a stumbling block for companies working on large-scale infrastructure or other projects. Even for some companies operating in sectors that are slated to expand significantly in coming years—Myanmar boasts the fastest-growing tourism market in Southeast Asia—the cost of starting up remains unjustifiable. Small luxury hotels aren't feasible at the moment because the property prices are too high, says Paul Kerr, chief executive of the U.K.-based hotel brand Small Luxury Hotels of the World, a group that includes about 520 hotels in more than 80 countries. "[Land owners] are dreaming about the amount they can make," he says. Mr. Kerr's concerns are echoed by many American businesses already operating in Southeast Asia. Of the more than 470 American business leaders in the region, polled in a U.S. Chamber of Commerce survey published in August, 86% said they were dissatisfied with the high cost of rentals and apartments in the country and 79% said office rentals remain a major concern for their companies in Myanmar. Still, not everyone is complaining. Investors are benefiting as the country's fledgling real-estate industry builds high-rises in markets where typically the tallest structures are still golden pagodas. ENLARGE Construction sites in Yangon. Analysts expect property prices in Myanmar to rise even more. Lauren DeCicca for The Wall Street Journal Many of these investors are wealthy Myanmar citizens who have few places to park their cash in the absence of a stable banking system, stock exchange or bond market. Increasingly, they are turning to real estate, pushing up land prices and thus rentals for foreign companies and expatriates. Foreigners are unable to buy land directly in Myanmar so they are limited to developing it through a joint-venture partnership with a Burmese developer. "There's going to be a shortage of supply for many years to come," says Andrew Rickards, chief executive officer of Yoma Strategic Holdings. Mr. Rickards says that Yoma—a Singapore-listed investment firm with interests including real estate, construction and agriculture—is part of Myanmar businessman Serge Pun's empire. Yoma stock is trading at more than 80 times future earnings, and has doubled since the same period last year. Yoma and other Myanmar firms are betting that growth will be fueled by the foreign companies that have taken a long-term view of the potentially lucrative market of 60 million. These include U.S. firms General Electric Co. and Coca-Cola Co. , telecommunication operators like Norway's Telenor AS TELNY A and Qatar's Ooredoo, and London-based bank Standard Chartered PLC, all of which have established operations in Myanmar over the past year. In the U.S. Chamber of Commerce survey, 49% of American businesses in Southeast Asia say they plan to expand in Myanmar, despite complaints about high costs and other infrastructure hurdles. Frits van Paasschen, chief executive officer of Starwood Hotels & Resorts —whose hotel brands include St. Regis, W and the Westin—says the company was planning to establish a presence in Myanmar. "Rising land prices and a construction infrastructure that is still in its early stages would make building a world-class hotel a challenge, but will make the prize that much greater when the hotel is open," he says. Yoma hopes to address the supply issues with new mega-developments, including the 10 million-square-foot Star City residential project in Thanlyin, northeast of downtown Yangon. Aimed at middle-class city residents, the development, slated for completion in early 2016, will be linked to downtown Yangon by ferry, and by road to the Japanese-led Thilawa special economic zone. Write to Shibani Mahtani at [email protected] Save Article

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How to Liberate America How is it that our nation is awash in money, but too broke to provide jobs and services? David Korten introduces a landmark new report, “How to Liberate America from Wall Street Rule.” Image by Beverly & Pack David Korten posted Jul 19, 2011 The dominant story of the current political debate is that the government is broke. We can’t afford to pay for public services, put people to work, or service the public debt. Yet as a nation, we are awash in money. A defective system of money, banking, and finance just puts it in the wrong places. Raising taxes on the rich and implementing financial reforms are essential elements of the solution to our seemingly intractable fiscal and economic crisis. Yet proposals currently on the table fall far short of the need. A newly released report of the New Economy Working Group, coordinated by the Institute for Policy Studies in Washington, DC, goes beyond the current debate to call for a deep restructuring of the institutions to which we as a society give the power to create and allocate money. How to Liberate America from Wall Street Rule spells out the steps required to rebuild a system of community-based and accountable institutions devoted to financing productive activities that create good jobs for Americans and generate real community wealth. We can’t afford to pay for public services, put people to work, or service the public debt. Yet as a nation, we are awash in money. Over the past 30 years, virtually all the benefit of U.S. economic growth has gone to the richest 1 percent of Americans. Effective tax rates for the very rich are at historic lows and many of the most profitable corporations pay no taxes at all. Despite the financial crash of 2008, the financial assets of America’s billionaires and the idle cash of the most profitable corporations are now at historic highs. Their biggest challenge is figuring out where to park all their cash. Read the report: How to Liberate America from Wall Street Rule Unfortunately, most of those who hold the cash and the corporations they control have lost interest in long-term investments that build and expand strong enterprises. The substantial majority of trades in financial markets are made by high-speed computers in securities held for fractions of a second. Business pundits still refer to this trading as investment. It bears no resemblance, however, to the investment required to put people to work rebuilding a strong America. Corporations are using their stores of cash primarily to buy back their own stock, acquire control of other companies, invest in off-shoring yet more American jobs, and pay generous dividends to shareholders and outsized bonuses to management. It was not always so. In response to the Great Depression, our country enacted financial reforms that put in place a system of money, banking, and investment based on community banks, mutual savings and loans, and credit unions. These institutions provided financial services to local Main Street economies that employed Americans to produce and trade real goods and services in response to community needs and opportunities. This system, which Wall Street interests dismiss as quaint and antiquated, financed the U.S. victory in World War II, the creation of a strong American middle class, an unprecedented period of economic stability and prosperity, and the investments that made America the world’s undisputed industrial and technological leader. David Korten's Agenda for a New Economy -Buy the book.-Read the blog series. In the 1970’s Wall Street interests began pushing a deregulation agenda that led to a transfer of financial power from Main Street to Wall Street. Wall Street’s mega-banks lost interest in real investment and developed a new business model. They now specialize in charging excessive fees and usurious interest rates, providing leverage to speculators, speculating for their own accounts, luring the unwary into mortgages they cannot afford, bundling junk mortgages to sell them as triple-A securities, betting against the clients to whom they sell the overrated securities, extracting subsidies and bailouts from government, laundering money from drug and arms traders, and offshoring their profits to avoid taxes. The consequences include the erosion of the middle class, an extreme concentration of wealth and power, a costly financial collapse, persistent high unemployment, housing foreclosures, collapsing environmental systems, the hollowing out of U.S. industrial, technological, and research capacity, huge public and international trade deficits, and the corruption of our political institutions. Wall Street profited at every step and declared its experiment with deregulation and tax cuts for the wealthy a great success. It now argues for extending the same measures even further. How to Liberate America from Wall Street Rule spells out details of a six-part policy agenda to rebuild a sensible system of community-based and accountable financial services institutions. Break up the mega-banks and implement tax and regulatory policies that favor community financial institutions, with a preference for those organized as cooperatives or as for-profits owned by nonprofit foundations. Establish state-owned partnership banks in each of the 50 states, patterned after the Bank of North Dakota. These would serve as depositories for state financial assets to use in partnership with community financial institutions to fund local farms and businesses. Restructure the Federal Reserve to function under strict standards of transparency and public scrutiny, with General Accounting Office audits and Congressional oversight. Direct all new money created by the Federal Reserve to a Federal Recovery and Reconstruction Bank rather than the current practice of directing it as a subsidy to Wall Street banks. The FRRB would have a mandate to fund essential green infrastructure projects as designated by Congress.Rewrite international trade and investment rules to support national ownership, economic self-reliance, and economic self-determination.Implement appropriate regulatory and fiscal measures to secure the integrity of financial markets and the money/banking system.How to Liberate America from Wall Street Rule is the product of extended discussions among representatives of a diverse group of organizations committed to deepening and reframing the conversation on financial reform to focus attention on the serious financial system restructuring required to build a strong new American economy adequate to the social and environmental challenges of the 21st century. It may be freely shared, reproduced and distributed with appropriate citations. Click here to read the report. It’s time we the people declare our independence from the money-favoring Wall Street economy.We can't go back to the old economy, and we really don't want to. We're witnessing the birth of something better: a new economy where livelihoods that are just, sustainable, and meaningful will be available to all. David Korten is co-founder and board chair of YES! Magazine and co-chair of the New Economy Working Group. He is the author of Agenda for a New Economy, The Great Turning: From Empire to Earth Community, and the international best seller When Corporations Rule the World. He is principal author of How to Liberate America from Wall Street Rule, which shows how America can restore economic health and financial integrity by rebuilding a system of accountable local financial services institutions much like the one that financed the achievements that made America the envy of the world. 10 Common Sense Principles for a New EconomyThe Old Economy’s Not Coming Back. So What’s Next? YES! Chico BagTell the world about YES! with this handy reusable bag. Life After Oil IssueHow we can get to post-carbon—and what life will be like when we do. When Corporations Rule the WorldUpdated 20th anniversary edition of David Korten's bestselling classic

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Financial Transparency Coalition [email protected] Available Translations English Auto Translate Country by Country Reporting Beneficial Ownership Automatic Exchange of Information International Institutional Architecture Enablers of Illicit Financial Flows Reports How Shell Corporations Undermine Schools in California California spends about $8,500 per year to educate its public school students. That’s about $3,300 less than the national average. In fact, according to Education Week in a national ranking of states and D.C., California ranks near the bottom, at 49th, in terms of per-pupil spending. There are reasons to believe that one cause of this problem is the system of property taxation in California—and its loopholes. The biggest player in property taxation and its policy in California is Proposition 13. Approved by California’s voters in 1978, Proposition 13 sets limits on the annual increases of assessed value... How Tax Evasion and Avoidance Undermine a Good Tax System In the United States, the overall noncompliance rate for all federal taxes and individual income taxes stands at about 14 percent. According to studies by the Taxpayer Compliance Research Program and the National Research Program, about 1 percent of wages and salaries are underreported and about 4 percent of taxable interest and dividends are misreported. A study of Germany found that the corporate tax base would have increased by 14% if no income-shifting had occurred. Developing countries lose about $900 billion in illicit outflows per year, which severely undermines these nations' abilities to effectively raise revenue. These activities are... Why Are So Many Tax Havens Islands? The View from Economics We often think of tax havens as tropical islands or tiny nations nestled in the mountains. We know most of them are geographically and demographically small. Very small. Given their huge reputations, just how small they are just might surprise you. Ireland, which is well known for its emerald hills and low tax rates, is about the same size as South Carolina. Luxembourg, a tax haven nestled in Western Europe between France and Germany, is about 2,500 square kilometers, or about a third of size of Rhode Island. Bermuda, a group of islands off the coast of South Carolina, is... Is Thomas Piketty Right About Tax Havens? If you have had much contact with the disciple of economics in the last year, you’ve heard of the book Capital in the Twenty-First Century, written by French economist Thomas Piketty. And Capital concerns two subjects that are very near and dear to us at the Financial Transparency Coalition: inequality and taxes. Piketty’s book is all the rage among economists and policy wonks. Perhaps for good reason. In a unique exploration of a new dataset, Piketty parses through literally centuries of tax data to discern long-term trends in inequality and wealth. His conclusions are broad and many, but... Blog Government Statements News Op-Eds Press Releases Speeches Uncategorized Video Stay Posted Sign up for the latest news & events Stay up to date on the latest developments in our fight to curb illicit financial flows. Your full name*Email address* Be a part of the community Support people across the globe who are helping to build a transparent financial system that works for everyone Strengthening int’l tax cooperation is crucial to tackling tax abuse, corruption, & money laundering. https://t.co/6FeD2LwfYZ- Sunday Jul 24 - 9:38am Follow @FinTrCo We are a global network of more than 150 allied civil society organizations, fourteen governments, and dozens of the world’s foremost experts on illicit financial flows. We use our wide reach and expertise to influence global norms and standards for financial transparency, and close loopholes in the global financial system. We seek to curtail illicit financial flows through the promotion of a transparent, accountable and sustainable financial system that works for everyone. The Center for International Policy serves as the neutral secretariat of the Financial Transparency Coalition. c/o CIP, 2000 M Street, NW #720, Washington, D.C.

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Orion Donates $7,500 to Nonprofit GroupsOrion Federal Credit Union has since the beginning of the year donated more than $7,500 and more than 1,000 items to seven local nonprofit groups. The charitable giving is part of the credit union’s community involvement program, Orion Gives Back. Launched in January 2012, Orion chooses a nonprofit each month to be the focus of the giving initiative. Recipients thus far have included the Mid-South Food Bank, Memphis Family Shelter, Literacy Mid-South, Memphis Farmers Market, Clovernook Center for the Blind and Visually Impaired and Youth Villages, among many others. State Labor Department to Discuss Workers’ Comp The Tennessee Department of Labor and Workforce Development is holding a series of seminars across the state to explain the Workers’ Compensation Reform Act of 2013. The bill removes injured workers’ claims from state trial courts and instead creates a special panel appointed by the governor to hear claims and appeals. The seminars aim to educate employers about the impact of the bill, including ways to avoid workplace injuries and how to better handle them if they occur. The seminars are being put on by the Workers’ Compensation Division, the Tennessee Occupational Safety and Health Administration and the Tennessee Chamber of Commerce. They take place from July 25 through Aug. 29. Specific dates, times and locations can be found on the department’s website at http://www.tn.gov/labor-wfd . Cohen 'Stunned' Woman Isn't His DaughterU.S. Rep. Steve Cohen, D-Memphis, said Thursday that he’s “stunned and dismayed” to learn that DNA tests revealed he is not the father of a woman with whom he had an affectionate Twitter exchange this year. In February, tweets between Cohen and Victoria Brink, a 24-year-old Texas woman, attracted public attention during the president’s State of the Union address. Soon after, Cohen revealed that he was Brink’s father. He said he’d learned about the relationship three years earlier. But on Thursday, CNN reported that DNA tests showed Cohen is not her father. “I was stunned and dismayed when DNA tests disproved what Victoria and I believed about our relationship,” Cohen said in a Thursday statement. “I still love Victoria, hold dear the time I have shared with her, and hope to continue to be a part of her life. “It’s been a roller coaster ride these last three and a half years from which I have learned something about parenting and some more about love, life, and heartache.” Brink is the daughter of Texas criminal defense lawyer Cynthia White Sinatra, who ran for Congress in 2006 against Ron Paul. Cohen described his relationship with Sinatra as longtime friends. Texas executive John Brink raised Victoria Brink. CNN reported Thursday that it obtained DNA from John Brink, Victoria Brink and Cohen for tests, and that results showed Cohen wasn’t her father. Cohen’s office said that he also submitted DNA to determine paternity independent of the CNN report. Cohen, who has never been married, said in February that he decided to publicly acknowledge Brink as his daughter after bloggers and the media tried to make exchanges during the State of the Union appear salacious. Cohen’s message to Brink included a Twitter abbreviation for “I love you.” 30-Year Mortgage Rate Declines to 4.37 Percent Average rates on U.S. fixed mortgages declined this week as concern waned in the financial markets over the Federal Reserve’s possible slowing of its bond purchases this year. Mortgage buyer Freddie Mac said Thursday the average on the 30-year loan slipped to 4.37 percent. That’s down from 4.51 percent last week but is still near the highest level in nearly two years. Just two months ago the rate was 3.35 percent, barely above the record low of 3.31 percent. Rates had surged in recent weeks amid concern over the Fed’s bond purchases, which have kept interest rates low. The average on the 15-year mortgage fell to 3.41 percent from 3.53 percent last week. Chairman Ben Bernanke said last week the Fed will continue to stimulate the economy, even after it begins to slow the bond purchases. Even with the recent gains, mortgage rates remain low by historical standards. Low rates have helped fuel a housing recovery that is helping to drive economic growth this year. To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount. The average fee for a 30-year mortgage was 0.7 point this week, down from 0.8 point last week. The fee for a 15-year loan also slipped to 0.7 point from 0.8 point. The average rate on a one-year adjustable-rate mortgage was unchanged at 2.66 percent. The fee declined to 0.4 point from 0.5. The average rate on a five-year adjustable mortgage fell to 3.17 percent from 3.26 percent. The fee eased to 0.6 point from 0.7. Tapes of Two Elvis Concerts Added to California AuctionUncirculated tapes of two Elvis Presley concerts recorded two months before he died have been added to a celebrity memorabilia auction in California. The Mecum Auction Co. says the tapes will be among the 2,000 pieces of celebrity-related memorabilia being displayed and auctioned in Santa Monica, Calif., on July 26-27. Mecum says the concert tapes were made at live Elvis shows in Omaha, Neb., on June 19, 1977, and Rapid City, S.D., two days later. Mecum says the tapes include original audio and video footage. Elvis died Aug. 16, 1977, in Memphis. The auction also will include Elvis’ 1972 Cadillac Custom Estate Wagon and other Elvis-related items. Arkansas Highway Chief Says Roads Face Funding GapArkansas’ highway chief says the state still needs an additional $200 million a year over the next decade just to maintain its roads, despite extra money coming in from a half-cent sales tax voters approved last year. Arkansas Highway and Transportation Department Director Scott Bennett told a legislative panel Thursday that he expects to begin issuing bonds in September that will be repaid by the new sales tax. He said he expects work to begin on some of the projects by the end of the year. Voters last year approved the tax, which will raise about $1.8 billion during the next decade for the state’s highway needs. The half-cent tax increase is set to expire by 2023. Bank of Bartlett Earns Magazine’s High Marks The “ABA Banking Journal,” the American Bankers Association’s monthly magazine, has recognized Bank of Bartlett as among the nation’s top performing banks based on return on equity for 2012. In the current edition of the magazine, the “ABA Banking Journal” lists the bank as the nation’s second best-performing community bank, with return on average equity at 65.33 percent and assets of $370.4 million. Since its founding in 1980, Bank of Bartlett has financed the construction of more than 20,000 homes in Shelby County and currently operates eight bank branches in Shelby County. Council Delays Referendums and OKs Alarm Fee Hike Memphis City Council members delayed Tuesday, July 16, several items that would have called for special referendum elections in this off-election year for Memphis voters. The council delayed final votes to set referendums on civil service changes as well as on a proposed half-percent sales tax hike. It also delayed a vote on third and final reading of the ordinance prohibiting pension “double dipping” by retired city employees who return to work for the city or a local government entity and continue to collect their pension as they get paid for the new job. The council approved on third and final reading an ordinance that ups some false alarm fines and fees. Also approved was $250,000 in funding for traffic signal improvements at Pleasant View Road and Covington Pike as well as $300,000 for engineering and inspection work on a Central Avenue crosswalk funded by the state for the University of Memphis. And $936,400 for road improvements along Fairley Road were approved. The council approved accepting $1.1 million in state Fast Track grant money for an access road into the site of the Nike plant expansion in Frayser. With a $3.2 million contract approved between the city and Memphis Light, Gas and Water Division, the next phase of the renovation of the Elvis Presley Boulevard streetscape in Whitehaven will begin. The contract is to locate overhead utility lines underground on the stretch of the state highway from Brooks Road to Winchester Road. Wunderlich Lists First Horizon as Buy Wunderlich Securities Inc. has an analyst note out maintaining a buy rating on First Horizon National Corp., the Memphis-based parent company of First Tennessee Bank, and keeping a price target of $13 on the stock. First Horizon reports second quarter results before the market opens Friday, July 19. In his note, Wunderlich analyst Kevin Reynolds said he expects the banking company to “meet or exceed” the consensus earnings estimate, which is $0.19 for the quarter. The company’s results for the quarter, he added, “should include modest commercial loan growth, improving asset quality, and continued expense reductions, partially offset by slight (net interest margin) compression.” AFSCME Union Names Tyree Interim Director Gail Tyree, the assistant director of local 1733 of the American Federation of State, County and Municipal Employees, becomes the interim executive director of the Memphis local effective July 22. Tyree’s appointment was announced Wednesday, July 17, by union administrator Shelley Seeberg. Outgoing executive director Chad Johnson is leaving the Memphis local to become California Area Field Services director of the international union. Johnson had been instrumental in fashioning a still unfolding new model for city sanitation services as the administration of Memphis Mayor A C Wharton Jr. seeks to move to a “pay as you throw” model. The model, which is still an emerging proposal, is one in which city residents would begin to move toward a system in which they pay a solid waste fee based on the amount of waste they leave for the city to pick up. Tyree has been a regular presence at countywide school board meetings representing union members who were affected by the countywide school board decisions to outsource some transportation services and all custodial services. The union is one of the big three municipal unions representing the bulk of city employees. Fed: Growth Improves Moderately Throughout US A Federal Reserve survey says the U.S. economy grew in most parts of the country from late May through early July, bolstered by the housing recovery, consumers and more factory output. Eleven of the Fed’s 12 banking districts reported “modest to moderate” growth. The Dallas district reported strong growth for the second straight survey. Housing construction and home prices improved, while consumer spending increased in most districts, fueled by rising car and truck sales. The housing recovery is also driving more production of lumber, materials and construction equipment. The report says hiring held steady or increased in most districts. But employers in some districts were reluctant to hire permanent or full-time workers. Reid-Hooker Road Closed July 24-25 Reid-Hooker Road between Raleigh Lagrange Road and Monterey Road in north Shelby County will be closed to through traffic July 24-25. County road crews will be repairing a pipe culvert north of Mary Creek Lane. Officers Step Up Highway Safety Efforts Law enforcement officials across the state are stepping up a campaign to increase highway safety. Richard Holt is the Governor’s Highway Safety Office Law Enforcement administrator. He says law enforcement statewide will be out in force from Thursday, July 18, to Sunday, July 21, and from July 25 to July 28 for the final phase of the More Cops-More Stops campaign to crack down on drivers who are speeding, drunk, distracted or not wearing a seat belt. In 2011, officials say more than 700 people died in Tennessee traffic crashes. Twenty-seven percent of the fatalities involved a drunk driver, and 23 percent were speeding-related crashes. Fifty-seven percent of those who died were not wearing their seat belts at the time of the crash. Appeal to Support Gun Law in Mississippi Coming Mississippi Attorney General Jim Hood says he’ll file an appeal early next week to try to push an open-carry gun measure into law. A Hinds County circuit judge has put the law on hold, calling it “unconstitutionally vague.” Hood will ask the state Supreme Court to overturn that ruling. Hood says many law enforcement officers around the state are confused about whether they can arrest someone who’s openly carrying a firearm. Hood says a Hinds County judge has the power to block a state law from taking effect, because the seat of state government is in Hinds County. But Hood’s also telling sheriffs and police officers in the other 81 counties they might be wasting their time by arresting people for simply carrying a gun that’s not concealed. New Boutique Heads to Overton Square A new boutique store is heading to Overton Square. Alexandra Rushing, owner of Harbor Town boutique The Ivory Closet and Adel Amor Cosmetics, has signed a lease for 1,300 square feet for The Attic at Overton Square, next door to Bar Louie. The retail boutique will carry men’s and women’s clothing and accessories from brands like Library of Flowers, Yosi Samra, Lucky Feather, Coobie and Chilly Jilly. Ben Scharff, owner of IronJaw Labs and creator of IronJaw custom mouth guards, will co-own the business. “Growing up in Memphis, we see Overton Square as a staple of our history and a vision of what will help shape the future of Memphis,” Rushing said in a statement. “We want to be a part of the renovation and revival of this fabulous Memphis landmark.” The Attic, which is expected to open its doors in September, will be open 11 a.m. to 8 p.m. Mondays through Saturdays and 1 p.m. to 5 p.m. on Sundays. Loeb Properties Inc. has stepped up retail leasing at Overton Square. Company officials said they believe it will provide new daytime traffic to complement the already bustling restaurant activity there. Breakaway Running and Cardio Barre have also signed leases for stores at Overton Square. June Building Permits Decline From Year Ago The number of permits filed by builders in June declined significantly from the same month last year. Builders filed 60 permits in June 2013, down from 89 permits filed in June 2012, according to real estate information company Chandler Reports, www.chandlerreports.com. While the number of permits issued was down, average home sizes and prices were up year over year. The average permit in June measured 3,712 square feet and $367,952 compared to 3,091 square feet and $231,884 in June 2012. Regency Homebuilders LLC was the top builder as tracked by home permits in June (30; 2,799; $204,398) followed by Grant Homes (6; 2,870; $171,700). Collierville’s Wolf River Ranch subdivisions saw the most activity, with 11 permits averaging 4,373 square feet and $383,909. Collierville’s 38017 ZIP code led the way in June with 18 permits averaging 3,847 square feet and $339,778. Builders sold 62 homes in June, down 13.9 percent from 83 sales in June 2012. Grant Homes led the way with 11 sales averaging $251,019 and totaling $2.76 million, followed by Regency Homebuilders with six sales averaging $242,893 and totaling $1.45 million. For the permits data from the second quarter, see Page 20. Sullivan Branding Makes Personnel Moves Sullivan Branding has made a few personnel changes and additions. The brand development, advertising, marketing and PR agency has named Earl Keister executive creative director for the Nashville and Memphis offices. He’ll be based at the agency’s Nashville office, and he’s served as creative director of the Memphis office since September 2010. The firm also has announced the hire of Leslie Skelton as digital strategy manager. She’ll lead online advertising and marketing strategies for tourism, retail and banking industry clients. Jason Lee is Sullivan’s new art director. He specializes in 3D animation, video and photography. Rounding out the new hires is Natalie Holcomb, who’s joined Sullivan Branding as social media coordinator. Arkansas Cotton Acreage Hits Longtime Low Cotton acreage is down sharply this year in Arkansas. Agriculture officials estimate 320,000 acres of cotton have been planted in Arkansas this year. That’s only about half as much cotton as growers planted in 2012. Jonesboro television station KAIT reports that farmers pulled back on cotton because of thin profit margins. Producers risk losing money if the weather takes a bad turn or if pests are abundant. Also, the crop is threatened by herbicide-resistant pigweed, which can choke out cotton plants. Metal Building Maker Spirco Honored for Safety Measures Memphis metal building manufacturer Spirco Manufacturing has been recognized for outstanding safety measures. The Metal Building Manufacturers Association recently awarded Spirco a 2012 Improved Safety Award in the category of 20 percent reduction in OSHA work case occurrences and restricted duty cases. Each year, the association recognizes metal building systems manufacturers who show exceptional commitment to assuring workplace safety. Spirco was one of only 10 companies across the nation to win an acknowledgement in its category. Glazer’s Inc. Acquires Memphis’ Star Distributing Glazer’s Inc. has signed an agreement to acquire majority control of Memphis-based Star Distributing Co. Glazer president and CEO Sheldon Stein said the company’s strategy is to “aggressively expand” its footprint in beverage distribution, and the deal announced will give it a significant presence in Memphis. His company is one of the largest distributors of wine, spirits and malt beverage products in the U.S. Star distributes wine, spirits and specialty items in Memphis for national suppliers including Bacardi, Sazerac, Moet Hennessy USA and Beam, among others. US Business Stockpiles Up Modest 0.1 Percent U.S. businesses increased their stockpiles only slightly in May, despite a solid sales increase. The figures suggest economic growth has slowed but could pick up in the second half of the year. The Commerce Department said Monday that business stockpiles rose just 0.1 percent in May from April, half the previous month’s increase. Sales increased 1.1 percent in May after being flat in April. That’s the best gain since February. Slower restocking could weigh on economic growth in the April-June quarter because it means companies ordered fewer factory goods. But the strong sales gain suggests companies may have to order more goods in the coming months to keep up with demand. That could drive more economic growth in the second half of the year. Many analysts think economic growth has slowed to an annual rate of around 1 percent or even less in the April-June quarter. That would be lower than the subpar 1.8 percent annual rate from January through March. Economists expect growth should rebound in the second half of the year to a roughly 2.5 percent annual rate as the effects of federal tax hikes and government spending cuts fade. The May increase brought total stockpiles to a seasonally adjusted $1.66 trillion. That’s up just 3.8 percent from May 2012. Wholesalers cut their stockpiles 0.5 percent, while manufacturers’ inventories were unchanged in May. Retail stockpiles rose 0.6 percent. Sales at the wholesale level rose 1.6 percent to lead all categories. Sales at manufacturers and retailers increased slightly below that level. A separate report Monday showed that retail sales slowed to a modest 0.4 percent increase in June. The brighter second half outlook is bolstered by steady job growth, which has kept consumers spending. Employers have added 202,000 jobs a month through the first six months of this year. That’s up from 180,000 in the previous six months. The increase in hiring has helped overall income grow, offsetting some of the drag from higher taxes. DiAnne Price Receives Beale Street Note Pianist and vocalist DiAnne Price, who died in March, will be honored with a brass note on Beale Street’s Walk of Fame, Sunday, July 21. Price’s unique blues phrasings and her extensive songbook were featured at Memphis Sunday brunches as well as music festivals. The ceremony honoring her will be at B.B. King’s Blues Club on Beale at 3 p.m. Meanwhile, Knox Phillips of Phillips Recording Studio was honored with a brass note that was presented to him Saturday at the Levitt Shell before the last live concert of the summer season in Overton Park. Downtown Commission Creates Design Guidelines After a nearly two-year process the Downtown Memphis Commission has produced the final draft of the Design Guidelines for Downtown. The commission’s Design Review Board will review the document at its Aug. 7 meeting and the DMC board will be asked to consider adopting the final draft at its Aug. 21 meeting. The 184-page document will guide the use of new technologies and materials, strategies of sustainable design, how public improvements – including sidewalk and streetscaping – should be pursued and how construction should be context-appropriate. The goals are to promote maintaining Downtown as a “cohesive and livable place with an attractive pedestrian-oriented environment” while promoting the “preservation of historic, cultural and architectural heritage,” according to the DMC. County Pension Fund Keeps Riding High Driven in part by stock market gains, the value of the pension fund that pays benefits to Shelby County retirees in May was back to a high not seen since before the 2008 recession. The size of the retirement defined benefit plan portfolio stood at nearly $1.03 billion in May. The last time the value was higher than that was in December 2007. Continuing a pattern, the fund for each of the first four months of 2013 has surpassed the monthly values for the first four months of every year back to 2007. Electrolux Donates Air Conditioners Executives at the Memphis Electrolux plant donated 200 room-size window air conditioning units Friday, July 12, as part of efforts by the Metropolitan Interfaith Association and Neighborhood Christian Centers to help needy Memphians in the worst of the summer heat. The Frigidaire air conditioning units were donated as part of a larger effort with donations by Electrolux this week in Charlotte, N.C., Springfield, Tenn., and Anderson S.C., where the company also has manufacturing plants and headquarters. Electrolux makes the Frigidaire units. The units donated in Memphis will be distributed through Neighborhood Christian Centers to Shelby County residents who are in need. Call 881-6013 Monday through Friday from 8 a.m. to 5 p.m. for information on how to apply. Advisory Board Formed for UTHSC College of MedicineCity leaders gathered earlier last week at the Hamilton Eye Institute boardroom at the University of Tennessee College of Medicine over concerns about health care and higher education in Memphis. The 18 meeting attendees, including Shelby County Mayor Mark Luttrell, state Senate Majority Leader Mark Norris, and local CEOs and civic leaders, formed an ongoing advisory board for the University of Tennessee Health Science Center College of Medicine. The advisory group will provide evidence and value-based approaches to delivering health care to physicians-in-training as well as finding new ways to reach out to the community. Participants gathered at the behest of Dr. David Stern, executive dean of the University of Tennessee Health Science Center College of Medicine and David Levine, a business consultant who is the former chairman and CEO of ResortQuest International. The next advisory board meeting is scheduled for the fall.

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UK banks told to raise more capital Bank of England's financial policy committee (FPC) adopts tougher stance by saying banks need to raise capital from external sources 'as early as feasible' The Bank of England's financial policy committee has recommended that banks hold more capital. Photograph: Andy Rain/EPA Jill Treanor The UK's major banks are being told to step up their efforts to raise capital by a new Bank of England regulatory body which is concerned they are not holding enough to "ensure resilience in the face of the prospective risks". After telling banks to restrain their dividends to shareholders and bonuses to staff last year in an effort to build up capital, the financial policy committee (FPC) has now adopted a tougher stance by saying the banks need to raise capital from external sources "as early as feasible". The FPC, set up by the coalition to tackle systemic risks in the financial system, also attracted criticism from Andrew Tyrie, the chair of the Treasury select committee, for failing to explain why it was not going to ask the government for powers to intervene in the mortgage market. The FPC did not detail how much more capital banks would need and it will now fall to the Financial Services Authority to have discussions with individual banks about their capital positions. All them are holding capital well above the minimum regulatory requirements, but the FPC is more concerned about absolute capital levels than the ratio of capital to its risks. The last time the FPC made pronouncements after its quarterly meetings it warned of the "exceptionally threatening environment" posed by the eurozone crisis and need to restrict bonuses and dividends to amass capital. The FPC said on Friday that the FSA had then discussed with banks how they could build capital in the short term. "Some progress has been made by banks in meeting the committee's recommendation," the FPC said, with cash bonuses down at four of the five largest UK banks and 17% down in total. Total capital at the three largest banks without taxpayer bailouts (while not named by the FPC these are Barclays, HSBC and Standard Chartered) has increased by more than £1.5bn in the second half of 2011. "Nevertheless, the committee remained concerned that capital was not yet at levels that would ensure resilience in the face of the prospective risks. It therefore agreed on the need for banks to continue to restrain cash distributions, including via share buybacks. But the scope to build capital through this route was limited. It therefore advised banks to raise external capital as early as feasible," the FPC said. Three months ago it said banks should give "serious consideration" to raising capital. The members of the FPC, led by Bank of England governor Sir Mervyn King, agreed that financial markets but were still "fragile", even with the European Central Bank's long-term financial operations. "Banks with large exposures to those countries where risks of persistent low economic growth and potential credit defaults remained high should be particularly alert to the need to build capital," the FPC said. The committee, which will not get statutory powers until next year, wants to be able to impose additional capital requirements on banks through what are known as "counter cyclical buffers" that can then be drawn down when the economy weakens. But the FPC called for a wider debate about whether it should be allowed to intervene in the mortgage market to restrict the size of loans to the value of a home or the size of the loan according to the homebuyer's income. "While recognising the potential power of these instruments, the committee also noted that the use of these tools would require a high level of public acceptability," the FPC said. This infuriated Tyrie. "The FPC's decision not to ask for stronger tools appears to demonstrate clearly that they lack the confidence, at this time, to explain to the wider public why such tools are necessary," the MP said. Banking reform Financial Services Authority (FSA)

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AID Partners Capital Makes An Equity Investment That Values Prime Focus World At USD 250 Million LOS ANGELES, March 20, 2013 /PRNewswire/ -- AID Partners Capital Limited ("AID Partners"); a private equity firm focused on expansion capital and buyout opportunities primarily in the media and entertainment sector; has made an investment that values Prime Focus World, NV ("PFW"); the creative services business of Prime Focus Limited ("Prime Focus", BSE code: 532748); at USD 250 million. The Hong Kong based private equity firm has made an equity investment of USD 10 million in PFW. "We have accomplished a great deal in the five years since we founded PFW. We've broken into Hollywood, built direct relationships with major studios, consistently delivered superior work all while generating a revenue growth with a CAGR of over 68%. Today it is heartening to see a discerning investor like AID Partners find such worth in our company." said Namit Malhotra, Founder, Prime Focus and Chairman & CEO, Prime Focus World N.V. The investment further validates strong investor interest in Prime Focus and the huge potential that exists in unlocking value in its subsidiaries. In December 2012, Standard Chartered Private Equity invested USD 70 million in Prime Focus Limited. "From the initial investment of $43 million in 2008, the business has grown five-fold. This is indeed great news for our shareholders as we fuel our next wave of growth." added Namit Malhotra. Coupled with AID's recent acquisition of a 100% stake in HMV Asia and its investment in Legendary Pictures ( Hollywood's leading media company behind such films as Christopher Nolan's Batman franchise) the PFW investment further underscores AID Partners' in-depth knowledge of and commitment to the growth of the entertainment industry in Asia. "3D and VFX are now key elements of big budget films. With the increasing budgets of China's tentpole movies, there is a tremendous demand for world-class 3D and VFX services in China." said Kelvin Wu, Principal Partner at AID Partners. According to the Chinese State Administration of Radio, Film and Television, China's 2012 box office receipts increased 30%; in majority part due to imported films; ranking China as the world's second-largest box office next to the US (surpassing Japan). PCR is also the largest 3D market outside of the United States, encouraging the government to relax import restrictions that now allow an additional 14 foreign films to be distributed in China provided they are in 3D or large format. "With China's rapid economic growth and the population's desire to enjoy an increasingly better lifestyle, we look forward to working together with Prime Focus to improve the quality of film content produced for the Greater China region and to enable further growth in the entertainment industry." concluded Mr. Wu. About Prime Focus Limited Prime Focus Limited, PFW's parent company, is a global leader in media and entertainment industry services, employing over 4,500 professionals in 19 facilities across 3 continents and 4 time zones. We provide end-to-end creative and technical services including visual effects, stereo 3D conversion, and animation through our subsidiary PFW, as well as video/audio post-production, Digital Intermediate, equipment rental, digital content management and distribution, versioning and adaptation to the Film, Broadcast, Advertising and Media industries. Leveraging our Global Digital Pipeline and pioneering delivery model we partner content creators at every stage of the process ensuring work flow efficiencies, cost optimization and creative enablement. Listed on the BSE and NSE of India, Prime Focus has operations in Los Angeles, New York, Vancouver, London and Mumbai. About Prime Focus World N.V. Prev

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No Appetite for Dean Foods What investors want to see are signs of sequential improvement, particularly with margins and free cash flow. NEW YORK (TheStreet) -- It's been over a year since Dean Foods (DF) announced it was selling its Morningstar Foods division to Saputo for $1.45 billion. Six months later, in May 2013, the company's board of directors agreed to spin off the company's stake in WhiteWave Foods Company (WWAV). According to some analysts, these moves justified a higher multiple on the shares, which closed Friday at $15.08, down 12% for the year to date. It didn't take long for investors to soak up the excitement. These maneuvers positioned Dean Foods as a pure play in milk and other lower-end dairy products. The Street applauded, sending the stock soaring close to 60% in the six months that followed. The consensus was that Dean's remaining businesses became clearer and easier to understand. Although this might have been true, management never fully outlined how the company's long-term strategy would reward investors. The way I saw it, the only real benefit management achieved was compiling the liquidity needed to service the company's massive debt and shoring up the balance sheet. [Read: Apple's Big Buyout Draws Wall Street Shrugs] I don't want to say management's back was against the wall, but Morningstar Foods was a strong-performing asset that management would have rather kept. I'm just speculating here. These are my words -- not the company's. But the fact that Morningstar Foods specialized in extended-shelf-life products like sour cream and creamers made it hard to replace. Besides, there aren't too many businesses, especially in the dairy industry, that are generating the cash flow and earnings before interest, taxes, depreciation, and amortization to the extent of Morningstar Farms. Well, from there, the milk spoiled. Fast-forward one year later and Dean Foods shares are right back where they were at the beginning of 2013 -- falling 30% from its 52-week high. The Street eventually realized that even though Dean Foods has made significant strides in its restructuring, including reducing its net debt to just $671 million in the November quarter (down from $4 billion), there are still questions about the company's operating structure. Adjusted earnings per share have been on a decline, while revenue has been flat. The 78% year-over-year decline in operating income did nothing to convince analysts that the margin situation will improve any time soon. Prev Par 3 for Mickelson Stock Picks After his recent investment problems, the pro golfer should stick with what he knows. Ben Stoto Does Callaway Finally Make the Cut or Remain on the Senior Tour? The golf company recently put up its best bottom-line in years. Jonathan Heller Tweets on the Street: Golfer's Gambling Woes and Big Pharma Pro-golfer Phil Mickelson listed as relief defendant in SEC insider trading case and Businessweek shows the money-trail between big pharma and charities. SEC Revives Insider Trading Charges Involving PGA's Mickelson A professional gambler and friend of the golfer trafficked in tips on Dean Foods received from a one-time board member.

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President, Economic Strategy Institute How to Save the United States The economist presents the "Prestowitz plan"—a to-do list for how we can play our cards better. Clyde Prestowitz is founder and president of the Economic Strategy Institute. He has played key roles in achieving congressional passage of NAFTA and in shaping the final content of the Uruguay Round, as well as providing the intellectual basis for current U.S. trade policies toward Japan, China, and Korea. Before founding ESI, Prestowitz served as counselor to the Secretary of Commerce in the Reagan Administration, where he led U.S. trade and investment negotiations with Japan, China, Latin America, and Europe. He has served as vice-chairman of the President's Committee on Trade and Investment in the Pacific and sits on the Intel Policy Advisory Board and the U.S. Export-Import Bank Advisory Board. Question: How can we turn around America's decline? Clyde Prestowitz: Well the first one I would take is the dollar; I think we need to really mount a major effort to reset the global exchange rates. Other currencies need to revalue against the dollar so the dollar would be worth relatively less. And I’d like to be able to do that through negotiations in the International Monetary Fund and even in the World Trade Organization. I think we should try that. If that doesn’t work, then of course we’ll have to think of other steps that we might have to take, but we should try to negotiate a serious resetting of currencies. I think we should lead an effort to create a new global financial currency system; one based on a basket of currencies, not just the dollar and maybe even eventually a single global currency. We had a gold standard, of course, in the late 19th century and the 20th century that was a single global currency. It has its advantages and disadvantages, but in a globalized integrated world economy, that’s a direction in which I think we should be going. Beyond that, I think it’s very important for the United States to respond to these investment incentives that are being offered by other countries to induce the movement of productive facilities out of the U.S. and to offshore locations. So I would have a war chest, or a fund, that I would call a "matching fund," and for every time a country offered to make a capital grab or a tax rebate to a global company in the U.S., I would match it to try and keep that production in the U.S. I think we should have a national infrastructure bank and launch a kind of an Apollo moonshot kind of a project or a Manhattan kind of project to achieve a modern infrastructure. I find it embarrassing, frankly. I travel a lot internationally and when I go through foreign airports and come back to JFK or to Washington Dulles, I feel like I’m in a Third World country. Just coming here today I was talking to you on the telephone and you know we lost the call three times. Well, that doesn’t happen in Egypt, let alone in Singapore or Korea. And we talk in the United States about broadband, fast Internet. The Koreans laugh at us; our "fast Internet" is what they call snail mail. So I’d like to upgrade and make the U.S. world class in infrastructure and that would drive a lot of investment and technology development, that I think part of that, should be a pressure or a policy to encourage production of that in the United States. I’d like to reduce corporate taxes. We have the highest corporate taxes in the world except for Japan. I’d like to reduce them to 15 or 20 percent. I’d like to adopt a value added tax. That has the advantage of taxing our over-consumption, it would help to solve our fiscal deficit problems, and the value added tax is rebated on exports so it would make us much more competitive in the global import/export markets. I would like us to focus on developing leading-edge technology pretty much across the board with industry government partnerships, and I think that it’s very important for us to dramatically revamp our schools with national standards and with serious testing so that we maintain competitive education levels with the other leading countries of the world. Question: If we don’t take action, what will happen? Clyde Prestowitz: Well I dread to think. I don’t want to think that way; I mean the path that we’re on right now is one full of sorrow and tears for Americans—and not just Americans, but for much of the world. America is the world’s buyer of last resort. America is the defender of important global values and the world will suffer, we will suffer, as a result if we stay on the path that we’re on. I like to think about it this way: I think about this as kind of a game of bridge and I ask myself each country has a hand of cards, and I ask myself which hand would I like to play. Would I like to play the Chinese hand, or the E.U. hand, or the Japan hand, or the U.S. hand? As I’ve been telling you, the US hand is not as good today as it was ten years ago and not as 20 years ago, but it’s still not a bad hand. We still have some pretty good cards. We still have the world’s leading universities, and we still have leadership in a number of key technologies. We have the world’s biggest market, we have the greatest economies of scale potential in the U.S. market, we have the rule of law. We have a lot of good cards. But you know, if you play bridge you can have good cards and you can still lose if you play the cards badly. And right now, we’re playing the cards just about as badly as it’s possible to play them. So we really desperately need to start playing the cards better, and that’s why I have adduced the Prestowitz plan as a guide to how to play the cards better. Recorded on May 10, 2010Interviewed by Jessica Liebman Big Think Interview With Clyde Prestowitz The Real Story of How America Got Rich The Problem With Having the Best Military The Dollar is Becoming Risky The Danger of Global Companies U.S. Abandons Unilateral Free Trade The United States will start to imitate the industrial and strategic trade policies of countries like China, Japan, Korea, Germany, and France. It will also begin to withdraw its overseas troops. Over a year ago Lisa Bodell Lisa Bodell: Kill the company to save the company Nicholas Kristof: Want to Make a Difference? Tell a Compelling Story. Andrew Winston Business Can Play a Profitable Role in Combating Climate Change, with Andrew Winston Philip Zimbardo on the Two Types of Heroes

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The S & P Goes Bearish On the U.S. By Rana Foroohar April 18, 2011 Share Is this the first domino in the next global financial crisis? It’s possible. Today the S & P revised its long-term credit rating outlook for the U.S. from “stable” to “negative.” The immediate result has been a flight from risky assets and anything linked to optimistic views on global growth – gold and Treasuries are up, while oil and dicey currencies are down. The big question is whether or not this is the beginning of a major inflection point in the global economy, one in which rich nations following a pattern that has long been common in emerging economies – after financial crises tend to come sovereign crises. It’s happened many times before in countries like Argentina, Thailand, and Indonesia. The question now is whether it will happen in rich nations. In other words, is it possible that the U.S. could actually loose its triple A-rating? My feeling is that yes, it’s a real worry. The US has been triple A ever since it was first rated in 1941, but as the FT Lex column points out today, countries that are put on a negative long term outlook have a one in three chance of being downgraded over the next six to 24 months. For more on the history of how banking crises can turn into sovereign crises, check out Ken Rogoff and Carmen Reinhart’s prescient book “This Time Is Different,” which looks at eight centuries of history on this score. The upshot – yes, it can happen here. And if it did, the likely result would be a bond market collapse, a spike in global interest rates, and a financial fiasco that could make the collapse of Lehman Brothers look tame. The fallout could very well throw the world back into recession. But the most worrisome thing at the moment isn’t so much the absolute state of the U.S. finances, which are bad, but no worse than many European nations; it’s the reason why we are in this position, namely political gridlock. Look closely at the S & P’s analysis on the long-term rating, part of which reads, “We believe there is a material risk that U.S. policymakers might not reach an agreement on how to address medium and long term budgetary challenges by 2013.” It’s not so much that the challenges themselves aren’t surmountable – it’s that we simply can’t get our political acts together to surmount them. This is an issue that comes up again and again when I am speaking to leaders abroad. I was in China a few months ago, and policy makers there were as worried about the kind of ugly populist politics represented by the Tea Party as they were about absolute U.S. debt levels. Larry Summers summed it up well at a recent conference in Bretton Woods, where he said, “not meeting our debt obligations is like allowing a child with matches to sit in a room full of dynamite.” He added, “I continue to find it close to inconceivable that elected policymakers would allow the risk of default.” Too true. But there’s still a chance that the S & P decision could end up being a positive thing for the U.S., if it becomes a fire under politicians. As a Capital Economics report I received today pointed, out, the agency’s decision to put the U.K’s triple A rating on a negative outlook in May of 2009 prompted major soul searching there, which eventually led to tough decisions on fiscal tightening which were taken by a coalition government. The result was that the U.K was rated back up last year. Let’s hope Washington got that memo.

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| Sat Nov 10, 2012 6:04pm IST Related: Business, Economy Obama insists on tax hike for rich as part of fiscal deal | By Mark Felsenthal and David Lawder U.S. President Barack Obama holds up his pen as he delivers a statement on the U.S. ''Fiscal Cliff'' in the East Room of the White House in Washington, November 9, 2012. Reuters/Jason Reed WASHINGTON President Barack Obama said on Friday he was prepared to compromise with Republicans to avert a looming U.S. fiscal calamity, but insisted a tax increase for the rich must be part of any bargain.Obama, who was re-elected on Tuesday, reminded Republicans that his approach to avoiding steep tax hikes and spending cuts due in January, which could trigger another recession, had just won the backing of Americans at the polls. His spokesman said he would veto any deal that did not include an extra contribution from the wealthiest.Obama invited congressional leaders to the White House next Friday to discuss the issue, the most pressing challenge as the president prepares to starts his second term in office. He will also hold a news conference on Wednesday.John Boehner, the Republican speaker of the House of Representatives, repeated his party's commitment not to raise anyone's tax rates as part of a deal to address the crisis.He too claimed a mandate from the elections, in which voters gave Republicans continued control of the House.The statements showed the two men, who have been divided on the issue for two years, were still far apart, leaving doubts over whether the "fiscal cliff" could be averted. Congress is expected to address it when it reconvenes next week for a post-election lame-duck session."Boehner and Obama are using softer tones, but the substance of what they're saying hasn't changed very much, and it doesn't look like there's been any movement from the last time they had a budget discussion," said Stan Collender, a former congressional budget aide.The automatic across-the-board budget cuts due in January were scheduled in August 2011 as part of a deal to raise the U.S. debt ceiling. Aimed at cutting the federal budget deficit, the planned measures could take an estimated $600 billion out of the economy and severely hinder economic growth.OBAMA SEEKS 'BALANCED' APPROACHIn his first event at the White House since beating Republican Mitt Romney in Tuesday's election, Obama called on Congress to work with him to produce a plan."I'm not wedded to every detail of my plan. I'm open to compromise. I'm open to new ideas," he said. "I'm committed to solving our fiscal challenges, but I refuse to accept any approach that isn't balanced." "If we're serious about reducing the deficit, we have to combine spending cuts with revenue. And that means asking the wealthiest Americans to pay a little more in taxes," he said.Obama said the majority of Americans believed those making more than $250,000 a year should pay more taxes, "So our job now is to get a majority in Congress to reflect the will of the American people. I believe we can get that majority.""I was encouraged to hear Speaker Boehner agree that tax revenue has to be part of this equation," he added.While striking a conciliatory tone toward the Republican House majority, Obama said voters supported his ideas, including raising taxes on the wealthiest Americans."I just want to point out, this was a central question during the election. It was debated over and over again. And on Tuesday night, we found out that the majority of Americans agree with my approach," he said.Tax cuts for people of all incomes enacted under President George W. Bush are due to expire in January and Obama said he was willing to extend them for those making less than $250,000 immediately but not for those making more. His spokesman, Jay Carney, said Obama would veto any bill that extends cuts for the top 2 percent of wage earners. MARKETS WORRIEDConcerned that U.S. growth might stall if the fiscal cliff becomes reality, financial markets at home and abroad are paying close attention to the political wrangling. U.S. stocks cut gains on Friday after Obama spoke.Britain's top shares fell on Friday, as worry over the U.S. fiscal cliff overshadowed robust U.S. consumer sentiment data. The FTSE 100 .FTSE index closed down 0.1 percent.Boehner called on Obama to play a more active role in addressing the issue."This is an opportunity for the president to lead. This is his moment to engage the Congress and work towards a solution that can pass both chambers," Boehner told a news conference. Top Senate Republican Mitch McConnell named taxes as the main bone of contention."I was glad to hear the president's focus on jobs and growth and his call for consensus. But there is no consensus on raising tax rates, which would undermine the jobs and growth we all believe are important to our economy," he said.The White House staunchly defended Obama's plans to go on a Southeast Asia tour this month, including a first-ever presidential visit to once-isolated Myanmar, despite the unresolved fiscal cliff issues.White House spokesman Jay Carney cited the planned meeting with congressional leaders a day before he leaves on his November 17-20 trip as proof of Obama's early engagement in negotiations."And I'm absolutely certain that the work that is begun there will continue while he is traveling," he told reporters.While disagreeing on immediate measures to avert the fiscal crisis, Obama and Republicans may find common ground in calls for enactment over the next six months of a larger package of deficit reduction measures, including a rewrite of U.S. tax laws.Obama sent a signal to Republicans of a willingness to compromise by calling for reduction in healthcare costs including in federal programs for the poor and the elderly, a favorite issue of fiscal conservatives."I intend to work with both parties to do more - and that includes making reforms that will bring down the cost of healthcare so we can strengthen programs like Medicaid and Medicare for the long haul," he said.The non-partisan Congressional Budget Office reiterated on Thursday that if left unaddressed, the abrupt fiscal tightening would knock the economy back into recession, with unemployment rates soaring back to about 9 percent. The rate is now 7.9 percent.It also warned of a crisis if the United States did not stem the growth of its exploding deficit.(Additional reporting by Tabassum Zakaria, Kim Dixon and Rachelle Younglai; Writing by Alistair Bell; Editing by David Storey and Peter Cooney)

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< Full site Copper mining plans face financial obstacles A shot of the solvent-extraction/electro-winning plant, which is used to pull copper from oxidized copper ore bodies, at the Chloride Copper Mine.Courtesy By Kim Steele KINGMAN - Despite negative company filings, an $11.2 million deficit and a serious lack of funding, Sierra Resource Group's director says he is still pursuing plans to re-open the Chloride Copper Mine."We're moving forward and intend to complete this project," said Sierra CEO Rod Martin. "We've had some delays, but what company doesn't?" Martin said the company recently contracted the firm CDM Smith to handle its air quality permit and all electrical work associated with the mine and building a substation there. CDM Smith oversaw the transfer and modification of the mine's existing aquifer protection permit, which was handled through the Arizona Department of Environmental Quality. Last year, the Bureau of Land Management accepted the company's Mine Plan of Operation, which was completed by Paul C. Rizzo Associates, Inc.Sierra anticipated hiring up to 40 employees and opening earlier this year, but production has has been placed on hold because of financial problems with the company. According to the company's annual 2012 and first-quarter 2013 filings with the U.S. Securities and Exchange Commission in Washington, D.C., in April and May, the company has not had any significant revenue since its inception in 1992 and there is no assurance it will get the financing necessary to pursue exploration activities. The reports state Sierra had a deficit of about $11.2 million and a loss of $933,540 as of Dec. 31, leading its auditors to issue a "going concern opinion," which means there is substantial doubt about whether the company can continue as an ongoing business. The reports note that proceeds from copper sales at the mine will be used to cover expenditures, but revenue may not be generated until next year. That means additional funding is paramount."If we do not achieve the necessary financing, then we will not be able to proceed with other planned activities, including our planned exploration activities, and our financial condition, business prospects and results of operations could be materially adversely affected to the point of having to cease operations, which would likely cause our investors to lose their entire investment," stated both reports.That news disturbed Talmadge Merit, an investor from Maryland who has been calling local state agencies for months to find out the latest news on the mine. Merit said he learned about the investment opportunity from a friend and bought into the idea about three years ago. Merit said he has plenty of questions but few answers."It's a money situation, from what I understand, where the company doesn't have enough funds," said Merit. "It has so much debt but not enough cash to move ahead. I've been waiting a long time for Sierra to get going with the mine. There have been a lot of promises during those years, but no action."Martin said the company recently entered into preliminary discussions about a possible agreement where the company's readily available ore already stockpiled at the mine would be processed away from the site. Martin said special permits would be required, which the company is already exploring."If a deal like this can be put together, Sierra could effectively be positively cash flowing much quicker than originally planned," said Martin. Ruben Sanchez, field manager for the Bureau of Land Management Kingman Field Office, said the agency has been working with Sierra on its environmental assessment but progress has stopped for now. Sanchez said the assessment is almost complete, but he isn't sure when it will be done."The company is going through some internal restructuring, and that's where the delay is right now," said Sanchez. "We need to know what direction the company is taking before we do anything else. The ball is in their court."Sierra is a Las Vegas-based exploration and mining company seeking to develop gold, silver, copper and other mineral resources. It owns 100 percent of the Chloride Copper Mine, which a 2006 report estimated contains 27 million pounds of copper. The company plans to re-open the existing plant, formerly known as Emerald Isle, and use open-pit mining to produce up to 5.4 million pounds of copper cathode each year. Sierra purchased the mine, which was managed by 10 different companies from 1917 to 1999 before it was shut down, in April 2010.The site is about 15 miles northwest of Kingman and about four miles south of Chloride. Sierra has acquired 450 acres of mining claims on the property, which sits on Old Boulder Road and is located within the Walapai Mining District.Click for home delivery with comics, grocery deals, inserts, TV listings, coupons and more 'Business friendly' approach by city seen as way to defuse disputes Stores in franchise will close doors by Oct. 31 Scuffle leads to more charges against GV man Democratic Women's Club all inclusive at candidate forum Pettit bucks the mayoral race tides, seeks to shift direction Auditor: City guilty of 'material weaknesses' in wake of embezzlement KUSD hires 70 new teachers, 14 more are needed Longoria: Kingman needs to grow, keep small town feel Kingman Daily Miner Home Copyright © 2016 The Kingman Daily Miner / www.kdminer.com 1up! Software, All Rights Reserved

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Modi win boosts Indian markets by Charles Riley @CRrileyCNN May 16, 2014: 11:04 AM ET Supporters of Narendra Modi and the BJP gather at a rally. India's stock market surged Friday after early election results suggested a sweeping victory for Narendra Modi and the pro-business Bharatiya Janata Party. Investors reacted to the news with enthusiasm, and Mumbai's Sensex index advanced by more than 5% in early trading before paring gains to close 0.4% higher. The rupee strengthened by more than 1% and hit a new 10-month high against the dollar. The prospect of a Modi-led government has helped boost India stocks by almost 13% since the start of the year. The rupee has responded too, clawing its way back from a dismal performance in 2013. The initial results indicate that Modi is on track to be India's next prime minister. While the final vote tallies have not been released, the BJP could capture more than 272 seats, the threshold required to secure a majority in the lower house of parliament. A jubilant BJP described the result as a turning point for Asia's third largest economy. "Till some time ago, it was said India's success story is over. Now, the time has come to rewrite India's success story," party chief Rajnath Singh told reporters. Exit polls released early this week suggested that India's 815 million eligible voters had supported the BJP in large numbers, but observers expressed surprise Friday at the extent of the party's apparent dominance over rivals including the Congress Party. Congress Party spokesman Randeep Surjewala conceded that his party was headed for defeat and that "trends indicate a victory for the opposition alliance." Investors are hopeful that Modi will implement long awaited economic reforms, but others are wary of his fractious relationship with India's Muslim community. Related: What India can learn from China India's potential for growth was once mentioned in the same breath as that of China. But the world's second most populous nation and biggest democracy has failed to deliver and its economy is just a fifth the size of its Asian rival. Economic growth has fallen below 5% in recent quarters, its lowest level in years. The currency has lost more than a third of its value since 2011. Observers don't expect much improvement this year, a troubling sign for one of the world's top 10 economies. Analysts say India would benefit greatly from changes to its tax code, a reduction in excessive bureaucracy and more efficient agricultural policies. Momentum on these reforms stalled under the leadership of the Congress Party. Related: Why did China force The Big Bang Theory offline? Modi has presented himself as a candidate in the mold of a CEO, campaigning on his record of fostering low unemployment and high foreign investment as head of Gujarat state. Investors are hoping that he will be able to conjure some of the same magic on a bigger stage. "The BJP victory is likely to herald a revival in India's economic fortunes, with the potential to boost Indian GDP growth back over 8% by 2017," said Rajiv Biswas, an economist at IHS Global Insight. Others think it likely that Modi's agenda will fall victim to India's fractious legislative process. The Congress Party could still obstruct reforms in the upper house. "Dynamics in the upper house, where the state and regional parties provide swing votes, will now be a key variable determining the advancement of the new government's reform agenda," wrote analysts at Eurasia Group. Many observers have also expressed concern over Modi's association with Hindu nationalist causes -- a potentially destabilizing agenda. Related: 11 things to know about world's biggest election Much of the criticism centers on his handling of riots between Muslims and Hindus in 2002 that resulted in the deaths of 2,000 people. Modi was accused of not responding quickly or adequately to the tumult, but he has denied any responsibility. --CNNMoney's Mark Thompson in London and CNN's Harmeet Singh in New Delhi contributed to this article. CNNMoney (Hong Kong) First published May 16, 2014: 2:40 AM ET Comments Social Surge - What's Trending

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November 08, 2012 8:30 am ET Wesley S. McDonald - Chief Financial Officer, Principal Accounting Officer and Senior Executive Vice President Kevin Mansell - Chairman, Chief Executive Officer, President and Member of Executive Committee Nathan Rich Charles X. Grom - Deutsche Bank AG, Research Division Lorraine Maikis Hutchinson - BofA Merrill Lynch, Research Division Erika K. Maschmeyer - Robert W. Baird & Co. Incorporated, Research Division Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division Kimberly C. Greenberger - Morgan Stanley, Research Division Lizabeth Dunn - Macquarie Research Daniel T. Binder - Jefferies & Company, Inc., Research Division Jessica Schoen - Barclays Capital, Research Division Gregory Hessler - BofA Merrill Lynch, Research Division Matthew R. Boss - JP Morgan Chase & Co, Research Division Patrick McKeever - MKM Partners LLC, Research Division Dana Lauren Telsey - Telsey Advisory Group LLC David J. Glick - The Buckingham Research Group Incorporated Good morning. My name is Marley, and I will be your conference operator today. At this time, I would like to welcome everyone to the Kohl's Quarter 3 2012 Earnings Release Conference Call. [Operator Instructions] Certain statements made on this call, including projected financial results, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Kohl's intends forward-looking terminology, such as believes, expects, may, will, should, anticipates, plans or similar expressions, to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause Kohl's actual results to differ materially from those projected in such forward-looking statements. Such risks and uncertainties include, but are not limited to, those that are described in Item 1A in Kohl's most recent Annual Report on Form 10-K and as may be supplemented from time to time in Kohl's other filings with the SEC, all of which are expressly incorporated herein by reference. Also, please note that replays of this recording will not be updated. So if you're listening after November 8, it is possible that the information discussed is no longer current. I would now like to turn the call over to your host, Wes McDonald, Senior Executive Vice President, Chief Financial Officer. Sir, you may begin your conference. Wesley S. McDonald Thank you. With me today is Kevin Mansell, our Chairman, CEO and President. I'm going to go over our financial results, and Kevin will talk about some more specifics regarding merchandising, marketing, stores. And then I'll follow-up with our guidance. Kohl's sales for the quarter increased 2.6% to $4.5 billion. Comp store sales increased 1.1%. The comp increase reflects a 0.6% increase in average unit retail, a 1% increase in units per transaction, resulting in a 1.6% increase in average transaction value and a 0.5% decrease in number of transactions per store. Year-to-date sales increased 1.2% to $12.9 billion, and comparable store sales decreased 0.5%. The year-to-date comp decrease reflects a 3.9% increase in average unit retail, offset partially by a 2.2% decrease in units per transaction, which resulted in average transaction value of a positive 1.7%. Transactions per store for the year are down 2.2%. E-Commerce sales increased 50% over the third quarter 2011 to $295 million. Year-to-date, E-Commerce sales have been $782 million, 41% higher than the first 9 months of 2011. The effect on our comp was 230 basis points for the quarter and 190 basis points year-to-date. Kohl's charge sales penetration increased 70 basis points to 58% of total sales for the quarter, and our year-to-date credit share is 57%, an increase of 165 basis points over the first 9 months of the year. Kevin will provide more color on our sales in a few minutes. Our gross margin rate for the quarter was 38 1 -- 38.1%, 44 basis points lower than the third quarter of last year, but considerably better than our expectations of a 60 to 80 basis points decline. SG&A dollars increased 0.6% for the quarter, consistent with our expectations of down 1% to up 1%. SG&A as a percent of sales leveraged approximately 50 basis points for the quarter and 40 basis points year-to-date. Kevin will provide some more color on expense management as well in a few minutes. Depreciation expense was $210 million in third quarter this year and $202 million in the third quarter of last year. The increase is primarily due to IT projects. As a percentage of sales, depreciation was 4.7% for the quarter, 5 basis points higher than last year. Year-to-date, depreciation increased 6%, primarily due to new and remodeled stores and IT projects. Net interest expense was $80 million this quarter and $243 million year-to-date. The $5 million increase over the third quarter of 2011 and a $20 million increase over the first 9 months of 2011 are primarily due to the $650 million of long-term debt issued in October of last year. Our income tax rate was 37.8% for the quarter, slightly below our expectations of 38%. Diluted earnings per share increased 14% to $0.91 for the quarter. Net income was $215 million for the current-year quarter and $609 million year-to-date. Year-to-date, diluted earnings per share was $2.54 this year and $2.56 last year. Moving on to square footage. We currently have 1,146 stores with gross square footage of 99.58 million square feet and selling footage of 83.09. Square footage is approximately 1% higher than last year at this time. We ended the quarter with $550 million in cash and cash equivalents. Capital expenditures were $641 million for the first 9 months of 2012, $114 million lower than the first 9 months of last year. The change reflects multiple changes in our capital expenditures, including fewer remodels and fall new stores, partially offset by higher IT spending. As a reminder, we opened 12 new stores this fall compared to 31 last fall. And capital expenditures are projected to be $800 million for 2012, $25 million less than our previous guidance. Our October inventory balance was $4.8 billion, a 17% increase over October of last year, and AP as a percent of inventory was generally consistent with last year at 50.5%. Weighted average diluted shares were 235 million for the quarter and 240 million year-to-date. Earlier this week, our board approved a quarterly dividend of $0.32 per share. The dividend is payable December 26 to shareholders of record at the close of business on December 5. I'll now turn it over to Kevin, who'll provide additional insights in our results. Kevin Mansell Thanks, Wes. Let me start by adding some color to our sales results. As Wes mentioned, comparable store sales increased 1.1% for the quarter. Footwear was the strongest category of the strength in athletic shoes. Men also outperformed the company average for the quarter with notable performance including casual sportswear, pants, basics and active. Children's reported a low single-digit increase on notable strength in toys. Home is positive, but below the company average. Better performance included bedding, electrics and bath. Women's was essentially flat for the quarter. Active was the strongest category with a double-digit increase. Updated and contemporary sportswear, classic sportswear and intimates also outperformed the company. As we expected, the juniors business continued to be challenging. Sterling silver jewelry was the strongest category in accessories. Handbags and small leather accessories and bath and beauty also outperformed the company. From a regional perspective, the South Central was the strongest region. All regions ran from slightly positive, slightly negative. From a brand perspective, 53% of our third quarter sales were private and exclusive Only-at-Kohl's Brands, an increase of approximately 150 basis points over the third quarter of 2011. This increase was the result of our new exclusive brands, Jennifer Lopez, Marc Anthony, Rock and Republic and Princess Vera Wang, as well as strong sales in Chaps, LC Lauren Conrad and FILA SPORT. On Wednesday of this week, we launched the first of our DesigNation collections. This limited edition collection was designed by Narciso Rodriguez and was inspired by his recent travels to Istanbul. On the gross margin front, as Wes indicated, our gross margin rate for the quarter was approximately 40 basis points lower than the third quarter of 2011. We enter the holiday season with an improved understanding of how our customer responds to our pricing, fresh inventory and normalized inventory levels. Total inventory units per brick-and-mortar store are up approximately 14% over October 2011 and 3% over October 2010, meeting one of our goals in getting inventory units in the stores back to those levels. The vast majority of these increases are due to our gift and great value programs, as well as in the areas that are performing well. Our expectation by the end of the year is that unit and cost increases per store will continue to converge as we gain benefit from the lower-cost fall receipts. We will be bringing in significant amounts of transitional goods in December and early January to be better prepared for spring selling. Our expectations would be that inventory per store on a dollar and a unit basis would be up low double digits per store at the end of the fourth quarter. On the SG&A line, we performed as expected. Our store organization continues to drive payroll efficiencies. Our fixed costs generally were flat as a percent of sales. We also reported significant leverage in our corporate operations, primarily due to lower incentive costs. Marketing costs did leverage in the third quarter, despite spending to support brand launches, including this quarter's Princess Vera Wang launch and to reemphasize the many great ways to save at Kohl's. We would expect marketing to leverage in the fourth quarter as well. Our credit operations slightly deleveraged to last year. Our performance will be predicated on the future on our portfolio growth and managing the customer servicing and marketing functions more efficiently. I would expect our profitability to grow in the fourth quarter versus last year, but perhaps not as fast as sales. Distribution centers also did not leverage as we continue to develop the infrastructure for our growing E-Commerce business. We opened 12 new stores this quarter, bringing our current store count to 1,146. All but one of these 12 new stores are small stores with less than 64,000 square feet of retail space. We expect to open 12 stores in 2013, 9 in the spring and 3 in the fall. Consistent with this year's new stores, we expect all but one of the 2013 stores to be less than 64,000 square feet. Year-to-date, we remodeled 50 stores. We expect to remodel 30 stores next year. Most of these remodels will occur in the fall season. As you know, we've temporarily reduced our remodel program until we have final results from tests we are doing in our home, accessory and beauty areas. We will make changes to our remodels based on the results of these tests and expect to accelerate our remodel program back to a more normalized run rate of approximately 100 stores per year beginning in 2014. Last week, we announced our integrated marketing campaign emphasizing gifts to dream of at unprecedented values this holiday season. Our fourth quarter marketing will emphasize the unbeatable savings opportunities that Kohl's offers. This year, shoppers will have extra days to both earn and redeem Kohl's Cash. In addition, every day between Black Friday and Christmas Eve, Kohl's will pick up the tab for one randomly selected shopper in every store and Kohls.com as part of our Dream Receipt promotion. We will also, once again, open nationwide at 12 a.m. on Friday, November 23. Stores will be open for 24 straight hours from 12 a.m. until midnight on that day. From a media mix perspective, we intend to significantly increase our digital marketing and broadcast spending in the fourth quarter. In closing, our improved third quarter sales results are, hopefully, a harbinger of good things to come. As we enter the critical holiday season, we believe we're in a great position. On the merchandising front, we have several brands which are new to the holiday season: Princess Vera Wang, Rock and Republic and Narciso Rodriguez. And we've reenergized several of our existing brands, Chaps, LC Lauren Conrad and FILA SPORT. As I just mentioned, our marketing program focuses on the gift opportunities and great values that are available at Kohl's. We've made a significant investment in inventory in order to improve our in-stock position. And we've invested in the Kohl's store experience, and as a result, our customer service remains best in class. We know that the economy is going to be tough, but we believe that the focus on value and gifting will win over the consumer in what we expect to be, as always, a very competitive holiday season. Earlier this week, our Board of Directors reaffirmed our commitment to return value to our shareholders by increasing our share repurchase authorization. Our existing share repurchase program was increased by $3.2 billion, up to a $3.5 billion level. Our expectation at this time would be to repurchase the shares over the course of the next 3 years. With that, I'll turn it back to Wes to provide our fourth quarter earnings guidance. Thanks, Kevin. Our fourth quarter earnings guidance is as follows: total sales increase of 7% to 8%. This includes the 53rd week; comparable sales increase of 3% to 4%. We expect November to be below that, December to be at the high end of the range and January to be at the low end of the range; a gross margin rate decline of 80 to 110 basis points; SG&A expenses, including the 53rd week, will increase 3.5% to 4.5%. Excluding the 53rd week, we expect SG&A to increase 1% to 2%; depreciation expense is forecasted to be $212 million; interest expense $86 million; and a tax rate of 37.8%. Our guidance also assumes 230 million diluted shares for the fourth quarter and 237 million shares for the year. This assumes $300 million in share repurchases in the fourth quarter at an average price of $55 per share. Including these estimated share repurchases, we expect our earnings per diluted share to be $2 to $2.08 dollars for the fourth quarter. Reflecting our current results and our fourth quarter projection, our fiscal 2012 guidance has been updated to -- excuse me, $4.52 to $4.60 per diluted share from our previous guidance of $4.50 to $4.65 per diluted share. And included in these results are the following estimated impacts of the 53rd week in fiscal 2012: sales of $180 million; SG&A, $30 million; net income, $20 million; and diluted earnings per share, $0.08 per diluted share. We will give you those exact amounts at year end in order to adjust your go-forward earnings models. And with that, we'll be happy to take your questions at this time. [Operator Instructions] Your first question comes from the line of Deborah Weinswig with Citi. This is Nathan Rich filling in for Deb today. I first wanted to ask about E-Commerce. It looks like you guys had the strongest E-Commerce growth that you've had in almost 2 years. Can you talk about what's driving that? I mean, I think from our perspective, it's just continuing to gain market share with the customer. I think we've invested a lot of money in digital marketing this year to drive traffic to the site. Our conversion rate is also improved over the course of the first 3 quarters. We just installed guided navigation recently, and we expect that to be a benefit for the holiday season. And we've also increased the number of SKUs we have available online. So I think it's just -- are starting to mature as a business there. And we've been behind in terms of some of our competitions, but we're catching up very rapidly. Great. And then if I could ask one question on holiday. You guys provided a lot of color around what you're doing from an inventory and marketing standpoint. I wanted to ask how you're using technology differently this holiday season. I mean, I think from a technology perspective, we're testing a few things mostly related to E-Commerce. We're fulfilling not only from our E-Commerce fulfillment centers, but we're sending ship-alone SKUs from our 7 retail DCs. We're also testing order online, ship from store. That's just a very small test if -- and we'll get a lot of learnings in that -- from that, and that'll be very beneficial for next holiday. We have electronic signs up in almost all of our stores now, so that should save us a lot of money in terms of our ad set quantities. But those are probably the main things. Your next question comes from the line of Charles Grom with Deutsche Bank. My first question is on the fourth quarter guidance. It looks like you tweaked it down a little bit from your former implied guidance that you guys gave out back in August. Just wondering if you could kind of walk us through what changed from your perspective. Sure. I mean, I think, fundamentally, it's about sales. We pulled sales down a little bit from what we might have been thinking about for the fourth quarter, and there isn't anything really specific in there. And we definitely have been impacted in November by the hurricane on the east coast. That's certainly an impact. I think our expectation -- our hope is that we'll get at least some of those sales back, but it's definitely part of the process. And I think the other one is just overall, I'm trying to make sure we're taking a kind of conservatively rational view of the opportunity. We had a good third quarter, but it was essentially in the middle of what our expectation was. And so mainly, the difference in the fourth quarter is about sales. Yes. I would say, Chuck, we basically -- the reason we guided November below the end of the range, we're just assuming we make our plan the rest of the way. So obviously, we didn't make our plan the first week because of the hurricane. If we get some of those sales back, that would be upside to what we just guided to. Okay. And then just a follow-up to that. How are trends sort of outside the Northeast? Has there been any CNN effect or election effects for you guys? Well, I mean, there's the seasonality in the business when you get down to that element of business by day or pre-election, postelection. We kind of looked back historically at past election years to sort of plan the days, so that's sort of built into our plan. I mean, typically, there is some impact pre-election and... A little postelection. A little postelection, and the business kind of accelerates. But that's sort of built into our planning process. You can never plan Halloween or Election Day too well. Fair enough. And then just the obvious concern continues to be kind of the inventory level. Can you maybe walk us through a little bit more detail in terms of the content by category? Where are you placing the biggest bets? Sure. I mean, from an inventory perspective, I would say I'd kind of break it into 3 things as we go into holiday and then one additional thing as we transition from holiday out. On the 3 things going into holiday, first and foremost, was we've been working hard at managing inventory levels and service levels, are the percentage of times we're in stock for the customer, up, year-over-year. Because we know we disappointed a lot of customers last year in our ability to do that. So there's a general focus on ensuring that we're in stock by size and color across the portfolio of the store with particular emphasis around areas that are trending, categories that are doing particularly well. Second, we know last year that we were not well positioned for gifts, and we lost share to others when it came to the gift-giving categories. And so there's been a very big focus on creating a gift headquarter strategy for November and December for the customer for holiday. And you should be able to see that in our stores in both our in-aisle and in-department outposts and presentations. It's built around this marketing handle of dream for Christmas, and that's been a focus area as well. And then the third area, probably just as important as the gift, has been our great value program. And the great value program generally is about opening price point items throughout the store in every single category that are -- probably lean more towards basic, I would say. They're not all basic items, but they have a tendency to lean that way. So those are kind of the 3 things where we've focused inventory going into the holiday. And then the last thing, which is really important, is last year, with the results that we had, we did a very poor job of transitioning into new spring selling. And so in many parts of the country, as we moved into December, we didn't have new fresh receipts coming in to be prepared to service the customer in January and February and March, and that's been a major course correction for us. So those are kind of the 4 elements. Okay, fair enough. And then my follow-up question is just -- in the past few months, there's been some positive developments in your business with traffic getting better and some better trends in the non-credit customer. When you looked ahead, how confident are you guys that those trends are going to continue? Well, I mean, all the elements are in place. I mean, I think we've spent a lot of time studying what went wrong in the fourth quarter last year and continued into the spring, as you know. And a lot of it was about servicing the customer properly, being competitive and being a gift headquarters for holiday and -- with particular emphasis on these kind of narrow and deep really important items, we call them the great value items, they're really key items, and a constant flow of receipts. So I mean, I guess to the extent that you can be confident coming out of a quarter that had improved sales results, October was a really good month for us. We saw it building, so all very, very positive. Your next question comes from the line of Lorraine Hutchinson with Bank of America. Just wanted to get a little bit more color on the remodeling program. I thought that you were going to expand that program pretty dramatically in 2014. Can you talk a little bit about how those remodels have trended recently? Well, I think, actually, we've taken a step back when we've been testing some of these things in home and beauty. We remodeled 100 stores as recently as last year so -- or maybe 2 years ago, 2010. But that's the run rate we need to achieve -- basically, to achieve our goal of remodeling a store on average every 10 years. So the remodels continue to trend up low single digits. The reason we've cut back the remodels and tried to test some different things in terms of in store and home accessories and beauty is to try to raise that to a mid-single-digit comp, which is kind of the comp we would like to have in order to achieve a return as good as a new store, for example. So that's why we're testing the 2014 acceleration to 100, assume that we can make some progress in achieving that goal. Quite honestly, if we can only get to a low-single-digit remodel, we still will continue to remodel that 100 a year because we feel like that's something we have to do, from a strategic perspective, to continue to invest in our fleet and make our stores look better than the competition. Your next question comes from the line of Erika Maschmeyer with Baird. Can you -- I guess just a follow-up on Lorraine's question, talk a little bit about some of the early learnings and kind of how you're feeling about the tests that you're doing in home and beauty. I mean, the short answer is no. We're planning to talk about that for sure. It's part of our plan to talk about it at our year-end call. Some of the categories that we're focused on, as you know, in those efforts are very intensive fourth quarter kinds of categories. So holiday, home, home accessories, beauty. And so to be fair, I think, to give us a complete and full read, we're planning on dealing with it in February. I mean, we feel good about some things and, as you can imagine, not good about other things. But we'll talk about it more in-depth on that call, Erika. That is fair enough. And then on that gross margin side, is kind of why shouldn't gross margin sequentially improve a little bit in Q4 versus Q3? I guess could you walk through the puts and takes for those margin -- merchandise margins? And how do you expect AUC to play out for you over the next few quarters? Well, I mean, from a margin rate perspective, what's driving our margin rate is really kind of 2 big factors. Obviously, one is this very focus that we have on being value right. That's a critical element, and we want to be very competitive for the holiday season. The second thing is that some of the categories that we're looking to intensify in the holiday season are lower margin. And so categories like home, which is an integral part of our gift strategy; toys, which is an integral part of our gift strategy, are both lower margin in the overall store. And as you can imagine, our online business, which also carries a lower merchandise margin as well is growing, it had its biggest growth in the third quarter with a 50% increase, is growing a lot. And from a mix standpoint, that also impacts it. So I'd say the way I'd think about it is it's sort of mix, and that's mainly online. It's classifications that we're driving, which are categories like home and toys that are big parts of our gift strategy, and then it's an intense focus on making sure we have great value as witnessed by the great value item program. Your next question comes from the line of Richard Jaffe with Stifel, Nicolaus. Just a follow up on the E-Commerce rapid growth. Historically, that's been not as robust a gross margin business as your regular businesses because of its emphasis on home. And are you seeing a rebalancing in your E-Commerce business and, as a result, some higher margins coming out of that business? No. I mean, I still think that overall, the factors that drive the margin lower than the brick-and-mortar margin are still in place. I mean, we're still -- those categories are growing rapidly, and they're a headwind from strictly a margin perspective now. I think you know, Richard, that while merchandise margin is really important for us to manage, we're also really focused on our returns. And our return on investment in our online business is really, really healthy, and we see a bright future in that. So you don't want to get too focused on just the absolute merchandise margin rate. But I think, Wes, the factors are all still on in play. Yes. I mean, shipping costs, obviously, are a big part of merchandise margins in E-Commerce. And that's something that continues to be very competitive in the fourth quarter, especially most people that have shipping with thresholds drop them to $50. We do the same for competitive reasons. So with E-Comm, actually, overachieving their plans. That's put a little pressure from a mix perspective on the fourth quarter. Your next question comes from the line of Kimberly Greenberger with Morgan Stanley. Wes, I'm wondering if you can talk about the inventory management. And is -- the 3% increase in inventory units relative to 2010, is that comp store inventory? Does that exclude E-Commerce? And how does that compare to your store volumes today versus 2010? That's store only. So E-Comm, obviously, the growth over 2010 is a lot higher than that. And our store volumes since 2010 -- obviously, last year, we ran basically a flat comp. We're down 0.5% today, so pretty similar. I guess you can count new stores would be, well, not as much. From our perspective, this is the right thing to do for us. Last year, we only got -- cut units significantly. We're investing, as Kevin mentioned, in the 3 categories: gifts, great value and areas that are trending. So our exclusive brands, for example, year-to-date, are up 11%. That is mainly concentrated in our update in the contemporary businesses. So their inventory units relative to 2010 are up double digits in both men's and women's. Other areas, such as home decor, which aren't trending this year, are actually down double digits to 2010. So we've tried to invest in the areas that make sense. And it's not inconsistent, to be honest, what we've been telling everybody since February. This is the results of our strategy, and we hope our sales continue to improve. And if we're able to run the kind of comp that we've guided to, we'll have a good fourth quarter. We'll continue to invest in inventory as we move into the spring as well, because obviously, it's been well documented and we've talked about it quite a bit. We missed a lot of business this spring as we continued to chase inventory to catch up with our price reductions. So as you will get like a normalized level of inventory, do you think that you do need to have higher inventories relative to your sales per store, sales per square foot going forward? Or do you think this is just sort of temporary? I'm just looking at the store sales being flat to down 0.5%. And since inventory's up 3%, it just -- there seems to be a little bit of mismatch. I would tell you this is our strategy. I would expect dollars and units to grow faster than sales until we get to the fall of next year. And then we'll be normalized, and we'll start to focus on bringing our inventories growth less than sales. I'd -- we missed gross margin in the fourth quarter -- I actually mean the first quarter this year. Prior to that, we've grown gross margin or made our gross margins most of the time in the almost 10 years I've been here. In second quarter and this quarter, we also made our margin. So we're managing the business how we think it should be managed, but we need to get the stores in a better in-stock position. Your next question comes from the line of Liz Dunn with Macquarie. My question is on the juniors business. Can we just have an update on -- obviously, that's been an area where there's been a bit more of a content problem instead of a quantity problem. How are you feeling about that business? And when do you think we might see -- start to see some better merchandise? I mean, I think our expectations for the fourth quarter in juniors are to continue to trend similarly to the way we've trended in the third quarter. So that's not good. It's far below the rest of women's, but it's kind of baked into our sales assumptions that we've given you for the fourth. So we're really kind of focused on transitioning into the first quarter of next year in a better place in juniors. But our assumption is, Liz, that the fourth quarter in juniors, while it might be modestly better, is not going to be a whole lot different than it's been. And that's a little bit less from a performance standpoint than the rest of women's. Women's has outperformed juniors consistently over the course of the year. And it's mostly a tops problem, is that right? Yes. It's definitely driven by tops. No question about it. I mean, in the third quarter, we made a big commitment, for instance, to colored bottoms. And colored bottoms were very successful and drove our overall bottom business to a better performance. But yes, it's definitely driven by our top business. Okay. And then just one more, if I may. In terms of the buyback, should we think about that $3.5 billion as being somewhat linear over the next 3 years? And how should we think about that in terms of your preference for dividends versus buyback? Well, I think from my perspective, that would be the best way to model it if you're looking out 3 years. How we actually do it will obviously depend on the stock price. In terms of dividends, assuming that you buy back that number of shares over the next 3 years, that would pretty much build in a double-digit dividend increase every year, holding the actual payout in dollars to be about $300 million. So that's how we're kind of modeling over the next 3 years. Your next question comes from the line of Dan Binder with Jefferies. I had 2 questions. First, around the gross margin guidance. I think last year, [indiscernible] guidance you were kind of positioning yourself to be able to respond to competition, as needed, and it turned out a little bit better. I was just kind of curious, when you think about the promotional environment going into fourth quarter, what you're assuming and how much leeway you've given yourself as you drive the gross margins today. Right. I mean, I think what you're just asking is without the rationale that, I think, behind the gross margin guidance, which really is about -- primarily about mix, and it's this dramatic increase in our expectation for our online sales. We just finished the third quarter when we were -- in which we were up 50%, which is the best performance we've had in a long time, and it does operate on lower merchandise margins. And then secondarily, the categories in which we're focused in both our gift and our great value programs have lower merchandise margins in them. So categories like home, which is a really big part of our gift strategy, and toys, which is a really big part of our gift strategy, have lower margins than the overall store. I think those are the 2 big things, Wes. Yes, I mean, I'd just try to make it simple. If you assume we were to run 44 basis points down in the fourth quarter versus last year, the difference between that and our guidance, about 1/3 of it's gifts and about 2/3 of it's E-Comm. Right, okay. But from a promotional standpoint, what are you guys sort of planning for or what are you expecting out of the industry this coming fourth quarter? Well, I don't know if it's more promotional. I think it's really, just as Kevin mentioned, the mix. I mean toys, fragrances and small electrics carry lower margins than our average, and we're investing a lot more inventory in those to drive traffic and, hopefully, other sales in the store. My second question was just around inventory levels. You've given us a lot of detail already. I'm just curious, at these levels, what would you assume? Sort of is markdowns sort of the normal course of markdowns in the business after the season get back to levels that we saw in 2010? Or do they end up being higher? And then if you could give us an update on sort of the inflation-deflation situation that we're looking at. Well, I mean, we're coming -- we're planning to come out of the fourth quarter, I think, in a low double-digit range. So from a flow standpoint, that's being driven by a focus on transitioning into the spring season much more aggressively than last year. Because last year, we made a big tactical error in not doing that. So just strictly thinking about what's assumed in terms of how to move through inventories in the fourth quarter, we're kind of assuming it's going to be very promotional Christmas, similarly to last year, maybe not any more so, but probably certainly not any less. And the margin rates are slightly lower because of the mix of our business driven by our online, and our gifts and great value programs are driving that a little bit lower. So that the overall markdown mix, as it relates to our level inventory, is kind of the same. There's really no difference than last year. Yes. I mean it's pretty simple, Dan. If we run a 3 to 4 comp, we're going to make the earnings we said. If we run a flat comp, we'll have margin issues like any other fourth quarter. It's not really related to the investment in the inventory. If in the fourth quarter, you don't run the comp you think, you've got to get rid of the units. Yes, okay. I guess what I was getting at was really just the level of markdowns that you would typically see in the business. So I'm assuming last year, it was very low. This year, it goes up a little bit, back to sort of normal. But maybe if we could just move on to the inflation -- or excuse me, sorry, the deflation. I mean, I think the short answer really is we're focusing on the out-the-door retails on like items being lower than last year. So that's going to really involve more promotional markdowns than clearance markdowns. If our strategy works, we should have similar clearance markdowns in terms of percentage of inventory leftover in January as we had last year. Your next question comes from the line of Jessica Schoen with Barclays. I was wondering if you could talk a little bit more about the investments in technology. And what kind of impact you've seen -- in addition to the strong performance in the E-Commerce business, what impacts have you seen that you feel are a direct result of those investments? Well, I mean, I think the biggest impact this year has been the rollout of electronic signs in our stores. That's allowed us to reduce our ad set payroll by about 90% in the stores that have them. I think we're down to about maybe 100 stores left that we'll do in January. That's probably the biggest thing that I can talk to you about from an SG&A perspective. We made an awful lot of investments in E-Commerce in terms of giving the ability for people to develop gifts, the guided navigation I talked about earlier, product reviews online, all that's really contributed to our growth in E-Commerce being so robust. We continue to work on longer-term projects involving the merchants in the stores. We have a pilot on our system we call merchandise locator system, which allows us to find product more easily in the back room, which would cut down on replenishing the floor. That's working out very well in the pilot stores so far, and we'll continue to roll that out. And we're working on various systems to allow our merchants to be more effective in terms of planning their assortments regionally. Okay, great. And then I know you've answered a lot of questions on the gross margin. But I was wondering if you could tell us about how the mix between private exclusive and national brands impacted the beat in the quarter and your expectations for the fourth quarter. I think the mix on private exclusive is about 53%. It's pretty much what we kind of expected. So that really didn't have a meaningful impact on how we came out in the third quarter. And it's sort of thought -- the way we're thinking about the fourth quarter is that, that mix will probably hold very similarly to what it's been trending at, which is a little bit higher than last year. Not a lot higher, but a little bit higher than last year. I mean, the biggest improvement in terms of comps was actually with national brands. They were still negative, but negative low single digits versus negative mid-single digits. So that helped us as well. Private and exclusive, as Kevin said, were pretty much the same. Your next question comes from the line of Greg Hessler with Bank of America Merrill Lynch. So my question is just a follow-up on the buyback piece. How should we be thinking about that in light of your commitment to the high BBB credit rating and kind of your leverage target? Is that something where you could increase the pace by funding with incremental debt? Are you asking about the pace of the buyback? I think -- you were cutting in and out, but I think I got the gist of it. We're going to continue to manage our buyback with a debt-to-EBITDA target of 2 to 2.25. It's been communicated to the rating agencies. They're comfortable with that. That would allow us to take modest leverage on every year of roughly $300 million, whether we do that or not is really up to the interest rate environment. In terms of the pace of the buyback, as I mentioned earlier, the best way to model is probably equally. But if stock seems cheap, we'll buy more quicker. If it's expensive, we'll buy less like all you guys out there. Your next question comes from the line of Matthew Boss with JPMorgan. So you've spoken about 5-phase SG&A deep dive longer term. As we look out, how should we think about the fixed cost leverage points and efficiency opportunities going forward in the model on the SG&A side? Matt, I think the goal for us has always been, from a long-term perspective, to leverage at a 2% comp. We're obviously going to do better than that this year for 3 main reasons. Stores have done a phenomenal job in terms of managing the payroll. We've also gotten the benefit of the electronic signs I mentioned earlier. Incentive comp, obviously, is a lot less than last year, given our performance thus far. And we continue -- although the benefits in credit weren't great in the third quarter, we did get strong performance in the spring season. Those are something we expect to continue to achieve going forward. The 5-phase thing that we're working on right now is really to drive incremental cost out. The goal is to allow us to drive enough savings to maintain that 2% comp leverage point going forward. Okay, great. And then on the gross margin front, I think you did a really good job of breaking out the different buckets for 4Q. As we think to next year and beyond, do you -- is there opportunity on the gross margin front? Or is this is a line that we should be modeling flattish going forward? Or just kind of any color around longer-term gross margin. Well, I think there's opportunity going forward. I would plan it modestly up 10 or 20 basis points a year. We've -- that's really with the assumption that costs continue to decline. We've seen that obviously in the fall. We've mentioned that. All-in, our cost decline is probably around mid-single digit depending on the category. We're seeing cost reductions so far on some of the spring receipts we've placed for next year. Assuming that continues, I think we can have modest gross margin improvement. If we can out-comp 2% comp, obviously that could provide more opportunity than the 10 to 20 basis points I talked about. Your next question comes from the line of Patrick McKeever with MKM Partners. Could you talk about the impact of weather on your business in last year's fourth quarter, just given the fact that it was so warm across much of your geographic footprint? And just what kind of weather outlook do you have baked into or assumed with your 3% to 4% same-store sales guidance for the fourth quarter of this year? Well, our -- we have a couple weather services we use, and they're basically saying, starting next week, through the balance of the quarter, it should be colder than last year. So that's certainly built into our thinking. Obviously, the weather affected the results early on in November with the hurricane and now you guys, I guess, East Coast are getting a snowstorm today or yesterday. So we think that's going to be good for business. But outerwear as a category has declined in importance the last few years as more people have been layering. But colder, for our business, is always better this time of the year. And then just on -- maybe you could give us a little bit more color around the impact of the hurricane, how many stores you had closed, that sort of thing. Well, I mean, with the peak, the first day, we had about 200 stores closed and then it went down to 60, down to 30s for balance of the week. And then by the following Monday, we had every store opened. For the most part, we had some generators and a lot of stores that ran out of fuel, but you're talking about double digits by the weekend. We do have one store that's going to be closed for a significant amount of time in Caesar's Bay in Brooklyn. That will be closed through at least the fourth quarter. I mean, the hurricane impact really hit a significant number of stores, as it did, I think, for most national retailers across both the Mid-Atlantic and, of course, particularly the Northeast. And that hangover lasted more than just a day or 2. So it dramatically impacted the first week of November for sure. Your next question comes from the line of Dana Telsey with Telsey Advisory Group. I was wondering if you'd comment -- as you think about the fourth quarter and promotions and clearance and the balance between the 2, is there a difference between the margin on clearance and the margin on promotion and how that trends during the year? Sure. I mean, our merchandise margins, because of the type of selling proposition we have, which is highly promotional, we were very event-driven. Our merchandise margin results are primarily driven by our promotional markdowns. And of course, the fourth quarter, of all the quarters, the impact of transitioning out of holiday goods into spring is proportionally a little bit higher than it is in any other particular quarter. But I would say -- and Wes should jump in here, but I think, for sure, the promotional markdown rate is what drives our merchandise margins up or down. And then the mix of our business, as we've talked about, is a really important factor on that as well. So I don't want to make it sound like clearance and how we clear goods is not impactful to our performance of margin. It is. But it's not the most important factor. Yes. I mean, most quarters throughout a number of years, we've ended the quarters with clearance less than last year. So as Kevin said, it's really about the promotional markdowns. And we do have time for one final question, which comes from the line of David Glick with Buckingham Research. Just a couple quick questions. Wes, could you just clarify your November guidance? I think you said below 3% to 4%. But I was just wondering, are you expecting a positive... Positive, but below 3% to 4%. And then more importantly, in terms of the non-credit sales and traffic, obviously, that helped you improve your trend in Q3. I'm just wondering how you'd strategize the fourth quarter on that front and how you've geared your marketing spend. You mentioned digital and broadcast as being increased. How much are you increasing your overall spend? And how disproportionate is that increase in digital and broadcast? And obviously, I think it's geared towards driving the non-credit customer and traffic overall. But if you could just give us some color on that, I'd appreciate it. Sure. I mean, I think Wes -- this is Kevin, David. I think Wes guided to a 7% to 8% total sales increase for the fourth quarter with the impact of the additional week on our accounting calendar. In the context of a 7% to 8% sales increase, we do expect marketing to leverage. So it's less than an increase of 7%. But that's a significant amount of dollars because the marketing dollars in the fourth quarter are very, very significant. The areas of digital, particularly, are dramatically higher than that. I don't even actually have a specific number, but it's double, probably, the rate of our overall marketing increase. So if sales are up 7% to 8% and marketing is up, but not up 7% to 8%, let's just say 5% or so, then digital, particularly, is well more than double that rate of increase. Broadcast is also higher, but not as increased as digital. So hopefully, that helps you. Thanks, everybody. Thank you for your participation. This does conclude today's conference call. You may now disconnect. About this article:ExpandTagged: Services, Department Stores, TranscriptsError in this transcript? Let us know.Contact us to add your company to our coverage or use transcripts in your business.Learn more about Seeking Alpha transcripts here.Search TranscriptThis transcriptFindAll transcriptsFindCompare To:All KSS TranscriptsOther Companies in this sectorTop Authors|RSS Feeds|Sitemap|About Us|Contact UsTerms of Use|Privacy|Xignite quote data|© 2016 Seeking Alpha

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Turning Good News into Bad With housing prices falling, energy prices climbing and the stock market on a roller coaster, it's no wonder many Americans are worried about their economic condition. But a new study on economic mobility in the United States suggests most of us are much better off than our parents were. Two out of three Americans have incomes higher than their own parents, and nearly 80 percent of children whose parents were in the poorest group of Americans in the late 1960s have higher income than their parents. The study was published by the Economic Mobility Project, a consortium made up of researchers from four widely respected public policy groups: the conservative American Enterprise Institute and Heritage Foundation and the liberal Brookings Institution and Urban Institute. The data come from an analysis of over 2,300 native-born Americans who were under 18 years of age in 1968 who were included in the Panel Study of Income Dynamics. The PSID is an annual survey of 8,000 families and is considered one of the best sources available for longitudinal data on income, health and social behavior for a representative sample of Americans. In 1968, median family income for the group was $55,600 (measured in inflation-adjusted 2006 dollars), compared with $71,900 today -- a whopping 29 percent increase. But those numbers don't fully reflect how much better off families are today. Families in 1968 were larger on average, comprising 3.1 individuals in 1968 but 2.1 persons now. Since there are many more childless couples and single parents today, the average family's income is spread among fewer people. CARTOONS | Ken Catalino View Cartoon And, since the study counted only cash income, it substantially understated the economic condition of the poorest families who receive non-cash assistance such as food stamps, subsidized housing and medical care. By all economic measures, the poor are better off today than they were a generation ago. Cash income alone among the poorest fifth of native-born Americans was up 18 percent in inflation-adjusted dollars during the period. The findings will probably come as news to those Americans who think the middle class and poor are worse off today, a view Democratic politicians and the media hammer home every chance they get. The Washington Post, for example, headlined a story about the study by Post columnist Eugene Robinson "Tattered Dream," which argued that "the American Dream is nothing but false hope." Robinson latched onto the finding that only 6 percent of those persons whose parents were in the poorest fifth of American families in 1968 had managed to climb into the wealthiest fifth by the time they were in their late 30s or 40s. He doesn't bother to quote the study's finding that "[c]hildren born into the bottom fifth are more likely to surpass their parents' income than are children from any other group." What seems to irk Robinson and others looking for bad economic news is the finding that income among the top two quintiles has gone up more than among the middle and lower two quintiles -- 52 percent for the top fifth, 39 percent for the second fifth, while only 29 percent for the middle, 22 percent for the second lowest and 18 percent for the bottom fifth. In other words, even though all Americans are much better off today than they were a generation ago, the most affluent Americans have improved their status relative to others. Robinson doesn't tell readers that more than 60 percent of children born into the wealthiest group don't stay there, slipping down into lower income groups, including almost one-in-ten who slip into the poorest fifth of Americans. About one-third of all Americans are upwardly mobile, according to the study, meaning not only do they earn more money than their parents in absolute terms, but they improve their ranking relative to others as well. Another third, though their incomes are higher than their parents', remain at the same relative rank, and one-third slip into lower ranks than their parents'. This seems to depict an almost perfectly mobile society, with equal percentages of Americans moving up, staying the same or moving lower in relative economic standing. But some folks, it seems, will always find a way to turn good news into bad. Share this on Facebook Tweet Tags: Jobs

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The Phantom Tax That Made The Deficit Look Better By Marilyn Geewax Jan 3, 2013 ShareTwitter Facebook Google+ Email The alternative minimum tax created a "useful fiction," as one analyst says, by appearing to shrink budget deficits. Tim Boyle As Americans continue to sort out the contents of the fiscal cliff legislative package passed by Congress Tuesday, they are finding elements they like and some they hate. There's one exception. Everyone is glad Congress finally found a permanent fix for the alternative minimum tax. That one portion of the U.S. tax code — always intended to affect only very wealthy people — had turned itself into a dreaded stalker. The AMT became a constant threat to millions of middle-class taxpayers who never understood it and never knew when it might strike them. Each year, Congress would rush to the rescue to "fix" the AMT to keep it from walloping tens of millions of filers with hefty new taxes. But until this week, lawmakers would never approve a long-term solution. Why? Largely because having the AMT on the books helped future budget deficits look smaller by making it appear that new tax revenues soon would be rolling in. "It was a useful fiction, but it was incredibly irresponsible," said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget, a nonpartisan research group. Goldwein said that on paper, the AMT would generate tons of tax revenues in coming years, making the future deficits look less frightening. But no one on Capitol Hill ever believed those funds would actually show up because each year, lawmakers would apply a "patch" to keep the AMT from hauling in huge revenues. The Tax Policy Center, another research group, estimates that in 2022, the AMT — with no patch — would generate nearly $400 billion in revenues to fund government. But if Congress were to apply the typical patch as it always does, the AMT would bring in only about $90 billion in revenues in 2022. How did the situation get this weird? It's complicated. We'll explain: In 1969, Congress decided it needed to ensure that everyone paid a minimum amount of taxes. But it also wanted to preserve tax breaks written into the code as economic and social incentives. For example, Congress wanted to keep the home mortgage interest deduction to provide more incentive to buy real estate. Supporters of that deduction say homeownership has economic and social value. But the tax code had so many various deductions that some wealthy people could take an array of them and end up paying extremely low taxes. So Congress created a parallel tax system. The wealthy could prepare their taxes in the usual way, then recalculate their taxes under the AMT formula, and pay whichever amount was bigger. Unfortunately, Congress failed to build in an inflation escalator. And over ensuing decades, it cut tax rates. The combined effect of higher inflation and lower rates undermined the intent of the AMT. Each year, it threatened to hit more and more middle-class families. The result was that a tax intended to affect only the richest Americans needed to get updated again and again so that it would hit only the wealthiest 4 million taxpayers. If Congress had not patched it on Tuesday, it would have applied to nearly half of the people with incomes of $75,000 to $100,000. That would have pulled in an estimated 27 million more tax filers, who would have found themselves paying an average of $3,700 more in taxes for 2012. The annual push to patch the AMT became chaotic because of congressional gridlock. "The biggest and thorniest problem for the IRS and next year's filing season is the AMT patch," IRS Commissioner Doug Shulman said in a September speech to the American Bar Association. Finally, in the fiscal cliff deal, Congress agreed to permanently adjust AMT income exemption levels to inflation. It also gives lower-income families bigger tax breaks to make sure they don't face the threat of getting caught up in the AMT. Tax experts say the changes will pretty much ensure that people making less than six-figure salaries won't have to think about the AMT rates, which range from 26 percent for singles to 28 percent for married couples. The tax collected some $102 billion in 2010, the last tax year on record. Goldwein said the permanent fix will now provide a more realistic assessment of what revenues will be coming in the future. "One nice thing about the fiscal cliff deal — at least from a budget wonk perspective — is that what is written into law is more closely aligned with what will actually happen in the future." And it will be better for taxpayers, who now will be able to plan better for what their taxes will be each year, according to Mark Vitner, senior economist for Wells Fargo Securities LLC. "You shouldn't go through this patchwork year after year," Vitner said. "It's always preferable to remove uncertainty."Copyright 2013 NPR. To see more, visit http://www.npr.org/. View the discussion thread. © 2016 WAMC

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Risk & Compliance KPMG Tax-Shelter Case Is Mixed Win for U.S. Some key acquittals in the long, circuitous prosecution could encourage an enforcement shift for both personal and corporate tax shelters. Roy Harris December 18, 2008 | CFO.com | US share The long, circuitous prosecution of KPMG LLP executives over the selling of illegal personal tax shelters concluded with a handful of convictions Wednesday afternoon. But some observers saw the mixed-bag result, which included acquittals along with the jury’s guilty verdicts, as a sign that the direction of government tax-shelter enforcement in both personal and corporate cases may change. Ex-KPMG tax partner Robert Pfaff, ex-KPMG senior tax manager John Larson, and lawyer Raymond Burble, once a partner at Brown & Wood, were convicted on tax evasion counts by a New York federal jury after a two-month trial. Pfaff and Larson were acquitted on one tax evasion count and a conspiracy count, while Ruble was acquitted on two counts of tax evasion. Ex-CFO of KPMG among 10 Newly Indicted KPMG Tax Shelter Case Could Be Dropped Judge Frees 13 ex-KPMG Employees A fourth defendant, ex-KPMG tax partner David Greenberg was acquitted on all the charges. Greenberg, according to Bloomberg News, had spent five months in prison, followed by three years of home confinement, after his 2005 arrest. Back then, the case involved 17 former KPMG executives, including its former deputy chairman, Jeffrey Stein, in a case the government described as involving shelters that had cost the U.S. Treasury $2 billion, according to the wire service. But U.S. District Judge Lewis Kaplan had dealt the case several setbacks along the way. The shelters — designed by an aggressive KPMG operation geared to personal tax planning — came in for at least as much attention as the defendants. They included bond linked issue premium structures, known as Blips; foreign leveraged investment programs (Flips); offshore portfolio investment strategies (Opis); and short option strategies (SOS.) Doug Whitney, a partner with the firm of McDermott Will & Emery, suggested to CFO.com that the acquittals, in particular, “send the government a strong signal that the criminal courtroom is not the place to define the illusive contours of the economic substance of tax shelters.” Legal experts will come to that conclusion because of “the long and tortured history of the case, combined with the acquittals on the conspiracy charges and the outright acquittal of Greenberg on the evasion charges,” he added. And those signals were just as strong, “if not stronger,” for corporate enforcement. Whitney said that “reasonable minds will differ on where to draw the lines about what constitutes sufficient economic substance” — what’s needed to make a tax shelter legitimate in the eyes of the law. And the U.S. attorney’s office may have “learned through the last five or six years that trying to criminalize acts on either side of the lines is just too difficult to justify.” For their part, prosecutors had argued that KPMG executives had realized in 1996 that certain strategies would eliminate the tax liability for clients, and to allow that result created investments that carried no risk, and that generated paper losses that could be used to offset income. Among the complications in the government’s case, however, had been Judge Kaplan’s dismissal of charges against 13 ex-KPMG people after he found that their former employer should not have refused to pay their legal fees. And, suggested McDermott Will & Emery’s Whitney, the mixed results in front of a jury yesterday could well lead enforcement to look instead for more-obvious violations, especially among the growing number of shelters that involve foreign jurisdictions. “We’ve been dealing with these personal shelters for a decade now, and the new wave appears to be through foreign bank accounts, where major financial institutions have potentially facilitated the sheltering.” He added, “That raises interesting issues of multijurisdictional enforcement that didn’t necessarily exist in this individual sheltering area.” Tax-shelter design — whether corporate or personal — tends to shift as enforcement displays weaknesses as well as strength. “The code is a living instrument, and particularly with the change in (presidential) administrations, there are going to be a number of changes in the tax code that will require litigation and rulings by the IRS,” which will help illustrate what the tax code really means, Whitney said. In the KPMG case, a conspiracy charge had been dropped against the accountancy itself in 2006, after it kept its part of a deferred-prosecution agreement with the government. It paid $456 million, and admitted to fraudulent conduct in designing and marketing certain shelters. ← Tyson, Macy’s Negotiate Loan Changes Ground Zero →

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Tech Hooked on Startups Some CFOs can’t resist the challenges of fresh beginnings and fast growth. David M. Katz February 18, 2016 | CFO Magazine share Forget about organization charts and job security. Since the dot-com boom two decades ago, a new breed of CFO has emerged. These finance chiefs don’t mind jumping from startup to startup, preferring the excitement of fresh beginnings to the everyday routine of a brand-name corporation. Indeed, the career risk is part of the attraction for finance chiefs at early-stage firms in the information technology sector. While such companies may fail fast, they can also have big upsides. More than that, however, the appeal for many CFOs in working for tech startups is the opportunity to create a finance function from scratch, get involved in operations, and play a key part in a fast-growing environment. To be sure, such finance chiefs retain all the traditional finance functions, including accounting, tax, financing, and risk management. But the top finance job also typically demands the flexibility to work on other corporate functions. While maintaining adequate cash flow is, not surprisingly, high on their list of concerns, helping their companies attract top talent seems an even more critical focus for startup finance chiefs. Such are the takeaways from recent conversations with four CFOs of software startup businesses about their current jobs and career paths. They represent a rich variety of endeavors: social-media data mining, radiology, accounts payable and payments automation, and — yes — providing grocery shoppers with detailed information about every egg they buy. Here are their stories. Why He Left Google Julio Pekarovic, Dataminr Although it wasn’t exactly like working for a traditional startup, Julio Pekarovic feels he got his first exposure to life in the fast lane in 1995, when he became commercial planning director of Expo ’98, the 1998 World’s Fair in Lisbon, Portugal. In that capacity, he built a team responsible for the revenue-generating operations of the 132-day exposition that grew from a handful of staffers to a roster of 1,000. His staff’s work included rounding up official sponsors, selling tickets, and merchandising. “That was the first taste I got of hypergrowth and growing companies. In this case it was a World’s Fair, but it was on a fast-paced basis,” recalls Pekarovic, now the CFO of Dataminr, a seven-year-old firm that mines tweets for data that companies can use to control their risks. Just as the dot-com boom was peaking, Pekarovic moved to Silicon Valley to eventually become senior finance manager for financial planning and analysis at Commerce One, where he ran the startup’s global trading site. After it went public in 1999, the business-to-business e-commerce firm saw its share price jump nearly 1,900%, leading Wired magazine to crown it the top-performing initial public offering of the year. But by 2002, like many of its peers, Commerce One was going downhill just as fast as it had risen. “Unfortunately — or fortunately — the company was hit very hard by the dot-com bust,” says Pekarovic. “I lived through a series of layoffs until I decided to jump ship and move on to a little-known search-engine startup that became Google.” As Google’s head of financial planning and analysis, Pekarovic was one of only a few hundred Google employees at the time. At the start of his seven years at the firm, he began hiring a finance team to support the growing business at Google. His first hire was Jason Wheeler, who is now CFO of Tesla Motors, the electric-car company. In those days, Pekarovic recalls, sales numbers were being calculated and recorded by finance people within sales, rather than overseen by finance. To help achieve what he feels was needed separation between sales and finance, he became director of a new division at Google, which he himself dubbed sales finance, he remembers. By 2009, Pekarovic had seen Google grow from a company with about $50 million in revenue to a $21 billion tech colossus with some 25,000 workers. But while the company was growing, the opportunity for creativity that he prized was shrinking. “The greatest value that the majority of employees at that time could provide was just to follow the established rules,” he says. As a result, he decided to leave Google that year to become CFO of Quantcast, a digital ad audience-measurement firm founded just three years earlier. Then, after four years at Quantcast, Pekarovic took the finance helm at Dataminr in September 2015. By a number of measures, Dataminr, which was founded in 2009, wouldn’t exactly be considered a startup. After all, it’s been valued at $700 million, lists Fidelity Investments among its major shareholders, and employs about 200 people. To Pekarovic, though, the essence of being a startup may be more a state of mind than anything else. “I think Google in many ways considers itself a startup and always did,” he says. “It’s an innovation hotbed.” And Dataminr? “The way that I would classify us is that we’re a technology company with a huge opportunity in front of us,” says Pekarovic. Driven by Uncertainty Andrew Webb, Candescent Health Two decades of working for small, midsize, and large companies have given Andrew Webb a clear sense of the kind of organization that fits his temperament. “I figured out over time that smaller companies are where I am most invigorated,” says Webb, CFO and chief administrative officer of Candescent Health. “Part of it is that there is almost immediate feedback on the things that you do.” Moreover, he says, “you can have the most influence on the success and, potentially, the failure of certain things. And that to me is really important.” Webb’s involvement with small firms began in earnest in 1999, when, as an associate in business development at Merrill Lynch, he helped launch a number of them. He left Merrill in 2002 to join one of those firms, a provider of capital markets data still known as Ipreo, as vice president of strategic development. Following Ipreo he spent five years as a managing director at financial services provider Knight Capital Group (now part of KCG Holdings), where he again helped launch a number of small firms. Continuing his career pattern of moving from jobs where he provided liquidity for early-stage firms to ones in strategy, operations, and, now, finance, Webb became CFO of Radisphere, a radiology practice, in 2014. The company was acquired by Sheridan Healthcare in 2015, but Radisphere founder Scott Seidelmann retained the firm’s software, analytics, and business processes, subsequently starting Candescent Health as an independent software company. Webb took the finance helm at Candescent. Unlike Radisphere, which actually provides X-ray services, Candescent provides a cloud-based system that aims to help radiologists be more efficient. Webb says that the change in his employer from health care provider to software startup has pushed him to be more innovative and find ways to make the firm more efficient. Before the sale of Radisphere, the combined company was much bigger in terms of revenue and staff. “Not to take away at all from the team that we had at Radisphere, but that got people into a mindset … of doing things just because they had been done in the past,” says Webb, who went from overseeing 10 finance staffers to just 2 at Candescent. That shrinkage prompted the new company to simplify its processes. Thus, even with a smaller finance staff, Candescent was able to slash the time needed to close its books from seven to eight business days to three to four days. Webb attributes the efficiency to two changes generated by the launch of the new company and the separation from the old one. For one thing, shedding Radisphere meant that Candescent’s finance team no longer had the burden of having to process the billing necessitated by thousands of radiology studies a month. The second change involved the winnowing down of the company’s personnel to a smaller team more attuned to the life of a startup. “People who choose to work at a startup generally have a certain personality type,” says Webb. “And we actively go out and try and find those people.” What kind of personality type is that? “For a startup you want to find people who are really motivated to be in an environment in which there’s always an element of uncertainty,” explains Webb. That uncertainty may range from where the next round of financing may be coming from to the nature of the work itself. Webb wants to hire people who are flexible enough to adjust when he says, “I know we told you your job was this, but today it’s going to be this, too.” Smaller Is Better Bill Price, Mineral Tree In 1991, after eight years in public accounting at now-defunct Arthur Andersen, Bill Price had an opportunity to join one of his clients, MediQual. Bain Capital had just invested in the medical software firm, which had a newly installed chief executive and was looking for a CFO. The leadership of the then-$2 million company “reached out to me, and the timing was right,” recalls Price. Thus began his current 24-year run as a finance chief of nascent software firms. Following MediQual, where he led and managed the company’s IPO and helped sell it to Cardinal Health in 1997 for $35 million, Price moved on to stints at NextPoint Networks, MarketSoft, and Zoominfo. Since 2013, he’s headed up finance at MineralTree, a venture capital-backed software-as-a-service (SaaS) firm that sells accounts-payable software. Comparing the desirability of working at larger, well-established companies and emerging firms, Price says: “I’ve worked for both. I much prefer smaller.” But there are pros and cons to both. “At an early-stage company there are certainly fewer resources to get your jobs done — not as many systems, certainly not as many people,” he says. “But on the positive side, everyone at our company is doing original work. There’s no such thing as a pure manager at Mineral Tree.” That gives him the chance to get involved in activities outside the realm of “straight-up finance.” In January 2015, for instance, MineralTree entered into an agreement in which e-commerce giant First Data is investing in the smaller firm and helping to finance the sale of MineralTree software to First Data customers. In the wake of the deal, Price is currently working with First Data to make sure that MineralTree has “policies, programs, practices, and operational steps in place to ensure that [First Data] customers’ data is secure” and that the software firm is complying with regulations. Among the traditional bread-and-butter tasks of a finance chief, Price is most concerned with weighing the need for speed in raising cash against that of investing it wisely. “It’s always a challenge financing a growing company,” he says, along with that of “balancing the responsibility of managing cash and maneuvering around the ever-changing financial landscape as well.” Now is a good time to raise cash, he observed late last year. Venture capitalists are doing more deals, he says, adding that “private equity is definitely getting involved in the right-sized company. And strategic investors have a ton of cash and are looking to put it to use.” Like other software companies, MineralTree’s most important accounting metric is annual recurring revenues. “With a SaaS-based company, it’s really all about signing up customers to a subscription, whether it is monthly or annual or multiyear,” says Price. “If you can do that, you’ll have a very successful software company, with significant growing revenues.” Daren Schultz, TEN Ag Tech “I like transparency, and I don’t like that things are being hidden from people,” says Daren Schultz, CFO of TEN Ag Tech, explaining what most appeals to him about the agricultural technology startup’s business model. Schultz, who has been finance chief and treasurer of the private equity-owned firm since July 2015, was referring to the difficulty shoppers might have in determining the freshness of each egg in the cartons they buy in supermarkets. In environmentally conscious Southern California, that’s a big concern, he says. Indeed, the San Juan Capistrano, California-based company aims, via its cloud-based technology, to partner with food retailers and farmers to get them to offer eggs that each have a use-by date and a code unique to the farm where the egg was laid. “We can trace your egg’s moment of packing to within 180 seconds,” the firm’s consumer website boasts. “Everyone deserves accountability, and everyone’s going to be able to understand whether there’s freshness, transparency, certification,” says Schultz. “They’ll be able to understand where the animals are, how they’re being treated, and, ultimately, the safety of the food they’re consuming.” The finance chief notes that it’s still early days at TEN Ag Tech — and that’s precisely one of the things he likes about it. He defines the five-year-old firm as a startup because it’s in a “test mode,” having spent the bulk of its efforts on research and development and patent work before 2015. It was only last year that the firm did a “soft launch” of its application, he says. “We’re still very young, and we’re not quite out to market yet in full capacity,” notes Schultz, who joined the firm in 2014 as director of financial operations before being promoted to his current post. Previously, he was director of finance at Mitchell International, a provider of insurance claims handling technology owned by private equity giant KKR. Referring to Mitchell as a “more established” company, Schultz feels he has more leeway to make a mark at TEN Ag Tech. “In established companies the business model and a lot of the processes are in place already,” he says, “whereas here, I’m going to be able to add a lot more value.” One area in which he feels he’s making a difference is in closing the firm’s books. “When I joined the company the close process wasn’t very thorough,” Schultz recalls. Now, “we are taking steps every day to improve and speed up the close.” David M. Katz is a deputy editor of CFO. ← Managing Your Margins Finance Roundup for Executives →

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A Song's in the Air on the Hill From the AARP Bulletin Print Edition, June 1, 2010|Comments: 0 AARP representatives recently distributed 400 singing cards on Capitol Hill to show support for proposed legislative curbs on Wall Street. The jingle targeted banks with the message, “We’re tired of playing your game.” AARP is encouraging Congress to finish work on legislation that was prompted by the 2008-09 financial crisis and recession. The House passed an ambitious bill last fall that provided greater scrutiny for banks and investment houses, and created an independent consumer protection agency. In the Senate, AARP’s efforts focused on protecting consumers from a repeat of Wall Street excesses and their consumer impact. “Older Americans have lost billions of hard-earned dollars due to the failure of an outdated and compromised financial regulatory system,” says Nancy LeaMond, AARP’s executive vice president for policy. “Investors deserve to know the benefits and the risks involved in the products they are buying, and their retirement security should not be compromised by reckless behavior on the part of bad actors.” AARP worked with Republicans and Democrats in both houses. The endeavor also included radio, TV and newspaper ads in 12 states. Join the effort at action.aarp.org/yourmoney.

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Oct 5 2015 at 11:45 PM Updated Oct 6 2015 at 10:06 AM No lifelines for old coal clunkers: ANZ shifts carbon emissions policy "A lot of banks use the language of a commitment to the transition to a low carbon economy but this is the first one to put numbers to it." Protesters attempting to block the first test train load of coal coming from the controversial Maules Creek coal mine by Ben Potter ANZ Banking Group will set strict rules on lending to the coal industry to bring the bank's business into line with the growing momentum across the corporate world of reducing carbon emissions.ANZ's new climate change commitments include $10 billion in new lending for greenhouse gas reductions over five years and a ban on lending to new coal plant that does not use the latest clean coal technology.The bank is Australia's largest lender to the fossil fuels industry and its pledge to support the shift to a low-carbon economy was supported by the coal industry and by groups seeking stronger action to limit global warming to 2 degrees above pre-industrial temperatures.Investor Group on Climate Change chief executive Emma Herd said: "A lot of banks use the language of a commitment to the transition to a low-carbon economy but this is the first one to put numbers to it." Ms Herd said some non-bank companies such as BHP Billiton and AGL Energy had already articulated what the commitment to 2 degrees means for their core business activities. But she said: "This definitely puts [ANZ] in a stronger position than the other banks in terms of articulating what they are doing about these issues."ANZ will continue to lend to the coal industry but will only back new coal-fired power plants if their carbon dioxide emissions are below 800 kilograms per megawatt hour, the maximum for the latest coal generation technology.Best practice It will not lend to existing coal plants – some of which emit more than 1100-1200 kilograms CO2 per megawatt hour – to extend their lifetimes unless the owner has a strong plan to significantly reduce emissions by a fixed deadline and move towards best practice.Greg Evans, executive director – coal at the Minerals Council of Australia, said two-fifths of installed coal generation in Asia already used cleaner technology, much more was being built, and this was good for Australia, which supplied the most suitable high-quality coal for these plants."It's good to see a significant financial institution taking account of the advances in technology and recognising the substantial reduction in emissions under way in coal-fired generation," Mr Evans said.ANZ's move is in response to mounting global pressure to reduce exposures to CO2 emissions ahead of the United Nations climate change talks in Paris in December. Last week Bank of England Governor Mark Carney warned that financial institutions faced "potentially huge" losses from climate change action that could leave vast reserves of oil, coal and gas "stranded". ANZ global head of Credit & Capital Management Kevin Corbally, said: "You are probably going to see a new global agreement coming out. There's going to be limits on greenhouse gas emissions."We want to be in a position where we can actively support the commitment made by governments and also work actively with our clients as well."The lending pledge commits ANZ to fund $10 billion over five years for emissions reductions undertaken by customers, such as boosting energy efficiency, low emissions transport, "green buildings", reforestation, renewable energy and battery storage, emerging technologies such as carbon capture and storage, and climate change adaptation."Our revised policies, rules and standards reflect that today, coal provides around 40 per cent of the world's electricity needs," Mr Corbally said in an email to senior managers on Monday. Tougher lending policies"Credible global future energy scenarios including the International Energy Agency forecast that coal will continue to comprise a significant share of the energy mix in the short to medium term," the email says."This means we will continue to support our natural resources and energy customers during the transition, provided they meet our new, tougher lending policies and standards."Climate Institute deputy chief executive Erwin Jackson said: "We are seeing the mainstreaming in Australian business and globally of the recognition that we need to get to net zero emissions this century if we are serious about the 2 degree goal." ANZ has one of the largest exposures of the big four Australian banks to the fossil fuels industry – about $12 billion, just under $3 billion of which is in direct coal mining.Coal-fired power has the highest CO2 emissions of any widely used fuel and some mainstream environmental NGOs are pressing investors to make a decisive break with the fuel.ANZ isn't going that far – this year it joined in the funding of Whitehaven Coal's controversial Maules Creek coal mine in northwestern NSW."I think it's the first time any of the big banks have come out that strongly and said, 'yes, climate change is happening', and 'yes, we are going to change our activities to be consistent with 2 degrees'," said Lyndon Schneider, national director of the Wilderness Society."They have recognised the scale of the problem but they are still lending to Whitehaven Coal, they are still lending to Santos, and these are the institutions we have been campaigning against over the last 18 to 24 months because they are opening up new fossil fuel fields. This issue is not going to go away and we'd hope that the bank would continue to review it over the next two to three years because continuing to lend to fossil fuel companies is not going to get us to 2 degrees."Mr Corbally said ANZ had consulted widely on its policy."We are confident that the measures that we have come up with strike the right balance because we're keen to continue to support the customers that we have got, the communities that they also operate in, but at the same time we are conscious of addressing what is the challenge effectively of climate change," he said. The world's hottest ever day (perhaps) Behind the global economy’s hesitation blues Further departures at Macquarie Private Wealth Adelaide NAB restructures to boost returns Clive Palmer's petroleum company placed into liquidation Latest Stories

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Dell delays buyout vote, signaling lack of support By DAVID KOENIG and MICHAEL LIEDTKE Associated Press Jul 18 2013 8:20 pm AP Photo/Paul Sakuma, File In this file photo, Dell CEO Michael Dell smiles at Oracle Open World conference in San Francisco. ROUND ROCK, Texas — Michael Dell believes he can revive the company bearing his name if his group of investors can buy it for $24.4 billion. But that deal is in danger of falling apart, increasing the chances that the personal computer giant’s founder might not be CEO much longer. The formidable challenges already facing Dell Inc. and its CEO got more daunting Thursday with the slumping company’s decision to delay a vote on Michael Dell’s proposed buyout. The postponement until next Wednesday signals that a five-month campaign by Michael Dell and the company’s board hasn’t overcome the staunch resistance of billionaire Carl Icahn and other shareholders, who argue that the buyout price is too low and discounts the company’s long-term prospects. Michael Dell’s offer has the support of three shareholder-advisory firms and is backed by the financial clout of buyout specialist Silver Lake Partners and a group of lenders. It would take the company private so that Michael Dell can try to engineer a long-term recovery without the glare of Wall Street and its fixation with quarter-to-quarter expectations. The offer works out to $13.65 per share, or more than 40 percent below where the stock stood in early 2007. That was when Michael Dell returned for a second stint as the company’s CEO – just a few months before Apple Inc. started selling the iPhone, which triggered a mobile-computing revolution that left Dell Inc. on shaky ground. Rather than relying on the types of desktops and laptops made by Dell, more people are embracing convenient and powerful smartphones and tablet computers to connect to the Internet and handle other common computing tasks. In a telltale sign of the upheaval, tablets are expected to outsell laptops for the first time this year. Michael Dell plans to invest heavily in tablets and a new breed of hybrid PCs that offer the touch-screen controls of mobile devices. That commitment is likely to depress the company’s earnings until the additional spending pays off. At the same time, he wants Dell to become a diversified seller of technology services, business software and high-end computers – much the way IBM Corp. successfully transformed itself in the 1990s. Unlike IBM, Michael Dell believes the radical makeover can be better done by a company that isn’t facing Wall Street’s pressures to increase profits and revenue from one quarter to the next. That’s why he structured his buyout to end Dell’s 25-year history as a publicly held company – a run that has made the 48-year-old CEO one of the world’s richest people, with an estimated fortune of $15 billion, according to Forbes’ latest rankings. Michael Dell and a four-person board committee overseeing the company’s sale negotiations will make last-ditch efforts during the next six days to persuade opposing shareholders to change their minds while also prodding apathetic shareholders who didn’t cast their ballots to weigh in with a yes vote. The proposal needs the backing of just over 42 percent of Dell’s outstanding stock to be approved. Less than 50 percent of the stock is needed because Michael Dell’s 15.6 percent stake in the company isn’t counted in the balloting. Shareholders representing at least 20 percent of the votes are known to be in opposition. It’s possible that Michael Dell and Silver Lake could sweeten their offer to sway the holdouts, although many analysts are skeptical that the bid will be increased because the PC market and Dell’s financial performance have deteriorated even further since the deal was reached in February. The board says it already wrangled six bid increases from Silver Lake and Michael Dell during the negotiations leading up to the agreement at $13.65 per share. Michael Dell isn’t sharing his thoughts publicly. He showed up at Thursday’s meeting at the company’s Round Rock, Texas, headquarters with several other board members. But he made no remarks and walked out without answering questions after the gathering was quickly adjourned to give him and the board more time to find a way to get the deal done. The hope for a better offer, or at least getting a deal done, seemed to help Dell’s stock Thursday. After the delay was announced, the stock gained 24 cents, or 1.9 percent, to close at $13.12. If Michael Dell’s deal collapses, it would thrust the company and its stock into turmoil, said Needham & Co. analyst Richard Kugele. “We fear that Dell is entering a period of massive uncertainty, where nearly all options are negative, disruptive and MESSY,” Kugele warned Thursday in a research note. The immediate worry would be a possible overthrow of Dell’s entire board, one that would also lead to Michael Dell’s ouster. Icahn, Dell’s second largest shareholder behind Michael Dell, is teaming up with Southeastern Asset Management, another major shareholder, in an attempt to replace Dell’s 10-member board with an alternative slate. That slate would back a complicated proposal to distribute nearly $16 billion in cash to stockholders while still leaving them with a stake in the company. In a joint statement, Icahn and Southeastern Asset said Thursday’s delaying tactic “reflects the unhappiness of Dell stockholders” with Michael Dell’s plan. Dell hasn’t scheduled the date of its annual meeting, but Icahn contends the law requires one by Aug. 14. Last year, the company held its annual meeting on July 13. Dell spokesman David Frink declined to say whether the meeting will be held by Aug. 14 this year. If his mutiny succeeds, Icahn has already pledged to dump Michael Dell as CEO. He hasn’t identified whom he has in mind to run the company. Even if the Icahn-led rebellion is thwarted, Kugele questions whether Michael Dell will want to remain CEO of a publicly held company that is trying to make wrenching changes to adapt to a shift in the way people are engaging with technology. Worldwide sales of laptop and desktop machines have fallen from the previous year in five consecutive quarters, the longest slide in industry’s history, according to research firm Gartner. Dell, the world’s third largest PC maker, saw its shipments slip by another 4 percent during the April-June period, despite aggressive price cuts to spur more sales. Michael Dell has proposed contributing $750 million and about $3.7 billion worth of stock toward the buyout. The rest of the $24.4 billion would come from Silver Lake and lenders, including a $2 billion loan from longtime Dell partner Microsoft Corp. To get a deal done at that price, Michael Dell and the company’s board will have to sway shareholders such as Joe Whitlock, who attended Thursday’s brief meeting. Whitlock, a longtime shareholder who said his stake “isn’t enough to make a difference” in the outcome, didn’t vote Thursday. Although his stockbroker had advised him to support the buyout, he began to have second thoughts and said the $13.65 per share being offered “is undervalued for the stock.” Icahn, Southeastern and other shareholders have reached similar conclusions, arguing that Dell Inc. has already made inroads in business software and other promising technology niches that are likely to drive the stock price higher within the next few years. They contend the deal currently on the table would unfairly allow Michael Dell and his backers to reap all the gains after buying the company at what will eventually look like a bargain price. The alternative drawn up by Icahn and Southeastern proposes buying up to 1.1 billion of Dell’s nearly 1.8 billion shares for $14 apiece. That would ensure existing shareholders would also still own stock, if they choose, so they could benefit from a turnaround. The bid would also distribute warrants giving shareholders access to some additional stock in the future. Icahn and Southeastern estimate their plan is worth $15.50 to $18 per share. Combined, Icahn and Southeastern own a nearly 13 percent stake in Dell. Dell’s board contends that shareholders are better off taking cash now and transferring all the risks of an uncertain turnaround to Michael Dell and his backers. It’s a gamble that others have been unwilling to take. Dell’s board says it approached dozens of potential buyers about making a bid for the company and couldn’t find any takers. After reaching the deal with Michael Dell and Silver Lake, Dell received an offer from another buyout group, the Blackstone Group. But that bid was withdrawn in April after Blackstone reviewed Dell’s books and was scared off by the company’s “rapidly eroding financial profile.” It has been a harsh comedown for one of corporate America’s greatest success stories. While still a teenager, Michael Dell started PC’s Limited, now known as Dell, from his dorm room at the University of Texas in Austin in 1984. He initially sold computer disk drives, but soon was assembling computers and undercutting conventional retailers on price. He raised $30 million by taking the company public in 1988. Dell went on to change the PC business with low costs, customized orders and direct sales – first over the phone and later the Internet. Dell’s stock hit a split-adjusted peak of $60 during the dot-com boom in 2000 when the company was still riding high amid booming sales of PCs. Many analysts believe the stock could plunge below $9 and test its lows reached last fall if there isn’t a deal in place to sell the company. Michael Liedtke reported from San Francisco.

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Chipotle's Challenge, CEO Pay, and Those Darn Awesome Cups Alyce Lomax, The Motley Fool May 19th 2014 8:42PM Chipotle Mexican Grill doesn't just provide delicious burritos that make its heady sales and profits run. It is also a huge force in sustainability and education about where our food comes from. The company doesn't rely on traditional marketing. Instead, it embraces unique ways to spread its "Food With Integrity" ways. See: its Cultivate Festivals, the Scarecrow social media campaign, sponsorship of films like Food Inc., and its more recent Farmed and Dangerous show. Now the burrito giant has revealed a wonderful initiative that displays a similar focus on underserved areas that many of us believe in strongly. Its cups will feature short works by well-known authors. It's odd, though, that the literary cup news arrived on the scene on the exact same day that we learned about an epic fail despite the many victorious aspects of the business. A landslide number of investors voted against Chipotle's CEO pay. To be difficult and critical, as I sometimes like to do, I've got some questions. In some ways, might the architecture of Chipotle not only boost growth and goodwill but have world-changing impacts, too? Is their leadership worth every darn penny? It's high, all rightThe truth is, Chipotle co-CEOs Steve Ells and Monty Moran do rack up the kind of pay that many would drop in the top tier of insanely "overpaid," regardless of insane stock and business growth in recent years. Together, their total compensation added up to $50 million last year alone. Chipotle's proxy statement also reveals some crazy perks. Although these are tiny dollar amounts in the grand scheme of things, paying for schooling for executives' children with shareholder money is a real bone of contention for anyone who wants to change corporate-governance policies for the better. However, Chipotle's SEC filings underline what is probably an important point, to management's and directors' perspective for the worthiness of retaining talent, anyway (emphasis mine): Our Chairman and co-Chief Executive Officer Steve Ells founded our company, has been the principal architect of our business strategy, and has led our growth from a single restaurant in 1993 to over 1,500 restaurants today. Monty Moran, our co-Chief Executive Officer, and Jack Hartung, our Chief Financial Officer, have also served with us for several years and much of our growth has occurred under their direction as well. We believe our executive officers, each of whom is an at-will employee without any employment contract, have created an employee culture, food culture and business strategy at our company that has been critical to our success and that may be difficult to replicate under another management team. We also believe that it may be difficult to locate and retain executive officers who are able to grasp and implement our unique strategic vision. If our company culture were to deteriorate following a change in leadership, or if a new management team were to be unsuccessful in executing our strategy or were to change important elements of our current strategy, our growth prospects or future operating results may be adversely affected. As much as in many companies' cases the "retaining talent" argument is silly, I do think there's a point at which new management just might not get it. However, in another BS-detector aside, founders and managements who "architect business strategy" rarely want to leave. Passion is at play. Gutsy CEOsSay-on-pay votes are non-binding. Managements and boards of directors don't have to do or change anything at all. However, more and more companies are responding to negative shareholder votes, even when votes against their policies don't even stack up to a majority. However, ignoring shareholder feedback casts managements in a poor light. Going public does mean having shareholder capital and a group of people who deserve a voice. Here are some examples of gutsy CEOs, though, and it isn't displayed through their millions and billions in pay. They probably get less credit because to the media and shareholders, it isn't that interesting or worth voting against. Some CEOs have made stands in the past to voluntarily reduce their pay or remain in the modest range of their industries and the prevailing pay schemes. Berkshire Hathaway's Warren Buffett makes peanuts. In 2013, his base salary was $100,000. Even counting the calculation of total compensation, he received less than $500,000. Charlie Munger's entire salary was $100,000. In an interesting aside, executive compensation is on page 9 of the proxy statement. It doesn't need much burying. In 2006, Whole Foods Market's John Mackey decided he didn't want to work for money anymore. Any money. He even rejected stock-based compensation (one of the tricky things about most CEOs who receive those $1 salaries). Kinder Morgan's Rich Kinder makes a buck. Again, a literal buck. He receives no bonuses, no stock options, nada. He reimburses the company for his health-care expenses. His pay package is at his request. In other words, he simply told the board that is what he wants to do. Morningstar CEO and founder Joe Mansueto views his pay in a similar vein. Mansueto's total compensation last year: a whopping $105,000. These individuals aren't hippies who don't understand or care about economics. These are individuals who have done quite well through the companies they've founded. In some cases, maybe they do feel that the passion for the companies they've created is the real reward. It's gutsy to save shareholder money by making voluntary decisions to preserve shareholder capital. It's gutsy because hardly anybody else in corporate America does this, much less thinks this way. For CEOs who are all about the boatloads of cash, it doesn't work in their benefit since many of them sit on boards of directors, in compensation committees crafting pay packages that float all the boats. Getting a readEven though I'm a shareholder who is continuously awed with the wonderful things about Chipotle -- the literary endeavor is one of those things -- it comes with enough corporate-governance negatives that I do feel disappointed. And that may be a nice way to put it. Obviously, 77% of shareholders are furious about Ells' and Moran's pay packages. It doesn't help that more and more often, fast-food companies' rock-bottom worker pay puts a highlight on the other side of the company's employee spectrum. Given some of the amazing stakeholder-friendly and holistic policies that make up part of the company's mission, they've left themselves open to be considered hypocrites. I feel bad when great companies leave themselves open to criticism that is by no means irrational. I feel especially bad about it when I'm a shareholder. I can't wait to read some of Chipotle's literary cups while I enjoy my tasty burrito bowls, many of which will involve Chipotle's new sofritas. However, I also can't wait to see what comes of this situation. Who knows. A management with lofty ideals may change the course of one area in which they look like almost everybody else. Check back at Fool.com for more of Alyce Lomax's columns on environmental, social, and governance issues. The article Chipotle's Challenge, CEO Pay, and Those Darn Awesome Cups originally appeared on Fool.com. John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Alyce Lomax owns shares of Chipotle Mexican Grill and Whole Foods Market. The Motley Fool recommends and owns shares of Chipotle Mexican Grill, Kinder Morgan, and Whole Foods Market. It also recommends Morningstar. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Arts-and-Entertainment Baby-Rooms Business-and-Finance Celebrity-Style Family-and-Relationships Having-a-Baby Home-and-Garden Home-Decorating Interior-Design Lighting-Design Room-Decorating Visual-Arts

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After the scandal: Congress now banks like the rest of us By Holden Lewis • Bankrate.com "Just running out to the bank" isn't what it used to be for our elected representatives in Washington. Times have changed.Before the Angry White Males of 1994 and the Soccer Moms of 1996, another breed of constituent terrorized Washington briefly in 1992: Regular Folks Who Pay NSF Charges When We Bounce a Check at the Bank. We were mad as hornets and looking for blood because of something you might remember -- the so-called House Bank Scandal in the spring of 1992.Some members of the U.S. House of Representatives were found to have written dozens or hundreds of checks for insufficient funds, without having to pay overdraft charges or suffer direct hits on their credit histories.But today our elected representatives are -- at least when it comes to banking -- just like the rest of us!Their personal little corner of the banking world has been torn down and in its place stand two federal credit unions.And they can't push in line when they go there.Checks and balancesCongress perceived the '92 fiasco as less an ethical lapse than a bipartisan political emergency (members of both parties wrote bad checks). House leaders quickly named names, then waited for the press pack to get bored with the story and find a presidential candidate to gnaw on.Sure enough, the House scandal receded as the press latched onto juicier subjects in that presidential election year: Gennifer Flowers' claim of an affair with Bill Clinton, Ross Perot's charge that rogue Republicans tried to disrupt his daughter's wedding, George Bush's astonishment at seeing a supermarket bar-code scanner.But Congress learned a lesson: get out of the unregulated, unaudited banking business.Nowadays members of Congress have to get banking services from regulated institutions. Among them are the House and Senate credit unions, whose members include not only elected members of Congress and their families, but lobbyists, Congressional staffers, Capitol Police, Supreme Court justices, C-SPAN cameramen, employees of a veterinary clinic in McLean, Va., and assorted others.Newly elected members of Congress who move to Washington expecting special privileges from their credit union would be disappointed. They don't get to cut ahead in line, and they don't get breaks on fees and interest rates, which are unremarkable when compared with other credit unions."Everybody's treated just like any other member," says Bob Hess, president of the Wright Patman Congressional Federal Credit Union.The Wright Patman credit union (named after a Texas congressman who championed the Federal Credit Union Act in 1934) is for members of the House and the aforementioned staffers, police, camera operators and veterinary assistants. The U.S. Senate Federal Credit Union serves members and staffers of that august body, as well as employees of the Supreme Court and the General Accounting Office, workers at a daycare center called Tiny Findings, and others.All customers are created equalThe two credit unions are proudly egalitarian.There are no exclusively printed checks just for House and Senate members, no special rules. Members of Congress have to wait just as long as everyone else for deposits to be credited to their accounts and they pay the same fees, charges and interest rates."I doubt that they would ask for any special privileges. It's never been asked of me," says Jerry L. Roley, president and CEO of the Senate credit union. "As a credit union, everybody's supposed to be treated equally."Says Hess: "It's in their best interest and in our best interest that they're treated just like everyone else in the credit union."Translation: A big political stink would ensue if politicians got special privileges, and federal regulators might not look too kindly on the practice, either.As for those NSF charges: A bounced check carries a $20 fee. But the credit unions encourage their members to apply for overdraft protection that transfers money from a savings account or taps into a line of credit.In other words, the House and Senate credit unions operate like any other credit union. Our elected representatives don't get huge interest rates on deposits or pay minuscule fees. Just like us, they earn about average interest and pay about average fees when they bank these days at the House credit union, which boasts 43,000 account holders or the 27,000-strong Senate credit union.Managers of both credit unions exercise discretion. Hess says he doesn't even know how many members of the House have accounts at the credit union, and he wouldn't dream of identifying any by name. Likewise with Roley, who doesn't know how many senators belong to his credit union but believes that a majority do.The 1789 treehouse clubThe Senate credit union was born in the 1930s and the House credit union was founded in the 1950s. They haven't existed nearly as long as the Office of the House Sergeant at Arms, established in 1789.For a long time, that office operated what was commonly referred to as the House Bank, which wasn't really a bank. It was more like a treehouse boys' club that allows members to raid the ol' cigar box where dues are kept so long as they intend to put the money back someday.The House Bank was really a collection of accounts minded by the chamber's Sergeant at Arms. Members' paychecks were deposited into these accounts. Although the Sergeant at Arms had no bank charter, members could write checks on their accounts.In the 1992 scandal, at least two dozen House members took advantage by routinely writing overdrafts in large amounts. Checks should have been bouncing like balls at the French Open, but the Office of the Sergeant at Arms covered overdrafts for free, with no penalty.When the public caught wind of the practice, House leaders scrambled to control the damage. Jack Russ, the sergeant at arms, resigned and later spent a stretch in prison for wire fraud and filing false financial reports. A former House member, Mary Rose Oakar, was indicted on a number of counts, including one of writing a $16,000 hot check on her House Bank account. She pleaded guilty to a misdemeanor count of funneling that money through fake donors.Ironically, she deposited the check in her account at the Wright Patman Congressional Federal Credit Union. The credit union, which did nothing wrong, cooperated with investigators.advertisementRelated Links:Hacker attack! Could bank hackers steal your money?The 10 largest banks in the worldDoes anyone still keep 'banker's hours'?Related Articles:What's 'account abuse'?Your bank was liquidated?Earn more interest safely Connect with Holden Lewis on Google+. Bankrate.com's editorial, corrections policy Posted: Feb. 22, 2000 Connect with us Checking Saving Rates Averages 7 crucial facts about FHA loans 5 dumb car-leasing mistakes to avoid 7 signs that the house flip is a flopCeleb house sold: LeBron JamesThe 10 worst cars to own advertisementAsk Dr. DonUse bonds for school, avoid tax?Dear Dr. Don, This is a bad news, good news situation that I'm asking about. I just received several Series EE and Series I savings bonds. I am the so-called payable-on-death beneficiary on the bonds. My mom, who purchased... Read moreadvertisement

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Jesus is the truth. Jesus showed us a grand conspiracy, through the timing of his death. As Jesus travelled from village to village, spreading his wisdoms, as a messenger of God, he also had a climax to the story, which is his death. Not how he died, but why and when. Keep in mind, Jesus walked and preached for a period of years. It wasn't until the incident in the Temple, where he was shortly after arrested. 12Jesus entered the temple area and drove out all who were buying and selling there. He overturned the tables of the money changers and the benches of those selling doves. 13"It is written," he said to them, " 'My house will be called a house of prayer,'[a] but you are making it a 'den of robbers.'[b]" Now we can probably all agree that this was against the making of money off of people vulnerabilities to God. But what Jesus emphasized here was the <b>money changers</b>. Most people don't realize what the money changers did. They tooks Ceasars money, and gave Church minted money back, and would get to keep a cut of that exchange. The church sold this idea by saying that Ceasars money wasn't acceptable to God, but the Templars money was. This was the beginning of the banking system, which was later picked up by the Knights Templar. Today, it is perpetuated by the Knights of Malta, of which the Queen of England is the current head of. She controls the 10 horned beast, or the G10 (keep in mind, the bible says the beast has 10 horns, and seven heads. Not 10 horns per head) The seven heads will be adressed later. in September 1999 Finance Ministers and central bank Governors of the Group of Ten asked their Deputies to conduct a study of financial consolidation and its potential effects. This Report presents the results of that study. Source: Group of Ten - Consolidation in the Financial Sector Notice how the study was started exactly a year before 9/11. Coincedence? Who exactly is the G10? The Group of Ten or G10 refers to the group of countries that have agreed to participate in the General Arrangements to Borrow (GAB). The GAB was established in 1962, when the governments of eight International Monetary Fund (IMF) members—Belgium, Canada, France, Italy, Japan, the Netherlands, the United Kingdom, and the United States—and the central banks of two others, Germany and Sweden, agreed to make resources available to the IMF for drawings by participants, and, under certain circumstances, for drawings by nonparticipants. Source: Group of Ten (economic - Wikipedia, the free encyclopedia) Notice how they were formed 3 years after the Queen took power in 1959. Now, the General Agreements to Borrow (GAB) is best defined as Special arrangement under which several industrialised countries stand ready to provide substantial temporary loans to the IMF to allow it to lend extra resources to countries to arrest crises which risk impairing the international monetary system. Source: BWP Glossary: General Agreement to Borrow But guess who the new player is on the field? Saudi Arabia. Pursuant to Article VII, Section 1 of the Articles of Agreement, the Managing Director is authorized to send to the Minister of Finance of Saudi Arabia a letter as set forth in the attachment to SM/02/369, proposing a further renewal, for a period of five years from December 26, 2003, of the 1983 borrowing agreement with Saudi Arabia in association with the General Arrangement to Borrow. Source: General Arrangements To Borrow-Borrowing Agreement Between Saudi Arabia and Fund-Renewal 12907-(02/122)) We are at the end of the dominoe effect. Last edited by stompk : 02-25-2008 at 07:45 AM. Re: Jesus is the truth. Powerful people who have resisted the money changers control, have died. 1963: President Kennedy issues dollar bills carrying a red seal, and called United States Note. A lot of people believe he was already printing his own debt free money and that is why he was killed, in much the same way as President Lincoln. However, these United States Notes carrying the red seal were merely a reissue of the Greenbacks introduced by President Lincoln. What could have been motive though, is that on June 4, President Kennedy signed Executive Order No. 11110 that returned to the United States government the power to issue currency, without going through the Federal Reserve. This order gave the Treasury the power to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury. This meant that for every ounce of silver in the United States Treasury's vault, the government could introduce new debt free money into circulation. Source: Daryl Bradford Smith The same year the G10 was formed. Now the 7 heads is the Seven Sisters, a group of Seven of the most powerful oil companies. The heads of the beast, which rises up out of the ocean, from oil drilling rigs. One man who did take OPEC seriously was the veteran lawyer-administrator JohnJay McCloy, who was then regarded as a kind of chairman of the American 'Establishment' (Richard Rovere: The American Establishment, New York, 1962, p. 11) and was to become the key figure in oil diplomacy. McCloy, then sixty-six, had moved effortlessly through the revolving doors of government and business. His origins were modest; he was born, as he liked to recall, on the wrong side of the tracks in Philadelphia, and worked his way up through Harvard Law School. Patient, philosophical and humorous, he was a natural mediator, and before long he was a top lawyer in Wall Street, and a confidant of the Rockefellers. During the war he was Assistant Secretary of War, and he had been High Commissioner for Germany, President of the World Bank, and Chairman of the Chase Manhattan. When President Kennedy took office in January 1961 McCloy advised him on such questions as arms control, security, defence and Germany. At the same time he was practising as a very highly-paid lawyer, in the prestigious firm of Milbank, Tweed, Hadley and McCloy, and from that office, it later transpired, he represented the anti-trust interests of all seven of the seven sisters (Multinational Hearings: Part 6, p. 290): 'My job,' as he described it to me later, 'was to keep 'em out of jail.' In the midst of a world of conflicting and disconnected interests, McCloy appeared as part of that discreet 'supra-government' which remains while Presidents come and go, and it was natural that Kennedy should turn to him for advice on oil, too. Kennedy was concerned about a Middle East confrontation with the Russians after his talk with Krushchev in Vienna in June 1961. He talked to McCloy who then warned Kennedy about the possible consequences of OPEC: if OPEC were to succeed in joint action, he said, it might be necessary for the oil companies on their side to be given authority for collective bargaining. Kennedy 'right then and there' arranged for McCloy to see his brother Robert, the Attorney-General, to whom McCloy repeated the warning. Robert Kennedy assured him that, if and when the companies contemplated joint action, he would be glad to discuss the possibility. McCloy thereafter made it his business to call on each successive Attorney-General, to repeat the warning: first to Katzenbach, then to Clark, then to Mitchell; though it was a decade before the expected eventuality arose. (Multinational Hearings: Part 5, PP. 2.55-7.) The principle was established: that for the sake of security of oil supplies and for reasons of foreign policy, the anti-trust laws would be waived again Source: The Seven Sisters - 8 The number of the name of the beast is your credit score, which their average is 666. That is why the bible says you have to understand numbers. An average is the focus point of a group of numbers. This is why you don't have a score between 0-100. It is a way for the anti-christs to subliminally mock God. Jesus knew this, and said he would send the Parakletos ahead of his second coming. A parakletos is one who defends the law. (Like a lawyer, but without the desire for monetary gain) Ron Paul could very well be that parakletos.

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You are hereHomeNewsroomNews Releases Newsroom Actions Resulting from Referrals to Federal and State Authorities Subscribe via RSS Subscribe via Email Follow us on Twitter News Release FINRA Investor Education Foundation and United Way Worldwide Announce Over $1.8 Million in Grants to Support Grassroots Financial Education Projects For Release: Monday, March 7, 2011 Contact(s): George Smaragdis, FINRA Foundation (202) 728-8988 Sal Fabens, United Way Worldwide(703) 836-7112, x401 WASHINGTON — The Financial Industry Regulatory Authority (FINRA) Investor Education Foundation and United Way Worldwide (UWW) have announced over $1.8 million in grants to 15 recipients as part of the Financial Education in Your Community initiative. Financial Education in Your Community, which is administered jointly by United Way Worldwide and the FINRA Investor Education Foundation, funds community-based financial education programs across the country, providing effective, unbiased financial education resources for hardworking individuals and families. The latest group of grantees marks the second year of this partnership, which awarded nearly $1.5 million to 12 grassroots projects in 2009. "We are proud to partner with United Way to provide support for community-based innovators who are developing effective approaches to financial education that can be leveraged in communities across the country," said FINRA Foundation President John Gannon. "These local organizations have a unique ability to provide low- and middle-income Americans with the information and support they need to make sound financial decisions and save for their long-term financial security." Two-year grants were competitively awarded to local United Ways and other non-profit community groups that will undertake projects to help identify best practices for providing working individuals and families with the information they need to take action toward increasing their financial stability. The projects leverage strategic partnerships and successful existing programs, and target a diverse group of clients from areas of the country that have been hit hard by the economy. In addition to funding, the Foundation is providing unbiased financial education materials and ongoing technical assistance. "United Way is committed to creating systemic changes that help working individuals and families achieve greater financial stability and independence," said Brian Gallagher, president and CEO of United Way Worldwide. "We are pleased that our partnership with the FINRA Investor Education Foundation will continue to provide critical information and resources to help navigate today's challenging economic climate". Grants were awarded to: Connecticut Association for Human Services, Hartford, Connecticut; $150,000; to partner with existing Volunteer Income Tax Assistance coalitions to provide access to financial education, financial coaching and asset building programs for 1,700 clients who qualify for the Earned Income Tax Credit. The project will focus on neighborhoods in Fairfield, New Haven and Litchfield counties, where 40 percent or more of the population qualifies for the refundable tax credit. Green Mountain United Way, Montpelier, Vermont; $149,963; to mobilize CASH Coalition partners to create lasting change in the availability of financial education for the residents of six rural Vermont counties. Partners will conduct train-the-professional workshops for local social service agency staff, and provide a variety of workplace-based and publicly available financial education workshops. The project will be supported by a comprehensive social marketing campaign. Maine Centers for Women, Work & Community, Augusta, Maine; $125,000; to add modules on investing and retirement planning to their basic money management curriculum, integrate financial planning and investing skills as core competencies in their workforce development programs, and create more effective marketing and promotional tools to support their work. Montana State University Extension, Bozeman, Montana; $31,125; to provide an education series on basic money management, investments, retirement planning and estate planning for employees of MSU satellite campuses and other working Montanans. Sessions will be offered in-person in Bozeman, and as "live webinars" to rural host locations and individuals. Sessions will be archived online to accommodate viewing at times that are convenient for participants unable to attend the live webinars. Santa Cruz Community Ventures, Santa Cruz, California; $150,000; to collaborate with a coalition of local partners to expand the Economic Justice Project—a social service model integrating financial and consumer education with legal and other support services—to help 2,000 low- to moderate-income Hispanic adults improve their financial and economic prospects. Step Up Savannah, Savannah, Georgia; $150,000; to build on a successful pilot effort to integrate financial education classes at employer sites from the hospitality, healthcare, warehousing and government sectors, and to design a new referral system to steer individuals from employer programs to neighborhood Centers for Working Families for more individualized assistance. United Way of Miami Dade Center for Financial Stability, Miami, Florida; $150,000; to reach out to under-employed and un-employed individuals and families in Miami-Dade County through two South Florida Workforce offices, tax preparation sites and local schools. The program will provide cross-training for agency volunteers and staff to enable them to provide basic education for the families they serve, and the ability to refer clients to the Center for more comprehensive counseling and coaching. United Way for Southeastern Michigan, Detroit, Michigan; $138,600; to collaborate with the Detroit Local Initiatives Support Corporation to support a network of financial coaches working in low-income communities in and around Detroit to assist individual families with understanding and overcoming the barriers to building wealth. United Way of Chittenden County, South Burlington, Vermont; $143,594; to lead a coalition of community partners in developing and testing two on-site workplace-based financial and investor education programs at 18 sites. This project builds on an existing relationship with employers through the Working Bridges project, which develops and pilots innovative strategies to improve the retention, promotion and financial stability of their employees. United Way of Greater Chattanooga, Chattanooga, Tennessee; $150,000; to provide financial education training for the staff and leadership of churches, non-profit agencies and community partners that provide financial assistance to low and moderate income individuals and families, provide trainers for "lunch and learn" sessions sponsored by local non-profit agencies and their clients, provide one-on-one debt reduction counseling and financial coaching for clients referred by partner non-profits who have received training, and undertake marketing efforts to reach outlying rural counties as well as targeted urban neighborhoods. United Way of Greater Kansas City, Kansas City, Missouri; $150,000; to collaborate with five service providers to develop a model for integrating financial education into services for homeless or near-homeless young adults, 16-24 years of age, who are either employed or have a stable source of income. One outcome of the project will be a report on lessons-learned and best practices that will be shared with other organizations that serve at-risk young people. United Way of Marion County, Ocala, Florida; $19,564; to conduct a two-year campaign to break down the barriers to participation in the Marion County Prosperity Campaign by Spanish-speaking residents in rural areas of the county. The project will emphasize free tax assistance for low-income Spanish-speaking clients and will provide Spanish-language Money Smart workshops. The project will be supported by a comprehensive social marketing campaign. United Way of Tampa Bay, Tampa, Florida; $45,000; to address the pervasive use of tax refund anticipation loans in two low-income neighborhoods in the Tampa Bay area through a combination of neighbor-to-neighbor outreach, classroom education, individualized financial coaching and a social marketing campaign. United Way of Tucson and Southern Arizona; Tucson, Arizona; $115,851; to build on the success of its Prosperity Center model by helping communities provide financial coaching and asset-building opportunities for low-income individuals and families through a pilot Prosperity Neighborhoods program. United Way of West Central Mississippi; Vicksburg, Mississippi; $149,625; to partner with local community groups in the lower Delta region to design and provide a sustainable basic money management education program for low-income citizens. The FINRA Investor Education Foundation is the largest foundation in the U.S. dedicated to investor education. Its mission is to provide investors with high quality, easily accessible information and tools to better understand the markets and the basic principles of saving and investing. To further this mission, the Foundation awards grants to fund educational programs and research aimed at segments of the investing public who could benefit from additional resources. Since inception, the FINRA Foundation has approved nearly $50 million in financial education and investor protection initiatives through a combination of grants and targeted projects. For details about grant programs and other FINRA Foundation initiatives, visit www.finrafoundation.org. FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing businesses in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation. FINRA registers and educates industry participants, examines securities firms, writes and enforces rules and federal securities laws, educates the investing public and provides trade reporting and other industry utilities. FINRA also administers the largest dispute resolution forum for investors and registered firms. For more information, please visit www.finra.org. United Way is a worldwide network in 40 countries and territories, including nearly 1,300 local organizations in the U.S. It advances the common good, creating opportunities for a better life for all by focusing on the three key building blocks of education, income and health. United Way recruits people and organizations who bring the passion, expertise and resources needed to get things done. LIVE UNITED is a call to action for everyone to become a part of the change. For more information about United Way, please visit: LIVEUNITED.org. Securities Helpline for Seniors™

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About the FSB About the FSB Organisational Structure and Governance Information about governing statutes of the FSB and how it is organised and managed. Message From Mark Carney, Chair of the FSB I am pleased to introduce the Financial Stability Board’s redesigned website. What We Do Vulnerabilities Assessment The FSB monitors and assesses vulnerabilities affecting the global financial system and proposes actions needed to address them. In addition, it monitors and advises on market and systemic developments, and their implications for regulatory policy. Policy Development and Coordination Building Resilient Financial Institutions Addressing SIFIs Effective Resolution Regimes and Policies More Effective Supervision Making Derivatives Markets Safer Transforming Shadow Banking Additional Policy Areas Implementation Monitoring Progress Reports to the G20 Monitoring of Priority Areas Monitoring of Other Areas Initiative on Cooperation and Information Exchange Compendium of Standards Key Standards for Sound Financial Systems Publications Browse All Publications Peer Review Reports Reports to the G20 Consultation Documents Responses to Consultation Chair’s letter to the G20 Finance Ministers and Central Bank Governors Reforming Major Interest Rate Benchmarks Proposed Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities See More Global Shadow Banking Monitoring Report 2015 Fifth annual monitoring exercise to assess global trends and risks of the shadow banking system, accompanied by a comprehensive dataset. Press Browse All Press FSB Chair updates G20 Finance Ministers and Central Bank Governors on progress in advancing the FSB’s 2016 priorities Meeting of the Financial Stability Board in Chengdu on 21 July FSB publishes progress report on implementation of recommendations to reform major interest rate benchmarks FSB publishes Proposed Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities See More FSB Chair’s Q&A session at the press briefing in Basel ahead of the 2015 G20 Leaders’ Summit in Antalya, Turkey Mark Carney, Chair of the FSB, gave a press conference on the day of the release of his letter to the G20. At the conference the Chair explained the key features of the newly-issued final standard for Total Loss-Absorbing Capacity (TLAC) and described the main messages from the FSB’s first annual implementation report. FSB to establish Task Force on Climate-related Financial Disclosures Press enquiries:+41 61 280 [email protected] Ref no: 91/2015 The Financial Stability Board (FSB) announced today it is establishing an industry-led disclosure task force on climate-related financial risks under the chairmanship of Michael R. Bloomberg. The Task Force on Climate-related Financial Disclosures (TCFD) will develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to lenders, insurers, investors and other stakeholders. Speaking at the COP21 Paris Climate Change Conference Mark Carney, FSB Chair, said “The FSB is asking the Task Force on Climate-related Financial Disclosures to make recommendations for consistent company disclosures that will help financial market participants understand their climate-related risks. Access to high quality financial information will allow market participants and policymakers to understand and better manage those risks, which are likely to grow with time. Michael’s experience working on climate change issues, his unparalleled track record of execution in a broad range of fields and his lifelong commitment to open and transparent financial markets make him the ideal leader for the Task Force.” The Task Force will consider the physical, liability and transition risks associated with climate change and what constitutes effective financial disclosures in this area. It will seek to develop a set of recommendations for consistent, comparable, reliable, clear and efficient climate-related disclosures, as set out in the FSB’s proposal in November. The wide range of existing disclosure schemes relating to climate or sustainability highlights the need for companies and relevant stakeholders to reach a consensus on the characteristics of effective disclosures and examples of good practices. In doing so, the industry-led Task Force will take account of the work of other groups related to effective disclosures. Speaking about his role, Michael R. Bloomberg said “It’s critical that industries and investors understand the risks posed by climate change, but currently there is too little transparency about those risks. When Governor Carney laid out the idea for a Task Force on Climate-related Financial Disclosures, I offered him my full support to help make it a success. While the business and finance communities are already playing a leading role on climate change, through investments in technological innovation and clean energy, this Task Force will accelerate that activity by increasing transparency. And in doing so, it will help make markets more efficient, and economies more stable and resilient.” The Task Force will conduct its work in two stages. During the first stage, the Task Force will consist of about 10 individuals, who will determine the scope and high-level objectives for its work. It is expected that this first stage will be completed by end-March 2016. During the second stage, the Task Force’s work is likely to be expanded to include up to 30 individuals, focused on delivering specific recommendations for voluntary disclosure principles and leading practices, if appropriate, with a view to completing its work by end-2016. As part of its work the Task Force will conduct public outreach. In similar fashion to the Enhanced Disclosure Task Force (EDTF), an industry-led group that was established by the FSB in 2012 to make recommendations on financial risk disclosures for banks, the Task Force will comprise senior technical experts from firms that are the preparers and users of company risk disclosures, as well as risk analysts. The members of the Task Force will be private-sector individuals drawn from financial and non-financial companies across a broad range of countries within the FSB’s membership. Mark Carney and Michael R. Bloomberg will discuss the Task Force at the Paris Climate Change Conference. The discussion will be available as a live webcast and recording on the COP21 website. In April 2015, G20 Finance Ministers and Central Bank Governors asked the FSB “to convene public- and private- sector participants to review how the financial sector can take account of climate-related issues”. G20 Leaders, in their Antalya Summit communiqué in November 2015 asked the FSB to continue to engage with public- and private- sector participants on this subject. Michael R. Bloomberg is the United Nations Secretary-General’s Special Envoy for Cities and Climate Change, Founder, Bloomberg LP and Bloomberg Philanthropies and was the 108th Mayor of the City of New York. Details on the full membership of the Task Force and its terms of reference will be released later in December. The FSB will publish periodic updates on the work of the Task Force on its website. The FSB has been established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with 65 other jurisdictions through its six regional consultative groups. The FSB is chaired by Mark Carney, Governor of the Bank of England. Its Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements. Press, Press Releases FSB Policy Area(s): Climate, Disclosure FSB proposes creation of disclosure task force on climate-related risks FSB sets out proposal to the G20 for creation of industry-led task force to consider climate change risk. Organisation and Governance Member Jurisdictions International Financial Institutions Standard-Setting and Other Bodies Connect with us Twitter Flickr RSS Feeds Email Alerts Copyright © 2016 | Financial Stability Board

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Hudsonite wins business award Hudsonite winsbusiness awardBill Michael of Hudson has been named the 2012 Franchise Source Brands International Regional Developer of the Year for his outstanding achievements during the past year. He was presented the award at the recent FSBI Annual Conference in Ft. Lauderdale, Fla., for his excellence in growing FSBI's AdviCoach brand throughout five key market areas in the Midwest, including Ohio, Michigan, Wisconsin, Illinois and Minnesota."Bill has been with us a long time and he continues to go above and beyond in exceeding expectations," said Brian Miller, chief operating officer of AdviCoach. "His experience in the industry is incomparable and he knows what it takes to help clients take their business to the next level, or what we're calling Your Business 2.0."Michael brings strong business acumen to his work as a regional developer for AdviCoach and its sister brand The Entrepreneur's Source, where he recruits new franchisees and works with them to ramp-up their business and manage their region. "I am really excited about the new tools and systems we have implemented for the brand and our progress over the last year with AdviCoach," said Michael, who has previously received several of the company's annual awards, including Region of the Year and the Terry Powell Leadership Award. "Our procedures get the coaches excited, which makes it easier for them to bring on more clients. I look forward to what's on the horizon and mirroring this success next year. My main goal is to keep everyone optimistic and energized and help them work through challenges they face."Call Michael at 330-650-9477 or visit www.bmichael.advicoach.com.

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Overhauling the System Finance & Development, September 2009, Volume 46, Number 3 Randall Dodd PDF version United States proposes most radical reform of financial regulation since the New Deal THE global financial crisis has had a devastating impact on major financial markets, undermining the solvency of firms, disrupting trading liquidity and forcing a rethinking of prudential regulation. The crisis has made these markets candidates for radical regulatory change. Whereas the regulatory focus had been on the soundness of individual banks, the crisis has shown the need to deal with the financial system as a whole, and such a systemic approach requires the proper regulation of the markets and of the transactions that reflect the interconnections between banks and other financial firms. The change in approach is reflected in proposed regulatory standards from the Financial Stability Board, the International Organization of Securities Commissions, and such private organizations as the Group of 30 and the Institute of International Finance. Recent proposals from the U.S. Treasury Department reflect similarly fundamental changes in the approach to financial market regulations. The proposals must still be drafted into legislation and approved by the U.S. Congress. But if legislators make few major changes, the Treasury proposals would become the first major overhaul of the U.S. financial system since the New Deal policies during the administration of President Franklin D. Roosevelt, when the world also faced a monumental economic crisis. New Deal reforms Over a seven-year period, starting in 1933, the United States reshaped the regulation of the market structures for banking, securities, derivatives, and mortgage and asset management (see box). New laws transformed the U.S. financial system from one plagued by fraud and frequent crises to one that set the world standard for stability, efficiency, and the ability to raise capital. Key New Deal financial regulatory laws 1933 – Glass-Steagall Act separated commercial from investment banking activities. Created the deposit insurance program and allowed greater branching by national banks. 1933 – Securities Act established disclosure requirements for issuing securities (stocks or bonds) on public securities markets and established prohibitions against securities fraud and manipulation. 1934 – Securities Exchange Act created the Securities and Exchange Commission and authorized it for rule making and enforcement. The Act extended federal regulation to secondary market trading in securities. It also established a system for self-regulation. 1935 – (Omnibus) Banking Act reformed governance of the Federal Reserve and broadened its powers. It established the modern version of the Board of Governors and the FOMC, and it expanded their authorities. It set collateralization rates (known as “haircuts”) and terms for emergency lending by reserve banks. 1936 – Commodity Exchange Act increased federal prohibitions against fraud and expanded them to manipulation. It also required that futures brokers be registered and keep records. It authorized speculative position limits and prohibited the trading of options on certain agricultural products. 1940 – Investment Company Act regulated companies that primarily invest in other companies such as mutual funds. It required registration and disclosure, including transactions between managers and any affiliate and set rules on corporate governance regarding executive management, board of directors, and trustees. 1940 – Investment Advisers Act required advisers to register, report, and keep records of their client relations. It also prohibited certain transactions and fee arrangements on the basis of conflict of interest. The key pieces of legislation ranged across many issues and the various financial sectors, but they are best understood when collected into categories that reflect their basic insights into markets: systemic stability, regulatory reorganization, transparency, enhancing market integrity, and reducing conflicts of interest. Systemic stability. The Glass-Steagall Act separated traditional commercial banking activities—essentially lending and deposit-taking—from those conducted by securities broker-dealers—such as underwriting, acting as a dealer (market makers), and investing in corporate stocks and bonds. As a result, the exposures of banks to cyclical fluctuations that affect securities were reduced, leaving banks more likely to be able to lend during recessions and recovery stages of the cycle. Other legislation required that certain commodity futures be traded on regulated exchanges and subjected trading in these markets to speculative position limits. The higher standard for margin (that is, collateral) at futures exchanges resulted in counterparty and market risks being more prudentially buffered against loss. The securities acts were also designed to reduce excess volatility and provide greater market stability. Reorganization. The Securities and Exchange Commission (SEC) was created to regulate and oversee securities markets and the asset management industry; the Federal Deposit Insurance Corporation (FDIC) was created to insure bank deposits. Substantial changes were made to the governance of the Federal Reserve System, including the make-up of the Board of Governors and the Federal Open Market Committee (FOMC). Transparency. Corporationsissuing securities in public markets were required to disclose the financial condition of their enterprises, and this was also applied to secondary market trading and to investment companies. Market integrity.Fraud and manipulation in banking, securities, and derivatives markets were prohibited, which strengthened the hands of investors and regulatory authorities. Conflicts of interest.These laws addressed many conflicts of interest in corporate governance and other investor areas such as asset management, especially mutual funds management. The Glass-Steagall Act also had the effect of preventing banks, which have non-public information about corporate borrowers, from trading for their own accounts in corporate securities markets. The system breaks down The financial stability spawned by the New Deal began to weaken in the 1980s as deregulatory measures and innovations created gaps that left many financial firms and activities outside or inadequately covered by the regulatory framework. The securitization process took off in the 1980s and many banks shifted their main business focus from traditional lending to issuing and trading securities and derivatives. And there were excesses and misuses of securitized products and derivatives. The meteoric rise of over-the-counter (OTC) derivatives markets generated enormous trading income, while shifting risks off balance sheets. That had the effect of reducing both capital requirements and other prudential constraints on risk taking. The expansive use of special purpose entities distorted the interpretation of a bank’s risk profile by allowing the institutions to keep some debts and risk exposures out of their consolidated financial statements. The U.S. Treasury response The U.S. Treasury Department recently released a reform proposal aimed at addr essing a wide array of problems in the regulatory treatment of financial firms and markets that have become apparent during the financial crisis. Included in the proposal is a call for international cooperation to raise global standards for financial regulation and supervision. The proposal reflects the profound changes in the approach to regulation that have resulted from the financial crisis—retreating from the deregulation that began a quarter-century ago and instead harkening back to New Deal reforms. The new proposals can be understood along similar thematic lines. Systemic measures and prudential regulation.The proposed measures include improved capital standards and liquidity requirements for all regulated financial firms. This includes measures to address off-balance-sheet items such as derivatives and lines of credit, and unconsolidated items such as special purpose entities. New requirements for provisioning for credit losses and accounting methodologies are intended to avoid procyclicality—when financial behavior magnifies the direction that the economy is already taking. The proposals also seek to reduce incentives for excess risk taking by linking executive compensation to long-term performance. The Federal Reserve’s general authority would be expanded to include systemically important financial firms (called Tier 1 financial holding companies), based on size or interconnectedness. The Fed’s bank holding company oversight would be expanded to include owners of all federally insured depository firms—including previously exempt unitary thrifts and industrial loan banks. The Treasury is seeking comprehensive regulation of OTC derivatives markets, comparable to the regulatory treatment accorded other financial markets. It seeks to move standard OTC derivatives onto regulated exchanges. It would require all OTC derivatives trades to be cleared through a clearinghouse (sometimes called central counterparty)—which would become the counterparty to both sides of each trade—instead of the current bilateral clearing arrangements. It would also require higher collateral standards, including the use of initial margin, for all OTC derivatives trades to reduce the systemic threat from the buildup of large counterparty exposures. The proposal’s trade reporting requirements would also enhance the ability of regulators to conduct market surveillance and to detect and deter fraud and manipulation. Reorganization. The plan would create a new Financial Services Oversight Council to formalize information sharing and policy coordination among key regulatory authorities and resolve disputes over jurisdiction. The council would include the heads of the major federal financial regulators and be chaired by the Treasury Secretary and staffed by the Treasury Department. A new National Bank Supervisor would take over the duties of the Office of Thrift Supervision (thrifts will be rechartered as national banks) and the Office of Comptroller of the Currency, which previously regulated national banks. The plan also would create an independent Financial Services Protection Agency to protect retail customers and investors—including home mortgage borrowers—in the financial services marketplace. This would entail removing consumer protection authority from the Fed but not the SEC and Commodity Futures Trading Commission. A new National Office of Insurance, within the Department of Treasury, would coordinate the national insurance industry and its state-level regulation and supervision. The Federal Reserve would regulate the systemically important (Tier 1) financial holding companies and their subsidiaries and affiliates at home and abroad. It would have expanded authority to supervise and regulate all affiliates of bank holding companies and impose consolidated prudential regulation of financial holding companies. It would also have oversight of all systemically important payments, clearing, and settlement systems. The clearinghouses, now supervised by their respective regulator, would have access to the Fedwire (which electronically transfers payments between financial institutions), the discount window, and other Federal Reserve services. Price transparency. The efficiency advantages of system-wide price transparency have long been thwarted by the enormous OTC derivatives markets, where prices are not public. By requiring that all OTC derivatives transactions be reported to a registry (unless otherwise reported to a clearinghouse) transparency is enhanced. New requirements for reporting prices and volumes in OTC derivatives trades would radically change the ability of regulators to conduct market surveillance by observing once-hidden open positions and trading activities and improving the price discovery process. Better price discovery will make the trading process more competitive because end-users (non-dealers) will gain more information about the entire market. Disclosure. The 1933 and 1934 securities acts established requirements for disclosure of key financial information as a condition for issuing and trading corporate equity and debt securities. The National Housing Act of 1934 led to the creation of the conventional home mortgage contract, standardized loan documentation, and a secondary market for home mortgages. In a similar vein, the Treasury plan calls for the SEC to develop standardized documentation for securitization and enhanced disclosure requirements for the issuance and trading of securitized debt instruments. The lack of transparency and inadequate due diligence were important factors in the failure of the market for structured mortgage securities. The proposed measures appear designed to make information about the securitization structure and the underlying assets more accessible to facilitate greater due diligence on the part of investors. Market integrity. The plan calls for the managers of most hedge funds, private equity, venture capital, and other such private pools of capital to register with the SEC, and report and keep record of their activities. The level of reporting is designed to be sufficient to allow regulators to determine whether the investment pools have become so large, leveraged, or interconnected that they threaten systemic stability. Registration would help reduce the incidence of embezzlement and other fraud by screening managers. The position reporting requirements would address concerns about market manipulation, turbulence due to short selling, and the distorting effect of hedge funds investments on commodity prices. These measures should also help make markets more trustworthy, improve investor confidence, and raise the surveillance capacity of supervisory authorities. The Treasury plan also would reinstall anti-fraud and anti-manipulation prohibitions in OTC derivatives markets that were removed in a deregulation act in 2000. Conflicts of interest. The Treasury proposes to address an array of conflicted investor relations. Issuers of asset-backed securities will be required to retain a portion of credit risk to exert market discipline on underwriting and risk transference. Executive compensation schemes will be required to shift focus from short-term gains to long-term performance. Credit rating agencies will be required to disclose their business relations with issuers, including fees they collect. Investment advisors managing hedge fund and other private capital pools will be restricted from certain other activities. A new “New Deal” The reform proposals represent a fundamental shift from the laissez-faire emphasis on self-governing financial firms that prevailed prior to the crisis to one in which prudential measures are used to improve the conduct of financial markets and govern the externalities that arise from large-scale risk taking. They appear to follow the same economic wisdom as those from the New Deal that reshaped the financial markets following the 1929 market crash and ensuing bank failures. The reforms of the 1930s produced a strong record of success. That is a daunting benchmark of comparison to this modern sequel, but the Treasury proposal has two advantages New Deal reformers did not: lessons of the New Deal experience itself and knowledge that the regulatory framework will need to anticipate future innovations. Randall Dodd is Senior Financial Sector Expert in the IMF’s Monetary and Capital Markets Department. Archive of F&D Issues F&D on Facebook F&D welcomes comments and brief letters, a selection of which are posted under Letters to the Editor. Letters may be edited. Please send your letters to [email protected] F&D Magazine About F&D

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Business | THE VIEW FROM EUROPE Crisis forces rethink: What makes name brands valuable? by Jochen Legewie Forbes recently published its annual list of the world’s billionaires for 2008. The list has shrunk considerably since 2007, when 1,125 people were deemed to have a net worth above $1 billion. This time only around 793 made the cut. Bill Gates returned to the top of the list, with $40 billion in assets. Gates lost about $18 billion last year but still managed to overtake Warren Buffett, who lost $25 billion. These are colossal sums of money by any standard, more than what 1,000 average earners would make in their entire lifetimes together. Forbes also published a list of Japan’s billionaires (or rather, the 40 wealthiest people or families in Japan). But they haven’t quite reached the level of their international peers. The wealthiest is Fast Retailing President Tadashi Yanai, who has a net worth of over $6 billion, a far cry from the likes of Buffett, Gates, et al. What is interesting to note in both of these lists is not just how much money is in the hands of such few people, but the regional and global forces behind these concentrations of cash. Take Yanai for instance. He is the owner of Uniqlo, the apparel retailer that caters to the average working family’s needs. Sales increased recently and were up again by more than 4 percent in February. Another brand he runs is called g.u., which is priced even lower. Its latest product is ¥990 jeans. Although the economic upheavals are certainly one factor driving people to buy Uniqlo and g.u., a recent Nikkei survey suggests perhaps other factors are at work. In 2004, when asked whether they were attracted to high-end foreign brands, 51 percent of Japanese surveyed said yes. That number fell to 32 percent at the end of 2008, indicating that the glory days for luxury brands may soon be coming to an end — even in Japan. Indeed, in the same survey, although Britain’s Burberry was selected as the favorite brand, the runnerup was none other than Uniqlo. In fourth place was Muji, a brandless Japanese brand whose plain and simple products sell for considerably less than the likes of Gucci, Dior and the others. This sea change in Japanese tastes was reflected in the decision of fashion giant Louis Vuitton to cancel the opening of its flagship store in Tokyo’s Ginza district last December. Instead, down-market U.S. retailer Gap stepped in to fill the space. One conclusion that has been drawn is that Japanese consumers are gaining confidence and feel less of a compulsion to rely on big-name brands to make a fashion statement. In a similar vein, when examining Forbes’ list, the top names in Europe stand out for their somewhat humble origins. The richest European is Sweden’s Ingvar Kamprad, who is worth an estimated $22 billion. He is the creator of Ikea, a global brand based entirely on the premise of being affordable and stylish. It is quite easy to imagine someone buying Ikea furniture while dressed a Uniqlo ensemble. Going down the list we find Germany’s Albrecht brothers, who started the Aldi supermarket chain. Aldis, for those who don’t know, are run much in the mold of discount shops, where goods are displayed in the cardboard boxes they were shipped in and customer service is rock bottom. It is said that 90 percent of German households do some of their shopping in one of Aldi’s 4,000 stores. One of the reasons behind Aldi’s success is that even wealthy families shop there because they are attracted by its high-quality goods. The company is on an aggressive expansion campaign in the United States, where it plans to open 75 new stores in 2009. There have been doubts about whether they can compete with the likes of Wal-Mart, but others say upscale U.S. shoppers will take well to Aldi’s rather basic take on service. A similar story is making the rounds in France, where food discounter E.Leclerc recently claimed the highest market share among “hypermarches” (hypermarkets), successfully eating into the classical domain of Carrefour. Perhaps the sea change in brand preference we are seeing in Japan is not just a local phenomenon, but part of a broader global shift away from the high end and back to the basics. If this premise is correct, the Forbes list could make for interesting reading in predicting future business and consumer trends that could take hold in Japan and elsewhere around the globe. Jochen Legewie is president of German communications consultancy CNC Japan K.K. Business

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Malaysia Airports Well on Its Way in Helping Government Enhance Bumiputera Participation in Entrepreneurship and Commerce Kuala Lumpur, 18 June 2014 – In view of some recent news reports stating that Malaysia Airports Holdings Berhad (Malaysia Airports) is lagging in its role to help enhance bumiputera participation in entrepreneurship and commerce especially with regards to klia2, we are pleased to provide our track record and existing successes. Bumiputera participation among retail outlets at klia2 Terminal currently stands at 35%. By the end of 2014, this number will increase further to 38%. This increase will come from the designated corporate responsibility (CR) lots as well as from dedicated bumiputera lots. When compared to other popular retail complexes within the Klang Valley, these figures are among the highest as other malls only register on average, between 5 to 10% participation. There are 17 corporate responsibility outlets where five have been awarded to Bread & Batter, The Dough, Batik Hub, Mollydookers Coffee Bar and Eat at Joe. All of which are new bumiputera entrepreneurs. Another six will be awarded under the Bumiputera Entrepreneur Development Programme, a collaborative effort with the Ministry of Trade and Industry. Participants under this programme are still under evaluation and the selected proposals will be tabled for Board approval in July 2014. This program is geared towards ensuring that a competitive and equal platform is provided for participants and only the best few who submitted sound and sustainable business plans are selected from the many aspiring Bumiputera entrepreneurs. As this is a collaborative effort, Malaysia Airports ensures that MITI is fully apprised of each stage of the evaluation process. In answering the government’s call for Malaysia’s top 20 government-linked companies (GLCs) to participate in the Bumiputera Economic Empowerment Plan, Malaysia Airports work hand in hand with Unit Peneraju Agenda Bumiputera or TERAJU. According to Tan Sri Dato’ Sri Dr Wan Abdul Aziz Wan Abdullah, Chairman of Malaysia Airports, “We are proud that we have answered the government’s call to participate to help enhance bumiputera entrepreneurship and commerce. In developing klia2 as a commercial space, we have put in place a plan that was aimed at helping bumiputera companies increase their participation in the retail business. This plan spans over five years and we are exactly on target right now. By 2018, we expect to have at least 54% participation, if not more from bumiputera companies.” klia2 has allowed bumiputera companies to benefit not only in terms of business opportunities and growth, but also in building invaluable experience and track record for developing and operating a world-class mega terminal. As a public listed company, Malaysia Airports is objective in ensuring that we act in the best interest of the company to remain competitive and continue to enhance stakeholders' value. Advertisement

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Press Center/2011 News Releases/Public pension funds are recovering from Wall Street crisis Back to: Press Center / 2011 News Releases / Public pension funds are recovering from Wall Street crisis Public pension funds are recovering from Wall Street crisis NEA says Pew report distorts the real strength, durability of public pension funds WASHINGTON - April 26, 2011 - NEA President Dennis Van Roekel today urged elected officials and policymakers to make sure they have accurate and up-to-date information on the strength and viability of public employee pensions. Van Roekel said a report, “The Widening Gap: The Great Recession’s Impact on State Pension and Retiree Health Care Costs,” released today by the Pew Center on the States, may cause unnecessary alarm because the data do not reflect current market conditions. New research by the National Conference on Public Employee Retirement Systems (NCPERS) paints a much different, much more accurate, and far more positive picture. Based on the most recently reported data, public funds had an average one-year return of 13.5 percent. Funds participating in the study reported a 20-year average of 8.2 percent. “Despite a drop in asset levels, stemming from the devastating 2008 stock market crash, pension funds across the country are recovering,” Van Roekel said. “The Pew report is based on the 2008 and 2009 period, following the stock market crash, and the condition of anyone’s portfolio during that period would be dismal. The fact of the matter is that by the end of 2010, state and local government retirement systems were reporting strong investment returns, growing assets, and more than adequate funding levels to provide current and future public employees with the modest retirement benefits they were promised.” According to Van Roekel, the average pension benefit for educators is modest—approximately $21,000 a year. “I’m not an economist, but as a math teacher I do know numbers. Guaranteed pensions remain the most economical and efficient way to ensure that Americans who have worked all their lives remain financially secure and self-sufficient during their retirement years,” Van Roekel said. States and localities devote only a small percentage of their spending to pension funding. According to recent estimates by the National Association of State Retirement Administrators (NASRA), less than three percent of all state and local government spending was used to fund public pension benefits. Further, NASRA says this cost should be considered in the context of the well-documented economic benefits that pension benefits generate in every state in the nation. In most cases, pension funding shortfalls are the result of the market crash. Although the report's snapshot of plan funding cannot be taken as representative of the medium- or long-term outlook for pension plans, Pew is quite right to note that some state governments created the problem by deliberately failing to fund their pension plans. Van Roekel cautioned that elected officials and policymakers should make sure they are making decisions based on facts, not misinformation. “The truth is that public pension funds are not the cause of state budget crises—Wall Street greed is the real culprit,” Van Roekel said. The National Education Association is the nation’s largest professional employee organization, representing3.2 million elementary and secondary teachers, higher education faculty, education support professionals, school administrators, retired educators, and students preparing to become teachers. CONTACT: René Carter 202-822-7494, [email protected]

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Keeping an eye on complacency Ellen Davis 01 February 2007 Is complacency about anti-money laundering initiatives setting in at financial services firms globally? The results of the latest OpRisk & Compliance Intelligence survey, conducted with risk management and compliance consulting firm Protiviti, show that this may be the case. According to the results of the survey, 80% of respondents expect regulatory scrutiny of AML compliance to either slightly or dramatically decrease over the next 12 months. "I can't imagine anyone in the US saying that," says Carol Beaumier, a managing director at Protiviti in New York. Other jurisdictions "may be overly optimistic" as well, she adds. "We have so many new regulations around the globe." Beaumier may have a point. In the US, January saw an enforcement action for anti-money laundering violations against Sumitomo Mitsui Bank for gaps in its compliance and risk management controls around correspondent banking and US dollar funds transfer clearing operations. This came after a raft of enforcement actions in late December from the Federal Reserve on AML, including one against the Bank of Tokyo-Mitsubishi UFJ for deficiencies in the same areas. Another AML-focused enforcement action was taken out against Pakistan-headquartered Habib Bank for its US operations. US model risk rules put lions back in their cages Regulator of the year: Financial Action Task Force Iran deal takes sanctions compliance into unfamiliar territory And in the US, it wasn't just the Federal Reserve handing out the enforcement actions. The Financial Crimes Enforcement Network, Federal Deposit Insurance Corporation, and Florida Office of Financial Regulation assessed a civil money penalty of $800,000 against Florida-based Beach Bank in December for an inadequate AML programme. As a result of the US actions against Sumitomo and Bank of Tokyo-Mitsubishi, Japan's Financial Services Agency announced in late January that it would be tightening up its anti-money laundering rules. Also in Asia, Australia, after passing new AML rules, is stepping up its enforcement activity. In the UK, a new team to fight financial crime was launched in January, new AML legislation was introduced, and other initiatives are under way for 2007. And in the rest of Europe, the third Money Laundering Directive is being implemented over the course of 2007. Judging from all this activity, it seems there will be more regulatory pressure on money laundering compliance, not less. But the survey results seem to point to relative underinvestment in the anti-money laundering area. Some 31% of respondents said their AML compliance departments had stayed the same size over the past three years – contrary to an industry trend of substantial growth in AML teams. And 46% of respondents said their firms do not use an automated system for monitoring unusual or suspicious activity. Instead, they rely on manual checking. Also, 19% of respondents said the cost of their AML compliance programme had stayed the same over the past three years, while 18% said it had increased less than 10%. Questions on AML training also showed a lack of commitment among many of the respondents. Some 50% of employees in high-risk positions receive training only annually, and some 22% of contract or temporary workers never receive AML training at firms. Only 73% of respondents said new employees received AML training at hiring. Even more disturbingly, some 18% of respondents said they had not assessed the key AML risks in their firms for customers, and 16% hadn't performed an AML risk analysis for business lines. "How can you build an AML programme if you haven't identified the risks?" asks Beaumier. The reason behind the lack of enthusiasm for AML compliance may be a certain cynicism that has developed among financial institutions globally about the value of the suspicious activity reports and other data that they provide to law enforcement agencies. When asked if they believe that the value of the information provided to regulators and law enforcement agencies by financial services companies justifies the cost of AML compliance, some 37% said "no". Another 48% of respondents said they didn't believe that financial services companies could effectively detect terrorist financing. But Beaumier says firms should really consider investing more in their AML compliance programmes, and bring them up to the standard regulators are asking for at a minimum. She sites the case of one large financial services firm that had to spend more than $50 million to fix its anti-money laundering programme after it was hit with an enforcement action. She says firms tend to add on people to help bolster their AML programmes, and these people are being used to manually do tasks that technology products could perform more inexpensively and with greater accuracy. This includes chores such as comparing client names against various government lists, and performing client account remediation. The market for trained experts to perform many of these tasks is relatively tight, so she said she is aware of many firms that are doing all of their AML monitoring without technology, and with relatively untrained staff. Indeed, monitoring and investigating ranked as the top challenge for firms responding to the survey. The constantly changing regulatory requirements and expectations took second place – hardly a surprise, given the flow of new rules that have emerged in January alone. Use of technology ranked third in the list of challenges, with the cost of compliance taking fourth place. The ability to recruit and retain trained people came in as the fifth challenge, while communication with law enforcement and regulatory bodies ranked sixth. Home-host issues took the bottom of the challenges ranking – this differs from other areas of regulatory activity such as Basel II and the Markets in Financial Instruments Directive, where home-host is one of the top concerns of financial services firms. This may be because there is a relatively high level of co-operation among national bodies in the fight against money laundering through such organisations as the Financial Action Task Force. In fact, some 66% of respondents said their primary regulator is consistent in the way it enforces AML compliance. Only 18% said their regulator wasn't consistent – again this differs from other regulatory initiatives, such as Basel II, where regulatory consistency has proved to be a major sticking point in such areas as model validation and the 'use test'. However, despite the amount of regulatory activity focused on AML, the survey showed that many AML departments are still focused on the more passive aspects of compliance with government regulations. While 90% of respondents said their departments were responsible for the development of AML policies and procedures, only 75% said they were responsible for monitoring for unusual or suspicious activity. Just 63% said they oversaw compliance with government sanctions programmes. Certainly, firms instinctively recognise the magnitude of the compliance challenge within the anti-money laundering area. While 30% said it constituted an "average" compliance challenge for their firm, some 55% rated it above average. And of those who said their firm didn't use technology to monitor unusual or suspicious activity, some 68% indicated that they were planning on making an investment in technology over the next two years. Beaumier feels that the AML space will simply continue to grow and develop over the next two or three years as firms are forced to get more serious as a result of regulatory activities. While banks grumble about "regulation through enforcement actions", it seems clear that it is often the prospect of the threat of enforcement actions that motivate firms to invest in resources and technology in this area. OR&C Money laundering reporting officer (MLRO) Protiviti Compliance technology Suspicious activity reports (SARs) Basel II

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Beard Miller Co. announces merger with Parente Randolph LLC Two of the top 40 accounting and consulting firms in the United States -- Parente Randolph LLC and Beard Miller Co. -- announced Monday they intend to merge. The two firms said the merger will create the top regional certified public accounting firm in the Northeast, with more than 170 partners and 1,200 employees throughout Delaware, Maryland, New Jersey, New York, Pennsylvania and Texas. The name and logo of the new firm will be announced at the close of the merger, which is expected to occur in the fourth quarter. Lamar Stoltzfus, chairman and chief executive officer of Beard Miller, will serve as chairman of the new firm. Bob Ciaruffoli, chairman and CEO of Parente Randolph, will serve as CEO of the new firm. Beard Miller has 13 offices, including one at 115 Solar St. in Syracuse. Parente Randolph has 15 offices, none in Syracuse. Comments

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Schwab Names 3 RIA Firms as Impact Award Winners for 2012 Seventh annual awards go to Foster Group; Sullivan, Bruyette, Speros & Blayney; and Glassman Wealth Schwab's Bernie Clark (far left) standing with Foster Group, the Best-in-Business award winners. (Photo: Orange Photography) Schwab announced Thursday that three RIA firms were the winners of the custodian's seventh annual Impact Awards. The three recipients were Foster Group Inc.; Sullivan, Bruyette, Speros & Blayney; and Glassman Wealth Services. The awards, which include a $15,000 donation in the name of each winning firm to each firm’s charities of their choice and separate donations of $1,000 a to each judges’ charity of choice, presented by Schwab CEO Walt Bettinger and Schwab Advisor Services’ head Bernie Clark at Schwab Impact 2012 in Chicago. The three winners were chosen by a panel of judges including Julie Littlechild, president of Advisor Impact; Sean Walters, executive director and CEO of IMCA; and Thomas Robinson, managing director for education at the CFA Institute. The Best-in-Business Schwab Impact Award was presented to Foster Group Inc., based in West Des Moines, Iowa. Foster is an RIA firm with more than $1.1 billion in AUM and 850 clients in 38 states. It was founded in 1989 by Jerry Foster. "There are a couple of reasons," Foster said, when asked by AdvisorOne about the win. "We had a commitment to succession planning early on, one that's combined with a culture that is employee-oriented and focused on leadership development. We also have a commitment to technology, and have spun off our technology platform into a separate company which other advisors are now using. Lastly, we have great strategic relationships; for instance, we're part of the Zero Alpha Group." Winning the inaugural Trailblazer award was the McLean, Va.-based Sullivan, Bruyette, Speros & Blayney. The RIA firm, acquired by Harris Bank in 2003 and part of BMO Private Bank, has more than $2 billion in AUM. The award was created, Schwab said, “to recognize a firm that combines an entrepreneurial spirit with a drive to advance the RIA industry’s interests.” In addition to being a highly respected wealth management firm, Sullivan, Bruyette, Speros & Blayney also encourages its staff to become involved in philanthropic and community activities and to take leadership roles in advisor associations. Co-founder Greg Sullivan, who serves as president of SBSB, was formerly president of the IAFP, one of the predecessor organizations that formed the Financial Planning Association, and is a founder of the Alpha Group, the respected think tank of advisors and advisor partners. Managing Director Mark Johannessen served as president of FPA. The Pacesetter Impact Award, designed to recognize fast-growing younger firms, was presented to Glassman Wealth Services, also based in McLean, Va. Founded by Barry Glassman in 2009, Glassman Wealth has about $530 million in UAM, representing a 60% growth rate since inception. As one of its core tenets, the firm believes that advisory firms and their employees can learn lessons from other industries. Glassman described some of the characteristics of his firm and its growth plans as part of an advisor roundtable article that appeared in the October issue of Investment Advisor. Schwab had previously awarded a separate “Best-in-Tech” Impact award, but said that excellence in technology was shared by several of the recipients of this year’s Impact awards. Check out complete coverage of Schwab Impact 2012 at AdvisorOne, including: Chuck Schwab: We’ll Go Over Cliff, but Let’s Move On Investing Outlook: ‘Sunny With a Chance of Hurricanes’ Marketing & Technology Financial Planning Association Bernie Clark CFA Institute Walt Bettinger

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Market Flourishes for Investing in Disaster Risk BNY Mellon predicts catastrophe bond sector will reach $50 billion by 2018 House destroyed in Hurricane Sandy (Photo: AP) Catastrophe bonds are growing at their fastest pace in six years, and outstanding issues could reach $50 billion by 2018, up from their current $19 billion, according to BNY Mellon. Cat bonds are risk-linked securities that transfer a specified set of risks associated with hurricanes or earthquakes from an insurer or a nation state to investors. In a new report, BNY Mellon estimated that the total amount of insurance-linked securities, of which cat bonds are a subset, could reach $150 billion by the end of 2018. Insurance-linked securities as an asset class will experience a compound annual growth rate of 25%, the report said. Cat bonds as a subset will grow by 20%, compared with 30% growth over the past nine years. In a statement, BNY Mellon acknowledged that it acted as a trustee and paying agent, and collateral agent on cat bonds. Last year, it was trustee on 68% of all cat bonds. Hedge funds and private equity initially dominated the cat bond investor base, according to the report. Now, more long-term investors such as pension funds are buying the products. “Investors are attracted by the high yields in the current low-interest rate environment,” Dean Fletcher, head of EMEA Corporate Trust at BNY Mellon, said in the statement. “Cat bonds also offer investors a chance to diversify their portfolios because of the low correlation of risk between catastrophic events and broader financial markets.” Natural catastrophes across the globe cost the insurance industry approximately $13 billion in the first half of this year, with overall economic losses estimated at some $45 billion. As a result, the industry covered less than one third of natural catastrophes, leaving governments and society on the hook for $32 billion of rebuilding costs. Climate change and urbanization will likely exacerbate future losses from catastrophes. “Insurers and the capital markets can help reduce the disaster gap by working together with big data to deploy new capital to cover new perils in new regions,” BNY Mellon’s international head of insurance Paul Traynor said in the statement. “This will reduce the cost of rebuilding for governments and provide a positive contribution to society.” The report suggested that a combination of legacy and predictive big data models will produce more robust risk modeling for cat bonds. It said these models should include unstructured data, fast changing data and data generated from an increasing number of sensors, mobile devices and social media applications. Check out Climate Change Is Today’s Problem on ThinkAdvisor. Also in Fixed Income Goldman Sachs Profit Jumps 74% on Bond Trading: Q2 Earnings Sell Oppenheimer Muni Funds on Puerto Rico Risk, Ameriprise Says More Fixed Income

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| REIT.com Skip to main content Industrial REITs Still Gaining from e-Commerce, Trader Says Kimco's 2020 Vision 4 Quick Questions With Cliff Majersik The Link Between Sustainability and Performance Disclosure: Assess Quantity Versus Quality CEO Debra Cafaro Leads The Way at Health Care REIT Ventas REITs “Appropriately Valued” Versus Equities and Bonds, Analyst Says Portfolio Manager Says Top-Tier Malls “Thriving” MORE REIT NEWS Data Centers and the Cloud Are Going Green REITs “Appropriately Valued” Versus Equities and Bonds, Analyst Says The Growth of Green Investment Strategies The Link Between Sustainability and Performance CEO Debra Cafaro Leads The Way at Health Care REIT Ventas Portfolio Manager Says Top-Tier Malls “Thriving” Industrial REITs Still Gaining from e-Commerce, Trader Says Disclosure: Assess Quantity Versus Quality MORE REIT NEWS Roth, Simon Talk Challenges, Opportunities for Retail REITs 6/5/2013 | By Carisa Chappell Steven Roth, chairman and CEO of Vornado Realty Trust (NYSE: VNO), and David Simon, chairman and CEO of Simon Property Group (NYSE: SPG), participated in a panel discussion at REITWeek 2013: NAREIT’s Investor Forum that had them offering candid thoughts on topics ranging from how their companies have evolved to the impact of the Internet on retail REIT to politics. Simon said that since Simon Property Group went public 20 years ago, he has been most surprised by the growth in the size of his company and the REIT industry in general. “I would never have predicted the size of the company when we went public. Not just us, but Vornado and a host of other companies,” he said. “In the late 1990s we were just trying to make smart deals. It’s really surprising that the whole industry has gotten to the size it is.” Roth said the “dire” state of the real estate industry in the mid-'90s proved to be a formative period for his company. “We changed in the past 15 or 20 years to constantly seek assets that are out of favor,” Roth said. “We started to go into New York City office in a very large way.” Both CEOs agreed that the advent of the Internet has both challenged retail REITs and provided opportunities for the sector. Simon said online sales will ultimately accelerate the obsolescence of bad retailers. On the other hand, stronger properties with successful retailers will get stronger, according to Simon, who said mall owners should embrace what technology can offer consumers. “Hopefully, over time, the mall owner will be able to introduce technology to make the shopping experience a better environment for them,” he said. However, Simon predicted a change in the way consumers choose to interact with one another. He said the millennial generation prefers physical interaction, as opposed to social networking. “That’s what we have the potential to deliver in a number of our shopping centers,” he said. “I actually think there will be a movement toward going back to the basics. There will be a social movement to looking up, as opposed to looking down at your PDA.” On a related note, Simon and Roth agreed that the adoption of the Main Street Fairness Act, federal legislation that would allow states to require online retailers to collect and remit sales and use taxes on purchases by residents of those states, is needed to level the playing the field for bricks-and-mortar retailers. The REIT CEOs also agreed that Federal Reserve Chairman Ben Bernanke deserves more credit than he has received for his stewardship of the national economy. “In my personal opinion, what the Fed has done has been remarkable,” Simon said. “The fact that our economy is reasonably stable, given all of the atmospherics that are going to and have occurred in Washington, is a direct result of Ben Bernanke.” “The single most important thing going on in the capital markets is 0 percent interest rates,” Roth said. Roth also discussed the struggling J.C. Penny’s chain and Vornado’s decision to invest in the retailer. “J.C. Penny’s was a mistake," he said. "We have a history of investing in retailers and have had an enormous amount of success. We lost some money, and thank God our company can withstand the loss. We admit the loss and we moved on." Roth added that the retailer has made management changes and moves to bolster its capital position. “We have a high degree of confidence and optimism that JC Penny's will move its operations and flourish again,” he said. Categories: Capital Markets, Company Profiles Log in or register to post comments Recommended for youModest Pickup in REIT IPO Activity Possible, Investment Banker Says Home

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Winners and losers in a hot municipal market By Cate Long May 22, 2012 Tags: Illinois | municipal bonds | Puerto Rico Like U.S. Treasury debt, muniland securities have been hot, hot, hot. Investors have been piling into municipal bonds for about 16 consecutive months. At first, demand was driven by investors who were attracted to the high yields in the wake of Meredith Whitney’s predictions of default, which scared retail investors out of the market between November 2010 and February 2011. Demand then accelerated as the Federal Reserve kept interest rates at artificially low levels, driving investors out of Treasuries and into riskier assets. Steady municipal bond mutual-fund flows, coupled with the reinvestment of muniland proceeds into new bond issues, has also helped keep demand elevated. On the supply side, municipal bond issuance in 2011 slowed to $295 billion, down 32 percent from 2010 and the lowest level since 2001. This lack of supply, along with massive demand, has covered over a lot of issuer weaknesses that would normally drive yields higher. Bloomberg reports: “There’s a shortage of bonds out there,” said Paul Mansour, managing director at Hartford, Connecticut-based Conning, which oversees about $10 billion of municipal bonds. At the same time, “there’s a rush for yield, and it’s masking the differences” in issuers’ credit quality, he said. One of the beneficiaries of this dynamic has been California. Its bonds have been enjoying strong demand even as the governor announced larger-than-expected deficits last week. Bloomberg said: The extra yield on issues from California, the lowest-rated U.S. state by Standard & Poor’s, fell to 0.82 percentage point [82 basis points] last week, matching the smallest since December 2008, according to data compiled by Bloomberg. Although the market has tremendous momentum, some issuers are being left out. For instance, investors are wary of Illinois debt, which has averaged 160 basis points over the last year. Another one of the laggards is Puerto Rico. As seen in the chart below prepared by Daniel Berger of Thomson Reuters MMD, the spread of Puerto Rico’s debt over the MMD AAA benchmark has remained relatively flat over the last year, hovering around an average of 219 basis points. Puerto Rico has been a big issuer of debt in the past year, so to control for whether oversupply was to blame, Berger compared its performance with that of hospital debt, which also saw heavy issuance (about 9 percent of new municipal debt in 2011 was issued by hospitals). As you can see, hospital debt has ridden the market momentum and, unlike Puerto Rico’s debt, seen its spread over the MMD AAA benchmark decline. Hot markets generally benefit everyone, but it’s not uncommon for some to be left out. The most interesting question, of course, is what happens to these issuers when the market weakens. Further: Barron’s: BofA Worries about Muni ‘Rate Shock’ as Issuance Rises MuniLand Snaps: May 21 Next Post » Glass-Steagall 2.0 No comments so far I’m Cate Long and I write about the retail fixed income markets including municipal bonds. My primary interest is creating tools and systems to help retail investors understand bond markets. I’ve worked for a number of years with industry standards organizations, regulators and Congress to help craft a more transparent and fair framework for investors to participate in the fixed income markets. I'm a guest contributor to Reuters.com. Any opinions expressed are mine alone. Any opinions expressed here are the author's own.

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Earvin ‘Magic’ Johnson Joins Detroit Venture Partners Filed Under: Brian Hermelin, dan gilbert, Detroit Venture Partners, Earvin Johnson, General Partner, investor, Josh Linkner, Magic Johnson Earvin “Magic” Johnson — Lansing native, Michigan State University and NBA Hall of Fame basketball star, philanthropist and entrepreneur — announced Thursday he will join Detroit Venture Partners as a general partner. DVP is a Detroit-based venture capital firm that invests in seed and early-stage technology companies primarily located in the heart of downtown Detroit. Johnson will also be investing an unspecified amount into the fund described as “millions of dollars.” Detroit Venture Partners was launched in 2010 by entrepreneurs Josh Linker, founder and chairman of ePrize LLC; Dan Gilbert, founder and chairman of Quicken Loans Inc. and majority owner of the NBA’s Cleveland Cavaliers; and Brian Hermelin, founder and chairman of the private equity firm Rockbridge Growth Equity. DVP finances and lends operational expertise to budding entrepreneurs who bring high-potential business opportunities. “I am investing in Detroit Venture Partners and the city of Detroit because I want to have a positive impact on the biggest downtown in my home state,” Johnson said. “I believe strongly in the Detroit 2.0 movement and creating opportunities to help people get back to work. Dan, Josh and Brian share my core values and are approaching their venture investing with the ‘hands on’ style I am familiar with because that is how I do business.” DVP so far has invested in six of the 12 companies it expects to fund in 2011. In the next several years, DVP plans to invest in early stage companies that are expected to create numerous jobs, bring significant economic activity and occupy substantial amounts of office space in downtown Detroit. “Earvin brings so much to the DVP team – entrepreneurial experience, a passion for Detroit and Michigan, additional capital to fund businesses, and the well-respected Magic brand,” said Linkner, CEO and managing partner of DVP. “There is absolutely nothing more important than transforming Detroit to an exciting place for young, eager, wealth-creating entrepreneurs to embark on their business journeys,” said Gilbert. “More and more great people, investors and businesses are joining the initiative to build something very special downtown every single day. And Magic’s involvement will only accelerate this process further and faster.” DVP, along with some of the businesses it invests in, will be located in Gilbert’s downtown Detroit Madison Theatre Building, which is currently being transformed into a hub where tech and creative companies can collaborate and innovate. DVP is “all digital” – with investments exclusively in the areas of digital media, software, cloud computing, e-commerce, marketing technology, mobile apps, internet and social. The company’s investments include: * Flud, a news-reader application for iPad, iPhone, and Android devices based in San Diego, California, and soon to launch a business development office in Detroit. * HiredMyWay, a Birmingham company that better connects job seekers and employers * Are You a Human?, a Detroit-based business providing a better alternative to the difficult-to-read internet form “CAPTCHA” * Detroit Labs, building Web, iOS, and Android applications for businesses ranging from local start-ups to Fortune 500 companies, with offices in Detroit * Gumshoe, based in Detroit, is an alternative reality game of Clue right in your back pocket where players compete against friends and a community of sleuths to solve mysteries * Favers, a Detroit company providing a social shopping platform for specialty retailers where consumers can share the products they “like” — plus “follow their faves” to get instant product updates. In addition to DVP, the real estate arm of Magic Johnson Enterprises is in talks with Gilbert’s real estate partnership, Bedrock Real Estate Services, exploring potential investments in downtown Detroit real estate. More at www.detroitventurepartners.com.

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Antonio Fatas on the Global Economy The "investmentless" recovery The behavior of U.S. employment at the end of the last two recessions (1991 and 2001) was different than in previous recessions. Employment did not grow fast and it took several years to reach the pre-recession levels. Because of this, the recovery years that followed both of these two recessions have been labelled "jobless recoveries". Below is a chart from Brad de Long that compares them to two other previous recessions (original posting is here).Employment was flat in 1991 and 2001 instead of increasing fast as in 1975 and 1982. Because of the current high level of unemployment combined with what might be weak growth there is a fear that the current recovery will also be a jobless one and that the unemployment rate will take a long time to reach a normal level (here is Krugman on this issue).The behavior of employment will depend on many factors (amount of labor hoarding, productivity) but at the end of the day, the major factor be remain the strength of the recovery and how fast GDP and demand can grow. If we look at different components of demand (or GDP) there is an interesting factor about the last two recessions: In both of them, investment played a weaker role during the recovery phase. Below is a chart comparing the behavior of investment (measured as a % of GDP) around the recovery time (0 is the quarter when the recovery started according to the NBER).What is interesting in this chart is that the last two recoveries were also special when it comes to the behavior of investment. In fact, the behavior of investment seems to mimic what we see above in the employment chart. While during the 1975 and 1982 recoveries investment grew faster than GDP (so the ratio increased), during the 1991 and 2001 recessions, investment grew at the same pace as GDP (so the ratio is flat). And this is more of a surprise if we take into account the fact that real interest rates remained very low during these two recoveries (more so in 2001).We know that investment is the most volatile component of GDP so the V-shape that we see in 1975 and 1982 is what we would normally expect. By definition, it has to be that other components of GDP played a stronger role (relative to previous recessions) in 1991 and 2001 (consumption, exports). What was the exact role of those components will (hopefully) be the subject of a future post in this blog. What is interesting so far is the similarity in the behavior of employment and investment across the most recent recessions.Antonio Fatás Inflation or Deflation? There is an ongoing debate on whether we will see inflation or deflation during the coming years. Inflation could be a result of the expansionary monetary policies we have witnessed in many countries around the world. Deflation could be caused by the effects of the economic slowdown (asset price deflation, deleveraging, low growth) and its global nature.Despite these concerns, inflation indicators remain very stable. After a period where they were pointing in the direction of deflation, they are now back to levels which are fairly consistent with inflation in recent years. The stability of inflation forecasts and how they seem to be ignoring some of the theories that suggest more radical changes ahead are a reflection of the strong anchoring of inflation expectations that has been achieved in recent decades. This anchoring of expectations is the result of very low and stable inflation in most economies since the mid 90s. Here is the evolution of World inflation since 1980 (source: IMF World Economic Outlook database October 2009).It is remarkable how after 1996 inflation has remained almost constant. While it is true that this was a stable period of time from an economic point of view, there were several episodes (the Asian crisis, the recession in 2001/2002) that could have had an effect in inflation. The fact that inflation did not react and remained in a very narrow range (between 4-5%) is behind the strong anchoring of inflation expectations. And this is a virtuous cycle: the more anchored inflation expectations are, the more stable inflation will be.What is also interesting is to see that the behavior of inflation has been very similar across developed and developing countries. In the case of advanced economies, inflation decreased very fast in the early 80s and came down even more in the mid-90s. In the case of emerging markets we witnessed a period of high inflation during the early 90s but after 1995 inflation has come down and remained stable for 13 years.While 13 years of stable inflation cannot guarantee that we will not see large changes in the inflation rate in the coming years, there is no doubt that this is a reflection of the strong anchoring of inflation expectations, more so than in any other period in recent history and this stability is likely to keep inflation volatility low even in the presence of many uncertainties. Antonio Fatás It will continue to go up until it stops. One of the best quotes I have recently seen in financial news sites. This is from CNBC Monday November 16th (link to the article and video here): Dennis Gartman, founder of The Gartman Letter told CNBC Monday that the price of precious metal will "continue go go up until it stops." "It is a gold bubble, Gartman told CNBC. He called the trade on gold "mind boggling," but also said that he is currently long - or betting gold will go higher.Well, I am sure he is right, the price of gold will continue to go up until it stops... By the way, Willem Buiter has an interesting blog entry on the market for gold.Antonio Fatas The definition of strong (dollar) Timothy Geithner said this week "I believe deeply that it is very important to the United States, to the economic health of the United States, that we maintain a strong dollar." It would be interesting to know what his definition of "strong" dollar is.When John Snow was asked the same question back in 2003 (May 18) when he was Secretary of the Treasury he said: "You want people to have confidence in your currency (...) You want it hard to counterfeit, like our new $20 bill." Antonio Fatás 9.5% productivity growth. How unusual? As reported by the Bureau of Labor and Statistics yesterday, US labor productivity grew at a 9.5% in the third quarter of 2009. Fast productivity growth is normally a sign of economic strength, but in this case because it is the result of a combination of GDP growth and destruction in employment, this has raised further concerns about the possibility of a jobless recovery (see Brad DeLong, among others).How unusual is to see productivity growing that fast during a recovery phase? No doubt that 9.5% is a very large number but we have seen similar patterns before. For example, the 1981Q3 recession showed a very similar pattern of productivity growth as seen in the picture below. Six or seven quarters after the recession had started, productivity was growing at rates which are very similar to what we are seeing now. Interestingly, the 1981 recession was also a long recession, it lasted 16 months. It is possible that the current recession ended in the summer of 2009 which would make it very similar in length to the 1981 recession. There is, however, a big difference between the two: in the 1981Q3 recession, we saw GDP growth rates close to 10% (quarter to quarter) seven quarters after the recession started - i.e. the last observation in the above chart. This time GDP is only growing at 3.5% and it is only because of the large decrease in employment that productivity growth is so high. This is not good news (unless we believe that this trend is about to reverse).What did productivity growth look like in shorter recessions? This second chart shows productivity growth in the previous two recessions (1990 and 2001). Both of these recessions were short, about 8 months. Productivity also increased in the quarters after the recession started. It started growing earlier (this is probably related to the short nature of the recession) and it did so in a smoother manner with peaks below the current levels.Antonio Fatás Reality check (fiscal policy) The IMF has just published their November 2009 edition of "The State of Public Finances Cross-Country Fiscal Policy Monitor". It is a great analysis of the current state of public finances and the risks ahead. Some good news: if one looks carefully at the numbers, while deficits and debt levels are high, they are manageable. They require an effort in the years (decades?) ahead but we have seen large fiscal consolidations in the past of a size which is similar to what is required from today's perspective. This seems to be the perspective of financial markets as interest rates on government bonds remain low and there is no obvious pricing of a default risk. The arithmetics of fiscal discipline are simple and the future effort will depend on the difference between the interest rate that governments will face and the growth rate of their economy. In emerging markets, we have seen rapid changes in this difference (interest rate getting very high as growth rates slow down) leading to crisis as the burden becomes unmanageable. While this is not the scenario that one might expect for advanced economies, it all depends on the credibility that governments established. And theoretically one could imagine a self-fulfilling prophecy where a crisis starts with a small change in the perceived credibility of governments which increases interest rates and leads to unsustainable interest payments.The bad news is that there is no guarantee that governments will behave better going forward. Yes, we know the effort that is needed to stabilize debt-to-GDP ratios but history is full of examples where once the crisis is over we forget about fiscal policy discipline. And here is where we need an exit strategy. It is not about about announcing a short-term schedule to remove the current fiscal stimulus is about giving reassurances that in the next decade or decades we will look at sustainability of government finances in a different way. I have argued in some of my academic research (together with my co-blogger Ilian Mihov) that there is a need to think about institutional reforms that change the way we think about fiscal policy and budgets. Other academics have presented similar proposals, all of them implying the creation of some constraints around the power of governments to decide on all aspects of fiscal policy. While numerical rules are the simplest way to think about constraints (budget balance rules, stability and growth pact), the empirical evidence is that implicit constraints - such as those created by the political process through which budgets are decided- can be as powerful and less rigid. A change in this direction would be a good "exit strategy" for governments. Without the need to harm the current recovery, it would provide the necessary foundations for a credible fiscal policy in the years ahead.Antonio Fatás Posted at I am the Portuguese Council Chaired Professor of European Studies and Professor of Economics at INSEAD, a business school with campuses in Singapore and Fontainebleau (France), a Senior Policy Scholar at the Center for Business and Public Policy at the McDonough School of Business (Georgetown University, USA) and a Research Fellow at the Center for Economic Policy Research (London, UK). Antonio Fatas' Web Site

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Brampton Brick Limited Announces Normal Course Issuer Bid By Marketwired . BRAMPTON, ONTARIO -- (Marketwired) -- 04/30/14 -- Brampton Brick Limited ("BBL" or the "Company") (TSX: BBL.A) announced today that the Toronto Stock Exchange (the "Exchange") has accepted a notice filed by BBL of its intention to make a Normal Course Issuer Bid (the "Bid"). The notice provides that BBL may, during the 12 month period commencing May 6, 2014 and ending May 5, 2015, purchase on the Exchange up to 460,086 Class A Subordinate Voting shares in total, being approximately 5% of the total number of Class A Subordinate Voting shares outstanding. The price which BBL will pay for any such shares will be the market price at the time of acquisition. The actual number of Class A Subordinate Voting shares which may be purchased pursuant to the Bid and the timing of any such purchases will be determined by management of BBL. As at April 21, 2014 there were 9,201,723 Class A Subordinate Voting shares and 1,738,631 Class B Multiple Voting shares outstanding. The average daily trading volume of Class A Subordinate Voting shares ("ADTV") for the most recently completed six calendar months is 975. The maximum number of Class A Subordinate Voting shares that may be purchased in one day pursuant to the Bid will be the greater of 1,000 and 25% of ADTV. All Class A Subordinate Voting share purchases will be made on the open market through the facilities of the Exchange and will be purchased for cancellation. BBL believes that its Class A Subordinate Voting shares have been trading in a price range which does not adequately reflect the value of such shares in relation to the business of BBL and its future business prospects. As a result, depending upon future price movements and other factors, BBL believes that its outstanding Class A Subordinate Voting shares may represent an attractive investment to BBL. Furthermore, the purchases are expected to benefit all persons who continue to hold Class A Subordinate Voting shares by increasing their equity interest in BBL. Certain statements contained herein constitute "forward-looking statements". All statements that are not historical facts are forward-looking statements, including statements regarding future plans, objectives, results, business outlook and financial performance. There can be no assurance that such forward-looking statements will prove to be accurate. Such forward-looking statements are based on information currently available to management, and are based on assumptions and analyses made by management in light of its experience and its perception of historical trends, current conditions and expected future developments, including, among others, assumptions regarding pricing, weather and seasonal expectations, production efficiency, and there being no significant disruptions affecting operations or other material adverse changes. Such forward-looking statements also involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others: changes in economic conditions, including the demand for the Company's primary products and the level of new home, commercial and other construction; large fluctuations in production levels; fluctuations in energy prices and other production costs; changes in transportation costs; foreign currency exchange and interest rate fluctuations; legislative and regulatory developments; as well as those assumptions, risks, uncertainties and other factors identified and discussed above under "Risks and Uncertainties" in the 2013 annual MD&A included in the Company's 2013 Annual Report and those identified and reported in the Company's other public filings (including the Annual Information Form for the year ended December 31, 2013), which may be accessed at www.sedar.com. The forward-looking information contained herein is made as of the date hereof. Other than as specifically required by law, the Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on forward-looking statements. Brampton Brick is Canada's second largest manufacturer of clay brick, serving markets in Ontario, Quebec and the Northeast and Midwestern United States from its brick manufacturing plants located in Brampton, Ontario and near Terre Haute, Indiana. To complement the clay brick product line, the Company also manufactures a range of concrete masonry products, including concrete brick and block as well as stone veneer products. Concrete interlocking paving stones, retaining walls, garden walls and enviro products are manufactured in Markham, Milton, Hillsdale, Brockville and Brampton, Ontario and in Wixom, Michigan and sold to markets in Ontario, Quebec, Michigan, New York, Pennsylvania, Ohio, Kentucky, Illinois and Indiana under the Oaks™ trade name. The Company's products are used for residential construction and for industrial, commercial, and institutional building projects. Brampton Brick Limited Trevor M. Sandler Vice-President, Finance and Chief Financial Officer

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Financial News Spain Spanish economy grows by 0.8% Spanish economy grows by 0.8% in the fourth quarter, the central bank said, quoted by Bloomberg. Thus, the country maintained the same rate of expansion as was registered in the previous three quarters. In 2015, GDP grew by 3.2 percent, the bank said in its monthly bulletin that uses preliminary data, based on early indications. The increase compared to the previous quarter was the highest during the period from April to June – 1%. “The modest slowdown in economic growth in the second half does not change scenarios for sustainable GDP growth over the next few quarters,” the report said. According to indicators Spanish consumers and companies are the engine of the recovery, record low interest rates set by the ECB have an effect on the economy. Retail sales surged to 10-month high in October, while activity in the services sector in November grew the fastest of three months. Spain’s economy is growing at the fastest pace in eight years, supported by cheap oil, favorable exchange rate of the euro and incentives program of the ECB. “Improved financial conditions have provided a favorable environment for the cost of business and households in the autumn”, according to the central bank. Yet after Sunday’s Mariano Rajoy’s conservatives lost about one-third of the MPs and parliament looks set to be one of the most fragmented in the democratic history of the country. Ratings agency Fitch said it expects a long period of political uncertainty, complicated because of thwarted reforms, which can harm the development of the economy. Spanish National Institute of Statistics is to publish its first estimate of GDP growth in the fourth quarter at the end of January. News Spanish economy grows by 0.8% After Elections in Spain shares dipped in Madrid © 2016 Financial News Spain

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July 31, 2014 8:31 am ET Patrick J. Fossenier - Vice President of Investor Relations Douglas W. Stotlar - Chief Executive Officer, President and Director Stephen L. Bruffett - Chief Financial Officer and Executive Vice President W. Gregory Lehmkuhl - Executive Vice President and President of Con-Way Freight Inc Joseph M. Dagnese - Executive Vice President and President of Con-Way Truckload Inc Robert L. Bianco - Executive Vice President and President of Menlo Worldwide Logistics LLC William J. Greene - Morgan Stanley, Research Division Christian Wetherbee - Citigroup Inc, Research Division Scott H. Group - Wolfe Research, LLC Kenneth Scott Hoexter - BofA Merrill Lynch, Research Division Thomas S. Albrecht - BB&T Capital Markets, Research Division A. Brad Delco - Stephens Inc., Research Division Jason H. Seidl - Cowen and Company, LLC, Research Division David G. Ross - Stifel, Nicolaus & Company, Incorporated, Research Division John L. Barnes - RBC Capital Markets, LLC, Research Division Jeffrey Asher Kauffman - The Buckingham Research Group Incorporated Thomas Kim - Goldman Sachs Group Inc., Research Division Todd Clark Fowler - KeyBanc Capital Markets Inc., Research Division Allison M. Landry - Crédit Suisse AG, Research Division Matthew S. Brooklier - Longbow Research LLC Welcome to Con-way Inc.'s second quarter earnings review conference call. I would now like to turn the call over to Patrick Fossenier, Vice President of Investor Relations. Please go ahead. Patrick J. Fossenier Thank you, Stephanie. Welcome to the Con-way second quarter 2014 conference call for shareholders and the investment community. In a minute, I'll turn it over to Con-way President and CEO, Doug Stotlar. Before we get in to the call, I'd like to offer a few reminders. First, certain statements in this conference, including statements regarding anticipated results of operation and financial condition, constitute forward-looking statements and are subject to a number of risks. Actual results of operations and financial condition might differ materially from those projected in such forward-looking statements, and no assurance can be given as to future results. Additional information concerning factors that could cause actual results and other matters to differ materially from those in the forward-looking statements is contained in our forms 10-K and 10-Q and other filings with the SEC. Second, today's prepared remarks contain non-GAAP financial measures. Reconciliations of GAAP to non-GAAP financial measures are found within the financial tables of our earnings release, which is available on our website at con-way.com. Also, certain financial and operating statistics of the company can be found in the Investors section of our website. Also, we have a lot of people on this call, so we'd appreciate it if you'd limit yourself to a question or two, then return to the queue. Now with that, I'm pleased to turn it over to Doug Stotlar. Douglas W. Stotlar Thanks, Pat. Good morning. On the call today, I'm joined by members of our senior leadership team, including Con-way's CFO, Steve Bruffett; Con-way Freight President, Greg Lehmkuhl; Menlo Logistics President, Bob Bianco; and Con-way Truckload President, Joe Dagnese. Steve will provide some commentary on our financial picture, and Greg, Bob and Joe will participate in the Q&A portion of the call. All of our business units delivered improved results in the quarter led by the performance of Con-way Freight, which recorded a more than 50% increase in operating income compared to last year's second quarter. In conjunction with the release of our quarterly results yesterday, we also announced 2 initiatives designed to return meaningful capital to shareholders, along with an increased level of pension funding for 2014. Regarding the shareholder initiatives, our Board of Directors authorized a $150 million share repurchase program and a 50% increase in our common dividend. Given the progress we have made toward our financial objectives, we have reached the point where we can redeploy a portion of our cash balance to fund these shareholder initiatives while maintaining a strong balance sheet. Steve will provide more detail around these actions during his commentary later in today's call. Moving to the second quarter's financials. I'll provide an overview of our results. In the second quarter of 2014, Con-way reported consolidated revenues of $1.49 billion compared to $1.38 billion a year ago. On an operating income basis, we earned $102.7 million this quarter compared to $76.3 million last year. Diluted earnings per share were $0.93 compared to $0.75 in the prior year period. On a non-GAAP basis, earnings per diluted share in the 2014 second quarter were $0.91 compared to $0.68 in last year's second quarter. Non-GAAP items consisted of tax-related adjustments and gains on sale of property from both years, and an increase in reserves for international bad debt in the prior year. Moving to our business segments. I'll start with a review of Con-way Freight, our LTL company. Con-way Freight had second quarter revenue of $940.5 million, a 5.4% increase from last year's revenue of $892.3 million. Higher yield and higher daily tonnage in the quarter contributed to the increase. Operating income was $83 million, up 51.8% from the $54.7 million earned in the second quarter a year ago. Results this period benefited from revenue management initiatives that contributed to improved composition of freight in the network and included a $3.4 million gain on the sale of property. Con-way Freight's operating ratio was 91.2 in this year's second quarter compared to 93.9 in the previous year period. Excluding the property gain, the operating ratio this quarter was 91.5. Revenue per hundredweight or yield increased 4.7% in the quarter compared to the prior year. Excluding fuel surcharge, the increase in yield was 4.1%. When adjusted for changes in length of haul and weight per shipment, the increase is 5.4%, excluding fuel surcharge. For the second quarter, daily tonnage was up 1.3% over the second quarter of 2013. With respect to tonnage per day, year-over-year, April was up 3.4%, May increased 0.5%, and June was up 0.2%, while July is down approximately 1.5%. This recent year-over-year tonnage trend was expected and reflected the amount of -- the impact of our revenue management initiatives, which improved the composition and profitability of Freight in the network. We experienced strong demand for Con-way Freight services in the second quarter. This reinforced the firming rate environment and supported solid profited growth as we continued to execute our lane-based pricing strategy and carefully managed our shipment mix to margin -- to improve margins. We continue to benefit from the improved data and sophisticated linehaul planning and optimization tools we've developed. We're pleased with the progress at Con-way Freight and are focused on the next phases of our continuous improvement roadmap. Now I'll move to our Logistics segment. In the second quarter, Menlo Logistics, our globally logistics and supply-chain management operation, reported increased revenues, net revenues and operating income. Revenue was $433.7 million, a 17.1% increase over the prior year's second quarter revenue of $370.4 million. The higher revenue reflected increased business in both Transportation Management and Warehouse Management Services. Net revenue or revenue minus purchased transportation came in at $186.7 million, a 15.7% increase from last year's net revenue of $161.4 million. The higher net revenue was primarily attributable to growth in Warehouse Management Services. Menlo's operating income this period was $6.4 million, an increase of 6.3% over the $6 million earned in last year's second quarter. The current period was affected by lower margins on Transportation Management Services and higher variable compensation expense. Menlo grew revenue in the quarter, yet felt the effects of tight capacity and rising rates in the truckload market, which increased purchased transportation expense, negatively affecting operating income. Menlo remains focused on reducing costs and improving margins. Following the surge of new business we saw last year in Menlo's Warehouse Management Services, its pipelines has returned to typical levels and a more balanced mix of services. We are encouraged by an increase in bids for transportation management Projects, as well as growth opportunities in new industry sectors for us, such as oil and gas and healthcare. Now I'll review results in our Truckload segment. In the second quarter of 2014, Con-way Truckload reported revenues of $164.1 million, slightly above last year's revenues of $161.8 million. Top line results benefited from higher other revenues and an increase in revenue per loaded mile, partially offset by a decrease in loaded miles. Truckload's operating income was $13.5 million in this year's second quarter, a 24.2% increase over the $10.9 million earned in the prior year. The year-over-year improvement was primarily the result of increased pricing and lower vehicular claims expense. The operating ratio, excluding fuel surcharge, was 89.4 compared to 91.4 in the year-ago period. A consistently firm demand environment supported higher yield for Con-way Truckload in the second quarter. Pricing strengthened throughout the quarter as the market dealt with capacity constraints, exacerbated by the worsening driver shortage. We made strides reducing driver turnover, which spiked last quarter. At the same time, we are still above our fleet's normal level of unseated trucks adversely impacting revenue and profit. Improving recruiting and retention remains a focus for Con-way Truckload. As we discussed during our call last quarter, we're working on enhancements to our driver pay package, which we expect to announce later this quarter. Now I'll turn it over to Steve Bruffett for some additional financial perspective. Stephen L. Bruffett Thanks, Doug, and good morning, everyone. I'll begin with the second quarter update, and then discuss our plan to redeploy a portion of our cash balance. The second quarter operating cash flow was $126 million compared to $108 million in the second quarter of last year. Now on a year-over-year basis, the main items that drove this difference were higher net income and lower pension contributions, partially offset by increased working capital. Net capital expenditures were $39 million in the quarter as compared to $73 million in the second quarter of 2013. For the full year, we are lowering our outlook to $275 million, which is down $10 million from our previous guidance of $285 million. This change is the result of slightly lower gross CapEx and higher proceeds from dispositions. Financing activities provided $6 million in the quarter, which was the net effect of capital lease repayments, common dividend payments and stock option activity. In total, was cash activity resulted in a balance of cash totaling $499 million at June 30, which compares to $485 million at year-end 2013. So now let me take a moment to discuss the redeployment of a portion of our cash balance. As we've described on previous calls, our cash balance was sized to accommodate several primary objectives coming out of the recession. These included the replenishment of our fleets, investments to support margin expansion at Con-way Freight and improving the funded status of our pension plans. Over the past several years, we've made a lot of progress on each of these financial objectives. We've reduced the average age of our fleets to their targeted levels, and we provide our drivers and our customers as one of the safest and most technologically-advanced fleets in the industry. We've ensured that Con-way Freight had the capital needed to fund strategic initiatives over the past several years, and we are now beginning to see the margin expansion we expected from these investments. There's more work to be done, but we have sufficient capital to fund the upcoming projects on Freight's continuous improvement roadmap. Most of these projects involve IT investments, which are not overly capital-intensive. We've also improved the funded status of our pension plans. Pension funding has been our primary vehicle for leverage reduction since it addresses our most volatile form of debt. Our reduced leverage, coupled with Con-way Freight's margin expansion, has helped to solidify our investment-grade credit rating. Importantly, we've also taken steps to de-risk these pension plans and reduced the likelihood that they'll become significantly underfunded in the future. So from a capital structure perspective, we've reached a point where it makes sense to redeploy a portion of our cash balance. Our dividend increase brings our yield in line -- more in line with its historical average, and our stock buyback program is designed to return a meaningful amount of capital to our shareholders. The incremental pension funding has the dual benefit of further strengthening our balance sheet while reducing our cash funding needs going forward. So overall, we're pleased to have made significant progress toward our financial objectives so that we're in position to implement these uses of cash. Now shifting gears, I want to provide some context on our near-term expectations for business unit performance. At Con-way Freight, we see continued strength in the LTL demand and pricing environments, along with steady progress on our margin expansion initiatives. As a result, we expect Freight's operating income to be approximately 25% over the $52 million that we earned in the third quarter of 2013. As we consider Con-way Freight's 50% improvement in the second quarter of this year and the approximate 25% improvement expected for the third quarter, the primary difference between these 2 percentages is the wage increase that was implemented in July. Now with respect to Menlo. For the third quarter, we expect modest sequential improvement in operating income over the $6.4 million earned in the second quarter of 2014. Then at Con-way Truckload. We expect strong demand to continue supporting a price -- a firming price environment, and this benefit will be somewhat offset by the costs associated with driver availability. In aggregate, we're expecting third quarter operating income to be up 20% over last year's $9 million. There's another topic that I'd like to mention, and it involves the termination of a small pension plan. We normally discuss our large pension plan, but we have 2 others, including this small legacy plan, that we're terminating. This process will be completed in the fourth quarter, at which point we expect to make an incremental $5 million pretax contribution, as well as record a pretax charge of approximately $15 million. The exact funding and expense amounts won't be known until the fourth quarter, and they will be driven by lump sum take-up rates and annuity prices at the time of termination. I'd also note that the $5 million contribution is included in the incremental $80 million of pension funding that we discussed in the earnings release. So lastly, here are some other items for your modeling purposes. First, we expect depreciation and amortization expense to be approximately $245 million for the full year. Also, we continue to anticipate that our 2014 effective tax rate, excluding discrete items, will be approximately 40%. Regarding our share count, we continue to expect our fully diluted shares for 2014 to be 57.8 million, and that's prior to the effect of any repurchases. Lastly, we expect to be modestly cash flow positive in 2014 before considering the impact of the cash redeployment initiatives we just discussed. So with that, I'll turn it back over to Doug. Thanks, Steve. Our second quarter results illustrate the progress we've made. We've upgraded our fleets, strengthened our pension plans and achieved margin expansion at Con-way Freight. Collectively, our business units are positioned with the resources and capabilities for sustained improvement. Because of this progress, we've been able to take additional actions that will return meaningful cash to our shareholders through share repurchases and dividend increase. We continue to benefit from a strong demand environment and firm pricing for trucking services. At the same time, our strategic improvement initiatives have plenty of runway left to drive further cost efficiencies and profit growth. Our focus remains on consistent execution, continuous improvement throughout the organization and expanding margins, while delivering safe, high-quality service to our customers. That concludes our prepared remarks. And operator, we're ready to open the line for questions. [Operator Instructions] Your first question comes from the line of Bill Greene with Morgan Stanley. I was hoping you can add a little bit more color around the third quarter trend, particularly as it relates to yield. I think if I heard you right, you said tonnage was running down about 1.5% this month. Is that sort of in line with your expectations? Or is that because of some big change on a contract side or something? And maybe you can add a little bit of color around some of the assumptions on yields that you're using on Freight for the third quarter. W. Gregory Lehmkuhl Sure. So we ended Q2 up 1.3% versus '13, as Doug talked about. And I think it's important to talk about the Truckload-sized shipments or over -- the shipments over 20,000 pounds when thinking about our yield trends. So we've been using our improved linehaul and pricing capabilities to ensure we're surgical about which of these shipments that we allow into the network. We're currently restricting about 3.5 million pounds of freight a day of Truckload-sized shipments. When we started this initiative back in March, it was about 1.5 million pounds a day. So without this initiative, our tonnage in Q2 would have been up about 5%, and we'd be up, per day basis in July about 3%. So this helps us maximize our use of existing assets and minimizes the need for purchased trans, especially in headhaul lanes, and obviously supports yield growth and ultimately, profit. And so when we couple that with our continued focus on lane-based pricing, we think we'll continue to see strong yield results for the foreseeable future. The yield results so far in July, have they been significantly slower than the second quarter? No, I would say in line. Another thing that's really driving our yield and just the composition of Freight and our network, we've talked about this on all the recent calls. In Q2, our national account tonnage was down about 1%, while our local account tonnage grew 8% year-over-year. And both of these segments were impacted by the heavyweight shipment restrictions. So I guess the point is our mix continues to trend in the right direction. Okay, fair enough. Steve, can I just ask you one quick question on the buyback? Are your intent to do this on a ratable basis or is this going to be totally opportunistic based on where the stock is? Yes, it's a good question. We -- first, we're glad to be in a position to implement these initiatives. And our approach will be similar to how we've approached the pension issue, the fleet age issue and so on, which is steady progress toward an objective over time. So we see ourselves being steadily in the market, perhaps not in a linear fashion, but we expect to make progress towards this buyback program and steady fashion over time. Your next question comes from the line of Chris Wetherbee with Citi. I guess maybe when you're thinking about some of the progress you've made on the LTL margins and the opportunity going forward, is there any way to sort of tease out what you're generating from the pricing side and really what's kind of being dropped to the bottom line from the initiatives you have rolling there? I know it's a bit of a circular argument because a lot of what you're doing is focused on improving pricing and the mix, but I just kind of wonder if you can give us a rough sense of how you feel like you're scoring yourself relative to your initiatives? Sure. So great, great question, and you're right. They're completely -- the revenue management side and the ops improvement side are very much linked. But I'd just like to start by saying thanks for recognizing Q2 was a solid quarter and I'd like to start just by thanking our 22,000 Freight employees for delivering $83 million in op income, 91.2 OR, and our most profitable quarter since 2006. The results were directly driven by their focus and hard work, and I believe provide further evidence that our strategic initiatives are working and that the demand environment remains soft. And so when you think about the contributions to the margin expansion, lane-based pricing was by far the largest single contributor of profit improvement, and we also had the benefit of the wage increase timing versus prior year in Q2. But Q2 was really the first clean quarter where we had a full year of lane-based pricing in place, if you consider the fact that the severe weather in Q1 skewed pretty much all of our operating metrics. And so as Doug said, our yield adjusted for length of haul and weight of shipment was up 5.4% versus 2013. And we're excited about the fact that given that we're only improving the process and getting more and more collaborative with customers as we do it, we would expect these results to continue. From an operation standpoint, in Q2, we did see some high points. We saw very strong fuel economy, up 5.4% year-over-year, and that's a direct result of our investment in EOBRs and trailer skirts. We saw reduced safety-related claims. We saw a strong pick up in delivery productivity up 4.5% from prior year. We also saw purchase trans as a percent of total miles drop from 39.6% -- from 39.6% last year to 37.5% in Q2. We also saw empty miles come down a little bit. Both of these things are clear signs that our linehaul optimization tools are working. That said, as you know in talking with our industry peers, the driver market definitely heated up in Q2 into higher-than-expected turnover, and therefore, higher-than-expected hiring. And this did lead to some network flow issues and some inefficiencies like higher cargo claims, a lower dock productivity and increased training expense. Most of these costs will continue into Q3 as we work to get our network back to maximum efficiency. And so while the hiring is still elevated today, we are seeing signs of network stabilization here in July. In fact, yesterday was our best on-time performance of the year. So I guess, the good news is we have a solid quarter and are comfortable with our guidance of a 25% operating income increased next quarter, yet we still have a lot of opportunity to provide increased improvement in operations as we get into the latter part of the year and in 2015, particularly on the cargo claims side and dock productivity. And so if you look at Q2, I'd say operations contributed, but the biggest single contributor was the revenue management initiatives. Okay, that's helpful. And when you think about the context of the buyback and some of the things, Steve, you said about what you're doing with cash deployment, can we look at that as sort of an indication that some of the spending on initiatives, whether it be technology or training or otherwise, are in the ramp down phase here? So we shouldn't be expecting too much more to kind of crop up or be all that lumpy as we think about the next several quarters? Just want to get a rough sense and sort of what the messaging behind the buyback is in regards to the initiatives? The good news is that we have a steady stream of initiatives lined up for the next several years. So there will be ongoing investments, and I can't sit here today and say there won't be any lumpiness in our IT expenses as we go through time, but we do see a steady pattern of investment as we -- as the technology really supports the initiatives that we're trying to do. It's not technology for technology's sake, but it's truly aligned with the strategic direction of Con-way Freight in particular that we're making these investments and recognizing the returns on. So it's not a statement that we're necessarily in a ramp down mode on those, it's a statement that we feel like we're able to fully fund all our obligations and opportunistic investments, as well as support the shareholder initiatives. So the businesses has improved to a point where you, from a margins standpoint, where you feel comparable kind of being able to allocate cash to all the various initiatives that you're thinking about, as well as the buyback because that's the way I think about it? Yes, sir, it is. Your next question comes from the line of Scott Group with Wolfe Research. So I think there's a lot of focus on the third quarter and your commentary there, but maybe we can look out a little bit further. So you just had a 91.4 in the second quarter OR and you're kind of implying somewhere around the 93-or-so in the third quarter? What do you -- how should we start thinking about 2015? Can we get into this lower-90 range or is it just too early to know? Or are there headwinds to think about? What do you think the second quarter and third quarter mean for next year? Scott, we're thinking about, as we look forward, and the environment has something to do with results, but we just expect continuous improvement as we go forward over time. We have a whole roadmap of initiatives, very similar to the initiatives we've played out over the last couple of years, lined up for the next several years, and they're all designed around continuous improvement and continuous margin expansion. In terms of the plan that you guys have had, was '14 supposed to be a bigger year than '15? Certainly we're happy with the market dynamics that have presented themselves in '14, but we're not forecasting '15 results at this time. Okay. And then just on the driver side, so I'm not sure if you mentioned it. What is the driver pay there, cents per mile or percent increase you're planning to put in on the Truckload side? And then maybe, Doug, give us some perspective on the LTL driver issues and how this compares versus history? And do you think we need to start thinking about bigger than normal LTL wage increases, too? So let me have Joe first talk about the Truckload industry and the driver market there, and I'll turn it over to Greg. Joseph M. Dagnese Scott, Joe here. On the driver pay side, we're working through what we need to do to implement our new driver pay package at Con-way Truckload. I'm not in a position to comment on any amounts or how the structure of that program will play out, because I firmly believe that our professional drivers need to hear it from me and our leadership team first. So once we get that pushed out, we'll be letting the balance of the community know what we're doing in regard to the pay package for our drivers. But it will be a mix of mileage pay and incentives. So on the LTL side, we are seeing increased demand for drivers. The wage increase that we implemented July 1 was greater than the one we did last year. It will be about $11 million a quarter, but we feel that puts us in a pretty good competitive position to recruit and retain growing forward. Your next question comes from the line of Ken Hoexter with Bank of America Merrill Lynch. A couple of questions on that. You've been reviewing the accounts as part of the initiative here, are you done at least touching all of the accounts at this point? And I guess, how much now, that you've gone through that whole process, do you still think we have to back and touch the other accounts that's on the process in terms of your initiatives? So, we touched all the contractual accounts last year and we'll do it again this year. But there's still plenty of opportunity for further profit improvement with our current book of business us. So when you look at maybe some of the initiatives that you've made, is it still getting rid of businesses? Is it repricing? What is the -- when you go address the business, what's the largest ticking point as you revisit some of the customers from your first go around? Every customer's different, but it's mostly -- it's the composition of which shipments of their book of shipments that we handle. So we're changing the mix of shipments to better fit our network and better support our customers' needs. And better leverage our cost structure. So is that part of why you're seeing the local business growing faster than the national you were talking about? Not necessarily. No, I think that that's a separate initiative where we're, our whole sales team, all of our account executives and directors of sales are incented to go out and get new business and new names, and that's working very well. I guess on that same vein, over at Menlo you've had a significant ramp up and you talked about some new initiatives. Can you maybe delve into that a little bit? Where are you seeing this new opportunity? And are we past the start-up cost that we've had the last couple of quarters? And will that lead to, I guess, continued operating improvement going forward? Robert L. Bianco Ken, this is Bob. Yes, we've been able to realize very good net revenue growth that, over the last few quarters, our profits have increased sequentially as a result over the last 2 quarters. Fortunately, we've been able to stabilize the operational issues we've had with some very large projects that we took on, that we mentioned on a couple of past calls. Our sales pipeline continues to be strong, and 2 things that we like about our sales pipeline: One is, it is -- we're seeing a high -- more projects that have Transportation Management in them. And that's a good thing because Transportation Management projects in our business come at a higher margin than Warehousing projects, so that opportunity's increasing. And we're seeing projects in new group areas, high growth areas like oil and gas and healthcare, and we're making a lot of progress in those areas, and we see that as a good growth opportunity for Menlo going forward. Your next question comes from Tom Albrecht with BB&T Capital Markets. As I look into the future and it's pretty clear you do have some nice momentum, I'm wondering that next round of OR improvement that would be maybe a little bit of a greater magnitude, do you need growth to accomplish that? I mean, you're tweaking the network, you're changing the mix of accounts, and that momentum will continue this year and into next year. But at some point, to accomplish the next thing, do you need more like 3% to 5% tonnage growth? So I don't think so in the next, call it, 18 months. I mean, with our internal initiatives, both on the revenue management side, the cost structure side and the operations side, can sustain steady improvement for the next, at least, year and a half. That said, we have retooled our sales force and are very focused on getting back into a tonnage growth position in 2015. So I think it'll come from both, but I don't necessarily think we need tonnage growth in the next 18 months for continued progress. And then on the OR question, I mean, I think I can plug in the wage and all that. But would you expect the normal sequential change from Q2 to Q3, which has been an OR deterioration of about 60 basis points? Would you expect that to hold that deterioration, plus whatever we plug in for wage? Or is the environment such that maybe the sequential deterioration is a little less? This is Steve. From what we can see, the normal seasonality is playing out. We've seen one month of the third quarter so far, and that would be our best estimation is that historical pattern would repeat itself, absent the item that you noted, the timing of the wage increase this year. Somewhere in that range. There's always some variation within there. And Tom, 2 things. That the -- there is an extra holiday in Q3 than there was in Q2, and you have a higher wage increase than what we've seen in some time in Freight. And your Truckload guidance, does that include some sort of a wage increase that you just haven't announced yet? Yes, it does. Your next question comes from the line of Brad Delco with Stephens Inc. I just want to ask sort of a bigger picture question. Looking back sort of in history, there's been a lot of focus on the yield side, and this is on LTL, and then the cost and productivity side, and commonly, always historically, has enjoyed a premium price relative to some of your peers. Where do you think you are right now versus the market with your yield, versus where you were on the cost side in your productivity initiatives? Are you 50% back to where you need to be relative to the market on yields? And are you close to being back to the costs and productivity measures that you've used to run at? I guess the point is, how much farther do we have to go on each of those focal points? So on the yield advantage side, I would say we're maybe 60% of the way to where we want to join. We're definitely gaining ground. On the operations side, we're more productive now overall in each segment of the operation than we've ever been. And yes, we have a lot of opportunities. I mean, if you think about Q2 and as we talk -- as I talked about last quarter, we accelerated our dock mix shift in Q2 to performing more of our dock workers -- with dock workers, versus what we traditionally done, which is rely on our drivers. And this helps us relieve the driving hiring pressure and enables us to utilize our CDL-carrying professional drivers where we need them most, and that's in front of our customers. But as we shift our mix as the year progresses, we'll reduce our cost structure by at least $10 million in '14 using this strategy. From the beginning of Q2 until now, we increased our dock workers 64% up to 2,200 dock workers throughout the company. So -- however, when we're bringing these new employees up to speed, not surprisingly, we've seen a dock efficiency drop. So the benefits of that cost for our reduction were actually masked in Q2 and will become more visible as the year progresses, and as we get into 2015. So that's one example of, even though overall our productivity is as good as it's ever been, this is a structural cost item that will benefit us starting in Q4 and going into '15. That's good color. But in terms on the cost of productivity side, relative to where sort of your internal targets are, how close do you think you are to those targets? Is yield 50% of the way there? Where do you think you are on the cost and productivity side? I don't think about a destination when I think about operational improvement, I think about a journey, and we're making good progress. And we have a lot of near-term things where we can improve further. But there'll never be a point where we say, "Oh, we can't get better linehaul efficiency or P&D productivity or dock productivity or cargo claims until they're 0". So we think there's plenty of runway. And then, Steve, I hate to have you repeat this, but the LTL guidance was to improve operating income, 25%. What was the base that you're using for third quarter? And then if it's the same as what I'd see in my model, it's about 170 basis points degradation from 2Q, is the big delta there just the timing of the wages? And did you say that was $11 million? I just want to make sure I have the numbers right. I think you have all that correct. It sounds like the basis for the third quarter -- I'm trying to find it that quick here, $52 million is the number. I think it's $51.7 million to be exact from the third quarter of last year that we were basing that off of. And what was the rest of the question? Yes, the $11 million, I guess, that implies sort of 170 basis points of sequential degradation. And to Tom's point earlier, you typically see, call it, 60 to 100 basis point of degradation. So it's a little bit worse. So I'm just trying to figure out, is it really just the $11 million of wage increases that's sort of the delta from to 2Q to 3Q? That is predominantly. Yes, it is about $11 million of quarterly expense coming in to the run rate. And $51.6 million, it looks like in the third quarter of last year that we're basing that off of -- the 25% off of. Your next question comes from the line of Jason Seidl with Cowen and Company. I just wanted to chat a little bit sort of about your mix of business between your national accounts and more of your local accounts. You say you reduced, I think you said -- or declined about 2% in the quarter. Is there a number you guys are looking to get to? Is there something you're going to continue to work on and sort of push the national accounts to pay more? And what is it -- what do you think we're going to end up in 3Q looking like? We were down 1% on national accounts in Q2, 8% on local. We don't have a goal on this. We're really treating each lane and each customer differently, and our focus is to improve our margin and profit. And so there's not a tonnage expectation. I mean, of course, we have a plan for Q3, but that's not the objective. The objective is improve network utilization, a return on capital and operating income. And as I look out for Menlo, obviously, you're showing a little improvement. There's been some other start-up costs and whatnot. As I look out to 2015, should we see some of these outsized start-up costs and the problem with that one international customers abate so we can see some margin expansion? What are your guys looking for? Well, like Doug said, we're looking for continuous improvement quarter-over-quarter. The dynamic that we face in our business is we're a project-based company. So as projects come on, we can't control the timing of when we are awarded these projects so we do have to face some start-up costs. But right now, we're in a period where we're seeing a low level of start-up costs that we're absorbing, and so we expect to see some improvement going forward in our margin. And that one international customer, you think that those issues will be behind you in '15? Your next question comes from the line of David Ross with Stifel. Could you, I guess, first, talk about Con-way Multimodal and where that fits into the portfolio, and then how that growth is trending? Yes, Dave, this is Bob. Con-way Multimodal is in Menlo's book of business and we are seeing very good growth out of that unit, in excess of 20% year-over-year. And it's -- not only does business with the affiliates with Con-way Freight and Con-way Truckload, but also grows with outside customers on a very good rate in the 20%. And does that margin have a better margin than Warehouse Management or the Transportation Management function? Excellent. And then really quick on the Truckload side, and maybe for Joe. You've had 8 straight quarters of declining revenue per tractor per week, and then the tractor utilization has actually declined 13 of the last 14 quarters. What are your plans to reverse those trends? And kind of what's gone wrong? And what's going to be different going forward? As we look forward, some of the key initiatives that are in place are to improve our yield and utilization through increasing our length of haul, which we've actually seen a fairly modest movement in the last 3 months on. Expanding our Mexico cross-border business, which we've also gotten some strong traction under as well. And then finally, looking to improve our Logistics and Brokerage business. Those are really the 4 key things that we're looking to do to drive that improvement rate. And you guys are already one of the dominant players in the Mexican cross-border business, what would you do differently to gain share down there? Well, we're seeing quite a bit of activity in regard to the near-shoring activities in that marketplace. We see this is a great opportunity to enter or re-enter, I should say, certain market segments that are a small portion of our portfolios, specifically automotive. And we're looking to that as a possible revenue growth area in the Mexico cross-border business for us. Your next question comes from the line of John Barnes with RBC Capital Markets. Two things. Number one, your comment earlier about the margin improvement this quarter was much more weighted towards the pricing contribution versus, I guess, the cost contribution. As you look at further improvement in the margin, would you expect the same, or at some point do those begin to balance out a little bit more and contribute a little bit more equally? I think it will balance out. Like I said, we've -- due to the driver turnover issues, we hired a whole lot of people in this last quarter, and we're training and getting those people up to speed. So we saw some drag on our overall operating performance despite the fact that we had all of our strategic initiatives like I talked about, fuel economy up 5.4%, pickup and delivery productivity up 4.5%, purchase trends down, empty miles down. So all the areas where we're focused are clearly working, but right now we're dealing with new employees. So once we get over that training curve, we would expect operations to contribute more significantly to the margin expansion. All right, very good. And then just a question around the networking capacity, with some of the things you've done, and especially the focus on productivity. As you further improve productivity, does it give you more opportunity to maybe right size the network down a little bit? Is there -- is the productivity in bigger facilities, does it mean that ultimately you can look to maybe reshape the network a little bit? And is there a big opportunity in some of the cost reduction perspective on that side? Yes, I don't think it's a big opportunity. We're kind of nipping and tucking each year and combining 2 or 3 into 2, or 2 into 1. But we don't have any plans for any broad-based network changes like we did back in 2008. Your next question comes from the line of Jeff Kauffman with Buckingham Research. Just a couple of questions. Steve, you mentioned that you're going to put an additional $80 million of funding into the pension. I guess the question is which of the pension plans? And net-net, it's a benefit to income, the lower pension expense this year of about $2.7 million, I think. Does this $80 million imply that we're going to get a better benefit to earnings in terms of pension expense next year? First of all, I'd reiterate, I'm just happy that we're at a point where we can be having this conversation. After numerous quarters of explaining where we were and where we're going, I feel that it's a nice benefit to the organization to have made the progress on numerous fronts to be able to be talking about it. So to clarify the incremental $80 million that we're talking about, $75 million of it will go into what we refer to as our large plan, the main one that has the roughly $1.5 billion of liability, and nearly that much of assets in it at this point in time. And then the remaining $5 million will go into the smaller plan, a legacy plan, that were referenced, that we're fully terminating, and getting that off of our balance sheet. So... And the big plan's frozen at this point? Yes. The big plan, the large plan, has been fully frozen since 2009. So it's been a strategic priority of ours to work our way out of that volatile form of debt on our balance sheet and put that in the rear view mirror. So with this contribution that we're making 2014, take a big step in that direction to band that in pretty tightly. All right. And the big plan was about $80 million underfunded at the end of last year. So this basically makes you just about adequately funded in that plan right? We're anticipating that we'll be at least in the mid-90s from a funded status when we end the year by the time all these contributions go in. Of course, that depends on discount rates and asset returns by the time we get there, but somewhere in that range. To your question about its effect on pension expense, one of the things that we've also been doing as we've improved the funded status of the plan, is we've been de-risking the plan. Along with that is the expected rate of return on those assets diminishes because you're less in equities and more in fixed income. So it has a bit of the opposite effect of what you were imagining might happen in that we could see slightly higher pension expense next year than this because of that. All right, and then the follow-up. Regarding the increase in Con-way, the July 1 increase. I was on the impression that this was more of an annual increase. I don't know if we call it cost of living, but why was the increase in April last year and July this year? Jeff, given the, obviously the difficult first quarter, we weren't quite sure how strong the demand environment was going into Q2. And so we deferred the wage increase, and really in hind sight I'm glad we did because what we learned during Q2 was the fact that the labor market was much more robust for -- to drivers, both Truckload and LTL, but LTL caused some issues for us and a higher turnover. And so, ultimately, we were able to calibrate it and make it, I think, a better wage increase for our employees. It also solved some of our turnover issues. Your next question comes from the line of Thomas Kim with Goldman Sachs. I appreciate the nice addendum that we have going on here. And we would think that the environment looks favorable near-term, but I'm curious, what risks do you see that we should be mindful of outside of let's say, some of the driver issues that we're all well aware of? I think that what concerns me most is just the macro environment. I mean, if Russia does something even stupider or the Gaza gets more crazy, and there's big disruptions in the economic environment, that's our biggest risk. I mean, outside of that, things look very strong and steady, and we're confident about our future. If I could just sort of ask on the competitive side. I mean, clearly we've been in this benign competitive environment for a few years now. Are you beginning to see any signs or hints that, that behavior is changing. And if it does, let's say hypothetically, and this isn't our base case, but let's just say hypothetically, if it does, how would -- how do you anticipate responding to an environment where you begin to see 1 or 2 of your other competitors out there may be getting a little bit more aggressive to try to win back business? Well, first, this is Doug. Let me clarify. I don't think we're in a benign competitive situation. I mean, every time we go into a customer, we're in a situation where you're bidding for the business, you're vying for the business based on your capability and your performance. So I wouldn't consider it benign. I would consider the fact that we're in a very firm demand environment to be a tailwind for pricing, but it's still a very competitive environment. At least from my perspective, I don't see where there's a situation in the near term that there is going to be aggressive -- an aggressive pricing environment to win market share. It appears that people are growing market share right now based on their product and based on the tailwinds of the firm environment. And if you look at in aggregate, across our -- the LTL industry, it's a good portion of the industry is still not earning their cost of capital. So I don't see what anyone's motivation would be to enter into any kind of aggressive pricing environment. Fair enough. And if I can just squeeze one more in here. As we look ahead, when you think about growing your daily LTL shipments again, do you anticipate a need to increase your sales and marketing efforts i.e. increase some costs to do that? Or do you think you can leverage your existing sales force to grow your volumes by, let's say, for example, building on your existing customers? So we restructured our sales force in the first quarter this year, and we don't think that we'll need to make any more significant investments to facilitate growth. Your next question comes from the line of Todd Fowler with KeyBanc Capital Markets. I guess I wanted to talk about growth as well. And I guess I'm curious as to maybe why this isn't the environment to be growing in and to understand. It sounds like maybe the growth won't be a focus for the next 4 to 6 quarters. Is that more of a function of getting the business back to an investable level before you think about growth? Is that there's more opportunity on the yield side? I guess how are you thinking about growth versus margin improvement right now? So we are thinking about growth. We're focused on profitable growth. So for example in our local segment, we could focus on growth, we've gotten 8%. On national side, we think there is more opportunity for margin expansion and profit improvement in the next, call it, 6 to 12 months than there is for an explosive growth. That said, we consider 3PLs and brokers as part of our national book of business, and we've just launched a strategic focus on growing that segment where we can be profitable. And we're starting to see good results here. So I think you'll see, in subsequent quarters and even the next 3 quarters, you'll start to see that segment growing, which represents about, call it, 17% of our tonnage. So I think, when it all nets out, it's hard to say how much tonnage will grow, but I do think you'll start seeing growth in tonnage per day in 2015. So Greg, it's not a specific margin level or anything that you're looking at, it's more of the balance of as the more profitable accounts continue to grow and offset some of the accounts that you're weeding out once that mix starts to net out, that's when we should see the improvement in tonnage on a daily basis? Yes. I think so. And as we talked about earlier, the fact that we're restricting 20,000 pound and above shipments, is definitely masking our growth. We'd be up 5% for the quarter in tonnage if we didn't do that, but we felt it was the right decision for profit. So as we lap that position next year, we're not going to have that headwind in tonnage. Okay, good, that makes sense. And then, I just can't help but ask, but on the purchase transportation side, again, another nice quarter of controlling the expenses. If I remember it correctly, I think you guys were out ahead of the curve and kind of locked in some multi-year rates. Can you talk about what you're seeing on linehaul capacity? And how you're positioned going into the back half of the year in the context of the tightness that we are hearing about in the Truckload market? Yes, especially with our restricting heavyweight shipments, we feel we're in very good shape. So our rates are locked for the year and in most cases, well into next year. And we're outside of some key areas that are always hot like out of Southern Cal, we're doing very well from a capacity standpoint. So not a huge concern at this point. And no big movement in kind of PT as a percentage of revenue over expenses or anything like that? No, we think we'll continue to make progress. Your next question comes from the line of Allison Landry with Credit Suisse. Just one quick question for me. I noticed on the balance sheet that your days accounts receivable has ticked up in each of the last few quarters. So I just want to -- was curious if there's been any change in how you manage working capital? Yes, Allison, this is Steve. You're right. Working capital has increased, predominantly driven by the increase in accounts receivable, and part of that is seasonality and revenue growth. In fact, about 2/3 of that is attributable to revenue growth. But there has been some DSO deterioration that we're focused on. It's predominantly in the international space as we've had more wins there. The DSO tends to be higher in the international space, and that is contributing to that as well. Outside of that, our domestic DSO is very much in line with historical patterns. So revenue growth and international growth are the contributors. We have time for one last question. Your last question comes from Matt Brooklier with Longbow Research. Bit of a nit-picky question given the good quarter, but just looking at your Truckload pricing and the growth there, in yield, it looks like it's tracking a little bit below the market. And just curious as to what's the driver there? Is it mix? Is it the timing of contracts being repriced? And I guess, what are your expectations for yield for the remainder of the year? This is Joe, Matt. So it is a combination of those things that you just identified. So as we look to push our length of haul up, it's taking our rate per mile down. We're seeing a good stickiness in the 4% to 6% rate increase range. We've completed all of our major contract rate discussions with our significant customers, which tend to fall into May through July period. And we're looking now forward into 2015 to restart those conversations for 2015 earlier than we have in the past. Thank you very much, operator. I think we're done. Thanks, everybody, for participating. Thank you. This concludes today's conference. You may now disconnect. Con-Way (NYSE:CNW): Q2 EPS of $0.91 beats by $0.16. Revenue of $1.49B (+8.0% Y/Y) beats by $20M. About this article:ExpandTagged: Services, Trucking, TranscriptsError in this transcript? Let us know.Contact us to add your company to our coverage or use transcripts in your business.Learn more about Seeking Alpha transcripts here.Search TranscriptThis transcriptFindAll transcriptsFindCompare To:All CNW TranscriptsOther Companies in this sectorTop Authors|RSS Feeds|Sitemap|About Us|Contact UsTerms of Use|Privacy|Xignite quote data|© 2016 Seeking Alpha

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JFK's Lasting Economic Legacy: Lower Tax Rates By Marilyn Geewax Nov 14, 2013 ShareTwitter Facebook Google+ Email Originally published on November 20, 2013 4:00 pm As the young U.S. senator takes the oath to become president, he sets out to fix an economy struggling with rising unemployment, slumping profits and depressed stock prices. He knows the deep recession could prevent him from advancing his broader domestic and diplomatic agenda. Yes — all true for President Obama. But that's what John F. Kennedy faced as well. On his frosty Inauguration Day in January 1961, Kennedy had to start fulfilling his campaign pledge to "get America moving again." Like Obama, he would need to win over a deeply skeptical business community. The similarities mostly end right there. Since taking office, Obama has struggled with the aftermath of a global financial crisis and a home foreclosure meltdown. Even after nearly five years in office, he presides over an economy stuck with a 7.3 percent unemployment rate and a disappointing growth rate well below 3 percent. In contrast, Kennedy enjoyed a nearly miraculous economic turnaround. At the time of his death in November 1963, an employment boom was beginning. Stocks were soaring, swept up in the emerging "go-go" era on Wall Street — a time when investors were falling in love with mutual funds and conglomerates. So, what exactly did Kennedy do? And as the nation marks the half-century anniversary of his assassination, do the experts credit him with having a lasting economic legacy? Most historians say Kennedy's long-term economic impact was profound but complicated. Virtually all agree that in the short run, his policies did contribute to that golden era of the mid-1960s when the United States was enjoying one of the most robust economic expansions in history. By 1966 — the year that might have been the fifth of his presidency had he lived — Kennedy would have been presiding over an economy growing at a rate of 6.6 percent and an unemployment rate falling to just 3.8 percent. That boom came after Kennedy got Congress to try to stimulate the economy by passing a "liberal" agenda that included: Increasing the minimum wage. Expanding unemployment benefits. Boosting Social Security benefits to encourage workers to retire earlier. Spending more for highway construction. But Kennedy also did something that conservatives have been praising ever since: He pushed for much lower tax rates. In 1962, speaking at the Economic Club of New York, Kennedy said he was committed to "an across-the-board, top-to-bottom cut in personal and corporate income taxes." The tax system, mostly designed during World War II, "exerts too heavy a drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incentives for personal effort, investment, and risk-taking," he said. Many lawmakers worried that reducing taxes without cutting spending would create unacceptable budget deficits. But Kennedy, who famously noted that "a rising tide lifts all boats," insisted tax cuts would generate broad-based growth. Congress finally approved the tax cuts in early 1964, three months after Kennedy's assassination. The following fiscal year, the federal budget deficit did indeed shrink. Stock investors loved it. Between 1962 and 1966, the Dow Jones industrial average nearly doubled. To this day, conservatives point to that robust period as evidence that cutting taxes will lead to higher revenues. But liberals say conservatives' interpretation is misleading because conditions were so different in the early 1960s, when the top marginal tax rate was 91 percent. The Kennedy-backed tax cuts took down that rate to 70 percent. Today, the highest rate is 39.6 percent. Cutting the top tax bracket now would not have the same impact because it already has been lowered several times, the argument goes. "You can only go to the well so many times before you lose effectiveness," says David Shreve, an economic historian who has written about the Kennedy-era tax cuts. Shreve says there's another factor conservatives overlook: Kennedy's biggest tax cuts were aimed at average wage earners in hopes they would spend more. Boosting the demand side of the economy "gave us the widest prosperity and longest unbroken run of growth in history" up to then. In contrast, conservatives focus on "supply-side" cuts, which target the marginal tax rates for wealthier individuals. The goal is to encourage them to invest more and expand output. So for the half century ever since, liberals and conservatives have been debating the lessons of the Kennedy-backed tax cuts. But Allen Matusow, author of The Unraveling of America: A History of Liberalism in the 1960s, says this much is clear: The cuts were game changers. Marginal tax rates never returned to the very high levels of the early 1960s, he says. "These were permanent tax cuts," Matusow says. Kennedy also fought inflation. In 1962, he directed Labor Secretary Arthur Goldberg to mediate negotiations for a steel-industry labor contract. In the end, the steelworkers union agreed not to strike, even though workers would get no raises that year. Kennedy praised the "obviously non-inflationary" contract, as well as the negotiators who demonstrated "industrial statesmanship of the highest order." Then, days later, U.S. Steel CEO Roger Blough announced an immediate 3.5 percent steel price hike. Other companies followed suit. An enraged Kennedy condemned the "irresponsible" businessmen who had shown "utter contempt" for their country. The companies rolled back the price hikes. And throughout the Kennedy years, inflation remained stable and low. But perhaps Kennedy's most lasting economic legacy was the groundwork he laid for eventual passage of the 1964 Civil Rights Act and the Medicare program in 1965. Both had the effect of reducing discrimination in access to hospital care for minorities, especially in the South. That improved the health of many American workers. Matusow says Medicare also helped drive up medical costs as hospitals felt freer to raise prices, knowing they would get reimbursed by government. "Medicare originated as a social welfare program, but it has had economic consequences."Copyright 2014 NPR. To see more, visit http://www.npr.org/. View the discussion thread. © 2016 WHQR

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What Does London's LIBOR Mean To The U.S.? By NPR Staff Jul 7, 2012 ShareTwitter Facebook Google+ Email British banking giant Barclays is at the center of an interbank loan rate scandal that caused several high-ranking executives to resign and forced the company to pay $455 million in fines. Originally published on July 7, 2012 5:24 pm Many of us were introduced to the term LIBOR for the first time this week, when it was revealed that some banks might have been manipulating the dull but vital interest rates to gain an edge in the market. LIBOR – the London Interbank Offered Rate – is a series of interest rates determined by a handful of representatives from the biggest banks in London. The rates are what the banks would charge other banks to borrow on different loan categories, which determines the global flow of billions of dollars and perhaps even the interest rate on your savings account or home mortgage. "We're talking about the reference rate by which ... the most complex derivative to the credit card in your pocket is actually set," says Mark Blyth, an economist at Brown University. The scandal forced chairman Marcus Agius and CEO Bob Diamond of British banking giant Barclays to resign, and the company has agreed to pay $455 million in fines to regulators in the U.K. and U.S. It was at Barclays that emails appeared to show bankers willing to manipulate the rate, but several other banks — including American ones — are now under investigation. To sort through the rubble of the LIBOR scandal and find out more about potential fallout, weekends on All Things Considered host Guy Raz talked with Matt Taibbi, a contributing editor at Rolling Stone, and MIT economist Simon Johnson. Johnson's most recent book, White House Burning, is about America's national debt.Interview Highlights On why people in the U.S. should care about the LIBOR scandal Matt Taibbi: "Because the scale is just mind-boggling. Every town and municipality in America probably has investment holdings that are pegged to LIBOR. I think The Wall Street Journal calculated $800 trillion of financial products. So if there's cartel-style corruption that is affecting the LIBOR rate, it is just impossible to imagine a financial corruption scandal that is bigger in scope than this." Simon Johnson: "Pensioners. Everyone who has saved [or] ... put any kind of money into products that [are] linked to a fixed interest rate – you may not even know that that is where your pensions come from, but it typically is – all of those people are losing when interest rates are manipulated down." On the rationale by banks for the manipulation Taibbi: "[Barclays] released an email the other day that suggested that they were actually quasi-suggested by the Bank of England to do this because during that crisis period ... everybody was worried about the appearance of financial soundness of these banks. The problem is: Where does it end? When the government can just step in and change numbers to suit itself, or the banks can do that, then we're really not dealing with a free market anymore. If they're going to make that argument I don't think that's going to hold up. On how to resolve the problem Taibbi: "They gave Barclays a record fine ... but that's not going to be enough to change the way these banks do business. There have to be high-level criminal prosecutions for them to really make changes, and I worry that's not going to happen." Johnson: "Criminal prosecutions where appropriate would absolutely begin the process of changing the culture. LIBOR should not be based on what a banker tells you in principal he or she could borrow at, it should be based on actual transaction data. That's what we do in other financial markets. It should be exactly the same thing for [LIBOR] rates: real transaction data without rigging, without cheating [and] without any kind of cartel operation. The people in charge of overseeing how banks operated have failed us again, on an enormous scale. I worry a great deal about the impact on the confidence in the banking system."Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/. Related Program: All Things Considered on WUKY © 2016 WUKY

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BHI in the Media Latest Business & Economics News Tax Analysis Economic Competitiveness Govt. Accountability and Regulation Labor Economics About STAMP Join BHI Support BHI Subscribe to NetLetter BHI's Blog Founded in 1991, BHI is the research arm of the Department of Economics at Suffolk University in Boston. The institute draws on faculty and student resources to produce readable, timely analyses of the issues. It distributes its research to interested citizens and to key opinion leaders and policy makers through various print and electronic media, including its quarterly newsletter, BHI NewsLink; policy studies; BHI FaxSheets; policy forums; opinion editorials; radio and TV interviews; and its web site (www.beaconhill.org). BHI publications and events have been the subject of more than 1,000 reports, stories and opinion pieces in major newspapers and magazines throughout the United States, including the The Boston Globe, Boston Herald, Christian Science Monitor, Chronicle of Philanthropy, Financial Times, Los Angeles Times Magazine, New Republic, Newsweek, The New York Times, U.S. News and World Report, Wall Street Journal and Washington Times. Coverage in the electronic media includes ABC World News Tonight, C-SPAN, CBS Evening News, CNBC, Fox News, MSNBC, National Public Radio and all major Boston radio and TV stations as well as AP, UPI, Reuters, and Bloomberg wire services. BHI specializes in the development of state-of-the-art economic and statistical models for policy analysis. About the Executive Director Contacting BHI

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Archives:The Audit WSJ Scoop: CFTC Will Blame Traders for Oil Spike By Ryan Chittum The Wall Street Journal has a big scoop this morning that the Obama administration is set to report next month that speculation has been a primary driver of super-volatile oil prices. That’s the exact opposite conclusion of a Bush administration report by the same agency, the Commodity Futures Trading Commission, last year, which one commissioner—a Bush appointee—now says was based on “deeply flawed data.” The Journal doesn’t have any of the data from the report here, only an interview, so it’s impossible to tell just what the CFTC has, if it has anything at all. But regardless, it could be politically explosive at a very bad time for Wall Street. Speculators have been a lightning rod of criticism from politicians world-wide, who worry that rising oil prices could damp the recovery potential of their recession-hit economies. Many lawmakers and regulators say they want to ensure that speculators don’t make it more costly for consumers to access heating oil, food and other essentials. It’s worth revisiting Matt Taibbi’s piece on Goldman Sachs for his theory on what happened last year to drive gas prices over $4 a gallon. With the public reluctant to put money in anything that felt like a paper investment, the Street quietly moved the casino to the physical-commodities market — stuff you could touch: corn, coffee, cocoa, wheat and, above all, energy commodities, especially oil. In conjunction with a decline in the dollar, the credit crunch and the housing crash caused a “flight to commodities.” Oil futures in particular skyrocketed, as the price of a single barrel went from around $60 in the middle of 2007 to a high of $147 in the summer of 2008… But it was all a lie. While the global supply of oil will eventually dry up, the shortterm flow has actually been increasing. In the six months before prices spiked, according to the U.S. Energy Information Administration, the world oil supply rose from 85.24 million barrels a day to 85.72 million. Over the same period, world oil demand dropped from 86.82 million barrels a day to 86.07 million. Not only was the shortterm supply of oil rising, the demand for it was falling — which, in classic economic terms, should have brought prices at the pump down… So what caused the huge spike in oil prices? Take a wild guess. Obviously Goldman had help — there were other players in the physical commodities market — but the root cause had almost everything to do with the behavior of a few powerful actors determined to turn the once solid market into a speculative casino. Goldman did it by persuading pension funds and other large institutional investors to invest in oil futures — agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed. Note that Taibbi’s hardly the first person to say that the money from the housing bubble moved to form the commodities bubble, which remember, not only sent gas prices skyrocketing but helped cause dangerous food disruptions around the world. He is one of the first prominent journalists I’ve seen to report that the massive oil spike had little or nothing to do with supply and demand for the physical product. I’d like to see some more reporting on that. If he turns out to be right, the financial press is going to have an awful lot of explaining to do. It seems clear the CFTC report will lend credence to Taibbi’s assertion that Wall Street and Goldman Sachs (an Audit funder) caused the oil spike, which he says wouldn’t have happened if trading were limited to those who had physical control of the oil, excluding those betting with derivatives. But of course there’s never a consensus on anything, as the Journal is good to note: These decision makers don’t present a united front. The U.K.’s Financial Services Authority has found no evidence that speculators are behind big oil-price swings, people familiar with the matter said Friday. This view, made by the overseer of one of the world’s biggest financial markets, contrasts with an opinion piece published in The Wall Street Journal two weeks ago, by French President Nicolas Sarkozy and U.K. Prime Minister Gordon Brown, who said governments need to act to curb “dangerously volatile” oil prices. The paper reports that the CFTC will hold hearings next week on whether to limit commodities speculation. And this is good context: The debate over speculators underscores the shifting nature of commodities trading in recent years. Before the mid-1990s, these markets were dominated by entities that had physical dealings with the underlying commodity, and “speculators” who often took the opposite position, providing liquidity to markets. But a new group of investors has emerged in recent years. Those who want to bet on commodities prices have increasingly put their money in indexes that track the value of futures contracts, in which investors promise to pay a certain amount in the future for oil and other commodities. As of July 2008, financial investors had about $300 billion riding on these indexes, roughly four times the level in January 2006, according to the International Energy Agency, a Paris-based watchdog. Watch out for this story. It could get nasty. Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at [email protected]. Follow him on Twitter at @ryanchittum.

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Cramer's Plan to Create Jobs Drew Sandholm | @drewsandholm Thursday, 8 Sep 2011 | 8:59 PM ETCNBC.com Cramer's Take On Jobs What can really be done to create jobs in this country? Mad Money host Jim Cramer says it's pretty simple, drop the ideology and go where the jobs are already happening, as in the oil and gas industry. Cramer's Take On Jobs Thursday, 8 Sep 2011 | 6:38 PM ET As President Barack Obama laid out a $447 billion jobs package of tax cuts and government spending on Thursday, Cramer unveiled his plan for job creation on "Mad Money." "You drop the ideology and you go where the jobs are already happening," Cramer said. "I’m talking about oil and gas, an industry that wants to hire and just can’t find enough bodies to get the job done." Two weeks ago, Cramer broadcast from the Bakken shale in North Dakota, which may be one of the largest oil discoveries in U.S. history. Right now oil companies are having difficulty getting enough people to drill the 48,000 wells that may be needed to get at the 24 million barrels underground, as well as lay the pipe and rails needed to transport it. Companies that want to bring oil to the market, including and especially the pipeline builders, have great capital intensive needs. Pipeline companies build the infrastructure slowly over time because of the capital intensive nature of the process, Cramer explained. "The government could offer loan guarantees that will accelerate the process and create tens of thousands of higher paying jobs at the same time," he said. "Pipelines produce steady income once they are finished so the credit risk is almost nil." The government can pay for these guarantees by issuing $500 billion in job creation Treasuries, Cramer said. After all, they would be able to take advantage of the very low rates. The money could then be lent, or used to back to the companies' debt issuance. It could also be used to convert surface transportation vehicles from gasoline to natural gas. "You want jobs? Go to where they can be created quickly where there is real demand, rather than trying to stimulate demand and ultimately failing," Cramer said. "Issue a half a trillion in bonds that yield a stingy 2 percent and back the fastest growing industry in our country, drilling, handling and shipping fossil fuels. It’s practical and it will work." Reuters contributed to this report Call Cramer: 1-800-743-CNBC Questions for Cramer? [email protected] Drew SandholmProducer

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A look at the eurozone's 5 bailouts By The Associated Press | March 25, 2013 | 10:28 AM EDT From left, Managing Director of the International Monetary Fund Christine Lagarde, Dutch Finance Minister and chief of the eurogroup Jeroen Dijsselbloem and EU Commissioner for Monetary Affairs Olli Rehn participate in a media conference after an emergency eurogroup meeting in Brussels on Monday, March 25, 2013. After failing for a week to find a solution at home to a crisis that could force it into bankruptcy, Cypriot politicians were turning to the European Union on Sunday in a last-ditch effort to help the island nation forge a viable plan to secure an international bailout. (AP Photo/Virginia Mayo) LONDON (AP) — Cyprus' bailout deal is the fifth agreed on so far in the 17-strong group of European Union countries that use the euro since the debt crisis began in late 2009. Here's a look at the rescue programs: GREECE — Greece has received two bailout packages from its eurozone partners and the International Monetary Fund. Its problems began in late 2009, when the government admitted that public debt was far higher than official statistics showed. That led it to accept a bailout package of 110 billion euros (worth $142 billion today) in May 2010. When it became clear that bailout was not enough — because the economy kept weakening — a second bailout was clinched in February 2012 for another 130 billion euros. That included a writedown on the value of Greek government bonds to lighten Athens' debt burden. IRELAND — Ireland's banks suffered from their exposure to the U.S. mortgage market meltdown as well as to a collapse in the local housing sector. The government stepped in to guarantee creditors and deposits, but the move cost it dearly. As it rescued its banks, the costs grew and soon the government's borrowing rates on bond markets rose so high it was unable to finance itself independently. It secured a 67.5 billion euro package in November 2010. PORTUGAL — After Ireland's rescue, investors turned their eyes to the next weakest country in the currency bloc. Portugal's economy was weak and public finances shaky. The government's borrowing rates in bond markets kept rising on fears it finances would prove unsustainable. By April 2011 talks on a bailout began. In May 2011, the country agreed to a package of 78 billion euros in rescue loans. SPANISH BANKS — Spain was considered the next weakest link, which fueled fear among European investors because the country's economy is much larger than those of Greece, Ireland or Portugal. Giving it rescue loans would severely test the eurozone's financial capabilities. The main concern was that Spanish banks, which took huge losses on a collapsed real estate market, would force the Spanish government into rescue efforts it could not afford. The Spanish government agreed a deal in July 2012 with eurozone officials to get up to 100 billion euros in rescue loans directly for the banks. For a few weeks it seemed the Spanish government would also need rescue loans, but its borrowing rates in bond markets fell back down after the European Central Bank vowed to do "whatever it takes" to save the euro. It created a new program to buy a country's bonds if needed, drastically boosting confidence in the eurozone states' public finances. CYPRUS — The ECB's move calmed markets in Europe for months, but Cyprus' financial problems continued to fester. The country's banks had taken huge losses from Greece's debt writedown and the government also needed saving after it was overwhelmed by the cost of supporting its banks. Cyprus first formally asked for a eurozone and IMF rescue package in June 2012. The talks continued for months as Cyprus negotiated for a better deal, possibly involving Russia. The issue came to a head in March, when Cyprus agreed to confiscate a part of deposits in exchange for 10 billion euros ($13 billion) in rescue loans. That was rejected by the Cypriot parliament and after days of more negotiations a new deal was crafted. Analysts estimate as much as 40 percent of deposits above the insured limit of 100,000 euros would be seized at the country's two largest and most troubled banks. Along with other, smaller measures, that would raise the money needed to qualify for the rescue loans. Printer-friendly version

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From the May 15, 2013 issue of Credit Union Times Magazine • Subscribe! Credit Union Branches to Go on the Endangered Species List? May 15, 2013 • Reprints The one clear fact in the raging debate about the role of branches for credit unions is that the voices are getting louder on both sides, with some insisting that clinging to branches is strangling the industry’s profitability while others say that the personalization is what makes credit unions different. Experts have been predicting the death of the branch at least back to the recent economic downturn in 2008, but hard numbers provided by Parth Kapoor, industry analyst at Callahan & Associates, show a drop of exactly 406 net credit union branches from 2008 to 2012. That’s around a 2% decline from 21,401 branches industrywide in 2008 to 20,995 in 2012. And yet something is happening because from 2011 to 2012 there was a net decline of 434 branches, which some experts point to as a sign of growing impatience with branch networks. For good reason. Right now is a moment for pervasive uncertainty about the future of branches ­because good points are made on both sides. On one side there is banking futurist and bestselling author Brett King, who is adamant that a wholesale reduction in expensive branches will be necessary for ­institutional survival as more ­consumers abandon branches in favor of mobile banking. He ­insisted that “20% of branches are unprofitable; they will close within three years.” He added that, by his numbers, in branch transaction activity had dropped by 50% since 2000. “We will lose 30 to 50% of branches by the early 2020s,” that is, within a decade, said King. Then there is the other side, articulated by Aite analyst Ron Shevlin, who authors the blog, Snarketing 2.0. “This is just a plain stupid argument. There will be branches as long as financial institutions make money from them,” he said. In Shevlin’s view, branches remain integral to the success of most financial institutions. “There are reasons financial institutions still invest in branches. Most of their consumers go in at least a few times a year.” Yes, Shevlin acknowledged, a lot of transactional activity like deposits and cash withdrawals can be easily switched to lower cost channels such as ATMs and mobile phones, but when consumers are executing trust documents or taking out a new mortgage or shuffling retirement accounts, most still like to do these complex chores face to face with a financial services professional. Also, Shevlin said, “Having a branch in a community signals that the institution is committed to the area. That’s important. Without branches, the financial institution had to spend a tremendous amount on advertising, as ING did.” He is adamant that branches will be around for some years to come. There’s a lot of high stakes tea leaf reading about branches. And none more frantically than among the executives whose livings revolve around commercial real estate. They definitely have opinions about branches. Joe Brady, an executive with Jones Lang LaSalle’s Corporate Solutions, a leader in commercial real estate, offered a perspective. “The death of the branch is exaggerated. But branches will change in size and what they do. This will be driven by technology.” He firmly predicted that, very quickly, branches are shrinking, from a norm of 3,500 to 5,000 square feet to 1,500 square feet or smaller. “Tellers,” he added, “are cost centers. The days of a teller line are over.” w“Banks need to think more like retailers,” said Brady. He also urged financial institution leadership to pursue ­flexibility in their real estate portfolio, ­eschewing long-term leases where possible and coming up with scenarios for disposing of locations that may no longer be needed as yet more banking shifts to DIY high-tech channels. These shifts may happen very rapidly and no institution wants to be saddled with high cost real estate it does not need but that it can’t dispose of. Will Weidman, a vice president with Applied Predictive Technologies, stressed that it is not just the rise of new technologies that is driving the flight from branches, it’s also that the institutions themselves are faced with constrained margins that don’t allow a lot of give to cover high operating expenses. This is pushing financial institutions to try to route more traffic to lower cost channels, such as mobile and online banking, and that cost efficiency trend is unlikely to soften because, if anything, most experts see competition in financial markets toughening as pressures erode fee income without any significant growth in interest income. Even so, Weidman said: “Branches will not go away completely. That’s been talked about since ATMs came out, and it hasn’t happened But there will be a lot of changes in branches over the next 5 to 10 years.” Yet another vote for the transformation but not extinction of branches came from Eduardo ­Alvarez, NewGround managing director of Brand and Retail Strategy. “Branches will exist in 10 years. But they will be smaller and perform different functions.” That, not the imminent closing of most branches, may be the big takeaway and the related message is that savvy credit union executives already are well along in their experimentation with new branch formats. A case in point is offered by ­Michael Poulos, CEO of Lathrup Village-based Michigan First, a $636 million institution that presently has nine branches. But, predicted Poulos, in 10 years that ­number will double. Yet, he said, “The futurists are right. We will serve more members through electronic channels.” Poulos said he is committed to opening are new style branches. He is especially pleased with 800-square-foot mini branches he has been opening in supermarkets. “We are looking for more locations,” he said. “They are profitable for us”. But he said the industry has to ride a trend where the people who come into branches are looking for ­advice, not to do transactions. “In the branches, we can’t just be a transaction provider. We have to offer advice and information that improves people’s lives. Do that and people will still come in.” “You have to be careful whom you staff branches with,” he added. That is, not every transaction-oriented teller is suited to work in a counseling focused branch. One reality that many are beginning is that branches will still be needed. They just will be different. But they will be part of the financial services landscape for some years to come. “People will go to branches to hang out, to learn more about their financial lives,” said Alvarez, who said that the desire to do this is “baked into the American psyche.” « Prev

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NEWS RELEASE 06/14/04 Financial Accounting Foundation Trustees Issue Statement Opposing Legislative Proposals to Curb FASB Independence Norwalk, CT, June 14, 2004—The Financial Accounting Standards Board (FASB), after extensive analysis and with careful public due process, issued a proposal on March 31, 2004 regarding accounting for employee stock options and other equity-based compensation. As Trustees of the Financial Accounting Foundation (FAF) we do not take positions on the FASB’s standards-setting proposals; we leave the complex task of accounting standards setting to the experts who comprise the FASB. However, we care deeply about the integrity and independence of the standards-setting process, which we believe is threatened by current legislative proposals. We, therefore, strongly oppose any current or proposed legislation that would undermine the independence of the FASB by preempting, overriding, or delaying the FASB’s ongoing effort to improve accounting for equity-based compensation. We believe that once Congress starts setting accounting standards through its political process, the integrity of U.S. accounting standard setting and the credibility of U.S. financial reporting will be dangerously compromised. If Congress sends the message that special interests are able, through legislation, to overturn expert accounting judgment arrived at through open and thorough due process, necessary and timely improvements in financial reporting will likely become impossible. We also strongly oppose such legislation because it will severely impede the important ongoing efforts by the FAF Trustees and the FASB to achieve international convergence of high quality accounting standards that will enable global capital markets to better serve the needs of U.S. companies and investors. The fundamental importance of the independent private-sector accounting standard setting to our capital markets has long been recognized and was recently reviewed and reaffirmed by Congress in the Sarbanes-Oxley Act of 2002 and by the U.S. Securities and Exchange Commission (SEC) in its April 2003 Policy Statement. Since its creation in 1972, the FAF has acted to preserve the independence of private-sector accounting standard setting so that the FASB is able to develop standards in a thorough, objective, and open way. We believe these efforts have contributed to the success of the FASB in developing high quality financial accounting and reporting standards that strengthen our capital markets and our economy by enabling efficient allocation of resources based on sound, credible and unbiased financial information. We, the FAF Trustees, as identified on the attached roster, therefore, strongly urge Congress to reject proposals that would thwart and supplant the FASB’s process for establishing accounting standards for employee stock options or any other topic. The Financial Accounting Foundation is responsible for overseeing, funding and selecting the members of the FASB and the GASB. For more information on the organizations it oversees, visit the Foundation’s websites at www.fasb.org and www.gasb.org. Financial Accounting Foundation Robert E. Denham Chairman and President, FAF Partner Munger, Tolles & Olson LLP Stephen C. Patrick Vice President, FAF Colgate-Palmolive Company Judith H. O'Dell Secretary and Treasurer, FAF O'Dell Valuation Consulting LLC Samuel A. DiPiazza, Jr. Chief Executive Officer PricewaterhouseCoopers Douglas R. Ellsworth Director of Finance Village of Schaumburg, Illinois Barbara H. Franklin President and Chief Executive Officer Barbara Franklin Enterprises William H. Hansell Executive Director Emeritus International City/County Management Association Richard D. Johnson Former Auditor of State, Iowa Edward W. Kelley, Jr. Former Governor Duncan M. McFarland President, Chief Executive Officer and Managing Partner Wellington Management Company Frank C. Minter Retired Vice President and Chief Financial Officer AT&T International Eugene D. O’Kelly Chairman and Chief Executive Officer Lee N. Price President and Chief Executive Officer Price Performance Measurement Systems, Inc. Ned V. Regan President Jerry J. Weygandt Arthur Andersen Alumni Professor of Accounting Barbara A. Yastine Chief Financial Officer

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An Interview With Roger Martin Brendan Byrnes | In the interview below, we chat with Roger Martin, strategy expert and dean of the Rotman School of Management at the University of Toronto. We touch on a number of subjects in this interesting interview, including Bill Ackman, innovation, corporate responsibility, executive compensation, and how to pick out great companies. Martin is the coauthor of Playing to Win, a new book focusing on strategy written with former Procter & Gamble CEO A.G. Lafley. A full transcript follows the video. If you're on the hunt for a great stock idea, The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the new free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company. Brendan Byrnes: Hi, I'm Brendan Byrnes and I'm joined today by Roger Martin. Roger is the coauthor of Playing to Win, and also the dean of the University of Toronto's Rotman School of Management. Thanks again, it's good to see you. Roger Martin: It's good to be back. Brendan: You know a thing or two about strategy, having helped turn around Procter & Gamble. I wanted to ask you about Bill Ackman and J.C. Penney. You wrote in a blog post recently that "Bill Ackman shows almost no evidence of understanding enough about strategy to turn around a company." What's he doing wrong? Martin: Well, I think he understands a whole lot about capital markets and a whole lot about how to make investors happy, but I'm not sure he knows how to make consumers -- customers -- happy in a way that brings about competitive advantage. What I see with J.C. Penney is sort of a fallacy that I see often in the strategy of companies, which is that it's good enough to try to improve things. It's not. Improving is good, but only in the context of having a goal to have an advantage against competitors with some set of customers so that customers say, "I need this company." If you just improve a company, you say, "I'm going to get their inventory turns up, or their sales per square foot up," that ends up often disappointing. I think that's, in some sense, what's happening at J.C. Penney. They just announced a huge fourth-quarter loss. Same-store sales were down almost 30% in 2012, but the focus has been on, "Oh, we've got the new J.C. Penney" -- 10% percent of the stores are this new store within a store and it's double the sales per square foot of the rest of J.C. Penney -- "so as soon as we get the stores converted over to 100% of this our sales per square foot," which were 130 apparently, and are 260 within the little store within a store, new J.C. Penney, "everything will be fine." But that begs the question, "Who are you competing against?" I would argue that right now, the new J.C. Penney is competing against and absolutely slaughtering an important competitor, and it's called the old J.C. Penney. The only way that sales per square foot can be up in the new J.C. Penney, that 10%, by that much, and sales per square foot for the store overall are down that much, is what? They're taking huge, huge amounts of sales away from the old J.C. Penney. In due course, once they've destroyed the old J.C. Penney and got its sales per square foot down to zero, they're going to have to start taking share from somebody else. What I don't see is evidence that they have that in their mind, which is "How are we going to beat Macy's, Nordstrom, Target," all the companies that one way or another they compete against. That's strategy, having a Where to Play, How to Win against competitors other than yourself. Brendan: J.C. Penney definitely has a strategy problem. Even bigger than that, it just seems like with declining mall traffic it's kind of an industry problem to some extent, although some of the other guys are doing much better obviously -- Nordstrom and Macy's, you mentioned. Can J.C. Penney survive with the competition from those big boys, and can they turn it around based on strategy? Martin: I think you can always have a strategy to win in a certain way in a certain place. This is a particularly tough one, but the key is that without a strategy I think the turnaround is actually doomed to fail. Brendan: Let's talk about activist investors. You saw Icahn recently purchasing a 6% stake in Dell. He's got 10% of Netflix. Bill Ackman we talked about earlier, obviously J.C. Penney. He lost his proxy fight with Target. If I'm a shareholder and I own one of these companies, should you welcome an activist investor coming in? What effect does that have on strategy? Martin: I think it really depends. What I've seen of the activist investors... I actually haven't seen any activist investor out there be able to improve the long-run operations of the core company they've gotten involved with. There's undoubtedly examples where it's happened, but I don't see any consistency of that. What I see is them triggering something that makes the capital markets very happy in the short term, so when Ackman went in and said, "Fortune Brands, you have to split into three companies," everybody said, "Oh, wow, this is great. We've released all this value," so there's a bump. The question is: Can you make the performance of each of the companies that much better? I think a short-term shareholder, if an activist comes in and forces them to divest something -- sell off their real estate assets or monetize some portfolio of assets -- they can have a bump in the stock. But I think if you're actually a long-term shareholder -- let's say you're a pension fund or something that wants to hold a given stock for 30 years and an activist comes in -- I don't think it's particularly good for you because what they tend to do is make their money on a one-time bump. As soon as we create the spinoff and we get a bump then we, the activist, can get out. It's a mixed blessing, depending on what your interest is as a shareholder. Brendan: Warren Buffett in his recent letter to shareholders of Berkshire Hathaway said that CEOs should stop complaining about uncertainty. He said, "Things have been uncertain since 1776." He might have stolen this idea from you, though, because you had a blog post where you talked about the "uncertainty excuse." What is the uncertainty excuse, and how can CEOs best deal with uncertainty? Martin: It would be lovely if Warren did steal something from me. He's been very nice to me in the past. Yeah, the uncertainty excuse is exactly what Warren is talking about, which is that companies say, "Well, things are too uncertain for us to make strategic choices, so we're just going to bob along and see what happens until such time as we've overcome this problem with uncertainty. Then we'll make choices." What I like about Warren Buffett's thoughts there is, "Yeah, maybe in another couple hundred years it'll be less uncertain." "Oh, no. In America it's as uncertain as it was back then." That's the problem. The uncertainty excuse is the way that executive CEOs convince themselves that they're doing the right thing by not making choices. No, I think what you have to do is face up to uncertainty, recognize that there will always be uncertainty, that strategy is not ever about perfection, it's about shortening your odds and you've just got to make choices. You've got to watch after you've made the choice and say, "Did it work out the way we thought? If not, what can we do to adjust that choice?" But you've got to make choices and not use uncertainty as an excuse not to make choices or, as Buffett said, not to invest. Brendan: Let's switch gears a little bit. Let's talk about a case study you wrote that talks about "inventing in the dark." You said invention should be based around what the users want, essentially -- what you call "user-driven innovation." Could you talk about what that means? What would that have meant for a Steve Jobs? When people talk about how Steve Jobs invented products -- the iPad, the iPhone -- that people didn't even know they wanted yet, how does that fit into that principle? Martin: It very much does. Any company that really wants to innovate, and innovate consistently, has to be close to their customers, has to be watching their customers carefully, understanding what the customers do with their product or service, because it's through understanding that and understanding frustrations they may have, things that they wish they could do, that you'll be able to come up with ideas that could help those consumers out. But where Jobs is absolutely right, and my friend and coauthor on Playing the Game always says, "Consumer research of any sort never tells you the answer. It's only an aid to your judgment and creativity." I think if Steve Jobs were with us today, he would probably say that. He's famous for saying, "We don't do consumer research," but he never said, "and I pay no attention whatsoever to what consumers think or want." But he was wise enough to say, "They won't invent the next cool gadget. They'll just have needs and wants that we've got to get close enough to them to understand." What's different about Jobs and Apple -- and this was pointed out to me by Tom Hulme, a really clever Ideo designer -- he said the explicit view at the top of Apple was, "We hire employees who are the best users of our product so we don't have to do as much consumer research as other companies, because we give all the prototypes to our internal people. They use them, and they are the great leading indicator for what people on the outside of Apple will want and use." That had never occurred to me, but I think he's more right than wrong. You can have an advantage in understanding the consumer if the people in your company are prime consumers of the product that you sell. Brendan: How important do you think it is to have a CEO or top management that are constantly innovating, to take Apple as an example? Are you of the opinion that they're in trouble now that Steve Jobs is gone and Tim Cook is in there -- more of an operator and less of an innovator? Is that how you see it, or do you think both can be successful? Martin: I've never met Tim Cook, so I'm loath to make assessments of people I've never met, but to your fundamental question I do think, especially in the modern era of business, if you don't have a CEO that really believes that his or her company's life depends on innovation, I think it's bad for you. I just think, with more global competition, especially with really legitimate players in so many sectors in the low-cost geographies -- whether it be Indian outsourcers in that business, or Chinese manufacturers in a whole bunch of businesses -- if you're not innovating, they're going to be able to replicate what you're doing now with a much lower cost structure and your advantage will be eroded that much faster. You always have to be one step ahead, and I think you need a CEO who's comfortable with that, not uncomfortable, not wistfully thinking, "If we could only just keep things the way they are," or "If I could only go to the government and prevent those Chinese or Indian companies from entering our market." If that's your CEO today, I just don't see good things for you. Brendan: You've also done a lot of work on corporate responsibility. How important is that to shareholders of a company, and how do you think potential investors should look at the corporate responsibility of a company when they're considering an investment? Martin: I think this is a really, really interesting issue which is still being very much sorted out. I think there is now a rising tide of desire for corporate responsibility among consumers. Until such time as that happened, I just don't think that corporations were going to respond, but I think now consumers care more than they ever have before, so I think getting out ahead of sustainability issues and how you treat your employees is important. Brendan: We talked about conscious capitalism last time. Companies like Whole Foods, Panera, Starbucks starting to do more of this and actually, if you look back at it over time, seeing better returns. Is that something that you think other companies will take notice and will start to take off and snowball like that? Martin: I think they will, and I think what is cool about those examples that you've given are that the expression of their corporate responsibility is through what they actually do for consumers. Starbucks saying, "You will get a cup of fair-trade coffee"; coffee is their business, so I like that better than -- even though I like corporate philanthropy -- than, say, giving money to something that doesn't relate at all to your business. Whole Foods would be a similar story. I think that's going to be the trend. If I was an investor looking at that I'd say, "Boy, I'd rather invest in a company that's figured out through their business, in a way that supports and enhances their business -- those people drinking a cup of coffee from Starbucks and having confidence that it came from a farmer who's making a decent living -- I think those businesses will prosper." As an investor I'd say the consumers will love them because they're expressing their responsibility through their product. I would look for that kind of corporate responsibility first and foremost. Brendan: Taking it a little bit deeper, do you think corporate responsibility and growth, when a company is trying to manage those from a strategic perspective, can they do both? Can they balance both or do you think a corporation should always focus on corporate responsibility, or should always focus on growth for the shareholder? What do you think? Martin: Both. I'm a "both" guy. In my book way back when, The Opposable Mind, I wrote about that. The great CEOs, the great leaders, are the ones who when they're faced with what appears to be either/or, "I can either be responsible or I can make a buck for shareholders" -- making that choice is easy. You can do one or the other; anybody can do that. The really great CEOs are the ones who say, "How can I make a good return for the shareholders while showing responsibility?" It's those companies and those CEOs that if I were an investor I'd be looking for. I'd be looking for that attitude that says, "We've got to be clever. We've got to figure out how to do both." Brendan: Executive compensation. You've said in the past that right now the executive compensation system is deeply flawed. What is wrong with it right now, and how has it evolved over time? Martin: What's wrong with it now is it's so much based on stock-based compensation, and that has evolved since about 1980. Prior to 1980 there was actually almost no consequential amount of stock-based compensation in the American economy. In 1976 less than 1% of CEO compensation was stock-based. By 2000 it had become 50%. The deep flaw, I think, is if you really think about what a stock price is, a stock price is simply everybody in the market's view of how well the company is going to do in the future. It's not a real thing. It's just about expectations of the future. Brendan: Another Warren Buffett; in the short term, it's a popularity contest. Martin: That's absolutely right, so in essence when you give somebody stock-based compensation... If you're the CEO of a company, I'm on the board and I give you a stock option at the current market price, and say, "This is your incentive compensation, Brendan. You should make the most of this," what they're actually saying to you is not, "Make the company perform better." They're saying, "Raise expectations about future performance by those people out there called 'investors.'" I would argue there are a lot easier ways to do that, especially in the short term, than actually work really hard to build better products and be more efficient and effective and a better company. Brendan: Let's talk about those ways. How do you do it better? Do you look at a model like maybe Jeff Bezos at Amazon and say, "He's focused on the long term, that's what we need more of?" Martin: Yes, I think so. I really think companies have to -- and Paul Polman at Unilever when he took over in January 2009, the Google guys who said when they went public, "We will never give quarterly guidance" -- I think you have to establish that early on, that you're interested in growing the company for the long run. You can't have it both ways. I'm not as sympathetic to the CEOs who complain about the capital markets as some people are. The minute you wander down to Wall Street and say, "We just had a great blowout quarter. You should really all be excited and push our stock price up" -- you're now in bed with those same people. Brendan: You can't have it both ways. Martin: You do not have it both ways. I think the ones who just are really clear, Jeff Bezos, Paul Polman, the Google guys, and then stick with that for the long run are absolutely doing the best thing for their company because it enables them to actually invest in creating real performance. As Warren Buffett would say, in due course the stock market does reflect underlying values. But boy, in the meantime there can be massive fluctuation. Brendan: What's an example of executive compensation done the wrong way? Martin: I really think the banks in the 2000s. They were highly stock-based in their compensation practices, and if you looked at the CEOs of the too-big-to-fail banks, those 14 banks, and ask what happened to them, lots of people say, "Oh, well, their incentives were aligned and they all suffered terrible downturns in their personal portfolio in 2008." But if you look at the numbers, they made so much money in realized stock gains between 2000 and 2008 and still had so much left even after the crash, it's an example of complete disalignment. There was massive, massive, massive destruction of shareholder value and they all came out with hundreds of millions of dollars of compensation, despite the performance of their banks. There just isn't alignment. Brendan: Why not take on that extra risk lever up if I'm going to leave with a golden parachute and say, "See you later." Martin: Absolutely. It's even probably more serious than that. If you have stock-based compensation -- again, I've just hired you to be my CEO and I give you a stock grant and I tell you, "Every year, you're going to get half in stock and half in compensation, like everybody else." It turns out if you really are bloody-minded about this and say, "I'm in this to make my compensation the highest possible," the smartest thing you could possibly do is immediately upon becoming CEO say, "I've looked at the books and it's so much worse than I've ever imagined. It's just horrible. I don't know what the previous guys were doing, but it's horrible. We're going to have to do a massive retrenchment and restructuring and everything." Brendan: Bring all the expectations down. Martin: Down, right, then let them stay there for a year. They're not going to fire you because they just hired you. You get your next big stock package January 1 of the next year. In the meantime, start working on a bunch of things that start to show up. Brendan: Start blowing out earnings on low expectations. Martin: You came in at, let's say $100 a share. You drive the stock down to $50 a share then you work it back up over a couple of years to $100 a share. Shareholders got what? Zippo. What did you get? Rich. Massively rich. Stock-based compensation, even though we believe in our heart of hearts -- there's this deep, deep belief that it actually aligns the interests and gets you to do the right thing -- it does not. It is an incentive to create volatility in your stock, and it is an incentive to take huge advantage of the shareholders in order to make money. Brendan: Should CEOs not get any stock-based compensation? Martin: I think the world would work a lot better if they didn't. We have this now romantic attachment to stock-based compensation. If people feel that they have to use stock-based compensation, I think they have to do two things. One is, in the case when I hired you, I'd say, "Brendan, this is your only grant of stock-based compensation you are ever going to get as CEO. It's a really big one, but we're not going to give you one annually." And, "These are restricted. They're restricted until three years after you retire." If that was the case, then you wouldn't try to drive things down to drive them back up because you're not going to get some more stock at a low value, and you won't try and time it right to the end and do all sorts of extravagant, crazy things at the end -- gigantic acquisitions, massive cost-cutting of all R&D and everything -- to get the stock as high as possible when you retire, because it's going to have to perform well for several years until you leave. That's what I would do. Brendan: And maybe you would focus more on grooming a successor. Martin: Oh, you sure would. You sure would. Brendan: Waiting three years afterwards. Martin: Yeah, because that person, you really depend on them. Again, back to P&G and A.G. Lafley, he went to the board and said, "You know all my stock-based compensation? I think you should make it vest in 10% increments in each year after I retire." He did that, not the board. He said, "This would be better for P&G and P&G shareholders." That means he's going to leave a company in the best shape possible with the best management team there, because he doesn't cash out until that last 10% comes 10 years after he retired: 2019. That's the kind of thing you would want, but that was A.G. saying it to the board, not vice versa. Brendan: The stock-based compensation system is pretty entrenched right now. Do you have any faith that it can change, going forward? Martin: I guess I do. I see that large changes in these things are made on the basis of theories and ideas. This all came into being because of one article written in 1976 by Jensen and Meckling, who posited that we needed to create this alignment through stock-based compensation. I think in due course people will just say, "You know what? This is bad theory." Mike Jensen says it's a bad theory, interestingly enough. He said, "It's been misinterpreted, and what's happening is not consistent with my article." But these things tend to take awhile. There's such an infrastructure built up around it, including all the proxy voting services. They give advice to the pension funds that say, "You need to make sure there's big stock-based compensation," so the pension funds say, "OK, I guess I'll vote for more stock-based compensation rather than less." You've got compensation consultants out there who say, "Oh, stock is a really important part of your compensation package." When you have all of that infrastructure around, it takes longer to break out of that. Brendan: As an investor, from your perspective, you have an inside view of quite a few companies. What do you think investors should look for, from the outside, at companies that are maybe doing things the right way from a strategic point of view? Martin: Boy, it's a really hard question. Lots of people say, "You're a strategy guy, Roger, so what's your investment advice?" I say you have to be careful. There are two things that are completely different. One is the real operations of a company, and then there's the expectations surrounding those. I have no experience, no insight, no nothing, on evaluating the expectations. I could say to the person, "Here's what I would do. If I wanted to understand whether that company was going to perform well over time I'd ask myself the question, 'Do they have a very clear Where to Play?' Can you tell from the outside that they want to play here and not there, and they're sticking to this? "Then they have a How to Win. Here's an offer that they have to their customer base there. If you can see that, and you can see that clearly, that company has got a better likelihood of performing well over the long term." Now, it may just be that everybody else looking at that says, "They're unbelievable. They're even better than you think they are, or better than reality," in which case buying that stock would be a bad idea. I often point to Microsoft. Microsoft, I sometimes feel sorry for them. I probably shouldn't, but you know what their stock price has done for the last 10 years? Brendan: Just about nothing. Martin: Nothing. Nothing. During those 10 years, has Microsoft done badly? No. They've doubled in sales and tripled in profit. But nothing. Why? It's because 10 years ago, even after the big dot-com crash, even after that, people had these huge expectations for how wonderful Microsoft was going to do. They've done wonderfully and everybody said, "Yeah, that's kind of what we thought." Look at Apple now. At $700, everybody was saying, "This is the best company. They're doing so fantastically," but they were saying "They're going to keep on doing that forever," and it's $427 today. Is that because Apple's a bad company? Heck, no. It's one of the best companies on the planet. That's where there's two skill sets, Brendan, that are completely different. One is running and understanding the real operations of a company, and then the other is understanding market sentiment. The reason why Warren Buffett is worth whatever it is, around $50 billion, is he's one of the few guys that I know of in the world who has profound understanding of both. That's why he can do two things. He can take companies private and make lots of money on them, and invest with an unbelievable track record. There aren't many people who can do that. There are either people who can invest and have a fantastic track record, or people who can really run companies fantastically, and the intersection is just a tiny, tiny, tiny little number. Brendan: They're on Warren Buffett's free float from the insurance companies. Martin: Right. Yes. Brendan: Roger Martin, very interesting. Thanks again, good to see you. Martin: My pleasure to be here. Brendan Byrnes owns shares of Berkshire Hathaway and Apple. The Motley Fool recommends Amazon.com, Apple, Berkshire Hathaway, Google, Netflix, Panera Bread, Procter & Gamble, Starbucks, Unilever, and Whole Foods Market. The Motley Fool owns shares of Amazon.com, Apple, Berkshire Hathaway, Google, Microsoft, Netflix, Panera Bread, Starbucks, and Whole Foods Market. 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. handyrandy0236 wrote: When Bill Ackman announced the Ellen Degenerate to market JCs clothing they lost millions of loyal customers.Why would someone say they do not care about the feelings of loyal,lifelong customers and put a gay activist in their spotlight! I don't care if someone is gay or not-"YOU DO NOT OFFEND THE BIBLE BELT AND GET AWAY WITH IT.THEY SHOP !THEY HAVE KIDS.When I was a kid growing up in South St.LOUIS,MO. JCs IS WHERE I GOT MY SCHOOL CLOTHES .We went faithfully to Cherokee St. before the neighborhoods went down in a bad decision by one judge to force bussing on us.His decision like Ackman's drove us out! They said in 1971 a moving truck was leaving every 75 minutes to get away from Judge Hungates stupid decision.St. Louis schools were already intergrating on their own and Hungate forced kids into the worst neighborhoods in the city and the city revolted.From a population of "ONE MILLION" PEOPLE to 300,000 in just one year !Don't beleive me-CHECK IT OUT! ACKMAN IS ANOTHER HUNGATE ! !

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Fed Slow to Grasp Scope of Subprime Collapse: Records Adam Samson Newly released transcripts from meetings among Federal Reserve Board members in the second half of 2007 show the group as a whole was slow to pick up on the cataclysmic economic storm that was bearing down on the global economy. In the summer and fall of that year most of America was just learning that a multi-billion dollar market existed comprised of nothing but securities built from loans given to people who probably had no business getting them. And, more importantly perhaps, that those securities were the foundation for a housing bubble that had prompted millions of Americans to wildly overextend themselves on credit. Transcripts released Friday of meetings and phone calls from June through December of 2007, just as stock markets were beginning to respond to the early tremors, show the members just starting to connect the dots but still underestimating the devastation to be wrought by the domino effect about to kick off. For instance, during a Sept. 17 meeting, Federal Open Market Committee member Janet Yellin said: “A big worry is that a significant drop in house prices might occur in the context of job losses, and this could lead to a vicious spiral of foreclosures, further weakness in housing markets, and further reductions in consumer spending.” Fmr. BB&T CEO on Ending the Federal Reserve How Things Could Change If We Had a New Fed Chief Fed to Make Projections for Short-Term Interest Rates Is the Federal Reserve the Great Enabler of Big Government? Of course, all of that would eventually come to pass. However, during that same meeting, William Dudley, then manager of the New York Fed’s open market operations -- and now president of the New York Fed -- told FOMC members losses in subprime mortgages for U.S. banks “will ultimately turn out to be in a range of $100 billion to $200 billion.” Losses Proved to Be Much Higher Those losses proved to be much higher. Banks received more than $400 billion in the Troubled Asset Relief Program approved in early 2009, and the wider impact of the crisis on household values and job losses ended up in the trillions of dollars. Also at that meeting, Fed economists projected a 5% decline in housing prices over the next two years – 2008 and 2009. Instead, home prices across the U.S. fell about 30%, crimping consumer spending and shutting down a vital piece of the economic engine. The transcripts show the writing was on the wall much earlier -- in June of 2007, shortly after two Bear Stearns hedge funds loaded with subprime loans began to implode, a move that foreshadowed the financial calamity to come. During a June meeting of the Fed Dudley described the subprime mortgage space as “very unsettled.” He said it was hurt by housing market fundamentals and problems with the two Bear Stearns hedge funds. The troubled funds had sent the spread on an index that tracks credit default swaps to a new record high at 1400 basis points. Dudley noted the “danger that forced liquidation of illiquid subprime-based securities could exacerbate the pressure on this market,” but said the problems are likely “mostly exceptional” in nature, suggesting that the problem was isolated. But Dudley went on to tell the FOMC that there is a potential for a more widespread event of this nature to cause a cascading effect. “There still are risks that forced selling could drive market prices down sharply, leading to lower marks for other portfolios of assets related to subprime mortgages,” he said. “This, in turn, could lead to margin calls, investor redemptions, and further selling pressure in this market.” And, in hindsight, that became the defining theme of the subprime crisis, the way in which defaults on a bunch of bad loans to high risk borrowers spread like wildfire through the global economy and nearly brought it down. Months of Hemming and Hawing Dudley was also ahead of the curve on the issue of top credit rating given to these securities by the three primary ratings firms, foreshadowing another powerful dynamic that contributed to the financial crisis. “The ratings are based on the risk of default, not the market risks associated with illiquidity. As a result, highly leveraged portfolios of highly rated but illiquid assets are subject to significant market risk that the ratings may obscure,” he said. Notwithstanding these warnings, FOMC members spent the next several months hemming and hawing over the scope of the problem and potential solutions. By December however the players seemed to be getting a better grasp on the coming crisis. Timothy Geithner, then president of the New York Fed and soon to take over as Treasury Secretary, said during a Fed phone call, “I think what’s happening in markets now is very serious and really potentially very dangerous.” Geithner also predicted the dramatic interventions by the Fed that would follow, moves that included years of historically low interest rates and trillions of dollars of asset purchases by the Fed in an effort to pump liquidity into ossified credit markets. “I think monetary policy is going to have to bear most of the burden for both responding to the risks to the economy presented by this dynamic and arresting some of the behavioral dynamic that we see manifest in markets today,” Geithner said.

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U.S.EditionsAustralia EditionChina EditionIndia EditionItaly EditionJapan EditionSingapore EditionUnited KingdomUnited States Jul 24, 6:42 AM EDT SubscribeEverything You Need To Know, Right Now. Everything You Need To Know, Right Now.The IBT Pulse Newsletter keeps you connected to the biggest stories unfolding in the global economy. Please enter a valid email Search Search BusinessTechnologyWorldNationalMedia & CultureMillennial MoneyEntertainmentSports Subscribe Business Back-To-School, Holiday Season Expected To Be Same Or Better By Angelo Young @angeloyoung_ On 08/20/12 AT 1:30 PM A man shops for shoes at a Foot Locker store in New York October 14, 2010. Photo: Reuters Unemployment is still above 8 percent, the cost at the pump is rising and consumers are still wary and cost-conscious, but recent surveys indicate back-to-school buys and the all-important upcoming holiday shopping season will be as good as or better than last year even as consumers strive to make every dollar count.Still, the theme of the season is cautious optimism and mixed signals about what direction consumers will take this year: will they exhibit classic recovery related buying patterns or will the economy take a turn for the worse, battering the holiday shopping season as it did in 2008?Consumer sentiment entered August at a three-month high and July's retail sales figures showed the first month-to-month gain since March. Job gains were better than expected. Unemployment stands at 8.3 percent, but it's lower than the 9.1 percent that ushered in last year's back-to-school shopping season. One positive indicator arises from expectations of maritime freighter traffic. A monthly estimate by the National Retail Federation and Hackett Associates indicated that container traffic through the nation's key ports is expected to be up 6.3 percent in August, up 7.3 percent in September and up 13.2 percent in October over the same months last year.Port traffic between August and October is an indicator of retailers' confidence as they stock up on imported items ahead of the all-important holiday shopping season. In 2011, imports shrank in all three of those key months, led by a 7 percent decline in August compared with the year before.Importers also appear to be gearing up for increased consumer spending. According to an annual survey by the New York-based non-bank trade financier Capital Business Credit, 77 percent of merchandise importers believe the fall and winter seasons will be the same or better than last year. This year, 44 percent of these importers said they believe this year's holiday shopping season will be better than last year's; this is up from the 27 percent, year-over-year increase in those who expressed the same sentiment last year. Still, 22 percent of those surveyed said they have seen orders shrink so far compared to last year.The recent slew of company earnings reports and conference calls showed a mixed bag, however, with bargain retailer Wal-Mart Stores Inc. (NYSE: WMT) reporting strong guidance for the season while specialty apparel retailer Aeropostale Inc. (NYSE: ARO) exhibiting a soft start."While I believe we are focused on the right key initiatives to improve our overall business, sales trends for the early back-to-school season have been inconsistent," said Thomas P. Johnson, Aeropostale's chief executive officer, said in announcing his company's second-quarter earnings last week.Carol Schumacher, vice president of investor relations for Wal-Mart Stores, Inc., said in a recent conference call that back-to-school apparel sales were up 7 percent from last year at about halfway through the shopping season."Within home, we're seeing strong performance in college essentials like bedding and bath," she added.

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An Analysis of the "Streamlined Sales and Use Tax Administration Act" By Michael D. LaFaive, published on June 22, 2001 At the request of state Rep. Leon Drolet, Mackinac Center for Public Policy Policy Analyst Michael LaFaive prepared an analysis of a bill aimed at "streamlining" Michigan's sales and use tax system. LaFaive found that the bill potentially would result in additional burdens on taxpayers in the form of taxes on e-commerce and other purchases made from out-of-state vendors. June 20, 2001 The Honorable Leon Drolet33rd DistrictMichigan House of RepresentativesLansing, MI 48909-7514 Stay Engaged Receive our weekly emails! email address Dear Rep. Drolet: Thank you for contacting the Mackinac Center for Public Policy about Senate Bill (S.B.) 433, the proposed "Streamlined Sales and Use Tax Administration Act." I appreciate the opportunity to share my thoughts with you on this issue. On its face, this legislation is a tool for the state to simplify the collection of sales and use taxes. There are thousands of taxing jurisdictions in the United States, and many define, and therefore tax, identical products differently. For instance, some jurisdictions consider orange juice to be a drink while others classify it as a fruit. S.B. 433, and similar legislation in other states, is being sold as a way to simplify the often confusing and complex issues involving how and whether or not to tax certain items. A closer look at the bill, however, suggests that simplifying or "'harmonizing" state sales taxes may lead to a de facto—or even an explicit—national retail sales tax as more and more states adopt such legislation. It's true that S.B. 433 does not give the state the power to directly mandate tax collection from purchases made by Michigan consumers from out-of-state businesses. But it does establish a framework for doing so. How does it work? First, if S.B. 433 becomes law, Michigan will have a mechanism at its disposal for a broader collection of use-tax revenue than it currently has. At first, the mechanism would be voluntary. But many observers believe that, once established, it would facilitate mandatory taxation by Michigan on remote sales, creating a de facto national retail sales tax as other states passed similar legislation. (Currently, more than 30 states are working to pass nearly identical legislation.) Grant Gulibon, a senior policy analyst with the Commonwealth Foundation in Pennsylvania, notes, "Internet tax supporters hope that ... the system they create will be so successful that Congress will give them [the states] the authority to make it mandatory." Currently, states may not tax out-of-state purchases made by Michigan citizens. But it is not too far-fetched to suggest that when and if Congress does allow states to tax remote sales, it may demand that states tack on an extra penny for Uncle Sam. The 1992 court decision Quill v. North Dakota has declared that catalog and Internet retailers need not collect sales taxes from purchasers outside of states in which they do not have a substantial physical presence or "nexus." Why? Because it would create an undue burden on businesses to collect and remit sales taxes to any one or more of the 7,500 taxing jurisdictions in the United States, in violation of the U.S. Constitution's Commerce Clause. This gets to an age-old question economists have debated, regarding the "incidence" of a tax. It is true that the consumer appears to pay the full tax at the point of purchase, but that's not the same as saying that the incidence of such a tax is entirely on the consumer. If that were the case, then the seller is unaffected by the imposition of the tax and simply passes the full cost on to the consumer with no effect on sales. Unfortunately, this is not the case. There is fairly clear evidence to suggest Internet, catalog, and 1-800 businesses will see a dramatic drop in business as a result of such a tax. Even though these businesses are not themselves being taxed directly, the tax is nevertheless taxing on their livelihoods. As a state of Michigan Office of Revenue and Tax Analysis report notes, Congress may be able to "remove the Commerce Clause barrier and allow states to force mail order and Internet firms to collect sales tax on purchases from their customers" provided states can simplify their existing sales and use tax laws, which is exactly what S.B. 433 is designed to do. Another danger of S.B. 433 is the number of jobs that could potentially be lost as a result of increased tax collection. Estimates show that broadening Michigan's tax revenue base to include the mandated collection of use taxes would kill between 1,500 and 4,700 Michigan jobs in the first three years of such a mandate. These estimates were calculated using an econometric model designed for the Mackinac Center for Public Policy by the Beacon Hill Institute of Suffolk University in Massachusetts. The model, the State Tax Analysis Modeling Program (STAMP), was specifically tailored to calculate the impact of tax increases and decreases on the Michigan economy. In order to estimate these job losses, this author employed estimates of tax revenue losses to Michigan from its failure to collect use taxes on out-of-state purchases made by Michigan residents. The estimates are from the General Accounting Office review of sales taxes on e-commerce and other remote sales. According to the GAO report, the state of Michigan "loses" between $109 million and $343 million each year in use taxes because Michigan citizens largely avoid reporting their out-of-state purchases. According to STAMP, raising this additional revenue by mandate would eliminate up to 4,700 Michigan jobs because people no longer have this money to invest in their own futures. It is effectively a tax increase on economic development. Unless S.B. 433 proponents are prepared to acknowledge and defend this tax increase, they should at least offer a corresponding tax reduction in some form so as to not do injury to Michigan's economy. An irony of S.B. 433 is that the extension of use taxes to Internet commerce is a direct contradiction of Gov. Engler's "economic development"' policies. The state of Michigan, led by the Michigan Economic Development Corporation (MEDC), has been aggressively pursuing technology-based economic development recently. For instance, it has created special low-tax "SmartZones" in 11 selected geographical areas to "stimulate the growth of technology-based businesses and jobs." Last year, the Legislature allowed the Michigan Economic Growth Authority (MEGA), through an amended statute, to provide Single Business Tax credits to small high-tech firms. And the MEDC is currently attempting to organize an angel investor network in Michigan to fund technology startups. Why bother making the effort to encourage economic development in technology on the one hand and hamper it on the other? University of Chicago economist Austan Goolsbee found that applying sales taxes to e-commerce would reduce the number of online buyers by 24 percent. Once again the state of Michigan's left mitten doesn't seem to know or care what its right mitten is doing. Gov. Engler's position is that it is simply unfair to tax traditional "bricks and mortar" businesses 6 percent on their sales while exempting sales over the Internet from the same sales taxes. The "fairness" argument is a common one among proponents of Internet taxation. But it is also a deeply flawed one. What Gov. Engler may not realize is that basing his case for taxing Internet purchases on the "fairness" or "uniformity" argument undermines other taxation positions his administration has taken. For example, the Engler administration often has bestowed special breaks, favors, and even direct subsidies on certain businesses at the expense of fairness and uniformity, and then praised the policy as promoting Michigan's "economic development." That is what the MEDC does routinely. For example, in December of 1999, MEGA officials authorized a $23.4-million incentive package for Webvan Group Inc., of San Francisco. Webvan runs the Internet web site Webvan.com, which operates as an electronic grocery store. The e-store receives orders over the Internet and fills and delivers them to its clients free of charge. The Webvan site has claimed that its prices, "on average, are up to 5 percent less than in local grocery stores." Giving special breaks to Webvan, then, clearly violates Gov. Engler's stated desire for fair treatment of all businesses—particularly in this case, Michigan's traditional "mom-and-pop" grocery stores. The bottom line is that S.B. 433 is more of a long-term revenue bill disguised as a tax simplification bill. Why else would special-interest groups that would otherwise have no interest in whether or not orange juice is a fruit or a drink be the first to testify in favor of it, just as they have? At a time when Michigan and the nation's economy is slowing, and technology firms are struggling just to keep their doors open for business, S.B. 433 and similar legislation takes Michigan and the rest of the country in the wrong direction. Michael D. LaFaivePolicy Analyst For more information, please see the Mackinac Center for Public Policy report, "Internet Purchases: To Tax or Not to Tax, Here Are the Questions." Michael D. LaFaive Cut Corporate Welfare to Help Balance State Budget Pure Michigan: An Economic Development Program That Doesn’t Create Any Development

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NCPERS Head Cries Foul Over Pew Pension Survey Age of data and time period analyzed at center of complaint A study released Wednesday from Pew Charitable Trust found 61 “key” cities across America have pension and healthcare funding gaps of a combined $217 billion. These cities had a shortfall of $99 billion in fiscal year 2009, the most recent year with complete data, according to the report titled “A Widening Gap in Cities.” The rest of the shortfall—$118 billion—was for retiree health care and other benefits. Because some cities are slow to report their results, a complete set of data was available only through fiscal year 2009. Over the long term, cities and states strengthen their fiscal position if they have policies that aim to fully fund their pension and retiree health care obligations, Pew notes. “Between 2007 and 2009, 16 cities consistently did well in funding their pensions, while nine cities underperformed. Wide disparities exist in how well prepared cities are to fulfill their pension obligations to employees. It notes Milwaukee had a surplus at the end of fiscal year 2009, with enough money to cover 113% of its liabilities. At the other end of the spectrum, pension systems in four cities—Charleston, W.Va; Omaha, Neb.; Portland, Ore; and Providence, R.I.—were the most poorly funded, with Charleston trailing all the cities at 24%. The report drew the ire of the National Conference on Public Employee Retirement Systems, the country’s largest trade association for public sector pension funds. Hank Kim, the organization’s executive director and counsel, called the report’s findings about the health of municipal pension plans “distorted and outdated.” Kim specifically took aim at the age of the data Pew analyzed, noting it was four years old and included the period directly following the economic crisis. "[It] may provide a valuable history lesson, but it cannot yield a realistic representation of the status of municipal pension plans today,” Kim said in a statement. Pointing to the organization’s own report, “The 2012 NCPERS Fund Membership Study,” he said it found that local pension funds are continuing their strong recovery from the negative impacts caused by the Great Recession. “Participating funds reported a solid average funded level of 74.9%—and it’s important to note that according to its February 2011 report Enhancing the Analysis of U.S. State and Local Government Pension Obligations, Fitch Ratings considers a funded ratio of 70% or above to be adequate. Those funds also reported strong and growing returns on their longer-term investments (three to 10 years), a very good sign for any organization that pays off its liabilities over an extended period of time.” More Economy & Markets Fitch Ratings Pew Charitable Trust Public Employee Retirement Systems

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S&P Weighs Restarting Talks on U.S. Suit Firm Isn't in Active Talks With Justice Department By Timothy W. Martin BiographyTimothy W. Martin @timothywmartin [email protected] Standard & Poor's Ratings Services, after more than a year of fighting a crisis-era lawsuit, is willing to reopen discussions with the Justice Department to settle the case, according to people familiar with the matter. The company isn't in active talks with the Justice Department and no deal is imminent, these people said. And while no penalties have been discussed, negotiations would likely focus on a range of several hundred million dollars to around $1 billion, these people said. The firm also doesn't want to admit...

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Home \ Contact Us \ Membership \ Calendar of Events \ Login All About CSBS CSBS Membership Examiner Certification Department Accreditation Board of Trustees & Committees CSBS Testimony CSBS Legal Issues Legislative Resource Links MSR Task Force CSBS Examiner CSBS Annual Reports CSBS White Papers CSBS Media Kit SRR Board of Managers About NMLS Examiner Archives | Home > Newsroom > CSBS Examiner A weekly report of events affecting the state banking system from the Conference of State Bank Supervisors 5/25/2012 In This Issue... CSBS Announces 2012-2013 Board & Officers New CSBS Chairman Greg Gonzales Says Community Banks Paint a Very American Story Senators Introduce Legislation to Bar Bankers from Serving on Federal Reserve Boards Around the States Around the Agencies Around the DC Upcoming Events... State-Federal Supervisory Forum, Savannah, GA, May 21-23: The State Federal Supervisory Forum is an annual gathering of senior executives in key leadership positions with state and federal regulatory agencies. Participants will discuss current and emerging policy and operational issues affecting state financial regulation and the state/federal regulatory partnership. The program will include formal presentations on a variety of important topics, open forum Q&A sessions, as well networking opportunities. Examiners Forum, Portland, OR, June 18-20: The 2012 Examiners Forum is designed to bring together Senior Certified Examiners and other "seasoned" examiners to discuss current and emerging issues. Senior School, Indianapolis, IN, June 25-29: Senior School is designed to meet the specific leadership training needs of state financial regulators who are rising into supervisory and/or management positions within their departments, serve as an examiner-in-charge in the field, or currently hold a managerial position within the agency. The behavioral science and management techniques presented are developed and honed each year to apply to the unique and evolving needs of financial regulatory personnel. Deputy Seminar, New Orleans, LA, July 30 – August 1: The Deputy Seminar is an opportunity for key banking department officials to gather to learn about upcoming issues, share challenges, and learn potential solutions. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> Legal Seminar, New Orleans, LA, August 1-3: The Legal Seminar provides a forum for state banking department attorneys, assistant attorneys general assigned to the department, and other regulatory attorneys. “Live rich, die poor; never make the mistake of doing it the other way ‘round.” – Publisher Walter Annenberg To which we might add, timing is everything, and Facebook founder Mark Zuckerberg appears to have perfect timing. We aren’t in a position to opine on the rumors about the underwriter of Zuckerberg’s IPO, but he collected his billions, pulled off a surprise wedding and presumably is happily-ever-aftering in some delightful locale. Rich or poor or in-between, we all live in the here-and-now and hope, if we’re lucky, to make the most of it._________________________________________________________ Following the annual meeting of the Conference of State Bank Supervisors (CSBS) held in conjunction with the CSBS State-Federal Supervisory Forum in Savannah, Ga., CSBS announced the new board and officers for 2012-2013. Newly-installed officers, who comprise the Executive Committee, include: • Chairman: Tennessee Commissioner of Financial Institutions Greg Gonzales.• Chairman-Elect: Kentucky Commissioner of Financial Institutions Charles A. Vice.• Vice Chairman: Arkansas State Bank Commissioner Candace A. Franks.• Secretary: Massachusetts Commissioner of Banks David J. Cotney.• Treasurer: Texas Banking Commissioner Charles G. Cooper.• Immediate Past Chairman: Louisiana Commissioner of Financial Institutions John P. Ducrest. Commissioners representing the CSBS Districts are: • District I – Maine Superintendent of the Bureau of Financial Institutions Lloyd P. LaFountain, III.• District II – Indiana Director of the Department of Financial Institutions David H. Mills.• District III – Alabama Superintendent of Banks John D. Harrison.• District IV – South Dakota Director of Banking Bret Afdahl.• District V – Oregon Administrator of the Division of Finance and Corporate Securities David C. Tatman. At-large Board Members are: • New York State Department of Financial Services Superintendent Benjamin Lawsky.• Utah Department of Financial Institutions Commissioner G. Edward Leary. Other members of the CSBS Board of Directors include: • Bankers Advisory Board Co-Chairman: Iowa Superintendent of Banking James M. Schipper.• CSBS Legislative Committee Chairman: Washington Department of Financial Institutions Director Scott Jarvis.• CSBS Regulatory Committee Chairman: Maryland Commissioner of Financial Regulation Mark Kaufman.• Chairman of the Foreign Bank Regulatory Committee: Connecticut Banking Commissioner Howard F. Pitkin.• Chairman of the State Supervisory Processes Committee: Iowa Bank Bureau Chief Vaughn M. Noring.• Chairman of the Board of Trustees of the CSBS Education Foundation: Wyoming Department of Audit Director Jeffrey C. Vogel.• Chairman of the State Regulatory Registry LLC Board of Managers: North Dakota Commissioner of Financial Institutions Robert J. Entringer.• Chairman of the Federal Financial Institutions Examination Council (FFIEC) State Liaison Committee: Nebraska Director of Banking and Finance John Munn.*• Bankers Advisory Board Co-Chairman, Banker: Farmers State Bank President and CEO Joseph G. Pierce.* Chairmen Emeritus, who serve as ex-officio members of the CSBS Board, include: • Idaho Department of Finance Director Gavin M. Gee.*• Virginia Commissioner of Financial Institutions E. Joseph Face Jr.*• Utah Commissioner of the Department of Financial Institutions G. Edward Leary.*• Oklahoma State Banking Commissioner Mick Thompson.*• Wyoming Department of Audit Director Jeffrey C. Vogel.* * denotes non-voting members_________________________________________________________ In his key note speech at the CSBS State-Federal Supervisory Forum, newly elected Chairman Greg Gonzales, Commissioner of the Tennessee Department of Financial Institutions, touted the role and value of community banking through the lens of his tour through communities in his state. “The fact I see over and over is that these banks are clearly and deeply ingrained into the very fabric of these communities,” stated Gonzales. “For some communities, the banks are the very lifeblood of the towns and cities they serve.” Gonzales asserted that over the next year CSBS will maintain its central role in both encouraging and maintaining a diverse and competitive banking system and an effective state system of bank supervision and regulation. “There is no greater goal than the effort to ensure the viability of the community bank model,” said Gonzales. “Community banks are simply too important to the health of our local, state, and national economies to be ignored.” To ensure the community bank model succeeds, Gonzales also stressed the importance of increased, constructive coordination among state and federal regulators. He said coordination is vital to identifying emerging threats and trends in the financial system and that it fosters opportunities for improved supervision. “I fear without honest and constructive coordination, the community banks we so heavily rely upon as a nation will fall victim to the recovering economy and the regulatory schemes designed to mitigate risk at our nation’s largest and most complex institutions,” stated Gonzales. John P. Ducrest, the Immediate Past Chairman of CSBS, also addressed attendees at SFSF. During his remarks, Ducrest, the Commissioner of the Louisiana Office of Financial Institutions, reflected upon his year as head of the Board and congratulated Gonzales in his new role as chairman. “Greg has a sure sense of what we want the financial services industry to look like in the future,” Ducrest said. “It’s not an industry comprised only of a handful of mega-banks, but a flourishing industry characterized by strong community banks operating in all corners of the nation, especially in rural areas that would not have access to financial services if it weren’t for their local community banks.” The full text of Gonzales’ speech is available here. _________________________________________________________ Sens. Bernie Sanders (I-Vt.) and Barbara Boxer (D-Calif.) introduced legislation Tuesday aimed at barring bankers from serving on the boards of the Federal Reserve's 12 regional banks. The bill (S. 3219), titled the Federal Reserve Independence Act, is a follow-up on an audit by the Government Accountability Office that cited potential conflicts in having bankers serve on Federal Reserve Bank boards. The measure would bar Federal Reserve Bank board service or employment for anyone who works for, or invests in, any firm eligible for direct financial assistance from the Federal Reserve, and sharply restrict stock ownership and investments by Federal Reserve Bank employees and board members. This is not a new issue before Congress. During the debate on Dodd-Frank, Congress considered proposals to eliminate the role of member institutions in selecting Reserve Bank board members. Ultimately, Dodd-Frank amended the Federal Reserve Act so that Class A directors (those Directors representing commercial banks regulated by the Reserve Banks) do not vote on the appointment of Reserve Bank presidents. Additionally, Congressman Barney Frank introduced legislation (H.R. 1512) last year that would remove representatives of the Reserve Banks from the Federal Open Market Committee. The measure is largely seen as a response to the recent trading loss of JPMorgan Chase & Co., whose chief executive officer, Jamie Dimon, sits on the board of the Federal Reserve Bank of New York. Because the Federal Reserve Bank of New York also regulates JPMorgan, Senator Sanders said the practice poses dangerous conflicts of interest. “The people ‘regulating’ the banks are the exact same people who are being regulated. If this is not a clear example of the fox guarding the henhouse I don't know what is,” Sanders said at a news conference. In a press release issued Thursday by the Kansas City Federal Reserve, Esther George defended the role of bankers serving on Federal Reserve Bank boards, stating that bankers provide valuable information about economic conditions in their communities. Furthermore, she said that “while all directors are involved in matters regarding Reserve Bank governance and oversight, they play no part in the Fed’s role in supervising and regulating financial institutions.”_________________________________________________________ PA: Consumers interested in strengthening their knowledge about personal finance and investing are invited to take part in the "Money Matter$" conference on May 31 in Erie. The event is co-hosted by the Pennsylvania Banking Department. The Department of Banking will host a session entitled "Banking Basics 101," which will focus on recent changes to the banking industry and how these changes can affect consumers' everyday lives. This session will also address different types of banking accounts and various fees that can be assessed to those accounts. Read more. TX: Effective June 1, 2012, the Texas Department of Banking is revising its policy regarding the use of branch certificates as part of its continuing efforts to minimize regulatory burden. As of the effective date, the Department will no longer issue branch certificates of authority and Texas state-chartered banks will no longer be required to display a certificate of authority at each branch. Read more._________________________________________________________ CFPB: The Consumer Financial Protection Bureau (CFPB) issued an Advance Notice of Proposed Rulemaking this week seeking input on how to ensure that consumers’ funds on prepaid cards are safe and that card terms and fees are transparent. This is the CFPB’s first step toward adopting consumer protections for the prepaid card market. “The people who use prepaid cards are, in many instances, the most vulnerable among us,” said CFPB Director Richard Cordray. “All consumers need, and deserve, products which are safe and whose costs and risks are clear upfront. Yet right now prepaid cards have far fewer regulatory protections than bank accounts or debit or credit cards. That’s why we are launching a rulemaking to promote safety and transparency in this emerging market.” Read more. CFPB: The CFPB is proposing a rule that would set up procedures to supervise non-banks that may have engaged in activities that pose risks to consumers. This rule would clarify procedures the CFPB would use when exercising the authority granted to it by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Read more. FDIC: Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported an aggregate profit of $35.3 billion in the first quarter of 2012, a $6.6 billion improvement from the $28.8 billion in net income the industry reported in the first quarter of 2011. This is the 11th consecutive quarter that earnings have registered a year-over-year increase. However, loan balances declined by $56.3 billion (0.8 percent) after three consecutive quarterly increases. Read more. FINRA: The Financial Industry Regulatory Authority (FINRA) announced that it has fined Citigroup Global Markets, Inc. $3.5 million for providing inaccurate mortgage performance information, supervisory failures and other violations in connection with subprime residential mortgage-backed securitizations (RMBS). Read more. TREASURY: The U.S. Department of the Treasury announced the identification of Belarus-based JSC CredexBank (Credex) as a financial institution of primary money laundering concern. Treasury took this action because it has reason to believe that Credex has engaged in high volumes of transactions that are indicative of money laundering on behalf of shell corporations, and has a history of ownership by shell corporations whose own lack of transparency contributes to considerable uncertainty surrounding Credex’s true beneficial ownership. Read more. _________________________________________________________ May 31: The National Journal is hosting Compare the Candidates: An Analysis of the Issues Defining the 2012 Presidential Election at the Newseum in Washington, D.C. at 8 am. The two presidential nominees sharply diverge on key policy issues such as the economy, workplace policy and foreign policy. The event will examine this clash of policy ideas, each candidate’s vision for America, and a broad range of public policy issues destined to define the 2012 general election cycle. Read more. June 18-20: The 2012 Examiners Forum will be held in Portland, Oregon and is designed to bring together Senior Certified Examiners and other "seasoned" examiners to discuss current and emerging issues. Read more. _________________________________________________________ Closing Comment “The dual banking system has provided and continues to offer significant benefits to our financial system and the economy. For example, it has allowed local bankers, state supervisors and state governments to construct a banking system closely attuned to the economic needs of each state and supervised by personnel with a strong knowledge of the structure and condition of the local economy.” – Esther L. George, President and Chief Executive Officer of the Federal Reserve Bank of Kansas City in a speech during the CSBS State-Federal Supervisory Forum in Savannah, Ga._________________________________________________________ Catherine Woody, EditorRockhelle Johnson, WriterEdward Smith, Contributing Editor ©2016 CSBS Terms of Use \ Privacy Policy \ Site Map 1129 20th Street, N.W., 9th Floor \ Washington, DC \ 20036 \ Tel. 202.296.2840 \ Fax. 202.296.1928

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Kigali, Rwanda / General Store A loan of $850 helped to purchase a large quantity of sugar, bread and rice. Sylvere's story Sylvere is 31 years old and single. He takes care of two relatives who are 12 and 16 years old. Sylvere is a self-employed businessman. He sells a variety of goods, such as cosmetics products and foodstuffs (bread, rice, sugar, cooking oil, etcetera). His shop is open from 6 a.m. until 7 p.m. daily. He employs two people to help him. Sylvere has now requested a Kiva loan via Vision Finance Company in order to purchase a large quantity of bread, sugar and rice, as they are in high demand. With this large quantity, he will also start wholesaling. In doing so, Sylvere hopes to earn more profits which in turn will allow him to renovate his house and continue paying school fees for his two relatives. More from Sylvere's previous loan » This loan helps low-income entrepreneurs in Rwanda grow their businesses and, ultimately, to support their families. These loans typically serve very poor and rural clients and particularly women, who often lack access to the traditional collateral needed for a loan. VisionFund Rwanda serves these entrepreneurs through both individual and group loans and provides them with financial education and tools for them to save money for the future. By supporting this loan, you are helping Rwandan entrepreneurs build the means to support their families and improve their lives. About VisionFund Rwanda: VisionFund Rwanda (VFR), is the microfinance subsidiary of World Vision and is one of the largest microfinance institutions serving rural underprivileged communities in Rwanda, many of which do not have access to formal financial services. VFR serves people and communities that are economically productive but low-income, especially in very rural areas. This includes small business owners and salary earners who are looking for opportunities to provide better lives for their families and a promising future for their children. VisionFund Rwanda This microfinance institution incentivizes its loan officers to serve women and rural communities who have typically lacked access to financial services. It pays special attention to poor and underdeveloped areas by working with World Vision Area Development Projects. In addition to financing, it provides training in financial literacy, enterprise management and health basics through partnerships with other NGOs. More about VisionFund Rwanda

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Home > VOL. 128 | NO. 125 | Thursday, June 27, 2013 Slower US Growth Might Lead Fed to Delay Tapering CHRISTOPHER S. RUGABER & MARTIN CRUTSINGER | AP Economics Writers From (email): Message: WASHINGTON (AP) – The U.S. economy may not be strong enough for the Federal Reserve to slow its bond purchases later this year. That's the takeaway from economists after the government cut its estimate Wednesday of growth in the January-March quarter to a 1.8 percent annual rate, sharply below its previous estimate of a 2.4 percent rate. The main reason: Consumers spent less than previously thought. Most economists think growth will remain low as consumers and businesses continue to adjust to federal spending cuts and higher taxes. Growth is expected to reach an annual rate of only about 2 percent in the April-June quarter. Even if the economy improves slightly, it would be hard to meet the Fed's forecast of 2.3 percent to 2.6 percent growth for 2013. Chairman Ben Bernanke rattled investors last week when he said the Fed will likely slow its bond-buying this year if the economy continues to strengthen. The bond purchases have helped keep interest rates low. Bernanke added that if the economy weakens, the Fed won't hesitate to delay its pullback or even step up its bond purchases again. Jennifer Lee, senior economist at BMO Capital Markets, said that if the April-June quarter proves tepid, the Fed will be looking at three straight quarters of subpar growth. "The Fed won't taper (its bond purchases) under these conditions," Lee said. "They need convincing signs of a pickup." Joel Naroff, chief economist at Naroff Economic Advisers, said he suspects the Fed will wait until next year to slow its bond buying. Like most economists, Naroff thinks growth will pick up in the October-December quarter and strengthen in 2014. "If the Fed doesn't take notice of this revision to growth, they would run the risk of being perceived as largely clueless about the economy," Naroff said. Stocks surged Wednesday, a sign that many investors also suspect the economy may prove too weak for the Fed to begin scaling back its stimulus later this year. The Dow Jones industrial average rose 173 points in late-afternoon trading, and broader stock indexes also surged. Most of the revision to last quarter's growth was due to a decline in consumer spending to an annual rate of 2.6 percent. Though that pace is the fastest in two years, it's sharply below the 3.4 percent rate previously estimated . The downgraded estimate of growth was due in large part to weaker spending on services, such as travel, legal services, health care and utilities. Spending on long-lasting manufactured goods, considered a barometer of consumers' confidence in the economy, was stronger than previously estimated. Some economists said the lower estimate suggests that an increase in Social Security taxes that took effect this year might be squeezing consumers more than expected. The tax increase has reduced take-home pay for most Americans. A person earning $50,000 a year has roughly $1,000 less to spend. A high-earning couple has up to $4,500 less. "There was still acceleration in the growth of consumer spending – just not as much," said Paul Edelstein, director of financial services at IHS Global Insight. The government's revisions also pointed to less export growth and weaker business investment spending, due mainly to less spending on buildings than previously estimated. For each quarter, the government issues three estimates of growth as it continues to collect increasingly precise data on the nation's gross domestic product. GDP reflects the economy's total output of goods and services, from haircuts to aircraft carriers. In Wednesday's third and final estimate of first-quarter growth, for example, the government lowered its figure for consumer spending based on newly available data from a quarterly Census Bureau survey of services spending. Edelstein cautioned that the government has trouble calculating spending on services. The estimate could change further next month, when the government will issue the revisions it makes to GDP every five years. These revisions incorporate data from the Census Bureau, Internal Revenue Service and other agencies. Wednesday's revision of 0.6 percentage point was larger than the government usually makes in its third estimate of GDP. From 1983 through 2009, the average change from the second to third estimate was 0.2 percentage point, the department says. But the change from the first estimate to its third one – from an annual rate of 2.5 percent growth to a 1.8 percent rate – was close to the average: 0.6 percentage point. "We do not want to overreact to the Q1 data," said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities. He noted that the government has tended to revise up its monthly employment data – a trend, that if it continued, would "suggest on balance that real GDP growth could be understated." The biggest drag on the economy remains government spending. It fell during the first quarter at an annual rate of 4.8 percent. That shaved 0.9 percentage point from growth. Economists expect steep federal spending cuts to continue to weigh on growth in the second and third quarters. Edelstein predicts annual growth rates of just 1.5 percent in the current quarter and 1.8 percent in the July-September quarter. Naroff is more optimistic than most: He's forecasting annual growth rates of 2.5 percent in both quarters. Still, both think the Fed is unlikely to scale back its bond purchases until annual growth moves closer to 3 percent. Mark Zandi, chief economist at Moody's Analytics, said he suspects the Fed will wait until its December meeting to slow its bond purchases, rather than in September as many have been predicting. Zandi thinks the unemployment rate should reach 7 percent by the middle of next year, in line with the Fed's projections. It's now 7.6 percent. The latest economic reports have been encouraging. U.S. factories are fielding more orders. Higher home sales and prices are signaling a steady housing recovery. Spending at retail businesses rose in May. And employers added 175,000 jobs last month, which almost exactly matched the average increase of the previous 12 months. Stable job growth has gradually reduced the unemployment rate to 7.6 percent from a peak of 10 percent in 2009. And it's lifted Americans' confidence in the economy to its highest point in 5½ years. "If growth accelerates in the fourth quarter, and that is followed by better growth next year, that would be the development that is necessary to convince everyone on the Fed that there are minimal risks to the economy from starting to taper the bond buys," Naroff said. "I don't see that happening until the spring." Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Greece is the first domino to fall, but are others far behind? At the mercy of the speculators, Greece had two choices: go to the IMF now or go later Larry Elliott Economics editor Thursday 15 April 2010 15.11 EDT Last modified on Friday 16 April 2010 11.39 EDT And so to the final act of the Greek tragedy. Stricken by recession and at the mercy of the speculators, Athens has decided enough is enough and decided to seek help from the International Monetary Fund. That's not the way the Greek government would have it, of course. It said that it simply wanted to clarify what was on offer, ironing out the technical details and so forth. But make no mistake, this is a pivotal moment. Having set the IMF hare running, Greece will have to get assistance from the hit squad that will be sent in from 19th Street in Washington DC or face retribution from the bond markets. In the end, the only choice is between getting the IMF in now or later, when the situation will be worse. Yet, it is not hard to see why the Greeks are so reluctant to call in the European Union, the European Central Bank and the IMF. History suggests there will be a heavy price to pay; not just in terms of draconian cuts in public spending, not just in a sharp increase in unemployment, but in the political humiliation associated with an IMF package. In Britain, the memories of the 1976 spending cuts imposed by the IMF in response to a sterling crisis traumatised the Labour party for decades afterwards. Only Black Wednesday in September 1992, when the pound was swept out of the exchange rate mechanism by George Soros, bears comparison in the pantheon of postwar economic disasters. The nations of south-east Asia felt much the same way when a crisis was visited upon them in 1997. Thailand, South Korea and Indonesia went cap in hand to the IMF and were forced to accept draconian spending cuts. Scarred by the experience, they drew up plans for an Asian Monetary Fund, only to see them strangled at birth by a combination of the IMF and the US treasury. From 1997 onwards, countries have gone to extreme lengths to keep the IMF at bay. Russia and Argentina defaulted on their debts, taking the risk that they were too integral to the global economy to be pariahs for long. Asian nations found another way of protecting themselves against speculative attacks on their currencies: they used the devaluations that were part of the IMF bailout packages to export their way back to growth. The result was that they amassed huge foreign exchange reserves, which they recycled into western financial markets, leading eventually to asset price bubbles. The countdown to the crash of 2007 started right there. Greece was in a more fortunate position than Thailand and South Korea, or at least it ought to have been. Unlike Asia, Europe had an embryonic regional monetary fund at its disposal. It has a single currency, a transnational central bank and, as the richest continent in the world, the resources to sort out its own family problems. Greece was the test of whether Europe could pull together in support of its weaker members. It failed. Only with extreme reluctance has Germany been persuaded to play its part in the Greek bailout, with Berlin making it clear that it was up to Athens to sort out its own mess. The consequences of that hardline approach are now clear. A crisis that could and should have been contained could now easily go viral, as it did when Thailand became the first domino to fall in 1997. Greece is not the only country in Europe with problems, as the hedge funds know only too well. More analysis Topics

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Obama's Middle Class Tax Credits: What Do They Mean for You? Email The Obama administration's new middle class initiatives will put more money into the pockets of many Americans, but will it bolster the flagging economy? Reactions to the plan, unveiled Monday as part of a forthcoming report by the administration's Task Force on the Middle Class, have largely split among ideological lines. Here's a look at some of the administration's proposals, what analysts are saying about them and what they mean for you: For Working Parents: Expanding Child and Dependent Care Tax Credit for Middle Class Families Right now, parents earning above $43,000 a year can receive credit for 20 percent of their child care expenses and may claim expenses of up to $6,000 for two or more children, resulting in a maximum total tax credit of $1,200, according to 2009 tax return guidelines from the IRS. (Those earning below $43,000 are eligible to receive a credit for a higher percentage of their expenses.) Under the administration's proposal, parents earning up to $85,000 a year would receive credit for 35 percent of their child care expenses -- a credit level that, currently, is only available to parents earning less than $15,000 per year -- bumping up their maximum total tax credit to $2,100. A fact sheet released by the White House said that eligible families making up to $115,000 per year would also see an increased credit. John Irons, research and policy director of the left-leaning Economic Policy Institute, argues that expanding the credit would benefit both individual families and the economy as a whole. "A lot of people struggling to pay their child care expenses -- this would be a nice boost for them," Irons said. "For the economy, it obviously puts more money into the economy -- it gives families more disposable income which they can roll back into the economy." But will the extra amount that working parents might spend really make a difference? Curtis Dubay, of the conservative Heritage Foundation, argues no. "This is not a pro-growth tax cut," said Dubay, the senior tax policy analyst at Heritage. He and others, including libertarians, argue that only broader cuts to marginal tax rates -- rather than targeted tax credits -- will encourage more Americans to work, earn and ultimately spend more. "The instinct to cut taxes is right but doing it through expanding the child tax credit is the wrong way to go about that," he said. Obama Unveils Proposals to Help Middle Class Taxpayers As with the Obama administration's expanded child care tax credit, changes proposed to the saver's tax credit would extend more benefits to higher-income groups than in the past. The saver's tax credit helps Americans save for retirement by providing a tax credit to match their own retirement savings up to a certain amount. Under current IRS regulations, married couples filing jointly are only eligible for the full saver's credit if their adjusted gross income (AGI) is no more than $55,000. The new proposal increases this income maximum to $65,000 and also offers partial credits to families earning up to $85,000. "Extending the AGI cutoff level from the current $55,500 to $85,000 would be particularly significant because couples with higher incomes are more likely to have the capability to make contributions to their retirement plans," Tom Ochsenschlager, the vice president of taxation for the American Institute of Certified Public Accountants, wrote in an e-mail. The new plan changes the existing formula for determining saver's credits to 50 percent of the first $1,000 contributed, meaning that families earning up to $65,000 would see a $500 credit if they contributed at least $1,000 to their retirement savings. The credit would be refundable: Americans who don't earn enough to pay income taxes would still have their retirement savings matched by the government. Not all middle-class Americans, however, would see their retirement savings bolstered by the proposal. That's because current rules take the first $2,000 of individual retirement contributions -- not $1,000 per family -- into account when determining the size of a tax credit. Depending on their income, Americans can see between 10 and 50 percent of their contributions reimbursed. So who could be hurt by the change? Take, for instance, a married couple earning total income between $33,000 and $36,000 who file a joint tax return. Under current tax rules, if each spouse contributes $2,000 to a qualifying retirement plan -- $4,000 total -- they would be eligible for a credit equal to 20 percent of their contributions, or $800. That's $300 more than the couple would receive under the administration's proposal. If the proposal's $1,000 threshold really applies to families and not individuals, "then it's not an advantage for people at that lower level," Ochsenschlager said. Overall, some say the credit likely won't provide an immediate boost to the economy because it would encourage saving as opposed to stimulating spending. And critics grouse that expanding the credit would result in yet another cost that the government would add to an already-ballooning deficit. But a major benefit of the credit, said Heritage Foundation senior research fellow David John, is that it may result in a cost savings for the government in the long run: workers benefiting from the credit now may rely less on government aid once they reach retirement age. "The question they're going to have to ask and that Congress is going to have to answer is whether or not the potential value of a saver's credit in the long run, " John said, "is worth the cost of establishing the saver's credit." For Student Loan Borrowers: Limiting Loan Payments to 10 Percent of Income Under another of the White House proposals, the payments for a borrower of a federal student loan would be limited to 10 percent of their income above what the administration called "a basic living allowance." For a single person with a $30,000 income and a $20,000 student loan, monthly payments would drop from $228 a month to $115 a month on a ten-year repayment plan, according to the administration's fact sheet. Irons of the Economic Policy Institute says the cap could inject at least some more money into the economy. For recent graduates struggling to find well-paying jobs in a tough economy, it can "help them get by for a few years until the economy improves again," he said. In the meantime, he added, graduates who find themselves with a little extra cash thanks to the cap are the "people most likely to spend that extra money." But Heritage's J.D. Foster, a senior fellow at the the foundation, argues that "bailing out" recent college grads isn't the best way to spend government funds. The president is "just picking out one particular group and saying, 'We're going to bestow on you a special benefit' " he said. "The rest of the country might like that particular benefit in the form of tax relief." More Proposed Initiatives Other proposals by the Task Force on the Middle Class include: Automatic IRAs: Employers who do not offer retirement plans to their workers would be required to set up individual retirement accounts that would automatically devote a certain percentage of a worker's salary to a retirement plan. Workers could opt out of the plan. Very small companies would be exempt from the requirement. A tax credit would help defray the administrative costs of the IRAs, according to the administration's proposal. More Transparent 401(k) Plans: The administration says this proposal would improve transparency related to 401(k) retirement plan fees, encourage plan sponsors to provide workers with investment advice, promote annuities and other guaranteed lifetime income options and require clear disclosures related to target-date funds, which adjust workers' investments as they near retirement age. More Funding for Programs to Care for the Elderly: The administration's Caregiver Initiative would provide $52.5 million to the Department of Health and Human Services for caregiver support programs -- including counseling and training -- as well as $50 million for programs that provide transportation, adult day-care and in-home services related to the elderly. Some say they're not terribly impressed by any of the proposals thus far -- what they'd really like to find out, they say, is whether Obama will extend tax cuts passed during the Bush era or whether the president will allow them to expire. Under Bush's tax cuts, the highest marginal tax rate dropped from 39.6 percent to 35 percent, while the fourth-highest tax rate, 28 percent, dropped to 25 percent. "What we're most interested in hearing, we haven't heard -- is it true the rumor that the Bush tax cuts might be extended an extra year?" said Bill Ahern, a spokesman for the conservative Tax Foundation. "There's been no hint on that and since many of the Bush tax cuts are middle-class tax cuts, that's the thing that we're looking to finding out." The president did offer at least one clue about his tax plans in an exclusive interview Monday with ABC's "World News." Asked if he could guarantee that there would not be a tax increase for anyone making less than $250,000, Obama said, "I can guarantee that the worst thing we could do would be to raise taxes when the economy is still this weak." The New Middle Class? The proposals from the administration and the Task Force on the Middle Class -- led by vice president Joe Biden -- come as the definition of middle class seems to be evolving. A new report from the U.S. Commerce Department's Economics and Statistics Administration argues that being a middle class family has more to do with a family's goals than its income. Those goals, according to the report, include home ownership, a car, college education for their children, health and retirement security and occasional family vacations. Lower-income families, the report said, can meet these goals through planning and saving but certain obstacles can set them back: if, for instance, they live in area with high housing costs (something that can hurt even higher-income families), lack employer-provided health insurance or have to spend significant amounts on child care or elder care. It's harder than ever for a family to achieve middle-class status, the report said, because prices for health care, college and housing have risen faster than incomes. Since 1990, health insurance premiums and out-of-pocket expenses have jumped 155 percent, college tuition for public, four-year colleges has risen 60 percent and housing prices are up 56 percent. Meanwhile, familiy incomes, after rising in the 1990s, were stagnant after 2000, according to the report. "The American dream is attainable, but if we don't attack the big problems today, whether it's health insurance, education, childcare or housing, it will be harder for more and more American families to reach the middle class," Commerce Secretary Gary Locke said in a statement issued Monday. What Middle Class Tax Cuts Mean For You " Sanders Camp Says Someone Must Be 'Accountable' for What DNC Emails Show " DNC 'Unity' Resolution Calls for Commission on Super Delegates, Caucuses " In Kaine Pick, Clinton Shuns Glitz for Competence -- and Strategy " Clinton Camp's Secret Plan to Announce Tim Kaine as VP " Thieves Using Simple Scam to Target Cellphones " Former 'Bachelor' Star Ben Higgins Will Not Run for Office After All " Man Uses Fake In-Flight Video to Propose to Girlfriend " Injured Penguin Gets Back on Her Feet With Special 3-D-Printed Boot " Cancer Survivor and Veteran Wins Lotto 6 Times " Shailene Woodley Leads Cross-Country Road Trip to the DNC " Aerosmith's Joe Perry to Return to the Stage Tonight " Man Surprises Girlfriend With Epic Skydiving Proposal " Harry Potter-Loving Dad Creates Spellbinding 3-D Nursery for Baby Boy " Student Finds Ivanka Trump's Earring, Uses Twitter to Return it " How Virtual Reality Can Help Heal Mental Trauma " Beloved K-9 Officer Dies in Hot Car Tragedy " Facebook Helps Adopted Woman Find Her Birth Mother " Trump, Clinton Will Receive Classified Briefings After DNC " Rielle Hunter 'Absolutely' Loves John Edwards " Fight to Save Walt Disney's California Home From Demolition " 10 Burning Questions About 'Star Trek Beyond' " Hawaiian Rising Star Aidan James Aims for ‘Unique Kind of Pop’ With Ukulele

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Former Chairman and CEO Kaleil Isaza Tuzman Sends Letter to KIT digital Board of Directors Urges Company to Discuss Acquisition Offer and Conduct Open and Transparent Sale Process NEW YORK, Nov. 23, 2012 /PRNewswire/ -- Board of DirectorsKIT digital, Inc.26 West 17th Street, 2nd FloorNew York, NY10011 Attention: Bill Russell, Chairman Dear KIT digital Board of Directors, KIT digital, Inc.'s ("KITD" or the "Company") November 21, 2012 8-K (the "8-K") effectively blamed prior management for the Company's delayed filing of third quarter results and the Company's intent to restate its financial statements for the 2009-2011 period, among other issues. The Company's attempt to attribute its current problems to prior management is spurious. As one of KITD's largest shareholders and the Company's former chairman and CEO, I have kept my opinions on the Company's trajectory confidential since my departure in April 2012, in deference to the efforts being expended by current management and to avoid unnecessary discord. However, I can no longer silently abide the Company's attempt to scapegoat previous management or tolerate the recent record of deficient management and poor business execution. KITD shareholders deserve to be leveled with on what has occurred at the Company to date, and shown a path forward to success and enhancement of share value, as we have set forth below. First, some clarifications concerning some implications contained in the Company's recent 8-K. During my tenure at the Company, all revenue recognition decisions were made in consultation with and approved by the Company's independent accounting firm, and approved by your audit committee. We have no reason to believe any of those decisions were improper. Since my departure, it is possible that your new audit committee members have elected, in consultation with the firm's outside auditors, to apply different revenue recognition policies. That is not prior management's responsibility, and a change in revenue recognition policies and application may reflect your recently insinuated decision to further separate the "software" and "services" lines of the Company's business. As shareholders, we cannot yet opine on the merit of your decision, since your 8-K lacked details on the matter. Similarly, the 8K's vague reference to a lack of disclosure concerning certain undisclosed "related party transactions" is misleading and inappropriate. During my tenure with KITD, all related party transactions were vetted by KITD's outside counsel and relevant disclosures in KITD financial statements were reviewed and approved by the Company's independent accounting firm. For instance, as you know, my affiliate investment companies, KIT Media and KIT Capital, supported the Company by investing on four different occasions between 2008 and 2011 in public share issuances alongside other public shareholders. These transactions were "related party transactions" in nature and were disclosed in great detail in press releases and Company financial statements at the time. The transactions were very positive for the Company (and included two successfully completed financings during the depth of the 2008-2009 financial crisis) and were broadly lauded by KITD's shareholder base at the time as demonstrating management's "skin in the game." In addition, stock options and restricted stock grants over time to me or KIT Capital for services rendered were also described in detail in the Company's public filings. Accordingly, these transactions were all appropriately disclosed and benefited the Company and its shareholders—and, in fact, neither myself nor KIT Capital has ever exercised or sold any of these stock grants or options, nor have I received a single dollar or share in severance. By comparison, you granted former CEO Barak Bar-Cohen a $250,000 "success bonus" for an extremely dilutive, death-spiral financing concluded after my departure and JEC Capital (the New York hedge fund which currently controls the Company and for which current KITD CEO Peter Heiland serves as Managing Director) recently lent $2.5 million to the Company without a concomitant press release—and the mention of this related party transaction received only cursory mention in an indirectly related SEC filing. Given the 8-K's emphasis on the dire current liquidity situation of the Company, it appears to us that you, in conjunction with the Company's senior creditors, may be conspiring to artificially decrease the Company's stock price so as to acquire the Company at a fire sale price that is unfair to shareholders. Indeed, the 8-K's disclosure regarding covenant breaches of current lender agreements could be interpreted as a lead-in to a pre-arranged, sweetheart deal with the Company's lenders. Previous management presided over a period between December 2007 and March 2012 during which monthly revenues expanded over 20x, operating results went from huge losses to small gains, and the Company's shares appreciated from $2.90 to over $9.00. Despite your attempt to blame past management for your current results, those close to the Company report that current management has shown disregard for the underlying business—including key clients, employees and vendors. Most startlingly, you seem to have presided over the Company burning more cash from operations in the seven months since I left than the Company had burned from operations in the prior two fiscal years. Adding to KITD's problems, the Company's current management has: failed to visit many, if not most key clients failed to visit more than a handful of Company field locations lost many, if not most, of the Company's key salespeople disassembled the Company's core engineering team demonstrated a lack of sufficient understanding of the Company's core technology, products and capabilities, and failed to make material progress in product development moved the Company headquarters from its low-cost European center of Prague to a high-cost NYC office—despite over 50% of the Company's revenues being European in origin incurred ballooning operating losses poorly executed on an ill-conceived idea of stripping down and selling individual pieces of the Company—without sufficient comprehension of how software and services units complement each other in serving clients failed to attract significant new talent to the business failed to add material new client contracts failed to communicate a coherent vision for the future to staff, clients and industry observers left an impression with staff, clients, vendors and competitors alike that KITD is under "temporary", "hedge fund", "Wall Street-focused" management. Ignoring these poor managerial decisions, the Company instead seeks to scapegoat prior management in describing its current condition. It is time to redress this situation. I originally resigned from my post as CEO of KITD in March 2012 (and subsequently resigned from his role as Chairman in April, 2012) because I had come to irreconcilable differences with the Board at the time concerning strategic decisions and the future of the Company. As a major shareholder, I ultimately felt I could make a greater positive impact on the Company's development from the outside than from within, especially considering that the Board formed a Special Strategic Committee (the "Special Committee") in January 2012 which had effectively taken control of all CEO-level decisions. By way of background, in December 2011, my core management team had recommended to the Board that the Company complete a major restructuring and consolidation of operations (a plan that you finally began to implement about two months ago). We also recommended to the Board at such time that the Company pursue two competing strategic transactions, each with the potential to be a homerun for shareholders (one a private equity buy-out and the other a merger-of-equals). Instead, the Board rejected management's suggested approach and formed the Special Committee with a broad mandate to oversee "any and all strategic decisions" at the Company. The Special Committee was comprised of two board members—Wayne R. Walker and Santo Politi—and immediately shut down or irreparably delayed the discussions with the strategic transaction counterparties. KITD's management-by-special-committee was predictably dysfunctional. After months of wrestling with the Special Committee to no avail, myself and several members of the core management team eventually resigned. In connection with my resignation I issued a letter—which was publicly filed by the Company as an 8-K at the time—stating that I intended to independently consider strategic alternatives for the Company. After my resignation, a bidding group (led by a large private equity firm which I had introduced to the Company), endeavored to obtain approval from the Special Committee to share information with me so that I could participate in connection with a potential offer for KITD. Unfortunately, the Special Committee refused this request, to the detriment of all shareholders. Since that time, KIT Capital and other prospective bidders have been repeatedly delayed or stonewalled in our continued efforts to create shareholder value, while the indecision and delay of new management and board continues to result in value destruction. For example, although KITD's current management and board finally adopted the staff reduction and office consolidation plan prior management first put forward almost a year ago, the delay has caused KITD to effectively run out of money and may put the Company into the pockets of its lenders. KITD must right its ship. From an operational perspective, KITD management must immediately: Articulate a vision of the "new" KIT digital, with the focus being on clients, employees and vendors—and away from capital markets Halve executive management costs Tour the top 30 clients globally to ensure contract compliance and renewal Implement a program to re-invigorate the core team of top 50-performing employees globally Complete our original cost reduction and office consolidation plan—including keeping headquarters in Prague, consolidating engineering team into two locations, consolidating New York and Atlanta office into one location and shutting down six other locations globally (including Dubai), while expanding sales and business development staff by one-third Cease the "divide-and-sell" approach to assets Clearly articulate a balance sheet-fortification strategy, centered on a significant private equity minority investment and concomitant restructuring of existing debt, while conducting an open and transparent auction of the Company (engaging both private equity and strategic buyer prospects), with a publicly announced minimum price of $3.75 per share. We do not believe that current management is capable of the actions listed in this letter. As a result, we are prepared to lead a bidding group to buy the Company at a reasonable and substantial cash premium to the current traded price of the Company's common stock. Since May 2012, we have repeatedly requested that the board engage with us and certain other private equity firms regarding a strategic transaction for the Company. In light of KITD's mismanagement and the Company's current circumstances, the Board can no longer afford to ignore these overtures. Based on our analysis of publicly available information, and subject to due diligence and the execution of a mutually acceptable definitive agreement, we are prepared to lead a bidding group to buy the Company at $3.75 per share in cash, which represents an 81% premium to the closing price of KITD common stock on Wednesday, November 21, 2012 (and an approximately 750% premium to the reported after-market trading price of KITD common stock on that date). We have reviewed this transaction with two large private equity groups who are interested in participating with us, and believe we have the backing of the Company's prior and current executives, salespeople and senior engineers who would be key to execute on our plan to right the KITD ship. We believe we can finalize financing and business terms with respect to this acquisition very quickly if the Board responds forthwith. For the benefit of all the shareholders, we ask that you to cease and desist from defamatory and inaccurate descriptions of KITD's prior management and immediately engage in an open dialogue with us on this offer. Kaleil Isaza Tuzman On behalf of:KIT Capital, LLC Contact: Jonathan CutlerJCUTLER MEDIA [email protected] Kaleil Isaza Tuzman

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A man apart March 27, 2014 By Ebony BrownBernard Madoff insists he “made more money for Jewish people and charities” than he lost.” (BRENDAN MCDERMID/REUTERS/Newscom) As he serves a 150-year sentence for running the biggest Ponzi scheme in American history, Bernard Madoff surely has a lot of time to think about his crimes and their ramifications. But in an interview last week with Politico, Madoff showed that he was a man apart — imperious, disconnected, unrepentant and surprisingly lacking in empathy. These troubling traits may help explain how he was able to maintain such a fantastically large fraud — estimated by investors to be as high as $65 billion — until it crashed in 2008. Among the more prominent of Madoff’s victims were Jewish organizations and individuals. The Robert I. Lappin Charitable Foundation, Hadassah, Yeshiva University and the Jewish Community Foundation of Los Angeles were all hit hard. The American Jewish Congress was reduced to a shoestring organization. These and other organizations and individuals invested money with Madoff, a man who convinced himself and others that he was a devoted and caring Jew. Based upon the interview, however, it doesn’t appear that Madoff feels particular remorse for what he did to the Jewish community he was a part of for decades, or to the Jewish institutions he had a hand in ruining, or for the predominantly Jewish retirees and investors who put their fortunes in his hands only to see them disappear. Thus, he told the interviewer: “I don’t feel that I betrayed the Jews; I betrayed people.” It’s almost as if Madoff thinks he ran an equal opportunity fraud. And then he went further. “I don’t feel any worse for a Jewish person than I do for a Catholic person,” he said. “Religion had nothing to do with it.” While it is true that Madoff betrayed “people,” the disproportionate impact of his fraud was on the Jewish community and on Jewish clients. Those clear results belie his rationalization. Madoff hurt Jews in many different ways, not all of them financial. But in the financial realm, the hurt to the Jewish community and to Jews was far greater than any other group. Madoff did admit: “I betrayed people that put trust in me — certainly the Jewish community.” But he then muddied his confession with another rationalization: “I’ve made more money for Jewish people and charities than I’ve lost.” Madoff’s claimed gains don’t bring much comfort. First, we don’t know whether he made that money or stole it. Second, we don’t really know whether the claimed gains are true. Madoff comes closest to the personification of the hateful stereotype of the cheating Jew than anyone in recent memory. We wonder where that fits in his analysis. There is, however, one thing we can learn from the interview: Bernie Madoff needs to do a lot more thinking about what he did and who he hurt. He has plenty of time. Filed Under: Editorials, Opinion Leave a Reply Cancel reply Your email address will not be published. Required fields are marked * Name * Email * Website Comment Follow us

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NYC Office of Mesa West Coordinates $14M Loan Secured by South Jersey Distribution Center NREI Kelly Stratton Kelly Stratton, Contributing Writer NEW YORK—The New York City office of Los Angeles, Cali.-based Mesa West has coordinated $14 million in first mortgage debt for the recapitalization of 200 Birch Creek Road in Bridgeport, N.J. for Dallas, Texas-based Hillwood Investment Properties and Brookfield Asset Management, which has U.S. headquarters in New York City. The Hillwood/Brookfield partnership was formed in 2012 to invest up to $1 billion in industrial properties over the next three years. The asset, which contains 597,000 sq. ft. of warehouse and distribution space, is currently vacant and was acquired from Cornerstone Real Estate Advisors in August of this year. The property is located in the Pureland Industrial Complex, with access to distribution highways serving Philadelphia and regional markets. "There is strong demand and a shortage of available inventory for large blocks of quality warehouse and distribution space in the Philadelphia Metro and Southern New Jersey industrial markets," said Daniel Tanner of Mesa West Capital, who helped originate the financing for the firm's New York office. "We have a high degree of respect for the partnership between Hillwood and Brookfield and believe they have a strong business plan with respect to leasing the property." Source URL: http://nreionline.com/city-reviews/new-york/NYC_office_of_mesa_west_coordinates_loan_secured_by_jersey_distribution_center

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A Subpoena For Goldman In Inquiry By SEWELL CHAN and GRETCHEN MORGENSON; Sewell Chan reported from Washington, and Gretchen Morgenson from New York. WASHINGTON -- The commission investigating the causes of the financial crisis said on Monday that it had subpoenaed Goldman Sachs and harshly accused the investment bank of trying to delay and disrupt its inquiry. ''Goldman Sachs has not, in our view, been cooperative with our requests for information, or forthcoming with respect to documents, information or interviews,'' Phil Angelides, the chairman of the Financial Crisis Inquiry Commission, told reporters on a conference call. The deputy chairman, Bill Thomas, accused Goldman of stonewalling, and said, ''They may have more to cover up than either we thought or than they told us.'' But even as Goldman appeared to be uncooperative, it tried over the last month to set up personal meetings with members of the commission, two people briefed on the discussions said. Lobbyists representing Goldman in Washington tried to arrange one-on-one meetings with a handful of commissioners, including Mr. Angelides, but he declined to meet with them, according to the people, who spoke on the condition of anonymity because they were not authorized to discuss the commission's inner workings. Mr. Angelides and Mr. Thomas both said that Goldman had inundated the panel with data -- about five terabytes, equivalent to several billion printed pages -- and dragged its feet on answering detailed questions about derivatives, securitization and other business activities. In particular, the commission sought records on collateralized debt obligations based on mortgage-backed securities, and the names of Goldman's customers in transactions of derivatives. In a chronology it provided, the commission also indicated that it was interested in Goldman's dealings with the American International Group, the insurance giant that collapsed in 2008, and in the bank's so-called Abacus transactions, which are at the heart of a civil fraud suit brought by the Securities and Exchange Commission. The commission's unusual public criticism -- it has issued 12 subpoenas, none accompanied by stinging accusations of obstruction -- underscored the anger in Washington at the outsize profits and influence of Goldman, which had emerged nearly unscathed from the financial crisis. It also reflected the fallout from Goldman's unyielding strategy of standing its ground in the face of inquiries and attacks. A spokesman for Goldman, Michael DuVally, said, ''We have been and continue to be committed to providing the F.C.I.C. with the information they have requested.'' The lashing by the commission further complicated Goldman's public image. In April, the bank was accused of securities fraud in a civil suit filed by the S.E.C., which contended that it created and sold a mortgage investment that was secretly devised to fail. That investment and others like it were the subject of a Senate investigation that also exposed Goldman to withering criticism. And federal prosecutors in Manhattan have begun looking into the mortgage practices of banks, including Goldman. The commission, created by Congress, is required to deliver a report by December, but with only $8 million and some 50 employees to draw on, it has at times seemed outmatched by the targets of its inquiries. ''I suspect they're spending more on their lawyers than our whole budget,'' Mr. Thomas conceded. Lloyd C. Blankfein, Goldman's chairman and chief executive, testified at the commission's first public hearing in January, with the top bankers Jamie Dimon of JPMorgan Chase, John J. Mack of Morgan Stanley and Brian T. Moynihan of Bank of America. After the hearing, the commission sent written questions for Mr. Blankfein and made requests for records in April and May. Mr. Thomas, a California Republican who served 28 years in the House, said the requests to Goldman were ''not inordinate'' compared with similar queries sent to a half-dozen other banks. All of the other institutions complied, he said. In contrast, Mr. Thomas said, Goldman gave a ''basically incomplete'' response, even as it deluged the commission with so much irrelevant information that it amounted to ''mischief-making'' that was both ''deliberate and disruptive.'' Mr. Angelides, a former California treasurer and candidate for governor, said, ''We did not ask them to pull up a dump truck to our offices and dump a bunch of rubbish.'' He added, ''This has been a very deliberate effort over time to run out the clock.'' The two men also seemed to acknowledge that the sheer volume of data was beyond the commission's capacity to analyze. ''We should not be forced to play Where's Waldo? on behalf of the American people,'' Mr. Angelides said. ''This is not right.'' Mr. Thomas, turning to the proverb about looking for a needle in a haystack, said, ''We expect them to provide us with the needle.'' The two men said that after the subpoena was issued on Friday, Goldman had moved to schedule interviews with several executives, including Mr. Blankfein; David A. Viniar, the chief financial officer; Gary D. Cohn, the president and chief operating officer; and Craig W. Broderick, the chief risk officer. The 10-member commission was slow to get started. It recently replaced its executive director, B. Thomas Greene, with Wendy M. Edelberg, an economist on loan from the Federal Reserve, who had been the research director. Mr. Greene, a former chief assistant attorney general for California, remains on the commission's staff as senior counsel. PHOTO: Phil Angelides, left, and Bill Thomas, of the Financial Crisis Inquiry Commission, said Goldman Sachs was uncooperative. (PHOTOGRAPH BY OZIER MUHAMMAD/THE NEW YORK TIMES) (B2)

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Looking Risky to Tee Up Here Meena Krishnamsetty Stock quotes in this article: ely, pool, nke, www, deck Callaway Golf (ELY) closed up 6% Monday, less than one week after the company's new CEO, Oliver Brewer, bought 20,000 shares of the stock at an average price of $5.50. Brewer, before taking the job in March, had previously served as president and CEO of Adams Golf. Another insider, Mark Leposky, bought shares in August at an average price of $5.75, according to our database of insider filings. Insider purchases tend to be bullish signs for a stock because, as a general rule, when these folks invest in companies they should generally prefer to diversify their wealth away from the one from which they receive an income. However, both of these insiders have already seen good returns on their investment -- so does the stock have further to rise? Let's look a bit deeper. Late last month, Callaway Golf reported disappointing results for the third quarter. Net sales were down 15% from the prior year, and with operating expenses showing little change, net losses increased by 37% (to $89 million from $65 million). This has reversed the somewhat more positive trend that the company had seen in the first half of the year, as net sales are now about flat for the first three quarters of 2012 vs. last year. Still, even with the poor quarter, net losses are still half of what they were. The decline in third-quarter revenue was led by sales generated in the U.S., Callaway's largest market, and in Europe. Revenue from the rest of the world came in about even with last year's numbers. Analyst expectations call for losses to continue for the next few quarters, with Callaway seen coming very close to breaking even in 2013. Chuck Royce's fund owned 3.8 million shares of the stock at the end of June, a small increase from its position at the beginning of April. However, other market players are quite bearish, with 11% of the shares outstanding held short, as of the most recent data. We like that insiders are expressing confidence in the company, but we wouldn't recommend buying at this point, given the declining U.S. sales despite a modestly growing economy. There aren't any publicly held golf-related companies with a sufficient market capitalization to make for good peers, but we can compare Callaway with swimming-pool supplies company Pool Corp. (POOL) and to shoe companies Nike (NKE), Wolverine Worldwide (WWW), and Deckers Outdoor (DECK). All four of these companies have delivered positive earnings on a trailing basis. In particular, Pool -- possibly Callaway's the closest peer -- trades at 20x forward earnings estimates, even though its third-quarter income declined 12% year over year. We don't think this one is a good buy, either. Nike also suffered an earnings decrease of 12% over the same period, but it obviously has a very strong brand name and market position, and carries trailing and forward P/E multiples of 21x and 16x, respectively. So Nike might not be a good buy on an absolute basis, but we think we'd rather own it than Pool or Callaway. The other two footwear companies are cheaper; Wolverine has P/E multiples in the teens, while Deckers actually trades at 8x earnings on either a trailing or a forward basis. Both of these companies have seen earnings fall, as well, and Deckers' decline was particularly steep. Further, more than 40% of its shares outstanding were held short as of reports from mid-October. So we'd avoid Wolverine and Deckers, as well. It's good to be informed about the insider purchase at Callaway, but even taking that into consideration, we don't think this stock is a good value. The company is even expected to lose money next year, given an anticipated improvement in its business, and it hasn't been improving much recently. More From Meena Krishnamsetty Hedge Funds Focus on Consumer Goods Billionaire Sandell's New Activist Idea Focus on Einhorn's Best Choices At the time of publication, Krishnamsetty and co-author Matt Doiron had no positions in the stocks mentioned. Tags: value investing | investment strategy | consume cyclicals

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Online peer-to-peer lender to refund savers if borrowers default 4/30/2013 12:14:31 PM - Reuters News By Kylie MacLellan LONDON (Reuters) - An online service that enables savers to earn interest by loaning money to other members of the public is introducing a back-up fund to reimburse loans made from Tuesday onwards if borrowers default. Peer-to-peer lending is one of several alternative sources of finance that have grown up as banks ration credit in response to tougher capital rules and the economic slowdown. The sector's rapid growth has prompted regulators to look at how best to ensure that individuals are aware of the risks and protected. Zopa, through which 300 million pounds ($465 million) has been lent since it was launched in 2005, said its safeguard measure would reimburse lenders' money on new loans, including interest, if a borrower defaulted. The site has a default rate of less than 1 percent, but co-founder and chief executive Giles Andrews said the change had been driven by feedback from the site's users. "Our users were asking if we could make it even safer. We have eight years of track record and the best performing personal loan book in the UK, but there is still a lingering question and, as we become more mainstream, that security issue becomes more important," he told Reuters. The Zopa Safeguard, a fund held in trust by a not-for-profit organization, will be financed with part of the fee paid by borrowers to use the site. If defaults exceed the total in the fund, lenders could still have to take a loss on their money. But Zopa said it could accurately predict the level of default and would monitor the fund daily to check it contained adequate funds to repay lenders, with an additional buffer. Peer-to-peer lenders will be regulated by the Financial Conduct Authority from April next year, and it is now consulting with sites such as Zopa on how the rules will work. "They were keen to understand firstly how we explain the risks involved and, secondly, what we do to mitigate that risk," said Andrews. Some lenders had also said they did not understand or want to have to choose between different grades of credit on the site, so Zopa is also launching a tracker product through which depositors will invest in a basket of loans across credit markets. Savers can earn around 5 percent annually after charges for lending money through Zopa for up to 5 years, compared with around 2-3 percent for fixed-term savings held at banks. Zopa, through which the government has said it plans to lend 10 million pounds to sole trader businesses, saw a 197 percent increase in the number of savers using the site in the first quarter of this year, compared to the same period in 2012. (Editing by Kevin Liffey)

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Fed Leaves Interest Rates And Bond Purchase Plan Untouched By Bill Chappell Jun 19, 2013 ShareTwitter Facebook Google+ Email Federal Reserve Chairman Ben Bernanke said Wednesday that a fall in the unemployment rate would not automatically trigger a rise in interest rates. He spoke to the media after the central bank issued a policy update. Originally published on June 19, 2013 2:57 pm The Federal Reserve will continue its program of purchasing $85 billion in securities and will leave the target interest rate for federal funds untouched to support the U.S. economy, the U.S. central bank said in a policy update issued Wednesday afternoon. Here's a summary of the state of the U.S. economy from the Fed, which concluded two days of meetings today: "Information received since the Federal Open Market Committee met in May suggests that economic activity has been expanding at a moderate pace. Labor market conditions have shown further improvement in recent months, on balance, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth." To bolster the U.S. economy, the Federal Reserve has spent $85 billion in stimulus measures every month, purchasing a mix of Treasury bonds and mortgage-backed securities. It has also worked to keep interest rates low, in an attempt to encourage borrowing by businesses and households. Update at 2:44 p.m. ET. No Direct Link To Interest Rates: "A decline in the unemployment rate to 6.5 percent" would not automatically trigger a move to raise interest rates, Chairman Ben Bernanke at a news conference following today's policy update. Bernanke also said the committee could taper off its purchase of securities later this year, echoing a statement he made last month. But he added that the Fed would still hold the securities it has purchased. In general, the Fed's projections for the U.S. economy were more optimistic than in recent sessions, with policymakers saying they see reduced risks since last fall. That sentiment has led many investors to believe the central bank will indeed begin to ease its pressure to keep interest rates low. Our original post continues: The Federal Open Market Committee's statement also said that inflation had remained below the panel's long-term goals, and that there is no reason to believe that will change. Here's the portion of the release dealing with interest rates: "In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal." And here's the part about the monthly purchase of securities: "To help support a stronger economy... the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month." Ten of the committee's members voted to approve the new monetary policy; the two votes against were brought by James Bullard, president of the St. Louis Federal Reserve, and Esther L. George, president of the Kansas City Fed. Both cited concerns about the policy's possible effects on inflation.Copyright 2013 NPR. To see more, visit http://www.npr.org/. View the discussion thread. © 2016 WWNO

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Criteria for Financial Assistance Selection AGRM members, business partners, and “friends” regularly contribute funds to help new and older missions in their growth and development. Although the Expansion Program Project receives the bulk of this funding, AGRM also provides qualified missions with sponsored attendance to the AGRM Annual Convention and district training events, as well as scholarships and grants to assist with specific needs that will accelerate the mission's growth and development. Criteria for selection: The mission should be two years old or newer, or has gone through a major reorganization in the last two years. The mission must be a U.S. government-recognized 501(c)(3) religious or charitable organization, or a Canadian NPO charity (filing a T3010), or the equivalent in the country of its establishment. The mission must have a board of directors of at least five individuals, a majority of whom shall be unrelated, and should have one ex-officio member who is part of the executive team at another AGRM member mission in the same district. The mission should have a mission statement that is compatible with the principles, precepts, and practices of AGRM and its existing members. The mission should have a realistic three-year plan outlining proposed growth. The mission’s chief executive should be able to sign AGRM’s Code of Ethics and Statement of Faith on behalf of the mission. The mission should be located in a city of 50,000 or more people, or a county (or the equivalent) of 100,000 or more people, or should be able to demonstrate the sustainability of financial support. The mission should have the backing of at least five churches in its immediate area, three of which should be considered evangelical. The mission must agree to become and remain an AGRM member for a period of not less than five years from the time of selection, with membership dues being the responsibility of the mission. Start a MissionThe NeedHow to Start a MissionExpansion ProgramFinancial Aid Expansion Contact

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Mar 16 8:47 am In the days since the investigation and lawsuit against Compass Academy founders Jonathan “Jay” and Tracy Brooks was made public, much has changed. Jay Brooks issued a statement on the school's website and via social media, denying all allegations made by the Attorney General's Office, which include fraud, lying to investors and the Securities Commission and the misappropriation of funds invested in the Compass Academy project. On Wednesday, just a few hours before Jay Brooks' statement was issued, 33 people were added to the mortgaged property – bought by Brooks in May 2012 for $300,000 – on which the school is being built. Those people and their investments – which total $5.544 million worth of Compass Academy securities – are now part of the public record. In all, $3.5 million of the funds came from Aiken and Graniteville investors. One small investment came from Augusta, with the rest of the funds provided by four Texas-based individuals who invested between $271,171 and $683,091. That piece of property also has someone else with a claim on it – Attorney General Alan Wilson. On behalf of the Securities Division of the AG's Office, attorney Tracy A. Meyers filed a “lis pendens.” Meaning “a suit pending,” the filing gives notice that there is a claim on the property, and the filing informs the general public that there is a claim against it and the title is not free and clear. This claim comes from the complaint filed against Jay Brooks, Compass Academy and his other companies, which holds substantial penalties of $10,000 per act, if he is found guilty. But Jay Brooks says he does not believe he is guilty of anything. Tracy Brooks, who handles all matters relating to Compass Academy, posted a statement on the schools' website late Thursday evening. The statement attacked the Aiken Standard's reporting of the lawsuit as “ripe with lies” and “horribly malicious.” Also in the statement, Jay Brooks offered denials of certain aspects of the AG's complaint and the Aiken Standard's story. The denials were laid out numerically. “1. I am not facing criminal charges.” This is true, no criminal charges have been filed against Jay Brooks. However, his case is under “criminal review” by the AG's Office. “2. My securities licenses have not been revoked.” True, Brooks' licenses are not revoked, but he cannot use them as the case against him has caused them to be suspended until further review. “3. I did not lie to the Attorney General's office.” The Securities Division said it stands by its pleadings, which make multiple, explicit references to Jay Brooks lying. “Defendant Brooks lied, among other things, about the number of his and (J. Brooks Financial's) clients invested in BREH and Compass; the circumstances of one or more of his investments; representations made in connection with one or more investments; and the securities underlying one or more of the investor's investment,” the complaint states. “4. There have been no ill gotten gains.” The Attorney General's complaint states the Brooks “on one or more occasions, misappropriated investor funds for personal use.” “5. I committed no fraud or deception.” “Defendants have, on one or more occasion, in connection with the offer or sale of a security ... engaged in an act, practice or course of business that operates or would operate as a fraud,” the complaint accuses. Jay Brooks' statement goes on to say that “we” have provided all receipts and bank statements, as well as a list of lenders to the AG's office. The AG's office has received all of the documents most-recently requested from Jay Brooks and his financial firms. However, his wife Tracy Brooks, who runs school operations, has an appointment Monday regarding missing receipts and the reasons that they are missing. On Friday, a judge granted a 10-day extension for records to be collected and examined. The Securities Division is working with the couple to try and get the matter resolved before they have to report back to Circuit Court Judge Casey Manning. If no resolution is reached, a public court hearing on the matter will be scheduled. Repeated requests for comment from Jay Brooks and his attorney Stan Jackson were not returned Friday. Brooks victims: ‘It was a house of cards’ Editorial: Compass purchase will fulfill community need Another suit filed against former Compass Academy owners

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My Financial CareerMarch 22, 2008 As I was writing yesterday’s article I kept thinking of a rather popular short story by Stephen Leacock, a Canadian writer who lived from 1869 to 1944. His most famous book is probably Sunshine Sketches of a Little Town, though if you aren’t Canadian you probably haven’t heard of it. You should. Leacock was downright hilarious as evidenced by a few favorite quotes: “Many a man in love with a dimple makes a mistake of marrying the whole girl.” “Each section of the British Isles has its own way of laughing, except Wales, which doesn’t.” “Advertising may be described as the science of arresting the human intelligence long enough to get money from it.” “Lord Ronald said nothing; he flung himself from the room, flung himself upon his horse and rode madly off in all directions.” Anyways, here is his story entitled “My Financial Career.” Chances are that if you went to grade school in Canada you’ve read it. When I go into a bank I get rattled. The clerks rattle me; the wickets rattle me; the sight of the money rattles me; everything rattles me. The moment I cross the threshold of a bank and attempt to transact business there, I become an irresponsible idiot. I knew this beforehand, but my salary had been raised to fifty dollars a month and I felt that the bank was the only place for it. So I shambled in and looked timidly round at the clerks. I had an idea that a person about to open an account must needs consult the manager. I went up to a wicket marked “Accountant.” The accountant was a tall, cool devil. The very sight of him rattled me. My voice was sepulchral. “Can I see the manager?” I said, and added solemnly, “alone.” I don’t know why I said “alone.” “Certainly,” said the accountant, and fetched him. The manager was a grave, calm man. I held my fifty-six dollars clutched in a crumpled ball in my pocket. “Are you the manager?” I said. God knows I didn’t doubt it. “Yes,” he said. “Can I see you,” I asked, “alone?” I didn’t want to say “alone” again, but without it the thing seemed self-evident. The manager looked at me in some alarm. He felt that I had an awful secret to reveal. “Come in here,” he said, and led the way to a private room. He turned the key in the lock. “We are safe from interruption here,” he said; “sit down.” We both sat down and looked at each other. I found no voice to speak. “You are one of Pinkerton’s men, I presume,” he said. He had gathered from my mysterious manner that I was a detective. I knew what he was thinking, and it made me worse. “No, not from Pinkerton’s,” I said, seeming to imply that I came from a rival agency. “To tell the truth,” I went on, as if I had been prompted to lie about it,” I am not a detective at all. I have come to open an account. I intend to keep all my money in this bank.” The manager looked relieved but still serious; he concluded now that I was a son of Baron Rothschild or a young Gould. “A large account, I suppose,” he said. “Fairly large,” I whispered. “I propose to deposit fifty-six dollars now and fifty dollars a month regularly.” The manager got up and opened the door. He called to the accountant. “Mr. Montgomery,” he said unkindly loud, “this gentleman is opening an account, he will deposit fifty-six dollars. Good morning.” I rose. A big iron door stood open at the side of the room. “Good morning,” I said, and stepped into the safe. “Come out,” said the manager coldly, and showed me the other way. I went up to the accountant’s wicket and poked the ball of money at him with a quick convulsive movement as if I were doing a conjuring trick. My face was ghastly pale. “Here,” I said, “deposit it.” The tone of the words seemed to mean, “Let us do this painful thing while the fit is on us.” He took the money and gave it to another clerk. He made me write the sum on a slip and sign my name in a book. I no longer knew what I was doing. The bank swam before my eyes. “Is it deposited?” I asked in a hollow, vibrating voice. “It is,” said the accountant. “Then I want to draw a cheque.” My idea was to draw out six dollars of it for present use. Someone gave me a chequebook through a wicket and someone else began telling me how to write it out. The people in the bank had the impression that I was an invalid millionaire. I wrote something on the cheque and thrust it in at the clerk. He looked at it. “What! are you drawing it all out again?” he asked in surprise. Then I realized that I had written fifty-six instead of six. I was too far gone to reason now. I had a feeling that it was impossible to explain the thing. All the clerks had stopped writing to look at me. Reckless with misery, I made a plunge. “Yes, the whole thing.” “You withdraw your money from the bank?” “Every cent of it.” “Are you not going to deposit any more?” said the clerk, astonished. An idiot hope struck me that they might think something had insulted me while I was writing the cheque and that I had changed my mind. I made a wretched attempt to look like a man with a fearfully quick temper. The clerk prepared to pay the money. “How will you have it?” he said. “How will you have it?” “Oh”—I caught his meaning and answered without even trying to think—“in fifties.” He gave me a fifty-dollar bill. “And the six?” he asked dryly. “In sixes,” I said. He gave it to me and I rushed out. As the big door swung behind me I caught the echo of a roar of laughter that went up to the ceiling of the bank. Since then I bank no more. I keep my money in cash in my trousers pocket and my savings in silver dollars in a sock. NEWER > The Rival Churches of St. Asaph and St. Osoph < OLDER Becoming a Better Apologizer In lieu of a comments section, I accept and encourage letters to the editor. Related Articles The First Three Lines: A Contest Saturday Miscellania Overcoming Sin and Temptation (Chapter 2) No One Weeps Like a Prophet Flashback

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JPMorgan in talks to settle probes for $11 billion Reuters with CNBC Thursday, 26 Sep 2013 | 6:28 AM ETReuters Emmanuel Dunand | AFP | Getty Images Pedestrians walk by JP Morgan Chase & Company headquarters in New York. JPMorgan Chase is in talks with government officials to settle federal and state mortgage probes for $11 billion, CNBC confirmed on Wednesday. The sum could include $7 billion in cash and $4 billion for consumers, sources told Reuters. The talks are fluid and the $11 billion amount could change, the people familiar with the matter said. The discussions include the U.S. Department of Justice, the Securities and Exchange Commission, the U.S. Department of Housing and Urban Development and the New York State Attorney General, the sources said. (Read more: Cramer: Feds are after this bank like Jimmy Hoffa) JPMorgan is hoping to ease some of the pressure that regulators have been putting on the bank for months. The bank sidestepped the worst losses in the financial crisis, but it has looked less smart since May 2012, when it said it was losing money on derivatives bets that became known as the "London Whale" trades. show chapters JPMorgan settlement to reach $11 billion? Federal and State regulators are reportedly asking JPMorgan to pay $11 billion in fines and restitution, with CNBC's Jackie DeAngelis. JPMorgan settlement to reach $11 billion? Wednesday, 25 Sep 2013 | 7:25 PM ET Those wagers ended up costing the bank more than $6.2 billion before taxes, and subsequent probes into how the losses happened revealed that the bank's outspoken chief executive officer, Jamie Dimon, had a dysfunctional relationship with regulators. But the London whale trades were just one of many missteps that has drawn regulatory scrutiny. The largest U.S. bank has disclosed more than a dozen probes globally in recent filings, including an investigation from the U.S. Department of Justice in California that preliminarily concluded that JPMorgan violated securities laws in selling subprime mortgage bonds. U.S. Department of Justice lawyers from other areas of the country and state authorities have been investigating JPMorgan's liability for mortgage securities sold by two other companies it acquired during the financial crisis, Bear Stearns and Washington Mutual. (Read more: JPMorgan may settle with group of agencies) The talks to reach a global settlement on the mortgage issues heated up this week after U.S. Department of Justice officials in California told the bank that it was preparing to file a lawsuit. The New York prosecutor's office is participating in the talks because it is part of a working group formed by President Barack Obama in January 2012 to investigate misconduct in mortgage securities that contributed to the financial crisis. For the bank, the biggest in the United States by assets, the sums being discussed are painful but manageable. The company reported net income of $21.3 billion last year and analysts have estimated that profits this year will be higher. At the end of June, the bank's net worth, as measured by the accounting value of its assets minus liabilities, was about $209 billion. Taking a toll JPMorgan generates so much excess capital from its operations that its board, with approval of regulators, authorized spending $6 billion to buy back stock in the 12 months through next March. That buyback was conditioned on the bank improving the way it calculates its capital needs. Still, the investigations have taken a toll. Before the London Whale debacle, regulators had given the bank approval to buy back stock at twice the current rate. The bank has spent about $5 billion a year on legal costs the past two years, largely because of the London Whale debacle and because of mishandling of mortgage loans and mortgage securities. After two government regulators in January issued public orders that the bank improve its risk and operational controls, as well as its anti-money laundering and Bank Secrecy Act processes, CEO Dimon said the bank had postponed projects that would have built its business so that it could put its house in order. (Read more: Analysts on JPMorgan Chase troubles: So what?) JPMorgan has added 4,000 staff to its control groups since 2012—three quarters of them this year—and increased spending on those efforts by about $1 billion. The bank's control group includes risk, compliance, legal, finance, technology, oversight and control, and audit functions. Dimon pointed out the efforts in a memo to employees last week in which he warned that the company was about to face more bad publicity. The bank's chief financial officer said earlier this month that many types of loans on its books are performing better, but mounting legal costs will prevent those gains from boosting profits. JPMorgan shares were up 2.7 percent at the close of New York Stock Exchange trading on Wednesday. —By Reuters Related Securities

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‘Grueling’ hours at banks in focus after intern death Matt Clinch and Arjun Kharpal Wednesday, 21 Aug 2013 | 6:59 AM ETCNBC.com Moritz Erhardt, Bank of America intern who died The widespread culture of long working hours and all-nighters for banking interns has been criticized after the death of a 21-year-old intern last week, with recruiters and human resources groups calling for changes to guidelines and working practices. Moritz Erhardt, collapsed at his London home in Bethnal Green on Thursday, after reportedly working until 6 a.m. for three days in a row at Bank of America Merrill Lynch's (BofA) investment banking division. The cause of death is unknown and some newspapers reported that he suffered from epilepsy. Bank intern's death probed CNBC.com's Jeff Cox comments on a story he wrote about a Bank of America intern who died, reportedly after working extremely long hours. Bank intern's death probed Tuesday, 20 Aug 2013 | 3:15 PM ET But in the wake of Erhardt's death, a group that advises graduates hit out at employers who allow young interns to work punishing hours. In addition, recruitment agencies that deal specifically with interns called for an independent body to support young people working in the finance industry. "Internships should not be an initiation process of low pay, tortuous hours and tasks designed to push the young person to their limits, even of health. They should not be exploited because they're the intern," said Felix Mitchell, co-founder and director of Instant Impact, an intern recruitment agency in London. (Read more: BofA intern dies after reportedly working 3 straight days) London's Metropolitan Police confirmed they are not treating the death as suspicious, and said the post-mortem has yet to be completed. Vote Total Votes: Not a Scientific Survey. Results may not total 100% due to rounding. The term "internship" currently has no legal status in the U.K when dealing with pay or working conditions, so firms are free to design their intern programs. But CIPD, the U.K.'s largest human resources body, said its policy guidelines will likely be changed after this incident to include suggested working hours for interns. "What it shows is that young people need a bit more support," Katerina Rudiger, head of skills and policy campaigns at CIPD, told CNBC. She added that young people were desperate to work hard, sometimes for free, in order to earn a job in this difficult economic climate. (Read more: Brussels interns protest working conditions, lack of pay) John McIvor, BoAML's head of international communications, said Tuesday he could not confirm the circumstances surrounding Erhardt's death or his working hours. The bank said it was deeply shocked and saddened by the death. "The whole point about internships is to give students a positive experience and to get to know our firm, and us to know them well, so we can work out who would be the best fit to join the company full-time after they graduate," McIvor said. A former employee at BoAML, who asked to remain anonymous, said interns tended to compete with each other in order to prove themselves to bosses in the hope of gaining a permanent job when graduating. Long hours were common at most banks, he said, especially the larger U.S. banks. Other former interns agreed, saying the culture of long-working hours was widespread. They were thankful this current case might put the work environment at banks in more focus. (Op-Ed: Don't force businesses to pay interns) A former intern at another investment bank said he had worked a hundred hours a week as an intern at the bank, and that first year graduate analysts worked the same hours, before cutting back to about 80-90 hours per week in their second year. Interns: A Peek Inside the Tech World The upcoming movie called, "The Internship," is about older, unpaid interns at Google. Former Google intern Rohan Shah; Business Insider's Alyson Shontell; and Julia Kemp of TheGrommet.com, discuss mid-career internships. Interns: A Peek Inside the Tech World Thursday, 6 Jun 2013 | 1:23 PM ET Another former intern at an investment bank dismissed Erhardt's story as "blown out of proportion." "I mean three all-nighters is definitely awful, but I did that at university and everyone has done it at university," she said, adding that she worked around 70 hours per week as an intern, leaving work at 11 p.m. on average. (Read more: Job seekers sleep on Manhattan street) CNBC contacted several investment banks, but they all declined to comment on the subject of working hours for interns. However, Richard Payne, a professor of finance at Cass Business School, said the lure of a prestigious and lucrative career and "glittering rewards" incentivizes interns to work long hours. "Interns are in a culture where time spent at your desk is often, probably wrongly, equated with productivity and dedication," Payne said. "Combining these, leads to an intern wanting to stay that little bit later than his or her fellow interns, and this competition to stay late may be exploited by an employer." Additional reporting by Bianca Schlotterbeck —By CNBC's Matt Clinch and Arjun Kharpal. Follow them on Twitter @mattclinch81 and @ArjunKharpal.

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2016-30/0361/en_head.json.gz/14043

Charges of Insider Trading for a Wall Street Luminary By LOUISE STORY, |The New York Times Friday, 30 May 2008 | 9:52 AM ETThe New York Times John F. Marshall spent decades teaching at business schools and watching his students parlay his lessons into fortunes on Wall Street. But when he and another professor reached for some of those riches themselves, events took a startling turn, the authorities say. Dr. Marshall, a retired professor at St. John’s University and a fixture on the Wall Street lecture circuit, was accused by the Securities and Exchange Commission in March of passing inside information about a multibillion-dollar corporate takeover to a professor at Pace University. The Pace professor, Alan L. Tucker, made more than $1 million trading on the tips in 2007, according to the S.E.C. The Justice Department has filed criminal charges. The developments have stunned Dr. Marshall’s former colleagues and students, who describe him as a meticulous scholar and a generous, unassuming teacher. The accusations have also jolted Wall Street, where Dr. Marshall is considered one of the wise men of financial engineering. “I am just shocked beyond belief,” said Jennifer Kim, a St. John’s graduate who was taught by Dr. Marshall. “If he wanted to, he could have made money — lots of money — years ago.” Suspicious trading has set off alarms at the S.E.C. during the record rush of corporate takeovers in recent years. Since 2006, the agency has filed more lawsuits related to insider trading than during the entire decade of the 1990s. But the usual suspects are bankers, analysts and executives — not academicians like Dr. Marshall, the author of books like “Financial Engineering: A Complete Guide to Financial Innovation.” Yet, like many business school professors, Dr. Marshall, 56, and Dr. Tucker, 47, built twin careers by hopscotching from teaching to consulting. Dr. Marshall’s stature in the field of finance eventually lead a board position at a fledgling electronic exchange for stock options — a position the S.E.C. said he had used to pass illegal tips to Dr. Tucker, a friend and business associate. The men declined to comment for this article. It’s a remarkable turnabout for Dr. Marshall, who co-founded the leading professional society for practitioners of financial engineering, the International Association of Financial Engineering, the math-heavy discipline that revolutionized Wall Street in recent years. Ms. Kim recalled how her former professor gave away complex computer software to his students. Dr. Marshall helped establish a graduate program in financial engineering at Polytechnic University in Manhattan and fostered the explosive growth of financial derivatives. He also became a popular lecturer at banks like Goldman Sachs , Deutsche Bank and Merrill Lynch . Few people on or off Wall Street moved in such rarefied financial circles. During a long, distinguished career, Dr. Marshall mixed with Nobel laureates like Myron S. Scholes, Fischer Black and Franco Modigliani — whose pioneering theories transformed the world of finance — while he himself lived modestly on Long Island. “Everybody loves Jack Marshall” said David F. DeRosa, president of DeRosa Research and Trading and a former Wall Street trader. “He is like the uncle of derivatives.” In an essay published in the 2007 book, “How I Became a Quant,” Dr. Marshall wrote that his work on Wall Street had informed his academic research. “What I was seeing during the day in the Street was growing increasingly at odds with what I saw being taught in business schools,” Dr. Marshall wrote. “Most of academia was missing the great transformation that was taking place in finance.” He recruited Dr. Tucker to help edit the financial engineering society’s journal, and together they proposed new types of options that companies might use to protect themselves from economic downturns. The pair also opened a small consulting firm in Port Jefferson, N.Y. Bridging the gap with practical applications Their work was notable for its real-world applications, professional colleagues said. “A lot of academics publish papers that have very little to do with practical applications,” said Anthony Herbst, a retired finance professor at the University of Texas in El Paso. “Jack Marshall bridges the gap.” Dr. Marshall retired from St. John’s in 2000 and went on to help form the International Securities Exchange, the electronic options exchange. He later became a member of its board and the chairman of its finance and audit committee. The trouble began in late 2006, when Eurex, a German exchange, expressed interest in buying the I.S.E. According to the S.E.C., Dr. Marshall tipped off Dr. Tucker about the deal, sharing insider details of the proposed transaction through multiple phone calls. Dr. Tucker later bought options giving him the right to buy I.S.E. stock, as well as shares in the American exchange, through an Ameritrade account, the S.E.C. said in its complaint. In e-mail exchanges, Dr. Tucker referred to the scheme as “the program,” according to the S.E.C. Dr. Marshall’s brother-in-law, Mark R. Larson, 45, bought shares of I.S.E. stock based on the tips, S.E.C. says. When Eurex agreed to buy I.S.E. for $67.50 a share in 2007, the value of the I.S.E. stock and options soared, producing a profit of $1.1 million. It is unclear if Dr. Marshall profited personally. But the options trades set off alarms with market regulators because Dr. Tucker was the only person buying some of the instruments just before the takeover. Since the S.E.C. filed its complaint in March, the men have fallen out of touch with friends and colleagues, longtime acquaintances said. Dr. Tucker finished out the spring term teaching at Pace but did not turn up at a recent finance conference he was scheduled to attend in China. Dr. Marshall has resigned from the I.S.E.’s board. Recent calls placed to his consulting firm on Long Island were unanswered. At universities and on Wall Street, people who know Dr. Marshall are dumbfounded. Manuchehr Shahrokhi, a finance professor at California State University at Fresno, said he was so surprised to hear about the allegations that he looked up the S.E.C. complaint to double-check. He could not reconcile the accusations with the man knew — someone he once heard speak on ethics in the derivatives markets. “You know, sometimes greed takes over your knowledge and your skills and everything else. But he is not a greedy man,” Dr. Shahrokhi said. “Really, the only conclusion I can come up with is it must have been an accident. I do not believe that a person of his stature would do this.”

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Contact l Sitemap Home » Industries » Financial Services, Insurance and ... Commodity Scams: Barclays, Goldman & JP Morgan Under Fire Photo by Terence Wright, London Commodity Markets. Used under Creative Commons license.JP Morgan Chase is expected to announce over $600 million in penalties and repayments for allegedly cheating customers in energy markets in California and Michigan. This just after Barclays bank paid out $470 million for manipulating electricity rates. Now Goldman Sachs is under scrutiny for possibly manipulating aluminum prices.Commodity market scams � from energy to metals � are notoriously hard to track partly because they involve huge players dealing with each other with little outside oversight. For example, consumers are outraged when they get hefty electricity bills but it often take a lot of time for regulators to prove that they deliberately manipulated the markets.Here�s a simple illustration how some of these scams work. Buying or hoarding large quantities of commodities is not illegal but it has the effect of driving prices up while dumping purchases has the opposite effect. Combine the two practices skilfully, it becomes easy to make a quick profit when prices are manipulated to change suddenly. (Say you buy a million shares of something at $10 and then another million at $20. Prices soar as others assume you are on to something, then you dump all of them at $16. Profit $2 million) Investigators at the U.S. Federal Energy Regulatory Commission (FERC) give the real life example of Ryan Smith, a Barclays trader who exchanged instant messages with another trader on February 8, 2007, about a large position in electricity indices which he dumped at a loss to make a profit with a different investment.FERC has published excerpts of their chats such as this one:setcjake: you blow your index load yet?smittybarcap: not yet. why?setcjake: watching to see how low the hr's can getsetcjake: its like that battle sceen from Braveheart: hold...hold...unleash hell! smittybarcap: ha.setcjake: with no load/low volume, a hvy handed index dump really moves it �Respondents not only engaged in this manipulative scheme at four trading nodes in the western United States during the Manipulation Months, but that they did so with the intent to commit fraud,� FERC officials wrote in a judgement handed down last week, six years after the trading took place.Smith, together with his colleagues Daniel Brin and Karen Levine, were each fined $1 million, while Scott Connelly, managing director of North American power at Barclays, was fined $15 million.Barclay denies the charges. �We believe the penalty assessed by the FERC is without basis, and we strongly disagree with the allegations made by FERC against Barclays and its former traders,� Barclays spokesman Marc Hazelton wrote in an email. �We intend to vigorously defend this matter.�A couple of years later, traders at JP Morgan Chase in Houston came up with a plan to profit out of the rights to sell electricity from several inefficient power plants that they acquired from Bear Stearns, a former Wall Street investment bank. The traders created eight distinct �schemes� between September 2010 and June 2011 that were �calculated to falsely appear attractive� to government officials in California and Michigan. The buyers paid out $83 million in �excessive� payments, say FERC investigators.Blythe Masters, the head of global commodities for the bank, �kept close tabs on the California and Michigan power plants� instructing them to inform her of the �many of the bidding schemes under investigation,� say FERC documents seen by the New York Times. Masters then �personally participated in JPMorgan�s efforts to block� government officials �from understanding the reasons behind JPMorgan�s bidding schemes.��We intend to vigorously defend the firm and the employees in this matter,� said Kristin Lemkau, a spokeswoman for the JP Morgan Chase told the newspaper back in May. �We strongly dispute that Blythe Masters or any employee lied or acted inappropriately in this matter.�The bank is now expected to announce a $410 million settlement as well as to give up $200 million in �unpaid claims.� Masters will not face any punishment. Observers say that the fine amounts to a slap on the wrist. �Going to jail or even being criminally indicted is about as likely for a Wall Street master of the universe as Edward Snowden getting a free ride on Air Force One and joining the Obama family on a Christmas vacation trip to Disney World,� writes Mark Karlin at Truth Out.The latest fines will push JP Morgan�s fines in the last few years to roughly $16 billion in the last three years, according to financial analyst Josh Rosner of Graham Fisher.(See below for a useful cheat sheet on some of the major fines, prepared by Matt Taibbi of Rolling Stone)Sudden changes in electricity prices tend to get noticed through by angry consumers. It�s much easier to get away with subtly raising prices on commodities like aluminum which consumers don�t buy directly. But anybody who buys canned fizzy drinks like Coke or Pepsi pays a fraction of a penny more without realizing it.Here�s how that works: In 2010 Goldman Sachs, another Wall Street bank, has allegedly worked out a way to manipulate the prices of the metal by buying up the major warehouses where national stocks of the refined metal are stored in Detroit. The bank then deliberately moves the physical metal from one building to the next to delay their sale and push up prices as well as the cost of storing the aluminum. Experts estimate that the hidden cost to the consumer at $5 billion over the last three years.�It�s a totally artificial cost,� Jorge Vazquez, managing director at Harbor Aluminum Intelligence, a commodities consulting firm, told the New York Times. �It�s a drag on the economy. Everyone pays for it.��Wall Street is flexing its financial muscle and capitalizing on loosened federal regulations to sway a variety of commodities markets,� write reporter David Kocieniewski. �The maneuvering in markets for oil, wheat, cotton, coffee and more have brought billions in profits to investment banks like Goldman, JPMorgan Chase and Morgan Stanley, while forcing consumers to pay more every time they fill up a gas tank, flick on a light switch, open a beer or buy a cellphone.�Last week, the U.S. Commodity Futures Trading Commission (CFTC) announced that it would investigate the practice of commodity warehousing.Goldman is not the only bank to do this. A mystery buyer recently started buying large quantities of copper till it had as much as half of the copper available in the market stockpiled, causing prices to spike. The buyer was eventually identified: JP Morgan Chase.Recent JP Morgan Chase Fines and Settlements (compiled by Rolling Stone)� Chase was one of 13 banks asked by the U.S. Federal Reserve and the U.S. Comptroller of the Currency (OCC) to pay up in this year's $9.3 billion robosigning settlement;� Chase was one of four banks last year to settle for a total of $394 million with the OCC for improper mortgage servicing practices;� Chase paid $297 million to the U.S. Securities & Exchange Commission (SEC) last November for fraud involving mortgage-backed securities;� Chase paid $228 million to the SEC for its role in a egregious municipal bond bid-rigging case;� Chase was fined $153.6 million by the SEC for the "Magnetar" fund case in which the bank allowed a hedge fund to create a "born-to-lose" mortgage portfolio to bet against;� Chase was convicted in Europe in 2012 along with several other banks for fraudulent sales of derivatives to the city of Milan. A total of about $120 million was seized from Chase and three other banks;� Chase paid $75 million in cash to the SEC and agreed to forego $647 million in fines in Jefferson County, Alabama where a local politician was bribed into green-lighting a series of deadly swap deals;� Chase paid a $45 million settlement to the federal government for improperly racking up fees for veterans in mortgage refinancings in 2012;� Chase paid $25 million to the state of Florida in 2010 for selling unregistered bonds to a state-run municipal money-market fund;� Chase was ordered by the CFTC to pay $20 million last year for improper segregation of customer funds (this was part of the Lehman investigation). The CFTC also fined Chase $600,000 last year for violating position limits in the cotton markets;� Chase was reprimanded by the OCC and the Federal Reserve for money-laundering behaviors similar to the infamous HSBC case, and also for regulatory failures and fraud in the London Whale episode. There was a separate U.S. Federal Bureau of Investigation (FBI) inquiry into the London Whale probe in which they allegedly lied to customers and investors about the loss;� Chase is under investigation by the FBI for allegedly failing to disclose Bernie Madoff's trading activities to authorities. Search CorpWatch send a blank message to [email protected]

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Mistrust and Betrayal: The Far Deeper Costs of the Foreclosure Crisis Lauren M. Ross Gregory D. Squires Professor, Sociology and Public Policy at George Washington University; Member, D.C. Advisory Committee to the U.S. Commission on Civil Rights The financial costs of the seemingly endless foreclosure crisis have been widely reported with Credit Suisse estimating that as many as 12 million families will lose their homes before this is all over. The predatory lending that led to the spike in foreclosures, and the robo-signings coupled with the illegal forcible removal of many families from their homes, promise to keep these issues in the headlines for years to come. Lost amidst the news reports, legislative hearings, scholarly journal articles and books, documentary films, and blogs of all sorts are the perhaps more profound non-financial consequences. There have been some reports of the family tensions that often surround financial struggles, the hardships children face when they are forced to change schools, and related social stresses. But a deeper, darker challenge may be on the horizon resulting from the mistrust and betrayal families report as a result of the deception they have experienced in the mortgage market. While also feeling shame and embarrassment, even personal failure, for having allowed themselves to be taken in, these families are also aware of the exploitation they have experienced at the hands of their "trusted" financial advisors. That mistrust threatens the recovery some believe has begun in recent months. As the British sociologist Anthony Giddens has noted, in complex societies where each individual cannot become expert in all the institutional contexts in which they must operate, trust is essential for people to negotiate the various realms, including financial institutions, in which they operate. People must feel secure in the trust networks they establish in order to survive and prosper, and for society itself to advance. In a series of in-depth interviews nationwide with 22 adults who are at risk of foreclosure (they were either behind in their mortgage payments at some point in the past two years or, in two instances, had already lost their homes due to foreclosure) all respondents expressed both anger and personal responsibility. The interviews lasted between 30 and 90 minutes. In no question with any respondent was the word "trust" used. But in every case but one, the respondents explicitly referred to the mistrust they now have for anyone associated with the mortgage lending industry in particular or financial services generally. One woman who, unknowingly, took out a variable rate mortgage told us "We didn't have any reason to believe that he would lie to us or would mislead us on this. I mean there was no reason for us not to trust him." Another young woman described the reaction of her elderly uncle who was misled into taking an adjustable rate loan, "He doesn't trust anybody now, nobody." Homeownership, of course, has long been one of the pre-eminent symbols of success in the United States. Self-respect for many is wrapped up in the fact that they could call themselves a homeowner. Taking care of one's family, being a contributing member of society, the very identity of who we are is often measured by the fact of being a homeowner. When that status is lost, it can be devastating. Many who are caught in the bursting of the housing bubble individualize their troubles and blame themselves, in part, for their situation no matter how egregious the deceit on the part of the lender. Anger is directed at their broker and themselves. As one homeowner, whose family income was inflated by a broker in one of the loan documents, offered, "...if I had to do it all over again I would definitely have legal representation just to be there, cross my 't's' and dot my 'I's'" One man acknowledged the haste with which he signed a loan where the broker misled him into thinking that various credit card loans would be consolidated. Instead, he was left with credit card payments on top of the mortgage, "Yes, I wouldn't have been so rushed in the process...we should've known better, the things that they tried to pull." So our respondents exhibited a double-consciousness. They knew they were victims yet they still held themselves responsible. More problematic, in various ways all said they would be far more cautious in the future, with some indicating they would not likely deal with financial institutions again. In reference to the use of credit in the future, one respondent observed "Don't let them have your money and don't listen to them. I will be borrowing a lot less and I will be doing a lot less than what I did." After watching his interest rate increase from 8 percent to 11 percent one man stated, "I tell my kids, you know, trust no one. No one out there, no one's your friend, and I'm learning that more and more each day. I don't trust them anymore." From a public policy perspective, even if the overriding concerns are the strictly financial costs, or more cynically the well-being of the "too-big-to-fail" institutions, these psychological and emotional costs may pose far greater challenges to our economy than the dollar amounts represented by the mounting number of foreclosures. Observers at all ends of the political spectrum recognize the importance of (prudent) risk-taking. When based on a foundation of knowledge, hard work, and no small amount of faith, entrepreneurship (which means risk-taking) is essential for any meaningful economic recovery. Refusal to participate in the nation's financial institutions (assuming they are properly managed) due to lack of trust or any other reason, can only forestall that recovery. Small business operators, homeowners, and citizens generally must have trust and faith in complex institutions, including banks, if our economy and society are to prosper. Whether our focus is Wall Street or Main Street, our families and homes or our global institutions, focusing only on the immediately transparent (and readily quantifiable) value of the foreclosed homes understates the true costs of the crisis and will only extend and exacerbate the years of struggle before us. Lauren M. Ross is a graduate student in the Department of Sociology at Temple University. Gregory D. Squires is a professor of sociology at George Washington University. This essay was drawn from their forthcoming paper, "The Personal Costs of Subprime Lending and the Foreclosure Crisis: A Matter of Trust, Insecurity, and Institutional Deception" to be published in the March issue of Social Science Quarterly. Foreclosures Foreclosure Crisis

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Business & Real Estate Why are bonds facing such risk today? Published: 27 February 2013 Written by Artie Green The Financial Industry Regulatory Authority (FINRA) recently warned investors that in the event of rising interest rates, “outstanding bonds, particularly those with a low interest rate and high duration, may experience significant price drops.” Why are bonds facing such risk today, and what should investors do as a result? We are on the verge of a long period of rising interest rates. At the moment, rates are not moving because the federal government is keeping them low artificially to stimulate economic growth. But this situation will not last forever. And when interest rates increase, bond prices decrease proportionally. Suppose you purchased a bond for $1,000, paying 5 percent interest (that is, $50 per year), and two years later interest rates doubled to 10 percent. What would your bond now be worth? Certainly not $1,000. Who would pay $1,000 for a bond paying $50 per year when they could buy another $1,000 bond paying $100 per year (10 percent)? Your bond would be worth only $500 (which, at $50 per year, would yield an equivalent 10 percent). You’ve just lost half the value of your bond! Does this mean that investors should heed FINRA’s warning and avoid bonds? Not so fast, argues Joel Dickson, senior investment strategist at Vanguard Group Inc. “It’s not clear that rising interest rates are detrimental to long-term returns,” he said in an interview at IndexUniverse’s Inside ETFs Conference. While rising interest rates might result in immediate losses, over a longer time frame, the benefits of reinvesting at higher rates could offset the short-term losses. Research by the Brandes Institute supports that view. When researchers reviewed bond returns over each five-year period from 1926 through 2011, they discovered that more than 85 percent of the returns over each of the five-year periods on average were due to income (that is, the interest payments) rather than capital gains (bond price changes). The results suggest that in a rising rate environment, there’s a real benefit in being able to recycle older lower-yielding bonds into newer higher-yielding ones, similar to the way most bond mutual funds work. Note also that FINRA’s warning specifically addressed higher-duration bonds. Duration is a measure of how sensitive a bond’s price is to changing interest rates. Shorter-term bonds (those with durations less than five years) would be affected much less severely than longer-term bonds in a rising rate environment. There are also many different types of bonds, each with its own risks and rewards. There are even Treasury Inflation-Protected Securities, whose prices adjust not only negatively with increases in prevailing interest rates, but also positively at the same time as inflation heats up. Although it’s common to fear short-term bond losses, investors might find themselves in trouble if they don’t keep to a long-term plan. “The behavioral reaction to the short-term losses is the real risk,” Dickson said. “There’s the potential to make things worse by selling and locking in the loss.” Indeed, how many people panicked in late 2008 and sold all their stocks, only to miss out on the subsequent rally as the economy healed? Keep in mind that although interest rates are expected to rise over the long term, the path is far from smooth. Leuthold Research examined bond returns from 1946 through 1981, the last period of rising interest rates. Although bonds had negative returns in 15 of those 35 years, returns were positive in the other 20, and were double-digit positive in five of them. Given the importance of bonds in a well-diversified portfolio, the message is that you should not avoid them. But for the next 30 years or so, be very selective with your choices. Los Altos resident Artie Green is a Certified Financial Planner with Cognizant Wealth Advisors. For more information, call 209-4062.

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Banks in $8.5 bln foreclosure abuse settlement Ronald D. Orol Deal expedites and expands reach of payment to troubled borrowers RonaldD. Orol WASHINGTON (MarketWatch) — Federal regulators on Monday reached an $8.5 billion settlement with ten banks over foreclosure abuses stemming from the so-called robo-signing scandal, a deal that government officials say is expected to help more than 3.8 million borrowers. The banks include Bank of America BAC, +0.77% , Citigroup Inc., C, +0.39% , Wells Fargo & Co. WFC, +0.04% and J.P. Morgan Chase & Co. JPM, +0.55% and six others. Reuters A sign placed by members of Occupy Cincinnati hangs on a door in the East Price Hill neighborhood during a demonstration to protest home foreclosures in Cincinnati, Ohio, March 24, 2012. The Federal Reserve and Office of the Comptroller of the Currency are still in discussions with four other financial institutions -- HSBC US:HBC Ally Financial, EverBank Financial Corp. EVER, +0.13% and OneWest Bank. At issue are deficient practices on mortgage servicing and processing, improper fees, wrongful denial of modification, and the robo-signing scandal -- the practice of assigning bank employees to rapidly approve numerous foreclosures with only cursory glances at the glut of paperwork to determine if all the documents are in order. The settlement includes $3.3 billion in cash payments to 3.8 million borrowers, some of whom went through foreclosures. Banks have agreed to provide an additional $5.2 billion in other assistance to homeowners, such as modifications to their mortgages or cuts to the amount borrowers owe. Bank of America reaches deal with Fannie Mae(5:06) Bank of America will pay $3.6 billion to Fannie Mae as well as repurchase certain mortgage loans made from 2000 through 2008 for $6.75 billion, a move it said would cut its fourth-quarter pretax income by about $2.7 billion. Photo: Getty Images. The agreement replaces an existing independent foreclosure review process where foreclosed-upon borrowers could request a review of their mortgage foreclosures to see if they are eligible to receive compensation or other remedies because of error. As of the application deadline of Dec. 31 — which was postponed several times to bring more attention to the issue — 495,000 borrowers have requested a review of their foreclosure. An OCC official said that based on the agency’s preliminary data on some of these borrower review cases, only 6.5% have been identified to have errors that would have resulted in financial injury. Alternatively, the settlement announced Monday is much broader and would seek to provide assistance to more than 3.8 million borrowers, including the 495,000 review-seekers, whose homes were foreclosed upon or were subject to other bank abuses in 2009 and 2010. The OCC said as part of the deal, the participating banks would end their independent foreclosure case-by-case review and replace it with this approach where payments would go out to eligible borrowers more quickly. Officials declined to break down what each bank will pay into the fund. Deciding who gets what Based on the new deal, regulators are setting up eleven categories of borrowers who are most likely to have been harmed. Participating banks will slot borrowers into each category for payouts. A major difference between this approach and the previously employed one is that banks and regulators are not looking for actual errors anymore. For example, troubled borrowers denied loan modifications will fit into a category of borrower who is more likely to receive greater funds even though regulators did not determine that an error was made. Some borrowers who received modifications but there were errors involved could also receive funds. If they were in some stage of foreclosure process in 2009 and 2010, it is possible that they could get payment even if there was no error. Regulators conceded that the complexity of the foreclosure and loan modification processes were delaying and adding significant costs to the review process. An OCC official noted that continuing the review process and determining precisely who was harmed and what exactly was the harm would have been prohibitive and delayed payments to borrowers. He added that this deal will speed up compensation to a broader number of borrowers. According to regulators, every one of the 3.8 million borrowers covered by the agreement will receive compensation, regardless of whether there was an error. The 495,000 borrowers who requested the review will likely receive greater amounts because they probably provided some evidence of abuse, an OCC official said. Eligible borrowers will receive as little as “hundreds of dollars” up to $125,000 in payments, depending on the mortgage error conducted by the bank. A borrower who is likely eligible to receive funds at the higher-end of the spectrum could be an active duty serviceman who went into foreclosure despite the fact that they were protected by the servicemember civil relief act. Many borrowers could be eligible to receive smaller payments, in the $250 range, because they were subject to inappropriate fees or other small errors. However, regulators expect fewer will receive payments on the high end of the spectrum. The specific category of dollar payouts have not yet been determined yet. An OCC official said that regulators will determine the level of compensation for different categories of borrower. The settlement comes roughly a year after state and federal government officials in February 2011 agreed to a record housing settlement of more than $26 billion with five of the country’s biggest banks over foreclosure abuses. Regulators said banks in this settlement will not be permitted to apply credit from assistance to borrowers from that deal towards this one. Read about $26 billion foreclosure deal The settlement was met with reservations on Capitol Hill. Rep. Elijah Cummings, the top Democrat on the House Committee on Oversight and Government Reform, said he has “serious concerns that the settlement may allow banks to skirt what they owe and sweep past abuses under the rug without determining the full harm borrowers have suffered.” In response to concerns about how the settlement may not be sufficient, an OCC official said the regulator will still produce a report at the conclusion of the process about how it went. The six other banks that agreed to the deal are Aurora Loan Services, MetLife Bank, PNC Financial PNC, +0.46% , SunTrust Banks STI, -1.78% Sovereign Bank and U.S. Bancorp. USB, +0.74% Bank of America’s $10 billion mortgage ‘put back’ settlement Separately, Bank of America on Monday agreed to pay roughly $10 billion to government-seized housing giant Fannie Mae FNMA, -0.51% over the housing finance firm’s claims over problem mortgages that turned toxic during the housing crisis. The deal focuses mostly on loans issued by Bank of America’s Countrywide Financial unit. The problem stems from the housing boom, when lenders originated lots of troubled home loans, then sold many of them to Fannie and the other government-seized housing giant, Freddie Mac. Read about Bank of America reaching $10 billion deal with Fannie Mae The settlement comes after Bank of America settled a fight in 2011 with Freddie Mac FMCC, +0.00% That deal is separate from a lawsuit filed by the Federal Housing Finance Agency, the regulator for Fannie and Freddie, against a dozen major banks, including Bank of America, for billions of dollars in losses on over $200 billion in mortgage securities. The Bank of America settlement on Monday is over loans while the FHFA litigation addresses mortgage securities purchased by Fannie and Freddie. Read about U.S. suing big banks over mortgage losses

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Dow 55,000? It's Closer Than You Think - views Stock Quotes in this Article: AAPL, GRMN, MA, SPY, T BALTIMORE (Stockpickr) -- There’s no two ways about it: Investors hate stocks right now. But all of that hate could help fuel a market rally that sends the Dow to 55,000. Don’t believe me? Look at the numbers. >>5 Stocks Hedge Funds Love -- and So Should You Investors hate stocks so much that Mr. Market is losing ground to the Mega Millions as a viable retirement plan. According to an old and oft-quoted study by Primerica, close to a third of Americans already believe that the lottery is a better way to earn a retirement nest egg than investing in the stock market. But now, more and more investors with long-term time horizons are losing faith in stocks too. Research done by MFS Investment Management says that 40% of people ages 18 to 30 admit that they will “never feel comfortable investing in the stock market.” That’s not a comforting statistic for people who already own stocks. Today, stock holdings as a percentage of all the assets held by mutual funds are lower than they’ve ever been. And investors continue to pull cash out of equity funds by the fistful. The most damning evidence that investors hate stocks right now doesn’t come from what folks are doing about their stocks, it comes from what they’re not doing: buying them. >>5 Toxic Stocks to Sell Now And it’s largely because investors have no clue about what’s actually going on in the market. According to a survey from Franklin Templeton, 66% of investors thought that the S&P 500 declined in 2009; the big index actually climbed 26.5% on the year. 48% of people thought that the S&P dropped in 2010, when it really jumped 15.1% higher. More than half of investors still think that stocks dropped in 2011, when they actually just churned sideways. And as I’ve been harping on this year, even though S&P has climbed around 13% since the first trading day in January, investors are more anxious about stocks than ever before. But all of that hate mail investors are sending to stocks is actually a good thing. So contrarian investors should be taking note of what’s going on all around. Harnessing the Boom and Bust Cycle For starters, we’ve seen this before. Just about every forty years, in fact. Sir John Templeton is credited with saying that the four most expensive words in the English language are, “this time it’s different.” The two most expensive words of the 21st century may end up being “new normal.” >>5 Rocket Stocks Ready to Rally Turn back the history book pages, and it’s clear that we’re not exactly in uncharted territory. Market technicians have been studying the 34-year boom and bust cycle for years, and sure enough Mr. Market looks like he’s following a 34-to-40-year cycle pretty squarely right now. Stocks fell out of favor back in the mid-to-late 1930s after the 1929 market crash scared investors away from stocks and the Great Depression put the country into the worst economic crisis of all time. The discount rate, incidentally, dropped to near where it is now in the years that followed, and stocks quadrupled in the decade after that. In the late 1970s, stocks fell out of favor again, prompting BusinessWeek’s infamous “Death of Equities” cover in 1979. Stocks more than doubled by the decade after that, and more than tripled by the mid-1990s. And now again, investors have been calling for the end of stock investing since the late 2000s -- even some really smart ones (though “new normal” espouser Bill Gross does admit to some “memory problems” in his October letter to investors). If history is any indication of what we should expect in stock performance over the next decade, Dow 55,000 isn’t unrealistic, even if it seems far away. Fundamentals Support More Upside More important than the historical evidence alone, the market’s current fundamentals support that sort of substantial rally too. Right now, the Dow’s average price-to-earnings ratio is 15.7. It was 16.2 in the last five years of the 1930s and just over 10 in the last five years of the 1970s. (For comparison, the high inflation of the 1970s warrants that P/E discount vs. the 1930s and now.) Corporate profits are sitting at all-time highs, corporate holdings of cash are sitting at all-time highs, and value is being returned to shareholders more quickly than in the last two decades. The dividend yield of the S&P 500, for instance, is higher post-2008 than it’s been since 1991. Since the market crash of 2008, stock prices have been pushing higher, but earnings have been moving even faster over that same period. Ultimately, that means that there are still some bargains to be had for investors willing to search them out. An Action to Take for Dow 55,000 The big question you’re probably wondering by now is: When, already? In the past examples of “death of equities rallies,” the returns were slow going, measured in decades rather than months or years. But this month marks the four-year mark since the floor fell out of the stock market in October 2008. We’re entering the territory where some of the biggest gains have historically been made. For that to happen, a good earnings season this quarter is only part of the battle. The other part is getting investors to think in terms of return on capital again, instead of return of capital. For that, it’s just a matter of time. Right now, investors are overweight in flight to quality investments like treasuries. But those investments are atrophying away under the low-rate, higher interest rate environment that we’re currently knee-deep in. It doesn’t take hyperinflation to create a toxic environment for low-risk assets, and the current conditions prove it. >>5 Blue-Chip Stocks to Buy to Beat the S&P Stocks may not be perfect, but when treasury investors can’t take the pain anymore, they’re going to have to turn to stocks again. When that happens, the flow of funds will send the stock rally moving in earnest. As contrarian investors know, though, those “risk-off” investors will necessarily miss out on the lion’s share of the gains. So how can you make sure you get in early? Focusing your portfolio on a few places now, while stocks are still out of favor, helps. The old adage goes that everyone looks like a genius during a bull market. That means that index ETFs such as the SPDR S&P 500 ETF (SPY) and the PowerShares QQQ Trust (QQQ) do really well in this scenario. But get a little more selective, and you’ll boost that investment IQ. Here are two of areas to focus on. 1. Buy Fundamentally Strong Dividend Payers Firms that generate high-quality earnings and throw off enough cash to return value to investors in the form of a dividend are a good option. Yes, they’ll obviously benefit from a stock rally, but the dividends (particularly if reinvested) should help to offset the negative effects of inflation while you wait it out. AT&T (T) is a good example of this sort of stock. The firm is a communications juggernaut that’s effectively the biggest mobile phone carrier in the U.S. Even though Verizon’s (VZ) network is a bit bigger, AT&T owns its network in toto. I like that. One result of that is huge cash generation. AT&T uses that cash to pay an enormous 5% dividend yield right now, and it also has been slowly paying down its debt load (telecom is a very capital intense industry, after all). The firm’s landline business is underrated, but it generates a nice quiet cash flow as well that should help finance the crown jewel wireless business for free. >>8 Stocks With Big Dividends, Steady Returns While they may not fit that mold perfectly, Apple (AAPL) and MasterCard (MA) are two other names that are skewed towards smaller dividends. Look, I understand that Apple is scary at around $620. But I’ve talked at length about why this stock is in fact cheap right now in spite of that price tag. It’s got mountains of cash (which offsets its valuation), high-quality earnings and enviable momentum. Few firms can offer that combination. Payment network MasterCard is attractive for similar reasons. Again, we’ve got a firm with high-quality earnings and momentum, not to mention the huge tailwind in the world’s transition from cash to electronic payments methods. While smaller than Visa (V), the stock is cheaper, and it’s quietly grabbing a bigger chunk of the industry’s revenues: The firm’s market share increased by 10.9% in the last year. 2. The Names Everyone Else Hates When all else fails, focus on the big names that everyone else hates -- the perennial short candidates. Heavily shorted stocks have the potential for a short squeeze as sentiment turns, and that’s more than just an old wives’ tale; my research shows that buying heavily shorted large and mid-cap stocks (the top two quartiles of all shortable stocks by market capitalization) and rebalancing monthly over the last decade would have beaten the S&P 500 by 9.28% each and every year. That’s some material outperformance during a decade when decent returns were very hard to come by. Garmin (GRMN) is one name that immediately springs to mind. The GPS maker currently sports a short interest ratio of 20.7, which means that it would take more than a month of buying pressure at current volume levels just for shorts to exit their bets. Couple that with the fact that Garmin has a debt-free balance sheet, has staged a post-crash revenue turnaround in the last year, and pays out a 4.5% dividend yield, and this stock looks overly hated. That means it should benefit more than most from a broad rally in stocks. There’s no question that we’re still in a challenging market right now, but with a little perspective from the past, the anti-stock sentiment points to a rally of significant proportions over the longer-term. To see these names in action, check out the Dow 55,000 Portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore. >>5 Big Stocks to Trade for Gains

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This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the bottom of any article. October 22, 2012 CFPB Proposes to Ease Credit Card Access for Stay-at-Home Spouses CFPB proposal clarifies CARD Act language intended to protect college students from exploitation The Consumer Financial Protection Bureau (CFPB) recently proposed updates to the Credit Card Accountability Responsibility Disclosure Act (CARD Act) which would make it easier for stay-at-home spouses to quality for credit cards. The CFPB’s proposed revision would allow credit card applicants who are 21 or older to rely on third-party income to which they have a reasonable expectation of access. Although the proposal applies to all applicants regardless of marital status, the CFPB said it expects that it will ease access to credit particularly for stay-at-home spouses or partners who have access to a working spouse's or partner’s income. CFPB Director Richard Cordray said in announcing the proposal that “When stay-at-home spouses or partners have the ability to make payments on a credit card, they should be able to obtain a card in their own name.” CFPB said that data made available to it suggest that “some otherwise creditworthy individuals have been declined for credit card accounts under the current regulation, even though they have the ability to make the required payments. Discussions with industry sources indicate that a significant number of these individuals may be stay-at-home spouses or partners with access to income from an employed spouse or partner.” CFPB cited Census data saying that more than 16 million married people do not work outside the home. “That equates to approximately one out of every three married couples who now could have easier access to credit cards with the bureau’s proposal,” CFPB said. The CFPB obtained jurisdiction over the CARD Act in July 2011, when regulatory supervision of Truth and Lending Act functions were transferred to the new agency. Rep. Barney Frank, D-Mass., said in a statement that “until the recent action by the CFPB, language intended to protect college students from unfair exploitation was not sufficiently clear and left some to conclude that partners or spouses, who were not themselves earning the family’s income, were ineligible for credit cards.” Frank said that “this was never the congressional intent” and that he’s “very pleased that the CFPB has once again demonstrated its value to consumers by making that clear and by proposing a rule that will fully enable spouses and partners to receive credit cards in appropriate circumstances.” The CARD Act became law in 2009 and requires that card issuers evaluate a consumer’s ability to make the necessary payments before opening a new credit card account. Under current CARD Act regulations issued by the Federal Reserve, a card issuer generally may only consider the individual card applicant’s income or assets. SheCapital, Robo-Advisor Aimed at Women, Shuts Down

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More Women Step Up as Family CFO, but Gap Remains Fidelity study finds young women highly deferential to male partners Women are increasingly engaging in the family finances beyond simply budgeting, but many still lack confidence when it comes to investing and routinely defer to their partners on important financial decisions, according to a report released Tuesday by Fidelity Investments. Fidelity's 2013 Couples Retirement Study analyzed retirement and financial expectations and preparedness among 808 couples who were at least 25 years old, married or in a long-term committed relationship and living with their respective partner, and had a minimum household income of $75,000 or at least $100,000 in investable assets. The new study found that the number of women claiming primary responsibility for day-to-day financial decisions had jumped to 24%, up from 15% in 2011, and those claiming primary status for long-term retirement decisions more than doubled to 19% from 9% in 2011. While 92% of couples agreed they communicated well and 81% described themselves as “one financial entity,” many women were more confident in their partners’ ability than their own in taking full financial responsibility of retirement decisions from a spouse if necessary. Fifty-three percent of men were very confident in their own ability versus 45% of women, and 52% of women, in turn, were confident their “other half” could assume this role, versus 43% of men. In an unexpected finding, younger women tended to be the most deferential of all, the report said. These findings were echoed in other recent research that showed significant numbers of affluent women lacked confidence in their investment abilities. “While a lot of progress has been made, it’s critical for women to empower themselves by becoming equal partners managing the family finances and in long-term financial planning conversations,” Kathleen Murphy, president of Personal Investing at Fidelity, said in a statement. This is particularly the case given that the average woman can expect to outlive her male companion by almost five years, Murphy said. The study explored why women aren’t as engaged as they should be about finances. It suggested women may lack confidence, for example, perceiving men as “better with numbers.” Other factors, it said, might include that couples divided household tasks based upon perceived strengths or interests, or perhaps repeated behaviors and habits they had observed in their own parents. At the same, research showed that women were often more disciplined investors and tended to stay the course once a financial plan had been crafted. They also tended to be more consistent, conservative and risk-averse investors. For example, only 4% of the women in this year’s survey were willing to invest a substantial portion of money to achieve potentially higher returns, even if this risked losing some or all of initial investment, versus 15% of men. The 2013 study expanded to examine the behaviors of Gen X (born 1967–1978) and Gen Y (born 1979–1988) couples. Even though more than three-quarters of younger women were working, they appeared to be playing a more passive role than older women. While 24% of boomer women (born 1946–66) identified themselves as the primary decision maker for day-to-day financial decisions, only 12% of Gen Y women did so. Moreover, only 45% of Gen Y women said they were a joint decision maker when in retirement savings decisions, compared with 58% of Boomer and Gen X women. In its statement, Fidelity recommended that couples consider the “three Cs” to help them engage and align on a financial plan: Communicate: Set aside time to have meaningful conversations and identify shared financial goals, engaging a financial professional if extra help or guidance is required Collaborate on a plan: This gives each partner an equal opportunity to understand their financial needs and how to get there, and helps identify potential hurdles and sacrifices Control leads to greater confidence: Having a plan and sticking to it, with yearly reviews, leads to greater confidence for both partners. Check out Women’s Investment Confidence Lags Their Increasing Affluence on ThinkAdvisor. Financial Stress Has Toxic Effects on Employees Social Security Bill Would Raise Retirement Age, Slow COLAs

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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. J.C. Penney May Borrow Against Real Estate The retailer is said to be considering splitting its real estate into a new subsidiary that could issue debt. J.C. Penney Co. is exploring ways to borrow against its real estate holdings to help raise cash, two people with knowledge of the situation said. The retailer and its financial advisers are considering options including spinning off real estate into a new subsidiary that could issue debt, said one of the people, who asked not to be named because the matter is private. Certain property-backed transactions may avoid triggering problems under existing bond rules, the person said. J.C. Penney is also exploring whether it could sell real estate and lease the property back as another way to free up cash, another person said, adding that other assets, such as inventory, could also be collateralized. It has not decided yet which alternatives to pursue, the person said. Reinstalled Chief Executive Officer Myron Ullman borrowed $850 million from J.C. Penney’s $1.85 billion revolving credit line Monday, a week after replacing Ron Johnson as CEO. Johnson’s failed effort to overhaul the retailer consumed cash and led to the company’s worst sales in more than two decades. J.C. Penney, which said Monday it’s working with advisers to raise capital, is focused on issuing debt, said another person familiar with the matter. Blackstone Group LP is helping J.C. Penney raise at least $1 billion, people familiar with the situation have said. The company also has tapped Centerview Partners LLC for advice, two people said Monday. “We expect the company to pool its real estate into a new subsidiary and issue senior notes with unsecured guarantees to back these notes,” Cantor Fitzgerald LP analysts said in an April 10 note. “We believe that JCP may be able issue up to $1.5 billion in this context.” Revolver borrowings will be used for capital spending and to replenish inventory as the company opens renovated home departments next month, the Plano, Texas-based retailer said yesterday in a statement. “Mike Ullman has his work cut out for him in terms of reassuring suppliers, landlords and employees that J.C. Penney is going to be a going concern,” Alex Fuhrman, an analyst for Piper Jaffray Cos. in New York, said in an interview. Assuming it will have access to the rest of the credit facility, “the company has enough liquidity to make it through the end of this year, but next year is really more of the issue.” J.C. Penney shares declined 27 percent this year through Monday, compared with an 8.8 percent gain for the Standard & Poor’s 500 Index. The stock sank 50 percent under Johnson’s reign from November 2011 to April 8. Viewed Positively While the drawdown was more than four times larger than expected, “any capital raise that is not egregiously expensive would be viewed positively for near-term liquidity,” Carla Casella and Paul Simenauer, analysts at JPMorgan Chase & Co. in New York, wrote in a note Monday upgrading J.C. Penney’s debt to neutral. The chain of 1,100 stores reinstated Ullman as CEO on April 8, about a day after Chairman Thomas Engibous first contacted him about returning to the job he relinquished to Johnson in November 2011. Ullman already has begun reversing some of Johnson’s strategies. J.C. Penney is halting the practice of reducing discounts and will put coupon advertising in newspapers again, Bill Ackman, the activist investor who is the retailer’s largest shareholder, said last week. The home department, whose renovations were under way when Ullman returned, make up about 15 percent of the chain’s total selling square footage and aren’t generating any sales now. The pending lawsuit with Macy’s Inc. over Martha Stewart-brand goods also has clouded the departments’ rollout during the next month. If J.C. Penney loses the dispute and isn’t allowed to sell Martha Stewart items, it may have to liquidate as much as $100 million of inventory, according to Deborah Weinswig, an analyst for Citigroup Inc. in New York. J.C. Penney was expected to ramp up spending this quarter to finish the home sections, Piper Jaffray’s Fuhrman said. What he didn’t expect was that the company would have to borrow this much from its revolver so quickly. J.C. Penney showed signs of deteriorating liquidity when its operations consumed $10 million in cash in the year ended Feb. 2, the first year it’s done so since at least 1987, according to data compiled by Bloomberg. The retailer’s operations generated $820 million in cash the previous year. The company in February increased the size of the revolver to $1.85 billion from $1.5 billion and got permission to expand it to as much as $2.25 billion. Swaps Rise Five-year credit-default swaps on J.C. Penney rose 1 percentage point to 15 percent upfront as of 11:11 a.m. Monday in New York, according to CMA, the data provider owned by McGraw-Hill Cos. that compiles prices quoted by dealers. That means it would cost $1.5 million initially and $500,000 annually to protect $10 million of obligations. The contracts pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. “People are looking for signs of how much of an urgent situation this is, so tapping something to that size puts it in the category of ‘fairly urgent,’” Michael Binetti, an analyst for UBS AG in New York, said in an interview. Binetti expected J.C. Penney to use $160 million from the credit line in the first quarter and $600 million in the second quarter. Chief Financial Officer Kenneth Hannah told analysts on a Feb. 27 conference call to discuss fourth-quarter results that the company had plenty of liquidity and would fund Johnson’s transformation of the more than century-old chain with cash from operations. Two weeks later, he said he wasn’t opposed to tapping the credit line. “Using that revolver for working capital requirements is what it’s intended to be,” Hannah said in a March 13 presentation. “Trying to use it as a substitute for the fact that you’re not connecting with your customer is something that the company has to avoid.” HSBC Bankers Charged in U.S. Currency Case Brexit Could Cut $40B from North American Company Profits Companies Turn to Consultants for Help on Brexit Why Bank Capital Standards Aren't That Standard Why Corporate America's Borrowing Costs Keep Falling Previous Benchmark Rates Should Reflect Real Data, Iosco Says Mutual Fund Expense Ratios Continue to Decline Related Terms Blackstone Group LP 34 McGraw-Hill Cos. 28 J.C. Penney Co. 18 J.C. Penney 10 Bill Ackman 9 Cantor Fitzgerald LP 8 Piper Jaffray Cos. 6 Carla Casella 4 Martha Stewart 4 real estate holdings 4 Alex Fuhrman 3 Centerview Partners LLC 3 CEO Myron Ullman 3 Kenneth Hannah 3 Mike Ullman 3 Myron Ullman 3 Paul Simenauer 3 Thomas Engibous 3 coupon advertising 2 Deborah Weinswig 2 Michael Binetti 2 Ron JOhnson 2

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Banks Make Smartphone Connection ENLARGE Emily Cooper Robin Sidel Americans are growing increasingly comfortable using their mobile phones to conduct basic financial transactions, sending banks racing to offer new technology that will cut down on costly customer-service calls and branch visits. The moves represent a big change from just a few years ago, when customers mostly used their phones to check bank balances or find the nearest branch. Customers now are manipulating their gadgets to deposit checks and move money between accounts. First Financial Bank, FFIN a community lender with 55 branches in Texas, recently rolled out a feature that lets customers pay bills using their mobile phone to snap a picture of their monthly payment coupon. U.S. Bancorp, the fifth-largest U.S. bank by assets, plans to launch its own version of "mobile photo bill pay" in March. The trend is taking hold with younger consumers who increasingly rely on smartphones for everyday tasks. It is less clear, however, whether older bank customers—many of whom took a while to embrace online banking and who are among the industry's most profitable customers—are willing to make another switch. The efforts come as banks of all sizes look for new ways to attract customers during a period of low interest rates, tepid loan demand and tight profit margins. U.S. banks closed more than 1,100 branches in 2012, on a net basis, said SNL Financial, a Charlottesville, Va., research firm. The mobile-banking efforts are more advanced than the industry's race to transform mobile phones into payment devices. Banks also compete against nontraditional payment firms like eBay Inc. 's PayPal. ENLARGE By contrast, consumers' "readiness to manage their personal finances and banking via a mobile device has caught the industry off guard," said Robert Hedges, managing director at AlixPartners LLP, a Boston-based consulting firm. Mobile banking represents roughly 8% of transactions, with online banking at 53% and branches, 14%, according to AlixPartners. Other methods, including automated teller machines, make up the rest. Kate Greenough of Boston rarely visits a Bank of America Corp. branch. She doesn't own a laptop or desktop computer. Instead, she relies on her smartphone and iPad for virtually all of her banking. "It has become part of my normal routine," said the 25-year-old who works in the marketing industry. She has used her phone to transfer rent money to her roommate's bank account and will sometimes log onto her account when shopping to check her recent spending habits. Most banks don't charge for the new mobile applications; they consider them as a way to lure consumers who may ultimately turn to the bank for a credit card, mortgage or wealth-management services. Nearly half of smartphone users who switched banks said that mobile banking was an important factor in their decision, up from 7% in 2010, according to an AlixPartners survey. J.P. Morgan Chase & Co., which started offering mobile banking in 2009, said that it has some 13 million customers who use its mobile services. "We have gone from mobile as an experiment to mobile banking being a core experience that is just as important as the branches, call centers and the Internet," said Ryan McInerney, who runs the New York bank's consumer-banking operations. Bank of America began offering mobile check deposit in August. The bank said customers are depositing more than 100,000 checks each day through their mobile phones. U.S. Bancorp is one of the few big banks that charges customers 50 cents to deposit a check by taking a picture of it with their smartphone. ENLARGE J.P. Morgan Chase, which started offering mobile banking in 2009, said that it has some 13 million customers who use its mobile services. "We find that our customers appreciate the convenience for the service and are more than willing to pay the 50 cents rather than go to the nearest ATM or branch," said Howell "Mac" McCullough, chief strategy officer at U.S. Bancorp. The Minneapolis-based bank doesn't plan to charge for its new mobile photo bill-payment service. Banks began offering mobile banking five or six years ago in the form of text messaging and web-based browsers. The adoption of mobile banking is being fueled by the explosion in smartphone usage. Roughly half of Americans who use a mobile phone are using a smartphone, according to mobile-phone industry estimates. The new features "give the banks a couple of new weapons in terms of engaging the next generation of consumers," said James DeBello, chief executive of Mitek Systems Inc., MITK a San Diego software developer that sells mobile features to banks. Still, there are skeptics. Nearly half of mobile-banking users and 63% of nonusers said they would be hesitant about using a phone camera to make a check deposit, according to a survey conducted last year by Infosys Ltd. INFY , a technology and consulting firm. Jeff Murphy uses a smartphone to deposit checks into his ING Direct savings account but said he wouldn't be comfortable using the feature for his everyday account at TD Bank even if the bank offered it. "I like the ING security, but I don't trust these app makers," said the 41-year-old systems administrator in New York. ING is a unit of Capital One Financial Corp. COF TD plans to offer mobile deposit in the first half of the year, a spokeswoman said. The bank, which has more than 1,300 U.S. branches, is part of TD Bank Group in Toronto. Banks say mobile banking is secure. Customers typically choose a login and password so that their bank information can't be accessed if a phone is lost or stolen. In the first 24 hours after First Financial, a unit of First Financial Bankshares Inc., Abilene, Texas, launched the mobile photo bill payment last month, some 53% of the bank's active mobile users upgraded to the new application that included the feature. "The appeal for us is opening new accounts and taking care of our customers to make the bank grow," said F. Scott Dueser, chief executive. Mr. DeBello of Mitek thinks banks ultimately will add features that allow customers to use smartphones to get a credit card or a mortgage. "It's instant, it's gratifying, it's easy and it's kind of fun. When is the last time you had fun banking?" he said. Write to Robin Sidel at [email protected] Save Article

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The volatile journey of Indian rupee since independenceBy Gyanendra Kumar Keshri | IANS India Private Limited – Thu 15 Aug, 2013 2:01 PM IST New Delhi, Aug 15 (IANS) The Indian rupee, which was at par with the American currency at the time of independence in 1947, hit a record low of 61.80 against the dollar recently. This means the Indian currency has depreciated by almost 62 times against the greenback in the past 66 years. The currency has witnessed a large volatility in the past two years. This volatility became acute in the past three months affecting major macro-economic data, including growth, inflation, trade and investment. Managing volatility in the currency markets has become a big challenge for the economic policy markers in the country. The central bank as well as the government has taken a series of measures to curb the volatility in the markets. Despite those measures, the rupee continues to depreciate. And the trend is unlikely to reverse any time soon. "We expect the rupee to depreciate further. It may touch 63 against a dollar in near-term (in a couple of months)," Reena Rohit, chief manager, non-agri commodities and currencies at Angel Broking, told IANS. She said rupee depreciation was badly hurting Indian economy. It was fuelling inflation and has hurt economic growth. The Indian currency has witnessed a roller-coaster journey since independence. Many geopolitical and economic developments have affected its movement in the last 66 years. Here is a broader look at the Indian rupee's journey since 1947: - India got freedom from British rule on Aug 15, 1947. At that time the Indian rupee was linked to the British pound and its value was at par with the American dollar. There was no foreign borrowings on India's balance sheet. - To finance welfare and development activities, especially with the introduction of the Five-Year Plan in 1951, the government started external borrowings. This required the devaluation of the rupee. - After independence, Indian choose to adopt a fixed rate currency regime. The rupee was pegged at 4.79 against a dollar between 1948 and 1966. - Two consecutive wars, one with China in 1962 and another one with Pakistan in 1965, resulted in a huge deficit on India's budget, forcing the government to devalue the currency to 7.57 against the dollar. - The rupee's link with the British currency was broken in 1971 and it was linked directly to the US dollar. - In 1975, the Indian rupee was linked to a basket of three currencies comprising the US dollar, the Japanese yen and the German mark. The value of the Indian rupee was pegged at 8.39 against a dollar. - In 1985 it was further devalued to 12 against a dollar. - India faced a serious balance of payment crisis in 1991 and was forced to sharply devalue its currency. The country was in the grip of high inflation, low growth and the foreign reserves were not even worth to meet three weeks of imports. Under these situation, the currency was devalued to 17.90 against a dollar. - The year 1993 is very important in Indian currency history. It was in this year when the currency was let free to flow with the market sentiments. The exchange rate was freed to be determined by the market, with provisions of intervention by the central bank under the situation of extreme volatility. In 1993, one was required to pay Rs.31.37 to get a dollar. - The rupee traded in the range of 40-50 between 2000-2010. It was mostly at around 45 against a dollar. It touched a high of 39 in 2007. The Indian currency has gradually depreciated since the global 2008 economic crisis. - Former finance minister Manmohan Singh, who is now the prime minister, was instrumental in liberalising the currency regime. The move led to a sharp jump in foreign investment inflows and boosted the economic growth. "India being a developing economy with high inflation, depreciation of the currency is quite natural," said Siddharth Shankar, an economic expert and advisor at brokerage firm KASSA. Shankar said the sharp depreciation as witnessed this year was hurting the economy. "Depreciation of rupee is good, so long as it is not volatile. A random depreciation that we have seen in the last few months is bad and it has hurt the economy," he said. The Indian currency hit a record low of 61.80 against a dollar Aug 6. It closed at 61.28 Wednesday. (Gyanendra Kumar Keshri can be reached at [email protected])

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For VC-backed companies, M&A is usually how the story ends. Scott Bernard Nelson Need a Business Idea? Here are 55 The Staff of Entrepreneur Media, Inc. Billionaire Venture Capitalist Chris Sacca on the 'Quickest Way to Get Rich' Low-Cost Business Ideas Low Cost Business Ideas Mike Walrath, 32, founded Right Media Inc. in 2003 as a New York-area consulting firm for buyers and sellers of internet advertisements. It wasn't long, though, before he created an online network where buyers and sellers could come together in a real-time internet ad auction. The concept caught on, and in 2005, VC firms started funding the company. After two rounds of venture financing, Right Media sold to Yahoo this spring for about $720 million. "We see this as the next logical step," Walrath says. "We don't talk about this as an outcome or an exit."For the VC funds that nurture companies such as Right Media, however, acquisitions are typically an exit. Even with IPOs showing a small resurgence this year, M&A remains by far the most common exit strategy for venture-backed companies. "Even during the dotcom boom, more VCs were exiting through M&A than through IPOs," says Kurt Roth of Intercap Merchant Partners, a merchant banking firm. "That's always been true."What has changed are the sectors likely to find M&A suitors and, by extension, VC funding. Historically, software has vacuumed up the largest share of VC dollars, but it was toppled early this year by life sciences. Sectors likely to be attractive in the coming years are medical device makers, media and entertainment (internet-related and downloading companies), green energy, and telecommunications (alternative communication networks).Walrath says the best strategy for attracting VC dollars and, ultimately, generating a good outcome is to be an expert in your industry. "[If you're] in an area you care passionately about," he says, "you'll discover things that aren't intuitive to others but that are fairly obvious to you." Exit Strategies Entrepreneur Magazine Exit Strategy

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Faruqi & Faruqi, LLP Is Seeking More Cash For The Shareholders Of TPC Group Inc. (TPCG) Faruqi & Faruqi, LLP, a leading national securities firm headquartered in New York City, is investigating the Board of Directors of TPC Group Inc. Faruqi & Faruqi, LLP, a leading national securities firm headquartered in New York City, is investigating the Board of Directors of TPC Group Inc. (“TPC Group” or the “Company”) (NASDAQ: TPCG) for potential breaches of fiduciary duties in connection with their conduct related to the sale of the Company to investment funds sponsored by First Reserve Corporation, a leading global investment firm dedicated to the energy industry, and SK Capital Partners, a U.S. based private investment firm focused on the chemicals sector. The deal is valued at approximately $627 million. Under the terms of the proposed transaction, TPC Group’s stockholders will receive $40 in cash for each share of TPC Group they own, while according to Yahoo! Finance, at least one financial analyst has set a price target of $55 for TPC Group. Request more information now by clicking here: www.faruqilaw.com/TPCG . There is no cost or obligation to you. Whether TPC Group’s Board of Directors breached their fiduciary duties to the Company’s stockholders by failing to conduct an adequate and fair sales process prior to agreeing to this proposed transaction, whether the proposed transaction undervalues TPC Group’s shares and by how much this proposed transaction undervalues the Company to the detriment of TPC Group’s shareholders are the key focus of this investigation. Faruqi & Faruqi, LLP is a national law firm which represents investors and individuals in class action litigation. The firm is focused on providing exemplary legal services in complex litigation in the areas of securities, shareholder, antitrust and consumer litigation, throughout all phases of litigation. The firm has an experienced trial team which has achieved significant victories on behalf of the firm’s clients. If you own common stock in TPC Group and wish to obtain additional information and protect your investments free of charge, please visit us at www.faruqilaw.com/TPCG or contact Juan E. Monteverde, Esq. either via e-mail at [email protected] or by telephone at (877) 247-4292 or (212) 983-9330. Attorney Advertising. (C) 2012 Faruqi & Faruqi, LLP. The law firm responsible for this advertisement is Faruqi & Faruqi, LLP ( www.faruqilaw.com). Prior results do not guarantee or predict a similar outcome with respect to any future matter. We are happy to discuss your particular case. Prev TPC Group Inc. Stock Upgraded (TPCG) TPC Group (Nasdaq:TPCG) has been upgraded by TheStreet Ratings from a hold to buy. Stocks Start Week With Stumble The major U.S. equity averages finish in the red on fresh global economic worries and more weakness in the technology sector. Andrea Tse TPC Group Inc. Stock Downgraded (TPCG) TPC Group (Nasdaq:TPCG) has been downgraded by TheStreet Ratings from from a buy to hold. TPC Group CEO Discusses Q2 2012 Results - Earnings Call Transcript

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Regions Financial takes over big Knoxville real estate portfolio at auction Regions Financial Corp. said Thursday it has taken possession of real estate in Knoxville valued at $2.9 million after the borrower failed to develop the properties into salable homes. Birmingham-based Regions, which is working through defaulted and delinquent loans that have hurt earnings, said it acquired dozens of lots this week in Knoxville at eight developments connected to the borrower, the Tennessee-based Saddlebrook Homes real estate firm. While that is a big chunk, the company's portfolio of loans not being paid as agreed and of repossessed real estate is improving. Properties acquired via foreclosure and other routes have fallen 25 percent since last year, along with the expense of maintaining them as they await a buyer. The Knoxville properties had been put up as collateral to Regions by Saddlebrook Homes. Regions sued over the underlying loan in April, saying $12.9 million was overdue. The largest bank based in Alabama was the only bidder at the foreclosure auction. Regions is the second-largest bank in Knoxville by deposit market share, with 17.3 percent from 31 branches. The company operates about 1,800 branches in 16 states. "We purchased these properties at foreclosure, which allows us to re-market and sell them," Regions spokesman Mel Campbell said. "We are optimistic that we will be able to quickly find a buyer." Such transactions add to a bank balance sheet item called "other real estate owned," meaning taking possession of properties such as those in Knoxville puts banks in the landlord business, requiring them to pay taxes, utilities and maintenance costs. That isn't the main business of a bank, and is a drag on earnings. But the picture has been improving at Regions, the largest private-sector employer in the metro area, with about 6,000 workers. The company's other real-estate balance decreased to $437 million in June, from $454 million in December and $546 million in June 2010. Regions spent $76 million on expenses related to repossessed properties in the first six months of 2011, down from $83 million during the same period last year. Regions had net income of $178 million in the first half of 2011, from a loss of $473 million during the same period last year.Join the conversation by clicking to comment or email Hubbard at [email protected]. Comments

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Home / The artist as capitalist: collateralizing creativity The artist as capitalist: collateralizing creativity Posted by: bookofjoe July 1, 2004 in Uncategorized Please Share...000000Yesterday’s Washington Post had a front-page story about how sculptor Sharon Louden dealt with raising the $20,000 she needed to begin fulfilling the biggest commission of her life. Her assignment: fill 6,000 square feet of space at the Kemper Museum of Contemporary Art in Kansas City, Missouri. At first, she resigned herself to borrowing the money on her credit cards and going deeply into debt. Then she had a better idea: sell shares in the sculpture (above), which would be put up for sale after its exhibition. She called previous buyers of her work, and easily raised the money. This past spring she sold it to a corporate buyer, earning investors returns of between 50% and 75% on their money. Investments had ranged between $200 and several thousand dollars, and the minimum return for any investor was $100. Louden said when she began telling investors about the size of their returns from the sculpture, many begged her to keep the money for her next venture. “They just freaked out,” she said. She said she has been inundated with phone calls from investors eager to get in on her next project and artists interested in her novel fundraising procedure. She is getting ready to solicit a second round of investors for an ambitious animation project. James McLaren, an investment banker who put money into Louden’s sculpture, said he was attracted by the structure of the deal: if the piece had failed to sell, each investor would have received a piece of the sculpture, which could easily be broken into pieces. But he said the real reason he put up money was the thrill of helping an artist. While Louden’s approach appears fairly novel, the idea of securitizing art is not new. One of the most famous examples is the “Bowie Bond.” In 1997, pop star David Bowie considered selling his extensive catalog of previous albums. Instead, he decided to sell bonds backed by future revenue from his songs. The bond sale raised $55 million for Bowie and allowed him to retain control of his work. Bowie bonds carry a 7.9% interest rate and have never missed a payment. Since 1997 bonds backed by royalties from songs in the catalogs of Motown Records, James Brown, Ashford & Simpson, and the Isley Brothers have been sold successfully. New York financier Robert D’Loren is preparing to sell bonds that will pay dividends based on royalties on everything from song lyrics to hamburger recipes. I wonder when I’ll be hearing from D’Loren to discuss securitizing my archives. They must be worth a fortune. I guess if the phone don’t ring, I’ll know it’s him. About bookofjoe Previous: Al Qaeda, Bush Agree On Iraq Next: Call Off the Search

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Titan Trading Analytics Inc. Announces Private Placement Closing and Executive Changes EDMONTON, ALBERTA -- (Marketwire) -- 11/20/12 -- Titan Trading Analytics Inc. (TSX VENTURE:TTA) (OTCBB:TITAF)(the "Corporation") is pleased to announce the closing of a non-brokered private placement of units ("Units") which raised CDN $500,000. The Corporation will issue 50,000,000 Units at CDN $0.010 per Unit. Each Unit consists of one common share ("Common Share") and one full common share purchase warrant (a "Warrant"). Each whole Warrant is exercisable into one Common Share for a price of $0.05 per Common Share during year one and $0.10 during year two following the date of closing. The Common Shares and Warrants comprising the Units and the Common Shares issuable upon exercise of the Warrants are subject to a four (4) month restricted period which expires on March 19, 2013. Closing of the private placement is subject to TSX Venture Exchange approval. The net proceeds from the placement will be used to for working capital. Titan reports that its board of directors has accepted the resignation of Titan's CEO and President, John Coulter. Mr. Coulter has stepped down as President and CEO to pursue other career opportunities, effective immediately. He will remain on Titan's board and will actively participate in the process of selecting a new CEO to ensure a smooth transition. The board has also accepted the resignation of Michael Gossland who is stepping down from his posts as CTO, Director and Corporate Secretary. Both resignations were prompted by Titan's decision to focus solely on licensing Titan's core trading strategies to third party fund groups that contract to run the technology in full automation on servers operated in Titan's Private Server Cloud. The company is currently in negotiations with multiple firms on hosted licensing agreements. The Titan automated trading system is currently available to firms who execute trades through Interactive Brokers and REDIPlus. About Titan Titan Trading Analytics Inc. is a premier provider of behavioral trading research. Trade signals are distributed via a powerful financial analysis and electronic trading software platform which captures and analyzes real-time market tick data and identifies trade opportunities based on numerous historical patterns, identified by Titan's Trade Recommendation Engine(TM) (TRE). Titan's flagship product, TickAnalyst(TM), delivers trading signals to proprietary trading firms and hedge funds via a cutting edge browser-based interface. Titan's internally developed products and services are at the forefront of the high growth global investment management and automated trading industry. Except for historical information contained herein, the matters set forth above may be forward- looking statements that involve certain risks and uncertainties that could cause actual results to differ from those in the forward-looking statements. Words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of management, as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors such as the financial crisis in the US, consumer spending, the amount of sales of the Company's products, the competitive environment within the industry, the ability of the Company to continue to expand its operations, the level of costs incurred in connection with the Company's expansion efforts, economic conditions in the industry and the financial strength of the Company's clients. The Company does not undertake any obligation to update such forward-looking statements. Investors are also directed to consider all other risks and uncertainties. Accordingly, readers should not place undue reliance on forward- looking statements. Titan Trading Analytics Inc. Irene Midgley [email protected]

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Foreclosure starts down on annual basis in October LOS ANGELES (AP) — U.S. homes are entering the foreclosure process at a slower pace than a year ago, and fewer properties are being repossessed by lenders, new data show.Between January and October, 971,533 homes were placed on the path to foreclosure, down 8 percent from the same period last year, foreclosure listing firm RealtyTrac Inc. said Thursday.At the other end of the foreclosure process, banks repossessed 559,063 homes through the end of last month, a decline of nearly 19 percent from a year earlier.That puts lenders on pace to complete 650,000 foreclosures this year, down from 800,000 in 2011, the firm said.While many states continued to see heightened foreclosure activity last month, the decline at a national level reflects several factors working to stem, or in some cases, merely delay foreclosures.Home sales are running ahead of last year, lifting home prices in many parts of the country, which can make it easier for homeowners to lower their monthly payments by refinancing."Those improving housing conditions are lifting all boats and lifting some people out of foreclosure," said Daren Blomquist, a vice president at RealtyTrac.However, Superstorm Sandy drove a large increase in foreclosures late in the month. RealtyTrac said foreclosures in New York and New Jersey more than doubled compared to a year ago, and in Connecticut, activity grew 41 percent. Those were the three largest increases in the U.S.Foreclosure activity rose 92 percent in the 34 counties in those states that were hardest-hit by the storm. Even with that increase, foreclosures in those areas were less than half the national average.Nationally, stronger job growth likely has helped some homeowners avoid foreclosure. Still, the country's unemployment rate remains just below 8 percent.The percentage of mortgage-holding homeowners who were at least two months behind on their payments sank in the third quarter to the lowest level in more than three years, according to credit reporting firm TransUnion.Efforts by federal and state lawmakers to slow down the foreclosure process or make loan modification a more likely option for homeowners also are having an impact.Lenders also appear to be more amenable to short sales, when the bank agrees to accept less than what the homeowner owes on their mortgage, as a way to avoid foreclosing upon a borrower.In February, the mortgage industry agreed to pay $25 billion to settle allegations that many banks and mortgage servicers processed foreclosures without verifying documents.Another instrumental factor in the sharp slowdown in foreclosure activity: The pipeline of risky home loans made before 2008 is shrinking. Loans issued since then, after banks tightened lending standards, are less likely to go unpaid."We're past the bulk of the high-risk loans that were most susceptible to foreclosure," Blomquist said.Even so, there are signs at the state level that more homes could end up in foreclosure in coming months.The trend is most evident in states such as New York, Florida and New Jersey. In those states, the courts play a role in the foreclosure process, prolonging the time it's taking lenders to tackle their backlog of foreclosure cases.Fourteen states saw an annual increase in foreclosure activity, which RealtyTrac measures as the number of homes receiving a default notice, scheduled for auction or repossessed by the bank.Of those, only two — North Carolina and Washington State — are not states where the courts are involved in foreclosures.Foreclosure moratoriums in New York, New Jersey and Connecticut in the aftermath of Sandy last month means it will take longer for lenders complete pending foreclosures, Blomquist said.All told, 89,209 homes entered the foreclosure process in October, up 2 percent from September, but down 19 percent from October last year, RealtyTrac said.Lenders repossessed 53,478 homes last month, a drop of less than 1 percent from the previous month, down 21 percent from October 2011. Home repossessions have declined on a monthly basis the past 24 months.

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Sunday, July 24, 2016 National/Regional Bank of America Hires Utilities Executive for Tech Role M&T's Wilmers Throws Support Behind Tiered Regulation BlackRock Hires Former Evercore Analyst Andrew Marquardt The Rise and Fall of Bank Coin-Counting Machines Banking's Big Sellers 2,632 Reasons To Be A Mortgage BankerAt least a few future mortgage bankers may someday have retired baseball great Cal Ripken Jr. to thank for their careers. As the new spokesman for NewDay USA, a VA, FHA and reverse mortgage lender, Ripken will headline not only the company's philanthropy and community outreach efforts but also its education and training efforts through NewDay USA University, a program to prepare college graduates for jobs in mortgage banking.Team BuilderA long-awaited recovery in housing finally seems to be taking hold, at least in certain parts of the country, and a handful of banks are making their move. Among them: Oregon-based Umpqua Bank, which recently started up a homebuilder finance group to provide construction and development loans in the Pacific Northwest. Kelly Warter, who has more than 30 years of homebuilder finance experience, has been hired to oversee the group. She is based in Seattle.Friends, RivalsTheir respective employers are fierce rivals in northern New Jersey, but that did not stop Domenick Cama, COO at Investors Bancorp, from introducing Christopher Martin, the chairman and CEO of Provident Financial Services, at a benefit where Martin was recognized for his volunteer work in the community.This wasn't a peacemaking effort arranged by the American Jewish Committee of New Jersey, which organized the dinner. Martin asked Cama himself to do the honors of introducing him at the event.Cama says the two have been friends for more than two decades, and their families are tight. So is the competition between their banks. Investors' president and CEO, Kevin Cummings, compares the relationship to the storied rivalry of Macy's and Gimbels.But for at least one night, the rivalry was set aside. "Provident is a great bank," said Cummings.Rollins to BancorpSouthBancorpSouth was taking so long to fill its vacant CEO post, a lot of folks were wondering if the Tupelo, Miss., company was looking for a buyer instead. But then it announced it had landed Dan Rollins for the roll. "This puts that rumor to bed," Mercer Capital's Jeff Davis noted when he learned about the appointment. Under Rollins, who had a highly successful run as the president and COO of Prosperity Bancshares in Houston, it's more likely that BancorpSouth will be a consolidator, rather than a target, Davis said.Smooth SailingFor some bank CEOs of a certain age, retirement might mean a chance to move on from a job that just isn't much fun anymore. But not Joseph Murphy.Murphy, CEO of Bar Harbor Bankshares and its $1.3 billion-asset Bar Harbor Bank & Trust in Maine, says his pending retirement has nothing to do with the fatiguing headwinds the industry faces. After all, Bar Harbor hasn't had a down year, never mind a loss, in the 11 years he's been leading the company. It has tripled in size, more than doubled its business banking base, expanded its retail presence and preserved its dividend.But at 70, Murphy and his fellow board members agreed it's a good time to find a successor. Kaplan Associates, a search firm in Philadelphia, will help evaluate internal and external candidates."Even though we're a local bank in Maine, we have shareholders in 30-odd states and we felt we needed to do a really strong, fiduciary, responsible search," Murphy says. "That's how I got here in 2002. We all think, humbly, that it worked out pretty well."And especially so for Murphy, who says that growing up in New London, Conn., he always wanted to be a bank president in a seacoast, New England town. "Up here in Bar Harbor," he says, "I've found what I pretty much consider my dream job,".Committee of 1 (So Far)Gateway Bank CEO Jeffrey Cheung is very proud to have been named to the OCC's new Minority Depository Institutions Advisory Committee-so proud, it seems, that his bank put out a press release about the appointment before the OCC was ready to go public with its own announcement disclosing the makeup of the committee. So at press time, it was a mystery as to who the other members would be. But there are only 181 MDIs, in case that helps to narrow things down.According to Gateway Bank, a $247 million-asset thrift based in San Francisco, committee members will serve a two-year term and will convene at least twice a year to advise the OCC. Cheung says Gateway is one of only 14 remaining minority thrift institutions in the country, putting him in a unique position to offer input to the agency.The Shuffle ContinuesJPMorgan Chase's decision this summer to create a combined corporate and investment bank is continuing to impact the architecture of the company's senior management team.In the latest reshuffling, Greg Guyett, head of the corporate bank at JPMorgan Chase, will move into a new, not-yet-determined role to make way for treasury services chief Don McCree, who adds the global corporate bank to his list of responsibilities. Both Guyett and McCree sit on the company's executive committee. McCree is a big supporter of his alma mater, the University of Vermont. He and his family have funded a scholarship in their name at the school, and McCree (class of '83) is a founding board member of the UVM Foundation.

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Application for T-Bills Domestic Debt The Institution History of the Bank CBS Building CBS Organisation Structure Division Administration Banking Services Financial Services Supervision Research & Statistics Technical Services You Are Here: Home > CBS Building The idea of constructing a new building for the future Central Bank was conceived as far back as May 1979. It arose out of the pressing need of the Monetary Authority for adequate accommodation, particularly for a more secure and spacious currency vault in the circumstance of a fast expanding currency issue. When the Central Bank took over from the Monetary Authority, it functioned in four separate locations in two buildings, the Liberty House with currency verification and destruction being carried out in the same building. Banking transactions were conducted over the counters, which the Bank shared with the Treasury, while currency stocks were held in one strong room on the ground floor and in two other rooms in the basement of Liberty House. The Research Department occupied the top floor of the three-storey block of the Pirates Building. In 1984, the new Central Bank Building was finally completed and was officially opened by the then President of Seychelles, Mr. France Albert Rene, on June 4 of the same year. The official opening was attended by a number of foreign guests from various organisations as well as government officials and members of the Central Committee. The guest of honour for the occasion was Mr. Shridath Ramphal, the then Secretary General of the Commonwealth. The building is one of the most impressive in Victoria and is an important land mark worthy of the unique position occupied by the Central Bank in the financial system in Seychelles. It is a three-storey structure, fully air-conditioned and covers a total area of some 3,500 square metres. It is located on Independence Avenue between the Independence House and the Pirates Arms Building. Home © 2012 Central Bank of Seychelles. All rights reserved

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Citigroup to cut more than 11,000 jobs Published: Wednesday, Dec. 5, 2012 11:59 a.m.�CDT NEW YORK – Citigroup said Wednesday that it will cut 11,000 jobs, a bold early move by new CEO Michael Corbat. The cuts amount to about 4 percent of Citi's workforce of 262,000. The bulk of the cuts, about 6,200, will come from Citi's consumer banking unit, which handles everyday functions like branches and checking accounts.Citi said that it will sell or scale back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay and focus on 150 cities around the world "that have the highest growth potential in consumer banking."The bank did not say how many jobs it will cut in the United States.About 1,900 job cuts will come from the institutional clients group, which includes the investment bank. The company will also cut jobs in technology and operations by using more automation and moving jobs to "lower-cost locations."Investors appeared to like the move. They sent Citi stock up more than 4 percent on a day when most bank stocks were up only slightly. Citi was up $1.48 at $35.77 in midday trading.Job cuts are a familiar template in a banking industry still under the long shadow of the 2008 financial crisis.Banks are searching for ways to make money as new regulations crimp some of their former revenue streams, like trading for their own profit or marketing credit cards to college students.Customers are still nervous about borrowing money in an uncertain economy. And they are still filing lawsuits over industry sins, like risky mortgage lending, that helped cause the crisis.Citi fared worse than others. It nearly collapsed, had to take two taxpayer-funded bailout loans, and became the poster child for banks that had grown too big and disorderly.After a long stretch of empire-building, it has been shrinking for the past several years, shedding units and trying to find a business model that's more streamlined and efficient.Corbat became CEO in October after Vikram Pandit unexpectedly stepped down. Pandit had reportedly clashed with the board over the company's strategy and its relationship with the government.While the job cuts are among the first major moves by Corbat, they are in line with Pandit's blueprint. Citi's roster of 262,000 employees is down from 276,000 at this time in 2009.Bank of America and Morgan Stanley have also shed jobs over that period.In a statement Wednesday, Corbat said his bank remains committed to "our unparalleled global network and footprint." However, he added: "We have identified areas and products where our scale does not provide for meaningful returns." He promised that the bank would continue to trim, whether in "technology, real estate or simplifying our operations."The paring hasn't always gone as well as Citi has hoped. This fall, for example, when Citi negotiated the sale of its stake in the retail brokerage Morgan Stanley Smith Barney, it got far less than it wanted from the buyer, Morgan Stanley.Corbat said Citi "has come a long way over the past several years."Citi said it expects the cuts to save $900 million next year, and more in the following years. They will be a drag, though, in the short term: Citi said it expects to record pre-tax charges of approximately $1 billion in the fourth quarter.

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Capital Instincts Life As an Entrepreneur, Financier, and Athlete by Richard L. Brandt; Thomas Weisel(contrib.) ; Lance Armstrong(other) Add to cart PDF any number of pages over any number of dayseb20 20% every 30 days PDF offeb20 on An insider's view of the investment banking world from someone who is actually shaping it Powerful, controversial and determined, Thomas Weisel is known for his unwavering focus on winning the race, whether he is competing in a national cycling championship, sponsoring Tour de France winner Lance Armstrong or negotiating with business competitors. For twenty-seven years he ran one of the major investment banks on the West Coast, bringing public companies such as Applied Materials, Siebel Systems and Yahoo! and was instrumental in establishing San Francisco as an alternative financial center to Wall Street. In 1997 he sold his company to NationsBank, which later merged with Bank of America. Unhappy with his treatment after the merger, Weisel trumped Bank of America by negotiating a separation package that included $500 million in stock options and the ability to hire away crucial Bank of America management. Within two years, the investment bank he started, Thomas Weisel Partners, reached half a billion dollars in revenues and negotiated high-profile deals such as Yahoo!'s merger with Geocities. Power Investor weaves Weisel's approach to success, his competitive nature and love of cycling into a fascinating inside account of the cutthroat world of investment banking. Thomas Weisel (San Francisco, CA) is the founder, CEO and Chairman of the Executive Committee of Thomas Weisel Partners, a research-driven merchant bank exclusively focused on the growth sectors of the U.S. economy. He is founder and president of Tailwind Sports, which manages the U.S. Postal Service cycling team, and was an Olympic-class speed skater and the former chairman of the U.S. Ski Foundation. Richard Brandt (San Francisco, CA) has twenty years' experience as a leading business journalist. He was a senior reporter for BusinessWeek for fourteen years and editor in chief of the technology business magazine Upside for four years. Wiley; March 2003354 pages; ISBN 9780471440772Read online, or download in secure PDF format Title: Capital Instincts Author: Richard L. Brandt; Thomas Weisel; Lance Armstrong Buy, download and read Capital Instincts (eBook) by Richard L. Brandt; Thomas Weisel; Lance Armstrong today! More Business Search Inside Yourself Daniel Goleman; Jon Kabat-Zinn; Chade-Meng Tan Rich Dad Poor Dad 13 Things Mentally Strong People Don't Do Amy Morin Bully at Work Business > Finance Business > Investments & Securities Business > Banks & Banking

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Public Information Notice No. 99/76 Public Information Notices Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. Modify your profile Public Information Notice: IMF Executive Board Reviews HIPC Initiative Modifications Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case. On August 5, 1999, the Executive Board reviewed International Monetary Fund (IMF) and World Bank proposals for modification to the framework of the Heavily Indebted Poor Country (HIPC) Initiative. This review is part of ongoing discussions to enhance the HIPC Initiative, including financing of the ESAF-HIPC Trust and the modalities for strengthening the linkage between debt relief and poverty reduction.1 At the conclusion of the Board's discussion of proposed modifications to the HIPC Initiative framework, Stanley Fischer, First Deputy Managing Director, summarized the discussions: "Executive Directors considered the paper entitled "Modifications to the Heavily Indebted Poor Countries (HIPC) Initiative" - which had been prepared jointly by the staffs of the International Development Association (IDA) and the Fund. "Directors welcomed the paper, which builds on the current HIPC Initiative framework with a number of specific modifications to strengthen it while adhering to the principles for change set forth by the managements of the Fund and the World Bank in April. Directors agreed with the general approach, including lower targets and thresholds that would provide deeper and broader debt relief. They underscored the importance of retaining the basic elements that had guided the HIPC Initiative, including participation by all creditors and a focus on sustainable development. Directors also cautioned that debt relief will only achieve its goals if it is integrated into an overall poverty reduction strategy. A few Directors stressed that in setting policy requirements for a completion point, governance issues should be addressed as a matter of priority. "Directors underscored that decisions on the enhancements to the Initiative need to proceed in parallel with agreement on additional financing -- not yet secured -- for the Fund's contribution to the HIPC Initiative, as well as that of other multilateral creditors, and the Bank in particular. Hence, today's discussion could only be considered preliminary. Decisions should also reflect an agreement on how to strengthen the link between debt relief and poverty reduction, on which a further paper is expected. Directors emphasized the need for all creditors, including the non-Paris Club bilateral creditors, to participate fully and equitably in an enhanced framework. A few of these Directors noted that some regional multilateral creditors may be constrained in their ability to participate. "Directors agreed that the debt sustainability targets under the current framework should be lowered to provide a greater cushion for the achievement of debt sustainability. To this end, Directors supported a lower net present value (NPV) of debt-to-exports target of 150 percent, thereby replacing the current target range with a single target. With respect to the fiscal window, Directors agreed to a lower NPV of debt-to-fiscal revenue target of 250 percent, and supported the lowering of the eligibility thresholds for the openness of an economy to an export to GDP ratio of 30 percent, and a revenue effort of 15 percent of GDP. "Directors also agreed to change the assessment base for debt relief under the Initiative from data projected for the completion point to actual data at the decision point. Directors noted that this would increase potential relief. These overall changes would broaden the number of countries that could potentially qualify for HIPC Initiative assistance. "Directors supported the provision of interim assistance and more front-loaded relief, as this could free up more resources for increased social and other poverty-reduction expenditures, subject to a country's capacity to make effective use of this earlier assistance and debt service falling due. They emphasized, however, that assistance should be provided in a way that maintains debt sustainability over the medium term, and results in a falling debt-service profile in relation to both exports and fiscal revenue. Some Directors noted that the cost implications for multilateral creditors of different profiles of front-loaded relief would have to be considered. "Most Directors were in favor of providing interim assistance by the Fund and other multilateral creditors in a cautious and pragmatic manner, provided the country was able to make effective use of early assistance, and that adequate funding was available. Directors supported the proposals made by the staff on how the Fund could provide interim assistance under an enhanced HIPC Initiative framework, underscoring that the provision of interim assistance should be conditioned on the pursuit of sustainable macro and social policies. "Directors supported the introduction of floating completion points in the HIPC Initiative as this would base the assessment of a country's performance on particular outcomes rather than the length of the track record. The use of floating completion points could also provide an incentive to implement reforms quickly and develop ownership over the timetable. In other words, this would put the countries themselves in the driver's seat in determining the timing of debt relief. However, several Directors noted that this was a major change in practice, and expressed concern that the reforms to which floating completion points were tied might be more ambitious than under the current framework, possibly leading to delays, which should be avoided. They therefore drew attention to the need to set clear policy priorities to avoid overloading the reform agenda. Others were concerned that it could be difficult to ensure fair treatment across countries. In view of these points, it was considered useful to provide examples of what a floating completion point would entail in practice, and there was general support for a review of floating completion points in one year. "Most Directors agreed that the proposed modifications to the framework would simplify implementation of the Initiative. In this context, country-specific vulnerability analyses and the category of borderline cases would no longer be required. "Most Directors agreed that the adoption of a decision point-based calculation of assistance would no longer require automatic reassessment at the completion point of the amount of assistance to be provided. Several Directors suggested that additional assistance could be provided on a discretionary basis to countries where exogenous shocks had led to a sharp deterioration in the debt situation at the completion point, underscoring the importance of providing a clear and permanent exit from unsustainable indebtedness at the completion point. A few other speakers, however, were concerned that such discretionary "topping up" at the completion point could give rise to false expectations. "Directors welcomed the inclusion of a more detailed analysis of debt service indicators in HIPC Initiative documents, including an analysis of the debt-service-to-fiscal revenue ratio and the overall budgetary context, and agreed that the delivery of debt-service should, on a country-by-country basis, reflect these indicators. They agreed that the debt-service-to-export ratio should fall within the 15 to 20 percent range or below, although this would not be a binding constraint. A few Directors suggested that the debt-service-to-fiscal revenue ratio should be the focus of the analysis of debt-service. "Directors agreed with the proposed mechanism for retroactivity, namely for countries that have already passed their decision points to benefit from the proposed enhancements to the framework based on their current (end-1998) situation. Directors stressed the importance of strong performance by countries eligible for retroactivity on both macroeconomic stability and the strengthened framework for poverty reduction emphasized under the enhanced HIPC Initiative, but they underscored that this should not lead to a third stage and unnecessary delays in the provision of debt relief to these countries. A few Directors, however, felt that countries may require additional time to put in place the reforms needed under the new framework to achieve effective poverty reduction. Directors stressed the need for continued aid flows to HIPCs, and urged donor countries to encourage policies in HIPCs related to poverty reduction and sustainable development. To help sustain progress by HIPCs, they considered that the international community should work to improve the access of these countries to industrial country markets, and restrain export credit lending and lending for unproductive expenditure to HIPCs. Several Directors also attached importance to new lending being provided on concessional terms and to the strengthening of debt management in HIPCs. "Finally, Directors agreed that the modifications paper be made available to the public by posting it -- as well as this summing up -- on the Fund's HIPC Initiative web site. This document should be viewed in conjunction with the forthcoming discussions on the other elements proposed to enhance the HIPC Initiative, including the financing of the ESAF-HIPC Trust and the modalities for achieving a strengthened link between debt relief and poverty reduction," Mr. Fischer said. 1 The HIPC Initiative entails coordinated action by the international financial community, including multilateral institutions, to reduce to sustainable levels the external debt burden of heavily indebted poor countries that pursue IMF and World Bank-supported adjustment and reform programs, but for whom traditional debt relief mechanisms are insufficient.

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MexiqueTowards a stronger, cleaner and fairer world economy Towards a stronger, cleaner and fairer world economy Remarks by Angel Gurría, OECD Secretary-General, delivered at the Economic Commission for Latin America and the Caribbean Santiago, 11 January 2010 Executive Secretary Bárcena, It is a great pleasure to be here at ECLAC to address this distinguished audience. First, the good news: a recovery is now underway, and most OECD and emerging economies are growing again. Financial market conditions are slowly continuing to return to normal and world trade is showing signs of a rebound. According to our latest OECD Economic Outlook, real GDP growth in the OECD has been positive for the last two quarters of 2009. Yet, in spite of these encouraging numbers, the overall figures for the year 2009 are mixed. OECD economies will shrink by 3.5%. Growth, though positive, will remain modest in 2010 and 2011, at 1.9% and 2.5% respectively. An unprecedented combination of macroeconomic measures and massive stimulus packages has helped us avoid the worst consequences of the crisis; and emerging markets, particularly China and India, have now become important engines of growth for OECD countries. Nonetheless, we’re not out of the woods yet. Economic growth in OECD countries is likely to be relatively modest for some time to come; the international financial system is still suffering from a lack of confidence; and global flows of trade, investment and tourism will take time to recover. Our latest analysis show that recent crises are generally followed by lower levels of potential output in many countries and rising structural unemployment rates. Indeed, unemployment rates are still at record levels in many countries. This crisis has cost many, many people their livelihood. In the OECD area alone, more than 16 million jobs disappeared between the start of 2008 and the end of 2009, and jobs will continue to be lost well into 2010. Unemployment in Europe has already hit 10%, while the United States continues to shed jobs (85 000 last December), with its unemployment rate also stuck at 10%. Another worry is that fiscal balances will remain heavily negative throughout the OECD for several years. Gross debt could exceed 100% of GDP on average in OECD countries by 2011. Good policy-makers are already crafting their exit strategies and indicating to markets how they will wind down the exceptional measures and implement fiscal consolidation. Latin America has not escaped the global crisis. As a region with strong trade, investment, migration and financial links with the rest of the world, it is naturally sensitive to external shocks. In spite of its improved macroeconomic fundamentals, better economic governance, and healthier financial systems, the region’s GDP is expected to contract between 1.5% and 2% in 2009. Of course, there are some major contrasts: while Mexico may experience a dramatic drop in GDP of around 7%, Brazil is expected to experience zero or slightly positive growth in 2009. While Chile has also been hit hard by the collapse of world trade and falling commodity prices, it has weathered the crisis better than other small open economies. Its economy bounced back in mid-2009, and growth is estimated to have been positive during the second half of 2009. Our latest growth forecasts from November envisage -1.8% in 2009 and + 4.1 % in 2010. Going forward, activity is set to gain pace gradually in 2010, and actual growth should exceed potential in 2011. Nevertheless, job markets in Latin America have been hard hit by the crisis. Both the ILO and ECLAC forecast that the unemployment rate in Latin America could reach 8.5% in 2009, raising the number of unemployed in the region to 18.4 million people. In less advanced economies, with fewer resources for social protection, the consequences of unemployment are immediate and dramatic: as many as 9 million Latin Americans may have fallen below the poverty line as a result of this crisis. This puts a serious dent in the impressive poverty reduction achieved during the economic boom of 2003 to 2007. Against this backdrop it is important not only to provide targeted assistance and support for the most vulnerable, but also to look at new sources of growth for a sustainable recovery. If Latin American countries want to be more competitive and productive in the future, their economies will have to diversify from their dependence on commodities. This is true for oil in Mexico as well as for copper in Chile. Joint public/private investments in renewable energies, in information and communication technologies or in the service sector could yield outstanding returns in terms of growth and employment and support Latin-American countries in their efforts to diversify their economies and increase their productivity. The crisis has opened up unique opportunities to pursue pending reforms in key sectors such as education, health, finance, labour, competition and the environment. The OECD will now be better able to support Chile, sharing experience on policies that have worked in other countries, and on those that have worked less well. The way each country is facing the challenges posed by the crisis reflects its fiscal and institutional capacity; but, beyond the short-term response, I would like to highlight three priorities for Chile: first, promoting productivity growth through competition and innovation; second, fostering new sources of growth, in particular through new types of “green growth”, by promoting innovation and renewable energies; and third, tackling the issue of unequal opportunities, through sound education and social protection policies. Let’s take these one at a time: Firstly, the economic growth model in coming decades has to be smart. By “smart” I mean a growth model that is based on innovation, which is crucial for tackling Chile’s challenges in terms of productivity, improved competitiveness and long-term growth. In the past few decades, new technologies, new industries and new business models have secured impressive gains in productivity and growth across the world. At our Ministerial Meeting next May, we shall present the final version of our innovation strategy, on which we have been working for two years, thus enabling Chile to share and benefit from its conclusions and recommendations. Our forthcoming economic survey on Chile shows that reforms to strengthen competition, entrepreneurship and innovation would go a long way toward enhancing productivity. Entrepreneurship could also be strengthened by reducing regulatory “red tape” for start-ups and by simplifying bankruptcy procedures. Second: we must make our growth model cleaner and greener. “Green growth” will require a shift in both public and private investments; and the limited public funds available need to be carefully targeted and accompanied by the right policy frameworks to help leverage private financing. We will work with Chile in the context of preparing our Green Growth Strategy, as commissioned by our Council of Ministers last June, for delivery in 2011. Third, education and social protection: Chile’s scores in the Program for International Student Assessment (PISA), in which some 70 countries participate, have improved recently, but they still fall short of OECD standards even after account is taken of the country’s lower income level. The fact that its scores are also more heavily dependent on students’ socio-economic background than in any OECD country shows that equity is a major education policy challenge in Chile. Income inequality is very high by OECD standards (Chile’s GINI index is the highest in the OECD), and this poses challenges for building an integrated society. In the longer term, Chile will need to increase its public programmes in the education and social protection areas. Higher education spending will need to be accompanied by a comprehensive education reform. These are some of the areas in which we could support Chilean policy-makers with our 50 years’ experience, together with our analyses and public policy recommendations. But it will be the Chilean authorities themselves who decide how best to take advantage of OECD expertise. Let me end by mentioning that just a few hours ago we formalised Chile's accession to the OECD. As the Organisation’s first South American member, its accession will make the OECD more inclusive and more global. Greater cooperation and more inclusiveness is exactly what we need after the worst economic crisis in our lifetime. The crisis has also shown us that we need new mechanisms for international dialogue, cooperation and concerted action. This is one of the many reasons why we are so glad to have Chile “on board”. The “OECD and Chile” will work together on these issues, to make both the world and the Chilean economies even stronger, cleaner and fairer. Hacía una economía mundial más fuerte, más limpia y más justaTowards a stronger, cleaner and fairer world economy

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dansk Deutsch español Français italiano Nederlands norsk português suomeksi svenska LDK Solar Announces Changes to Management and Board of Directors from LDK Solar Co., Ltd. XINYU CITY, China and SUNNYVALE, Calif., March 18, 2013 /PRNewswire/ -- LDK Solar Co., Ltd. ("LDK Solar") (NYSE: LDK), a leading vertically integrated manufacturer of photovoltaic products, today announced that Dr. Liangbao Zhu has resigned from the company for personal reasons effective March 17, 2013. Dr. Zhu joined LDK Solar in 2005 and served as executive vice president and a director of LDK Solar's Board. The resignation of Dr. Zhu does not affect the composition of the Audit, Compensation or Nominating and Corporate Governance Committees of LDK Solar's Board. "On behalf of LDK Solar, I would like to extend our appreciation to Liangbao for the valuable service he provided during his time with the company," stated Mr. Sam Tong, President and CEO of LDK. "We wish him well in his future endeavors." About LDK Solar (NYSE: LDK)LDK Solar Co., Ltd. (NYSE: LDK) is a leading vertically integrated manufacturer of photovoltaic (PV) products. LDK Solar manufactures polysilicon, mono and multicrystalline ingots, wafers, cells, modules, systems, power projects and solutions. LDK Solar's headquarters and principal manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province in the People's Republic of China. LDK Solar's office in the United States is located in Sunnyvale, California. For more information about LDK Solar and its products, please visit www.ldksolar.com. Safe Harbor StatementThis press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this press release are forward-looking statements, including but not limited to, LDK Solar's ability to raise additional capital to finance its operating activities, the effectiveness, profitability and marketability of its products, the future trading of its securities, the ability of LDK Solar to operate as a public company, the period of time during which its current liquidity will enable LDK Solar to fund its operations, its ability to protect its proprietary information, the general economic and business environment and conditions, the volatility of LDK Solar's operating results and financial condition, its ability to attract and retain qualified senior management personnel and research and development staff, its ability to timely and efficiently complete its ongoing projects, and other risks and uncertainties disclosed in LDK Solar's filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on information available to LDK Solar's management as of the date hereof and on its current expectations, assumptions, estimates and projections about LDK Solar and the PV industry. Actual results may differ materially from the anticipated results because of such and other risks and uncertainties. LDK Solar undertakes no obligation to update forward-looking statements to reflect subsequent events or circumstances, or changes in its expectations, assumptions, estimates and projections except as may be required by law. SOURCE LDK Solar Co., Ltd. RELATED LINKS http://www.ldksolar.com Preview: LDK Solar Announces Second Sale of Shares to Fulai Investments Preview: LDK Solar Announces Sale of Shares to Fulai Investments Limited

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Toops Scoops: When Millennials Flout IT Rules, Who's at Risk? Filed Under:Carrier Innovations, Regulation/Legislation Marine Insurers Face Myriad Uncertainties in a Dynamic Global Marketplace Dec 15, 2011 | By Robert Gallagher When looking at the ocean marine insurance marketplace, it’s easy to start speaking like former Defense Secretary Donald Rumsfeld talking about known knowns, known unknowns and unknown unknowns—the things we don’t know we don’t know. As a global business inextricably linked to the world economy and trading system, marine insurance has more than its share of unknowns. Speaking at the International Union of Marine Insurance (IUMI) Conference in Paris, Denis Kessler, CEO and chairman of SCOR, characterized them as “key uncertainties in a stochastic world.” These included uncertainty about the shape of recovery in the face of a global recession, monetary policies, low interest rates and unstable exchange rates, taxation and regulation, and the sovereign-debt crisis. It’s useful to consider some of these issues and several others from the unique perspective of marine underwriters. This fall, the World Trade Organization economists revised their forecast of 2011 trade growth to 5.8 percent, down from their earlier conservative estimate of 6.5 percent. They specifically cited the lingering effects of the earthquake and tsunami in Japan, the budget impasse and credit downgrade in the United States, and the ongoing Euro-area sovereign-debt crisis. There is general agreement that the overall pace of economic recovery will vary by region and country, with Asia stronger than the U.S. and the U.S. stronger than Europe. IHS Global Insight expects the U.S. economy to grow 1.8 percent in 2012 and 2.3 percent in 2013—and that’s assuming the worst doesn’t happen in Europe. While upbeat on the longer-term prospects for the U.S. economy, Federal Reserve Chairman Ben Bernanke acknowledged in September that the pace of recovery has been frustratingly slow and erratic. Unfortunately for insurers, the Fed’s low-interest-rate policy has negatively impacted investment income at a time of slow economic growth. Although the forecast is for mediocre economic growth, it is still growth, compared to the decline that the world trade system experienced a couple of years ago. Overall, the September HSBC Trade Confidence Index finds that despite a dip in global-trade confidence, the majority of respondents (84 percent) anticipate either an increase in international trade or consistent levels of international business activity over the next six months. However, the trade-confidence survey, which was conducted between July and September of 2011, shows that confidence amongst U.S. traders was at its lowest since the first survey was conducted in 2009. Less than half of U.S. respondents (49 percent) anticipate a slight or significant increase in trade volumes in the coming six months—a 13 percent drop from a similar period in the first half of 2011. This variance of views parallels the results of global and U.S. marine insurers. The IUMI reported that global marine insurance premiums totaled $25.3 billion in 2010, up 10.5 percent from $22.9 billion in 2009. But as IUMI’s numbers now include nearly $2 billion in premium from China that had not been reported in the past, growth was very modest. The growth picture in 2010 was even more modest in the United States. Members of the American Institute of Marine Underwriters (AIMU) reported that total 2010 premiums rose slightly to $2.33 billion, up 1.3 percent from $2.30 billion in 2009. Underwriting results declined somewhat but still remained strong. AIMU reported an overall combined gross loss ratio for all marine lines of nearly 82.9 percent in 2010, up from 81.5 percent in 2009. That’s remarkable when you consider the combined ratio for all property-and-casualty lines in 2010 was over 102 percent. Intense price competition among ocean marine insurers in 2010 is reflected in the annual OpCost report on shipping costs. That survey found that while total annual operating costs in the shipping industry increased by an average of 2.2 percent in 2010, the cost of insurance fell by 4.7 percent for all vessel types. What about 2011 and 2012? It depends on whom you ask and their perspective. Marsh’s Marine Market Monitor reported in September that in spite of major catastrophe losses, any anticipated market hardening has not been realized. In fact, said Marsh, “the opposite has been the case, and the first half of 2011 has seen continuing and wide-ranging softness across marine insurance markets.” In particular, the report said that soft-market conditions in the hull line have become more widespread during 2011 and that the influx of new-cargo underwriting capacity in recent years has resulted in a continuing downward trend in pricing and a general broadening of terms and conditions. An October report from Conning on U.S. market conditions said unfavorable economic conditions and depressed investment income will continue to plague growth in the P&C industry through 2011 and early 2012. But the Conning report found at least one major bright spot: Ocean marine insurance premiums grew 16.9 percent between the second quarter of 2010 and the second quarter of 2011. This finding contrasts sharply with commercial-lines pricing in the U.S., which has been in negative territory since 2004. There are a few more key uncertainties affecting the marine insurance industry. One federal issue to keep in mind is the impact of Medicare’s mandatory reporting program on marine-liability insurers. All insurers and self-insured entities are now required to report claims made by Medicare-eligible claimants to the Center for Medicare and Medicaid Services. Companies are subject to a $1,000 daily fine for late reporting. Also impacting marine insurers are thorny issues like sanctions and piracy. The extent of sanctions clauses vary widely from market to market. The existing AIMU sanctions clause, for example, is very specific to the violation of any U.S. economic or trade sanctions, while the clauses of other nations often are broader. AIMU is in the final stage of releasing an International Sanctions Clause and will continue to review its trade-sanction clauses as sanctions are likely to continue to proliferate. Regarding piracy, AIMU and other marine organizations are neutral on the subject of using armed guards on vessels as a deterrent. The consensus is that such a decision rests with ship owners. Many of the uncertainties challenging marine underwriters are the result of new technology. Today almost half of all container ships have a capacity of more than 10,000 twenty-foot equivalent units. The average size of vessels delivered this year will be more than double that of a decade ago. What does the size of such behemoths mean for accumulations of cargo, and how will marine underwriters deal with them? There is growing interest in offshore wind farms, and as more offshore wind towers have been installed off the coast of Europe and the United Kingdom, a new type of ship has evolved to install them: the Wind Tower Installation Ship, a unique vessel designed to operate under extreme conditions and provide ample deck space for heavy and oversized cargo and equipment. How will marine underwriters meet the challenge of developing proper coverage to insure them? Marine insurers are used to managing change brought on by new technology, economic turbulence or political volatility. But the number, breadth and complexity of the challenges confronting the industry today can appear daunting to even the most experienced underwriter. In concluding his IUMI address this fall, Kessler observed: “Decision-making in a time of high uncertainties is management’s most difficult task.” More than ever, U.S. marine insurers will have to rely on their skill, dedication and knowledge in dealing with myriad uncertainties while competing in a dynamic global marketplace. « Prev OptimaWrite-Intake for Insurance Carriers Provided by Cognizant Technology Solutions Carrier Innovations eNewsletter Critical news on the latest tech solutions, information security, analytics and data tools and regulatory changes to help decision-makers at insurance carriers keep their business thriving – FREE. Sign Up Now! Deadly heat wave grips California, Southwest for second day Mark Chediak, Ryan Collins At least four hikers died in Arizona, where on Sunday Phoenix set a record for the date of 118 degrees Fahrenheit.

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As Super Bowl Nears, FINRA, NFL Tackle Issue of Financial Planning for Players Joint project helps players make informed financial decisions and avoid fraud While many players for the Pittsburgh Steelers and Green Bay Packers will be at the pinnacle of their careers this Super Bowl Sunday, they will all eventually grow old and retire, whether after a long career or, more likely, an injury-shortened one. That’s why the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation and the National Football League announced Jan. 21 that they were working together to help incoming NFL players spot and avoid investment fraudand begin their playing careers by making informed financial decisions. “We are pleased to be working with the FINRA Foundation to provide our prospective players with the tools to build a solid financial future," said Adolpho Birch, NFL senior vice president of labor policy and player development, in a statement. "It's never too early to learn, and I am pleased that, together with NFL Security, we will be able to reach these players and their families at this important time in their lives." Football players have been in the headlines a lot recently, and the news is not just in the sports pages. Stories about the risk of brain concussions, former players living in poverty and outreach programs for players seeking health care and disability benefits have all contributed to concerns about how America’s favorite sport may be damaging the players who appear so invincible on the field. As a result, the NFL is seriously looking at how to protect players—physically, mentally and financially. Under the FINRA-NFL partnership, players will learn how to choose the right financial professional and how to do a background check. Players also will learn about the risks of taking on debt. Prospective NFL players and their families received information about the FINRA-NFL joint program at the East/West Shrine Game in Orlando, Fla., on Jan. 22 and the Under Armour Senior Bowl in Mobile, Ala., on Jan. 29. "It is critically important that players make informed financial decisions at the beginning of their careers," said Rick Ketchum, chairman of the FINRA Investor Education Foundation, in the statement. "Working with the NFL, we hope to reach these players and give them the information and insight they need to avoid financial pitfalls." The FINRA Foundation presented its Outsmarting Investment Fraud curriculum at both events to players and their parents. It included an explanation of the psychological persuasion tactics that con artists use to get their victims to make emotional rather than logical investment decisions. The curriculum delivered at the NFL events has been tested and shown to reduce susceptibility to investment fraud by over 50% among participants, according to an NFL-FINRA joint release. Also in Estate Planning SEC Talks Crowdfunding, Grapples With Accredited Investor Rules Don’t Waste the ‘Summer of DOL’ as Fiduciary Compliance Clock Ticks Saving Early No Longer Enough for Retirement Success: Survey More Estate Planning

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Meredith Whitney: I’m a ‘Growth Chaser,’ Not a ‘Doom and Gloomer’ Wall Street wunderkind explains ‘60 Minutes’ interview at IMCA conference At IMCA conference, Meredith Whitney said doom and gloom tag drove her “crazy.” (Photo: AP) Star analyst Meredith Whitney kicked off the Investment Management Association’s annual conference on Sunday in Seattle by decrying her reputation as a “doom and gloomer.” “Like you, I’m a growth chaser,” Whitney appealed to the advisors and investment managers in the audience. “And like you, I get paid to find good investment ideas for my clients.” Claiming she identifies more with the retail rather than institutional space due to her background at Oppenheimer & Co., she notes, “I’ve been on Wall Street for 20 years. Six years ago, I made my most famous call on the credit crisis. I am not a doom and gloomer. I am a growth chaser. The doom and gloom tag drove me crazy." Referring to her initial claim to fame, her downgrade of Citibank in 2007, Whitney said, “I made the call with Citigroup when they replaced their CFO. I was invited to a cocktail hour with him. Another analyst said they couldn’t understand Citigroup, it was just too big with too many parts. I thought that was strange to say because figuring out companies like that is our job, so I went back and tried. What I noticed was it was impossible to sustain their earnings, so I wrote it up.” She did, however, hold it until after the Fed meeting at the time because she didn’t want a potential action by the central bank to cause the call to “blow up in my face.” "When I did release it, it quickly became the call heard around the world," she said. She said after the Citigroup call, she understood where the growth “wasn’t coming from,” and decided to try and find out “where it was coming from.” “It’s not coming from the coast or the so-called ‘sand states,’” Whitney explained. “It’s coming from the central corridor. Unemployment is also twice as high as it is in the central corridor, and per capita average debt in California is twice that of Texas. With structurally high unemployment, you can’t grow yourself out of debt.” As a result, the demography of the United States is changing “right before our eyes,” she said, with high tax and debt states on the coast losing out to those in the central corridor. “Illinois raised taxed a few years ago; the governor of Wisconsin went on TV and held a sign over his head that said “open for business.” Referring to the “800-pound gorilla in the room,” the moderator noted that Chuck Prince resigned as CEO of Citigroup roughly a week after her downgrade of Citigroup, so she was “obviously aware at that time that her words had power.” “I’m making sure there are no cameras from ’60 Minutes’ here,” he said. “So what made led you to make the call [about] municipalities?” “It was a statement, not a call,” she clarified. “I would never go on ’60 Minutes’ and make a call. I did a lot of research at the state level and what I found were bad assumptions that were so reminiscent of banks. That year, 26 new governors were elected, and they took a great amount of political risk to try to fix the situation. “ He then asked about some of her favorite picks, to which she answered, “one of my pure-play growth favorites is Discover, a financial services firm outside of Chicago that lends to the central corridor. It’s been one of the best financial services companies in each of the past three years. It’s got everything you want.” The old levers of the economy no longer work, she concluded, and noted earnings growth will no longer come from banks. “Regulators won’t let them get bigger through M&A," she said, "and they are also talking about instituting higher capital requirements.” Read After Stockton, Economist Sees More Pain in California and Beyond on AdvisorOne. Oppenheimer & Co. Meredith Whitney

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